25 slides from Magyar Telekom Telecommunications's earnings presentation, December 2012
Slide 1: Investor presentation Magyar Telekom Group – December 2012
Investor presentation M Magyar Telekom T l k Group G – December D b 2012 Significant achievements in challenging environment, on track to meet full yyear revenue and EBITDA gguidance 1
Slide 2: Strategy, Outlook and Guidance
Strategy, Outlook and Guidance 2
Slide 3: Overview – Magyar Telekom Group at a glance
Overview – Magyar Telekom Group at a glance International presence Overview Leading telecommunications operator in Hungary, Czech Republic Macedonia and Montenegro Slovakia Austria Moldova Hungary Slovenia Croatia Croatia Romania BiH Serbia Majority owned by Deutsche Telekom (59.2%) S bi Serbia Mont
Slide 4: Hungarian economic environment
Hungarian economic environment Growth structure and wages Contribution to GDP growth (%) Economic challenges 8 -1.5% 0.7% 6 Economic downturn coupled with high rate of 4 i fl i inflation 2 GDP performance is dependent on 0 export dynamics -2 consumption is under pressure due to declining househo
Slide 5: Market positions on the Hungarian telecommunication market
Market positions on the Hungarian telecommunication market Mobile voice market shares (based on total SIMs) Mobile broadband market shares (based on total SIMs) Subscribers Subscribers 15,000,000 3,000,000 12 000 000 12,000,000 2,500,000 26.0% 22.4% 23.0% 22.7% 2,000,000 23.8% 9,000,000 Vodafone 27.
Slide 6: Hungarian ICT revenue trends
Hungarian ICT revenue trends Hungarian ICT market development (HUF bn) ICT market 1.7% 1,233 1,256 1,279 Hungarian ICT market is expected to 1,210 1,159 1,171 1,186 expand wider economic recovery, when IT it comes,, is expected p to increase total market size Fixed data CAGR of ca. 2% expected T
Slide 7: Magyar Telekom’s revenue mix
Magyar Telekom’s revenue mix T Transformation f ti off Magyar M Telekom’s T l k ’ H Hungarian i revenue mix i 100% Revenue turnaround 80% New N New Significant Si ifi t revenue potential t ti l ffrom non-core revenue sources revenue New activities sources ca.30% revenue 60% ca.40% sources demand f
Slide 8: Opex and Capex developments
Opex and Capex developments C t structure Cost t t C Capex structure t t HUF bn HUF bn 15% 14% 15% Capex/Sales 250 -6% 231 100 92 90 213 84 204 200 20% 75 33% 44% 32% 44% 45% 150 31% 50 33% 100 36% 13% 56% 25 9% 56% 55% 10% 50 37% 25% 22% 0 0 2009 2010 2011 2010 2011 2012F Employee-related expenses
Slide 9: Free cash flow and dividends
Free cash flow and dividends Free cash flow* flow generation Dividend payment HUF bn Net debt ratio** DPS (HUF) 120 50 % 74 80 26 70 100 17 40 % 36.4 % 28 34.1 % 60 14 32.7 % 50 Target 80 14 30 % 50 12 50 60 40 20 % 30 40 84 78 69 65 20 10 % 20 10 0 0% 0 2008 2009 2010 2011 2010 2011 Sep 2012 Specia
Slide 10: 2012 targets and 9M 2012 results
2012 targets and 9M 2012 results 2012 targets 9M 2012 results Flat to -2% +0.9% R Revenue s results l changing revenue mix and energy services are facilitating revenue turnaround increase in recessionary pressures and declines in h household h ld consumption ti 2011 figure: HUF 597.6 bn Underl
Slide 11: 9M 2012 Group results – Revenues and EBITDA
9M 2012 Group results – Revenues and EBITDA Groupp revenues Groupp EBITDA HUF bn HUF bn Underlying performance 450 170 1.9 442.3 13.8 10.3 12.6 440 438 2 438.2 68 6.8 160 20 2.0 157 8 157.8 1.6 2.5 3.7 8.9 149.4 430 2.1 150 2.0 3.0 2.4 1.8 420 140 410 130 400 120 9M Mobile Fixed Fixed M. non non- Mo
Slide 12: Q3 2012 Results
Q3 2012 Results 12
Slide 13: Telekom Hungary – Financial performance
Telekom Hungary – Financial performance T l k H Telekom Hungary revenues HUF million +2% 120,000 106,258 107,946 573 5,225 Telekom Hungary 100,000 80,000 fixed line revenues down by 5% 60,737 59,902 60,000 higher revenues from TV services partly compensating for voice revenue erosion 40,000 Energy
