Telekom Austria Ag · VIE:TKA

Telekom Austria — Q2 2008 Earnings Presentation

26 slides from Telekom Austria's earnings presentation, Aug 20, 2008

  1. Slide 1: Telekom Austria Group Results for the Second Quarter 2008

    Telekom Austria Group Results for the Second Quarter 2008 Vienna, August 20, 2008 Cautionary Statement “This presentation contains certain forward-looking statements. Actual results may differ materially from those projected or implied in such forward-looking statements. Forward-looking information

  2. Slide 2: Agenda / Key Developments

    Agenda ƒ Key Developments ƒ Fixed Net ƒ Mobile Communication ƒ Financial Overview ƒ Outlook Results for the Second Quarter 2008 3 Key Developments Results for the Second Quarter 2008 4 2

  3. Slide 3: Telekom Austria Group – Second Quarter 2008

    Telekom Austria Group – Second Quarter 2008 ƒ Revenues grow by 5.6% to EUR 1,276.2 mn ƒ EBITDA increases by 0.6% to EUR 469.1 mn ƒ Growth of international operations drives EBITDA ƒ Effect of roaming regulation amplified by seasonality of Easter holidays ƒ Continuing stabilization of Fixed Net trend

  4. Slide 4: Fixed Net

    Fixed Net Results for the Second Quarter 2008 7 Improving Trends Following New Product Bundles, Exceptional Expenses Impact the EBITDA Revenues (EUR million) ƒ Moderate revenue decline despite -2.2% no consolidation effect from eTel in 521.9 533.4 2Q 07 ƒ Higher costs driven by higher 2Q 08 2Q 07 em

  5. Slide 5: Third Consecutive Quarter With Substantially Lower Line Loss

    Third Consecutive Quarter With Substantially Lower Line Loss ƒ Fixed net product strategy over- Line Loss hauled starting in 3Q 07 (in 000) 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 ƒ Propositions built around product bundles, broadband speed and -48 -32 -35 aonTV -54 -60 ƒ New propositions effective in aonTV c

  6. Slide 6: Product Bundles & Up-Selling Soften ARPL Decline

    Products Bundles & Up-Selling Soften ARPL Decline ƒ Average revenues per access line declined by only 2.1% despite heavy promotions for product bundles ƒ Average revenues per access line includes revenues from line rental, voice, broadband and aonTV Average revenues per access line ƒ Product bundles

  7. Slide 7: Growth Driven by New Operations; Double Digit Subscriber Growth

    Growth Driven by New Operations; Double Digit Subscriber Growth in all Countries Revenues ƒ Subscriber base grows by 52.5% to (EUR million) 16.5 mn customers, double digit subscriber growth in all countries 10.1% 814.3 739.5 ƒ Organic subscriber growth, excluding Velcom of 21.3% 2Q 08 2Q 07 ƒ Revenu

  8. Slide 8: mobilkom austria Extends its Market Leadership

    mobilkom austria Extends its Market Leadership in a Challenging Environment Market Shares As of June 2008 42.5% ƒ Market share increases from 32.7% 39.6% to 42.5% 19.2% ƒ Distance over #2 competitor 5.6% widened 2Q 06 4Q 06 2Q 07 4Q 07 2Q 08 ƒ Mobile broadband subscriber mobilkom austria Hutchison T

  9. Slide 9: Strong Subscriber Base and Revenue Growth in Belarusian Velcom

    Strong Subscriber Base and Revenue Growth in Belarusian Velcom Revenues ƒ Subscriber base grows to 3.4 million subscribers at (EUR million) end of June 08 compared to 3.2 million sub- 71.1 scribers at end of March 08 ƒ Revenues of EUR 71.1 mn 2Q 08 ƒ EBITDA of EUR 35.0 mn with a margin of 49.2% EBIT

