Magyar Telekom Telecommunications Plc · BET:MTELEKOM
Magyar Telekom Telecommunications — H1 2008 Earnings Presentation
19 slides from Magyar Telekom Telecommunications's earnings presentation, 2008
Slide 1: Presentation: 2008 interim results
Presentation 2008 interim results Strong margin reflects efficiency improvements
Slide 2: Agenda
Agenda Overview Magyar Telekom’s strategy Changes in organization, brand structure NGA strategy Headcount rationalization Challenges and strengths Dividend policy Public targets for 2008 and 2008 H1 results First half 2008 summary and segment analysis Regulatory snapshot Abbreviations: 3G: third gen
Slide 3: Overview: Magyar Telekom Group at a glance
Overview Magyar Telekom Group at a glance Market leader in all core businesses Stock information Integrated operations in Hungary, EUR 3.2bn market capitalization Macedonia and Montenegro alternative/wholesale operations in Romania, Stock exchange listing Bulgaria and Ukraine listed on NYSE and
Slide 4: Magyar Telekom's strategic priorities
Magyar Telekom’s strategic priorities Focus on service excellence, efficiency and expansion Excellence Expansion stronger customer focus seeking value-accretive acquisitions both in Hungary improved service quality and the region integrated sales and call-center services leading position i
Slide 5: Changes in organization, brand structure
Changes in organization, brand structure Leaner organization, simpler brand structure New organizational structure New brand structure Structural changes in the telecom industry Clear brand structure – strong corporate technological development and innovation brand convergence throughout the ind
Slide 6: New generation access (NGA) strategy
New generation access (NGA) strategy Reinforcing technology leadership Wireline network strategy CAPEX requirement 5-year plan with aiming to cover 1.2 million Total CAPEX investment is HUF 40 billion households by 2013 (~30% of Hungarian between 2009 and 2013 households) offering bandwidth of up to
Slide 7: Headcount rationalization
Headcount rationalization Efficiency improvement Headcount-reduction commitment to reduce cost across the Group headcount reductions enabled through integrated Headcount reduction for 2008 operations and leaner corporate structure 15% decrease (~1,800 employees) by end of 2008 compared to the
Slide 8: Challenges and strengths
Challenges and strengths Changing business needs continuous efficiency improvements Change in revenue mix Increasing profitability and return Revenue breakdown continuous headcount reduction and cost cutting bear fruit HUF million visible signs of efficiency improvements in the 700 000 671 196 6
Slide 9: Dividend policy
Dividend policy Net debt ratio and dividend yield Net debt ratio** Dividend yield*** 50% 9.1% 9.2% 10% 46.6% 8.7% 8.7% 8.7% 40% 38.8% 8% 32.9% 33.2% 31.7% 31.0% Targeted net 31.6% debt ratio range 30% 6% 20% 4% 10% 2.3% 2% 1.4% 0% 0% 2001 2002 2003 2004 2005 Q1 2007* 2007 2008 2009 * 2006 dividend p
Slide 10: Public targets for 2008 and 2008 H1 results
Public targets for 2008 and 2008 H1 results 2008 public targets 2008 H1 results Revenue Flat over 2007 +2.2% competitive landscape excluding HUF 8.5bn F2M related reversal of sluggish economic growth limits disposable provisions revenues decreased by 0.4% in H1 2008 income Hungarian broadban
Slide 11: First half 2008 summary
First half 2008 summary Revenues EBITDA EBITDA margin Group HUF 335.8bn +2.2% HUF 144.3bn +12.1% 43.0% Underlying** HUF 149.8bn +8.7% 44.6% T-Com HUF 147.7bn -3.0% HUF 64.4bn +7.4% 43.6% underlying HUF 66.2bn +3.9% 44.8% T-Mobile HUF 169bn +2.0% HUF 75.7bn +5.2% 44.8% Segments* underlying HUF 75.7bn
Slide 12: T-Com: Hungarian operations
T-Com: Hungarian operations Focus on efficiency and customer retention Revenue breakdown Voice revenues under threat from HUF million 150 000 competition -3.4% 120 000 increasing threat from cable operators offering VoCaTV & 3Play 90 000 strong mobile substitution as mobility 60 000 premium dimi
Slide 13: T-Com: Hungarian operations
T-Com: Hungarian operations Broadband market developments Cable services General deceleration of BB market growth Second player on the cable market cable broadband is becoming more popular than T-Kábel market share ~19% based on cableTV ADSL among new customers (in H1 2008 ~70% of the customers
Slide 14: T-Mobile: Hungarian operations
T-Mobile: Hungarian operations Competitive environment Increasing focus on customer acquisition continued growth in RPC base (up 13%) HUF/min Mobile termination rates due to distribution of free SIM cards acquisition 40 cost/new RPC fell by 20% to HUF 5,675 in H1 35 Tariff erosion more conscio
Slide 15: T-Mobile: Hungarian operations
T-Mobile: Hungarian operations Solid financial and operational performance Continued tariff decline Usage and ARPU trends MOU increased by 5% yoy to 152 in H1 ARPU (HUF) MOU ARPU down by 9% to HUF 4,104 (~EUR 17) 6 000 160 growing importance of VAS (17% of ARPU) 5 500 150 5 000 140 Postpaid
Slide 16: T-Com: international operations
T-Com: international operations Macedonia Montenegro Limited top line growth opportunities Booming broadband market fixed line penetration was 22.1% (down 1ppt) fixed line penetration at 28.3% (down 2.4ppt) number of lines ~483,000 (down 4.5%) number of lines ~185,000 (down by 2.9%) strong
Slide 17: T-Mobile: international operations
T-Mobile: international operations Macedonia Montenegro Subscribers (th) Subscribers (th) 121% 164% 169% 180% 198% Penetration 70% 73% 81% 93% 100% Penetration 1 200 2 500 000 1 000 23% 25% 16% 25% 2 000 000 9% 10% 800 8% 1 500 000 4% 600 48% 42% 43% 30% 30% 30% 58% 41% 34% 33% 400 1 000 000 200 42%
Slide 18: T-Systems
T-Systems Growing importance of SI/IT services Declining traditional revenues Leading position in the Hungarian SI/IT Pressure on voice and data revenues market intense competition from alternative service providers and strong mobile substitution full scale IT service portfolio offered through a
Slide 19: Regulatory snapshot
Regulatory snapshot Fixed-line Mobile Hungary – in line with EU regulatory framework geographic number portability since January 2004 mobile number portability since May 2004 WS naked ADSL offered to ISPs since end-March 2007 EU roaming regulation adopted IC fees slightly below EU average,
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