Slide 14: Hungary – Fixed voice market
Hungary – Fixed voice market T l k H Telekom Hungary fifixedd voice i subscribers b ib Subscribers 2,000,000 -4% Market trends 1,617,679 1 553 901 1,553,901 1,500,000 significant reduction in fixed voice churn thanks to the retention benefitst of: 1,000,000 - Hoppá package: flat fee package; 37% o
Slide 15: Hungary – Energy retail
Hungary – Energy retail Gas and electricity points of delivery (POD) PODs 140,000 126,017 Market trends 120,000 Gas 100,000 87,819 Electricity soft launch in 2010, nationwide from April 80,000 2012 61,516 60,000 customers receive discounts of 3-8% on 40 000 40,000 35 262 35,262 their energy bill
Slide 16: Hungary -- Fixed broadband and TV market
Hungary -- Fixed broadband and TV market T-Home fixed broadband subscriber breakdown Subscribers 1,000,000 +4% Market trends 835,054 867,300 867 300 3.2% 4.5% 800,000 broadband market growth driven by cable and 24.2% 27.4% fiber, while ADSL growth has slowed down 600,000 restructured service por
Slide 17: Hungary – Mobile market
Hungary – Mobile market T-Mobile smartphone penetration % of total handsets Market trends 24.7 % 25 % improving customer mix: postpaid ratio 20 % increased from 45% to 47% y-o-y 15.6 % 15 % smartphone sales in the postpaid segment reached 85% in Q3 2012 ((vs. 71% a year y ago) g ) 10 % 7.9 % b
Slide 18: T-Systems Hungary – Financial performance
T-Systems Hungary – Financial performance Revenues HUF million -14% T-Systems Hungary 35,000 30,776 30,000 Falling voice and data revenues 26,367 25,000 lower usage on fixed voice and data 48.6% 20,000 48.8% networks 15 000 15,000 continued pressure on tariff levels 27.2% 10,000 28.9% SI/IT Decl
Slide 19: Macedonia – Financial performance
Macedonia – Financial performance Revenues HUF million Macedonia -9% 20,000 18,221 Mobile revenues under pressure 11 9% 11.9% 16,570 6,5 0 13.0% strong price competition 15,000 42.8% MOU up due to increasing volume of 10,000 41.9% bundled minutes M bil other Mobile th #1 position maintained wi
Slide 20: Montenegro – Financial performance
Montenegro – Financial performance Revenues HUF million 0% Montenegro 10,000 9,109 9,075 Competitive mobile market 8,000 9 3% 9.3% 11.9% weaker k summer season put pressure on retailil revenues 40.6% 35.3% 6,000 lower wholesale revenues driven by cut in interconnection tariffs in 2011 4 000 4,00
Slide 21: Financials
Financials 21
Slide 22: Magyar Telekom – Consolidated Income Statement
Magyar Telekom – Consolidated Income Statement HUF million 3Q 2011 3Q 2012 Change Mobile revenues 79,922 78,890 -1.3% Fixed line revenues 58,594 54,793 -6.5% System Integration/Information Technology revenues 13,031 11,237 -13.8% Revenue from Energy Services 573 5,225 Revenues 152,120 150,145 -1.3%
Slide 23: Magyar Telekom - Consolidated Balance Sheet
Magyar Telekom - Consolidated Balance Sheet HUF million Dec 31, 2011 Sep 30, 2012 Change Currentt assets C t 220,396 220 396 179,666 179 666 -18.5% 18 5% Cash and cash equivalents 14,451 13,867 -4.0% Other current financial assets 65,286 40,038 -38.7% Non current assets 877,632 845,175 -3.7% Propert
Slide 24: Magyar Telekom - Consolidated Cashflow Statement
Magyar Telekom - Consolidated Cashflow Statement HUF million Sep 30, 2011 Sep 30, 2012 Change Net cash generated from operating activities 134,233 105,441 -21.4% Investments in tangible and intangible assets (43,875) (70,891) 61.6% Adjustments j to cash ppurchases ((6,705) , ) ((1,658) , ) -75.3% Pu
Slide 25: For further questions please contact the IR department
For further questions please contact the IR department: Investor Relations Phone: +36 1 458-0424 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, CUG: closed user group, HQ: headquarte