  10. Slide 10: Greenfield Operations Contribute to Larger Subscriber Base

    Greenfield Operations Contribute to Larger Subscriber Base Total Subscribers HY 08 Vip mobile in Serbia (in 000) +10.8%* 666.6 ƒ Subscriber base of 666,600 with +28.1%* 64,900 net adds in 2Q 08 209.2 ƒ Market share of 7.2% at the end of June 08 understated Serbia Macedonia *Compared to 1Q 08 Revenue

  11. Slide 11: Lower Contribution from Fixed Net Impact Net Income

    Lower Contribution from Fixed Net Impact Net Income (EUR million) 2Q 08 2Q 07 % change HY 08 HY 07 % change Revenues 1,276.2 1,208.0 5.6% 2,535.8 2,353.8 7.7% EBITDA* 469.1 466.1 0.6% 967.7 942.4 2.7% Operating income* 174.7 198.1 -11.8% 389.9 410.2 -4.9% Financial Result -51.2 -30.1 70.1% -100.1 -5

  12. Slide 12: Higher Ordinary Capital Expenditures, Lower Growth Capital Expenditures

    Higher Ordinary Capital Expenditures, Lower Growth Capital Expenditures (EUR million) 2Q 08 2Q 07 % change HY 08 HY 07 % change Fixed Net 64.4 64.5 -0.2% 132.5 123.9 6.9% Mobile Communication 126.3 106.0 19.2% 217.8 197.7 10.2% Ordinary capital expenditures 190.7 170.5 11.8% 350.3 321.6 8.9% Fixed N

  13. Slide 13: On Track to Reach 2.0x Net Debt/EBITDA Target

    On Track to Reach 2.0x Net Debt/EBITDA Target Around Year-End 2008 Net Debt ƒ Net debt/EBITDA at 2.3x compared to (EUR million) -0.1% 2.4x at the end of 2007 4,402.2 4,407.2 ƒ Stable net debt despite dividend payment of EUR 331.7 mn 2Q 08 FY 07 ƒ Share buybacks still suspended and to be resumed when

  14. Slide 14: Telekom Austria Group Reiterates Outlook for Full Year 2008

    Telekom Austria Group Reiterates Outlook for Full Year 2008 Including DPS Guidance of EUR 0.75 Group ƒ Revenue growth of approximately 5% ƒ EBITDA growth of approximately 3% ƒ Net income to decline by approximately 12% due to higher interest expenses ƒ Operating free cash flow growth of about 10% ƒ

  15. Slide 15: Regulatory Issues – Key Aspects

    Regulatory Issues – Key Aspects (1) Mobile termination rates: The Austrian administrative court rescinded the last two SMP-decisions because the National Regulatory Authority imposed an ex-ante obligation on mobile operators retroactively which is illegal in the court’s view. With this revocation th

  16. Slide 16: Regulatory Issues (3) / Development of Revenues

    Regulatory Issues – Key Aspects (3) International roaming charges: On July 15, 2008 EU-Commissioner Reding announced her plan to prepare a recommendation for the Parliament and the Council on the extension of the existing roaming regulation. The recommendation could call for: ƒ Extension of the roam

  17. Slide 17: Development of EBITDA / Fixed Net Access Lines

    Development of EBITDA EBITDA* (EUR million) 466.1 -32.4 469.1 35.0 1.6 2.6 -0.4 -3.7 7.9 -11.9 4.3 consolidation Eliminations Vip mobile Mobiltel Si.mobil Vip operator Fixed Net mobilkom change Vip net change change Corporate, EBITDA EBITDA change change 2Q 07 2Q 08 austria Others & change change Ve

  18. Slide 18: Fixed Net – Voice & Broadband Market Shares

    Fixed Net – Voice&Broadband Market Shares 70% 65% 60% 55% 50% 45% 40% 35% 30% 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 Local + National long distance traffic Fixed to mobile International Fixed Net broadband Results for the Second Quarter 2008 35 Fixed Net: Average Revenues per Access Line and Broadband Reside

