Magyar Telekom Telecommunications Plc · BET:MTELEKOM

Magyar Telekom Telecommunications — Magyar Telekom — FY2011 Earnings Presentation

28 slides from Magyar Telekom Telecommunications's earnings presentation, April 2012

  1. Slide 1: Roadshow presentation – Magyar Telekom Group – April 2012

    Roadshow presentation M Magyar Telekom T l k Group G – April A il 2012 Public targets achieved, strong cost focus reflected in g margins 1

  2. Slide 2: Strategy, Outlook and Guidance

    Strategy, Outlook and Guidance 2

  3. Slide 3: Overview – Magyar Telekom Group at a glance

    Overview – Magyar Telekom Group at a glance International presence Overview Integrated operations in Hungary, Macedonia and Montenegro Czech Republic „ leading telecommunications service provider in all three Slovakia Austria Moldova countries Hungary Slovenia Croatia Croatia Romania „ leading SI/IT

  4. Slide 4: Market trends

    Market trends Revenue based market shares in Hungary in 2010 (HUF bn) Evolution of Magyar Telekom’s market share since 2006 333 35 116 95 108 31 100 % 23% 38% 80 % 48% 51% 54% 69% 29% 60 % 18% 1% 21% 4% 17% 40 % 23% 13% 26% 1% 7% 1% 20 % 31% 26% 17% 28% 31% 20% 5% 0% Mobile voice Mobile BB Fixed voi

  5. Slide 5: Change in revenue trends

    Change in revenue trends Hungarian ICT market development (HUF bn) Change in Magyar Telekom Telekom’ss Hungarian revenue mix 100% +1,4% 1.391 1.342 1 295 1.295 1 299 1.299 New 1.280 1.263 80% New 1.215 1.229 revenue 1.209 1.206 1.209 revenue sources New sources ca.30% revenue ca.40% IT 60% sources c

  6. Slide 6: Continued efficiency improvements in core operations

    Continued efficiency improvements in core operations Cost saving S bl underlying Stable d l i margin i andd CAPEX HUF bn 60 % -5% 150 131 50 % 126 121 116 116 40.7 % 40.8 % 40.7 % 41.0 % 106 103 106 40 % 100 30 % 50 20 % 16.0 % 15.8 % 15.1 % 14.0 % 10 % 0 0% 2008 2009 2010 2011 2008 2009 2010 2011 T

  7. Slide 7: Capex and Free cash flow generation

    Capex and Free cash flow generation C Capex bbreakdown kd F cashh flow* Free fl * generation i HUF million HUF million 100 000 95 000 -9% 738 92 025 7 883 80 000 33% 90 000 32% 60 000 85 000 2 004 33% 40 000 36% 7 226 9% 80 000 10% 77 495 3 321 20 000 25% 22% 75 000 0 2010 2011 70 000 2010 EBITDA**

  8. Slide 8: 2011 FY Group results – Net income and dividend policy

    2011 FY Group results – Net income and dividend policy Net income development Dividend payment HUF million 75 000 Net debt ratio* DPS (HUF) 64 378 29 533 50 % 74 80 60 000 70 40 % 45 000 34.1 % 60 4 172 21 857 32.7 % 50 Target 30 % 50 50 30 000 40 31 390 20 % 30 15 000 20 0 10 % 7 379 606 10 -7 457

  9. Slide 9: Results and Hungarian macro-economy trends 2010-2011

    Results and Hungarian macro-economy trends 2010-2011 Growth structure and wages g Contribution to GDP growth (%) 8 6 4 Macro effects 2 0 Economic downturn impacting MT -2 results -4 „ MT results are very sensitive Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 to fluctuations in domestic 2010 2011 demand Consumption Net e

  10. Slide 10: 2011 results versus guidance and 2012 targets

    2011 results versus guidance and 2012 targets 2011 targets vs. achieved results 2012 targets Revenue 3 5% decline 3-5% -2.0% 2 0% Flat to -2% 2% vs results „ increasing revenues from energy resale „ fears for recession, declining household „ higher revenues from handset sales driven income strengthe

  11. Slide 11: Q4 2011 Results

    Q4 2011 Results 11

  12. Slide 12: 2011 Q4 Group results – Revenues and EBITDA

    2011 Q4 Group results – Revenues and EBITDA Group revenues Group EBITDA 160 000 1 005 159 424 56 000 Special Influence Underlying performance 2 503 158 000 156 977 2 554 20 626 445 4 568 48 000 2 558 46 683 2 880 1 532 156 000 2 692 154 000 1 016 40 000 291 580 152 000 32 000 150 000 26 024 24 000 0

  13. Slide 13: Telekom Hungary – fixed revenue decline slowing down

    Telekom Hungary – fixed revenue decline slowing down Fixed line and SI/IT revenues Mobile revenues HUF million HUF million +3% -1% 60 000 75 000 48 772 50 031 62 105 61 397 50 000 60 000 10 038 11 701 14 544 10 925 40 000 45 000 11 346 11 581 6 784 7 210 30 000 10 507 10 557 Other 30 000 20 000 TV 4

  14. Slide 14: Hungary -- improvement in fixed voice churn

    Hungary -- improvement in fixed voice churn Telekom Hungary fixed voice subscribers Subscribers Hungary fixed voice churn 2000 000 -5% 1 688 405 1 604 035 1500 000 Fixed voice ƒ significantly lower fixed voice churn 1000 000 thanks to the retention effect of: ƒ Hoppá package: flat fee package VoCa 5

