Magyar Telekom Telecommunications Plc · BET:MTELEKOM
Magyar Telekom Telecommunications — Magyar Telekom — Q1 2022 Earnings Presentation
24 slides from Magyar Telekom Telecommunications's earnings presentation, June 2022
Slide 1: Magyar Telekom Group Investor Presentation
MAGYAR TELEKOM GROUP INVESTOR PRESENTATION June 2022
Slide 2: Disclaimer
DISCLAIMER This investor presentation contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore should n
Slide 3: Strategy and Market Position
STRATEGY AND MARKET POSITION
Slide 4: Overview – Magyar Telekom at a Glance
OVERVIEW – MAGYAR TELEKOM AT A GLANCE Overview Pillars of transformation ▪ Integrated operations in Hungary and North Macedonia GROW ▪ Leading telecommunications service provider in both countries Lead In Customer Lead in Lead in Business ▪ Leading SI/IT service provider in Hungary Experience Techno
Slide 5: Firm Focus on Strategic Priorities
FIRM FOCUS ON STRATEGIC PRIORITIES Network Customers Resilience ▪ Continued fiber rollout to provide seamless ▪ Customers choosing to sign up for an increasing ▪ Tackle challenges from the fast-changing connectivity to expanding base number of our services macro-economical environment ▪ RAN moderniz
Slide 6: Hungarian Telco Market Positions
HUNGARIAN TELCO MARKET POSITIONS Mobile voice market1 Mobile data market1 SIMs (mn) SIMs (mn) Others Digi 9.7 9.6 9.7 9.8 9.8 9.6 7.5 10 Vodafone 8 7.1 7.4 Others 0.5% 0.7% 0.7% 1.4% 1.9% 1.9% 6.6 2.2% 2.2% 2.4% 0.2% 0.3% 8 25.8% 25.6% 26.4% 26.7% 26.9% 27.4% Telenor 5.9 1.1% 27.2% Vodafone 6 5.4 1.
Slide 7: IT Market in Hungary: 2020-2025
IT MARKET IN HUNGARY: 2020-2025 Total B2B IT market (HW&SW and IT services)1 IT Services market shares (by revenue)3 HUF bn +5.8% SYSTEM INTEGRATION IT INFRASTR. SI & 987 1 000 +3.8% 937 Pack- age Custo m app. IT Apps. OS & IT Infra. OS Infra. proj. IT 890 900 834 60 appl. 60 dev. 60 SI 60 Outsourc.
Slide 8: Hungarian Economic Environment
HUNGARIAN ECONOMIC ENVIRONMENT Growth structure & Domestic demand 8% 7.1% 6% 5.1% 4.9% ▪ Magyar Telekom leveraged positive trends of domestic demand 4.0% 4% 2.0% ▪ Investment levels show volatility due to EU fund cycles 2% 0% ▪ 2021 GDP showed a 7.1% year-on-year growth, mostly on the back -2% of st
Slide 9: Guidance, Outlook and Shareholder Remuneration 2022-2024
GUIDANCE, OUTLOOK AND SHAREHOLDER REMUNERATION 2022-2024
Slide 10: 2022 Public Targets and 2023-2024 Outlook Reflects Strong Commercial Momentum
2022 PUBLIC TARGETS AND 2023-2024 OUTLOOK REFLECTS STRONG COMMERCIAL MOMENTUM 2021 results 2022 guidance 2023 – 2024 outlook REVENUE HUF 700.1 bn 1%-3% growth moderate annual growth EBITDA AL HUF 216.3 bn moderate decline2 moderate annual growth CAPEX AL1 HUF 109.3 bn broadly stable FCF 1 HUF 56.2 b
Slide 11: Shareholder Remuneration After 2021 Results and Policy for 2022-2024
SHAREHOLDER REMUNERATION AFTER 2021 RESULTS AND POLICY FOR 2022-2024 Shareholder remuneration Shareholder remuneration policy for 2022-2024 HUF bn 29,6 ▪ The Board of Directors approved the shareholder 25,5 remuneration policy for 2022-2024 ▪ Goal is to increase transparency, visibility and reliabil
Slide 12: Q1 2022 Results
Q1 2022 RESULTS
Slide 13: ARPU Growth in Hungary Driven by Favorable Subscriber Base Trends
ARPU GROWTH IN HUNGARY DRIVEN BY FAVORABLE SUBSCRIBER BASE TRENDS AND STRONG DATA USAGE Mobile SIMs Mobile ARPU ‘000 HUF +5.0% M2M Q1 2021 5,456 5,727 Prepaid 3 604 Q1 2022 Blended +3.4% 8.7% 11.4% 3 727 Postpaid 27.5% 25.1% 5 094 Postpaid +4.6% 5 328 63.8% 63.5% 1 102 Prepaid +7.1% 1 180 Q1 2021 Q1
Slide 14: Growing Customer Base Coupled with BB and TV ARPU Trends