  19. Slide 19: Fixed Net Minutes and Average Tariffs; Mobile Subscribers

    Fixed Net - Minutes and Average Tariffs (in million minutes) 2Q 08 2Q 07 % change National 673 746 -9.8% Fixed-to-mobile 186 188 -0.7% International 101 103 -1.7% Total voice minutes 960 1,037 -7.4% Internet dial-up 84 177 -52.4% Total Fixed Net minutes 1,045 1,214 -13.9% (Average tariffs in EUR) 2Q

  20. Slide 20: Operational Data and Mobile Data – mobilkom austria

    Operational Data – mobilkom austria MoU per Subscriber ARPU & Data ARPU (in EUR) 186.1 183.4 177.1 174.4 174.0 32.0 31.4 28.4 28.7 28.1 6.3 6.6 7.1 7.0 6.9 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 Blended ARPU Data ARPU Quarterly Churn SAC per Gross Add* (in EUR) 7.7% 79.5 6.8% 68

  21. Slide 21: ARPU & MoU per Subscriber; Headcount Development

    ARPU & MoU per Subscriber – Mobile Communication ARPU (in EUR) 32.0 28.1 23.3 23.6 15.6 14.9 10.3 9.9 6.9 n.a. mobilkom Mobiltel Velcom Vipnet Si.mobil austria 2Q 07 2Q 08 MoU per Subscriber 174.4 177.1 (in minutes) 165.8 135.4 125.1 86.2 92.1 93.0 70.3 n.a. mobilkom Mobiltel Velcom Vipnet Si.mobil

  22. Slide 22: Fixed Net – Revenue and Expense Breakdown

    Fixed Net - Revenue Breakdown (EUR million) 2Q 08 2Q 07 % change HY 08 HY 07 % change Switched voice base traffic 79.0 85.6 -7.7% 162.9 172.3 -5.5% Switched voice monthly & other voice revenues 117.0 120.8 -3.1% 233.7 242.2 -3.5% Payphones & VAS 10.0 11.6 -13.8% 21.0 22.7 -7.5% Wholesale data & IT-s

  23. Slide 23: Mobile Communication – Revenue and Expense Breakdown

    Mobile Communication - Revenue Breakdown (EUR million) 2Q 08 2Q 07 % change HY 08 HY 07 % change Traffic revenues 411.1 361.0 13.9% 791.2 697.9 13.4% Monthly rental 186.4 144.6 28.9% 369.1 283.0 30.4% Equipment 54.1 68.7 -21.3% 115.2 123.3 -6.6% Roaming 39.6 56.7 -30.2% 90.0 114.3 -21.3% Interconnec

  24. Slide 24: Revenues, EBITDA and Operating Income by Segment

    Revenues by Segment (EUR million) 2Q 08 2Q 07 % change HY 08 HY 07 % change Fixed Net revenues 521.9 533.4 -2.2% 1,043.8 1,044.2 0.0% Mobile Communication revenues 814.3 739.5 10.1% 1,610.8 1,433.6 12.4% Corporate, Other & Eliminations -60.0 -64.9 -7.6% -118.8 -124.0 -4.2% Operating revenues Telekom

  25. Slide 25: Capital Expenditures by Segment; Net Debt

    Capital Expenditures by Segment (EUR million) 2Q 08 2Q 07 % change HY 08 HY 07 % change Fixed Net tangible 52.2 59.8 -12.7% 100.8 108.5 -7.1% Mobile Communication tangible 100.2 110.4 -9.2% 173.8 183.4 -5.2% Tangible 152.4 170.2 -10.5% 274.6 291.9 -5.9% Fixed Net intangible 12.2 4.7 159.6% 31.7 15.4

  26. Slide 26: Debt Maturity Profile

    Debt Maturity Profile Ratings: (EUR million) ƒ S&P: BBB+ (stable outlook) ƒ Moody‘s: A3 (stable outlook) 1,328 1,095 1,028 Ratio: 704 ƒ Net Debt / EBITDA (last 12 months): 2.3x 212 224 2008 2009 2010 2011 2012 thereafter Selected long-term debt instruments: ƒ EUR 750 million 2003 – 2013 ƒ Undrawn co

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