  15. Slide 15: Hungary – Energy resale business

    Hungary – Energy resale business Gas and electricity points of delivery (POD) PODs 40 000 35 262 Energy resale 30 000 24 628 ƒ low direct and EBITDA margin, however 20 000 retention impact is significant 15 226 11 080 ƒ lower churn in HHs subscribingg for energy gy 10 000 7 874 service as well Gas E

  16. Slide 16: Hungary -- Fixed broadband: stable market position

    Hungary -- Fixed broadband: stable market position Fixed broadband market developments in Hungary T-Home retail fixed BB market share 36.3% 36.6% Subscribers +10% Fixed broadband 800 000 744 165 677 088 ƒ market growth driven by cable and fiber, 600 000 while ADSL market growth has slowed down 400 0

  17. Slide 17: Hungary -- TV market: significant growth achieved

    Hungary -- TV market: significant growth achieved TV market share Subscribers +3% 3500 000 3 108 000 3 213 000 TV customer growth 3000 000 26 26.4% 2500 000 28.9% ƒ significant migration from cable to IPTV driven by EuroDocsis 3-enabled cable 2000 000 23.0% 22.2% network 1500 000 Other 24 0% 24.0% 2

  18. Slide 18: Hungary -- Mobile voice: stable market share

    Hungary -- Mobile voice: stable market share Mobile voice market shares (based on total SIM cards) Subscribers -3% 14000 000 12 011 823 12000 000 11 689 937 Mobile voice 22.4% 23.0% 10000 000 8000 000 ƒ population-based penetration at 117% 34.3% 32.0% 6000 000 ƒ stable market share, slight growth in

  19. Slide 19: Hungary -- Mobile broadband: major growth driver

    Hungary -- Mobile broadband: major growth driver Mobile broadband market developments (based on total SIM cards) Mobile broadband Subscribers +131% ƒ already 600 HSPA+ base stations offering 2500 000 2 154 842 21 Mbps download speed 2000 000 23.8% ƒ significantly increasing smartphone sales 1500 000

  20. Slide 20: T-Systems Hungary – Strong revenue growth in Q4

    T-Systems Hungary – Strong revenue growth in Q4 Revenues T-Systems HUF million +13% Falling voice and data revenues 40 000 37 161 32 908 „ lower usage and high fixed churn, churn principally caused by mobile substitution 30 000 45.5% 57.2% „ continued pressure on mobile tariff levels 20 000 „ lower

  21. Slide 21: Macedonia – Financial performance

    Macedonia – Financial performance Revenues +1% Macedonia HUF million 20 000 18 828 18 989 Significant FX impact: HUF weakened by 9.3% 10.9% 13.0% against i MKD in i Q4 2011 vs. Q4 2010 15 000 Declining fixed line revenues in MKD 41.1% 39.5% „ decreasing fixed retail voice revenues 10 000 due to cabl

  22. Slide 22: Montenegro – Financial performance

    Montenegro – Financial performance Revenues Montenegro HUF million 10 000 +4% Significant FX impact: HUF weakened by 9.3% 8 106 8 447 against i EUR in i Q4 2011 vs. Q4 2010 8 000 7.5% 11.6% Fixed voice revenues under pressure 6 000 37.9% 32.4% „ deterioration in retail voice revenues (in EUR) driven

  23. Slide 23: Financials

    Financials 23

  24. Slide 24: Magyar Telekom – 2011 Consolidated Income Statement

    Magyar Telekom –2011 Consolidated Income Statement HUF million 2010 2011 Change Fixed line revenues 249 633 240 552 -3.6% Mobile revenues 315 173 308 518 -2.1% System Integration/Information Technology revenues 44 773 48 547 8.4% Revenues 609 579 597 617 -2.0% Direct costs (157 427) (161 047) 2.3% E

  25. Slide 25: Magyar Telekom - Consolidated Balance Sheet

    Magyar Telekom - Consolidated Balance Sheet HUF million Dec 31, 2010 Dec 31, 2011 Change Current assets 200 574 220 396 9.9% C h andd cashh equivalents Cash i l t 15 841 14 451 -8.8% 8 8% Other current financial assets 56 560 65 286 15.4% Non current assets 908 432 877 632 -3.4% Property, plant and

  26. Slide 26: Magyar Telekom - Consolidated Cashflow Statement

    Magyar Telekom - Consolidated Cashflow Statement HUF million 2010 2011 Change N cashh generatedd ffrom operating Net i activities i ii 164 670 168 781 2 5% 2.5% Investments in tangible and intangible assets (91 762) (83 796) -8.7% Adjustments to cash purchases 4 462 3 722 -16.6% Purchase of subsidia

  27. Slide 27: Investigations into certain consultancy contracts

    Investigations into certain consultancy contracts As previously disclosed, the Company Company’ss Audit Committee conducted an internal investigation regarding certain contracts relating to the activities of the Company and/or its affiliates in Montenegro and Macedonia that totaled more than EUR 31

  28. Slide 28: For further questions please contact the IR department

    For further questions please contact the IR department: Investor Relations Phone: +36 1 458-0423 Fax: +36 1 458-0443 e-mail: investor.relations@telekom.hu Abbreviations: 3G: third generation, 4G: fourth generation, ARPU: average revenue per user, BB: broadband, CBC: call-by-call, CPS: carrier pre-se

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