GROWING CUSTOMER BASE COUPLED WITH BB AND TV ARPU TRENDS DRIVING GROWTH IN HUNGARY Fixed line multiplay residential subscribers Fixed Voice, BB and TV ARPU ‘000 HUF +3.4% Q1 2021 1,542 2 058 Q1 2022 1,492 Fixed voice -6.8% 1 918 19% 16% 1Play 2Play 3 228 36% 39% Fixed BB +15.3% 3 721 3Play 3 323 45%
Slide 15: Revenue Growth Driven by Sustained Commercial Momentum
REVENUE GROWTH DRIVEN BY SUSTAINED COMMERCIAL MOMENTUM Revenue, Q1 2022 vs Q1 2021 HUF bn +8.4% ▪ Growth in mobile service revenues driven by strong 4,4 0,9 175.9 data demand that offset lower voice revenue -1.0 contribution 3,7 ▪ Fixed service growth driven by broadband and TV 5,5 services ▪ Increa
Slide 16: Favorable Business Trends and One-off Gain Leading to Outstanding EBITDA Growth
FAVORABLE BUSINESS TRENDS AND ONE-OFF GAIN LEADING TO OUTSTANDING EBITDA GROWTH EBITDA AL, Q1 2022 vs Q1 2021 HUF bn 26.4% ▪ Strong increase in gross profit attributable to 3,3 55.8 positive underlying telecommunication service -0.3 0,9 developments 7,8 ▪ Decrease in indirect costs primarily driven
Slide 17: Positive Net Income Trend Driven by Strong EBITDA Growth
POSITIVE NET INCOME TREND DRIVEN BY STRONG EBITDA GROWTH Net income (and adjusted net income), Q1 2022 vs Q1 2021 HUF bn 107.0% 12,0 ▪ Increase in D&A related to RAN -0.2 0,3 18.4 modernization in North Macedonia -1.3 -1.1 15.6 ▪ Net financial result down YoY due to lower -2.8 derivative-related gai
Slide 18: Continued Focus on Network Development
CONTINUED FOCUS ON NETWORK DEVELOPMENT CAPEX AL, Q1 2022 vs Q1 2021 Gigabit capable fixed network development HUF bn # of access points (th) 4 500 4 259 4 314 4 333 4 356 4 374 4 385 103.1 4 194 4 209 4 224 4 238 4 000 +14.7% 33.7% 30.8% 29.4% 3 500 40.7% 38.9% 36.5% 2,5 23.0 51.6% 50.3% 48.1% 44.9%
Slide 19: Free Cashflow Supported by Strong EBITDA and Subsidiary Disposal
FREE CASHFLOW SUPPORTED BY STRONG EBITDA AND SUBSIDIARY DISPOSAL Free cashflow, Q1 2022 vs Q1 2021 HUF bn 1.7 ▪ Improvements attributable to 5.5 -0,5 − Favorable business performance 8.7 0.1 0.6 − Lower interest payments due to reduced debt and some temporary timing differences − Proceeds from dispo
Slide 20: Back-up
BACK-UP ? For further questions please contact the IR department: Diana Várkonyi Rita Walfisch Capital Market Relations Hub Lead Investor Relations Expert Phone: +36 1 481-7676 Phone: +36 1 457-6084 e-mail: varkonyi.diana.annamaria@telekom.hu e-mail: walfisch.rita@telekom.hu
Slide 21: Awards and Recognitions in 2021
AWARDS AND RECOGNITIONS IN 2021 ▪ B, PRIME ESG rating from ISS ▪ Constituent of FTSE4Good Index Series ▪ AA ESG rating from MSCI ▪ Zyntern.com #2 most attractive employer ▪ PwC Hungary – Most Attractive Workplace (Telecommunication category) ▪ Randstad Most Attractive Workplace (Telecommunication se
Slide 22: North Macedonia: Q1 2022 Results
NORTH MACEDONIA: Q1 2022 RESULTS Revenues, Q1 2022 vs Q1 2021 EBITDA AL, Q1 2022 vs Q1 2021 HUF mn +4.9% HUF mn -2.9% 743 69 16,578 462 -39 6,725 15,805 6,529 -627 -31 Q1 2021 Mobile Fixed SI/IT Q1 2022 Q1 2021 Gross profit Indirect costs IFRS 16 impact Q1 2022 22
Slide 23: Further Details on Adjustments on Net Income
FURTHER DETAILS ON ADJUSTMENTS ON NET INCOME ’Adjusted Net Income’* is to be adjusted for major non-cash below EBITDA one-off items that are not part of the underlying performance Such as: ➢ Change in fair value of derivatives ➢ FX result realized on principal of the CCIR (cross currency interest ra
Slide 24: Hungarian Mobile Spectrum
HUNGARIAN MOBILE SPECTRUM Sectrum allocation (MHz) 700 10 10 5 25 800 10 10 10 30 900 15 10 10 35 1800 15 5 10 20 5 20 75 2100 15 15 15 5 10 60 2600 30 20 20 70 1500 40 2600 5 25 15 5 50 3500 10 60 20 50 60 200 3700 60 140 200 Magyar Telekom Vodafone Telenor Digi not allocated 24