Magyar Telekom Telecommunications Plc · BET:MTELEKOM

Magyar Telekom Telecommunications — Magyar Telekom — Q1 2013 Earnings Presentation

25 slides from Magyar Telekom Telecommunications's earnings presentation, June 2013

  1. Slide 1: Investor Presentation Magyar Telekom Group – June 2013

    INVESTOR PRESENTATION MAGYAR TELEKOM GROUP – JUNE 2013

  2. Slide 2: Strategy, Outlook and Guidance

    STRATEGY, OUTLOOK AND GUIDANCE

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

    OVERVIEW – MAGYAR TELEKOM GROUP AT A GLANCE International presence Overview Czech Republic Slovakia Austria Leading telecommunications operator in Moldova Hungary Slovenia Croatia Hungary, Macedonia and Montenegro Croatia Romania BiH Serbia Serbia Bulgaria Montenegro Kosovo Bulgaria Albania Macedoni

  4. Slide 4: Hungarian Economic Environment

    HUNGARIAN ECONOMIC ENVIRONMENT Growth structure and wages Contribution to GDP growth (%) Economic challenges 8 0.2% 6 Economic downturn coupled with a high rate 4 of inflation  GDP performance dependent on export 2 0 dynamics -2  continued decline in household spending -4 due to the weakening HUF

  5. 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 3,500,000 3,000,000 25.9% 12,000,000 25.9% 23.0% 22.8% 2,500,000 22.7% 9,000,000 Vodafone 2,000,000 28.5

  6. Slide 6: Hungarian ICT Revenue Trends

    HUNGARIAN ICT REVENUE TRENDS Hungarian ICT market development (HUF bn) 1.2% 1,189 1,211 1,146 1,167 1,125 1,123 1,131 ICT market IT Hungarian ICT market is expected to expand moderately  CAGR of ca. 1% expected Fixed data between 2012 and 2018 TV  growth to be mainly driven by Mobile BB mobile bro

  7. Slide 7: Magyar Telekom's Revenue Mix

    MAGYAR TELEKOM’S REVENUE MIX Transformation of Magyar Telekom’s Hungarian revenue mix 100% Revenue turnaround New Significant revenue potential from non-core 80% New revenue revenue activities sources New sources ca.30% ca.45% revenue  revenues from new services expected 60% sources ca.60% to surpa

  8. Slide 8: Opex and Capex Developments

    OPEX AND CAPEX DEVELOPMENTS Cost structure Capex structure HUF bn HUF bn 15% 14% 15% Capex/Sales 250 -3% 100 92 92 213 84 204 203 200 22% 75 33% 32% 44% 45% 46% 150 30% 50 33% 100 36% 11% 25 9% 56% 55% 54% 10% 50 37% 25% 22% 0 0 2010 2011 2012 2010 2011 2012*** Employee-related expenses Other opex w

  9. Slide 9: Free Cash Flow and Dividends

    FREE CASH FLOW AND DIVIDENDS Free cash flow* generation Dividend payment HUF bn Net debt ratio** DPS (HUF) 120 50% 80 26 70 100 40% 28 32.7% 34.1% 34.3% 60 14 30.8% Target 80 33 14 30% 50 12 60 40 14 74 20% 30 40 78 50 50 50 69 65 20 48 10% 20 10 0 0% 0 2009 2010 2011 2012 2009 2010 2011 2012 Specia

  10. Slide 10: Public Targets for 2013 and Q1 Results

    PUBLIC TARGETS FOR 2013 AND Q1 RESULTS 2013 targets Q1 2013 results approximately flat* +6.8% Revenue s results  pressure on real disposable income to lead to a  strong contribution from energy services due *raised from 0-3% decline further decline in household consumption to heating season  spen

  11. Slide 11: Q1 2013 Group Results – Revenues and EBITDA

    Q1 2013 GROUP RESULTS – REVENUES AND EBITDA Group revenues Group EBITDA HUF bn HUF bn 160 60 9.4 0.3 156.6 51.6 6.8 155 50 6.5 150 1.4 2.1 39.0 146.6 3.8 2.4 40 1.7 145 2.8 2.7 0.9 1.0 30 140 20 135 5 10 0 0 Q1 Mobile Fixed Fixed M. non- Mobile Fixed SI/IT Energy Other Q1 Q1 2012 Taxes* Direct Emplo

  12. Slide 12: Q1 2013 Results

    Q1 2013 RESULTS

  13. Slide 13: Telekom Hungary – Financial Performance

    TELEKOM HUNGARY – FINANCIAL PERFORMANCE Telekom Hungary revenues +12% HUF million 120,000 116,574 104,510 15,337 Telekom Hungary 5,957 90,000 Fixed line revenues up by 2% 56,659 55,023  higher revenues from equipment sales 60,000 and TV services compensating for voice revenue erosion 30,000 Energy

  14. Slide 14: Hungary – Fixed Voice Market

    HUNGARY – FIXED VOICE MARKET Telekom Hungary fixed voice subscribers Subscribers 2,000,000 -3% 1,585,092 1,535,271 1,500,000 Market trends 1,000,000  significant reduction in fixed voice churn due to the retention benefit of: VoCa 500,000 • Hoppá package VoIP PSTN • 2Play/3Play offers 0 March 2012

  15. Slide 15: Hungary – Energy Retail

    HUNGARY – ENERGY RETAIL Gas and electricity points of delivery (POD) PODs 200,000 Gas Electricity 168,147 Market trends 160,000 147,845 126,017  soft launch in 2010, nationwide from April 120,000 2012 87,819 80,000  customers receive discounts of 3-8% on 61,516 their energy bill depending on the n

  16. Slide 16: Hungary – Fixed Broadband and TV Market

    HUNGARY -- FIXED BROADBAND AND TV MARKET T-Home fixed broadband subscriber breakdown Subscribers +3% 1,000,000 Market trends 858,791 884,043 4.1% 5.1%  broadband market growth driven by cable and 750,000 25.8% 28.8% fiber, while ADSL is slightly decreasing  internet service portfolio restructured

  17. Slide 17: Hungary – Mobile Market

    HUNGARY – MOBILE MARKET T-Mobile smartphone penetration % of total handsets Market trends 40 % 34.4 % 31.3 %  improving customer mix: y-o-y increase in 30 % postpaid ratio to 47% from 46%  smartphone sales reached 68% 20 % 18.4 %  broadband subscription attach rate at ca. 83% 10 %  full LTE cove

  18. Slide 18: T-Systems Hungary – Financial Performance

    T-SYSTEMS HUNGARY – FINANCIAL PERFORMANCE Revenues HUF million +1% T-Systems Hungary 30,000 27,833 28,083 Falling voice and data revenues 20,000 47.5% 56.2%  lower usage on fixed voice and data networks  continued pressure on tariff levels 10,000 28.6% 23.3% SI/IT Mobile 19% increase in SI/IT reve

  19. Slide 19: Macedonia – Financial Performance

    MACEDONIA – FINANCIAL PERFORMANCE Revenues HUF million Macedonia 20,000 -9% Mobile revenues under pressure 16,329 15,000 10.9% 14,843  strong price competition 14.2%  MOU up due to increasing volume of 44.9% 10,000 43.1% bundled minutes Mobile other  #1 position maintained with 48% market 18.6% M

  20. Slide 20: Montenegro – Financial Performance

    MONTENEGRO – FINANCIAL PERFORMANCE Revenues HUF million Montenegro 10,000 -6% Competitive mobile market 7,870 8,000 7,415  unfavorable economic environment and SIM 10.8% 15.0% based tax put pressure on retail voice 6,000 32.2% revenues 26.4% 4,000  lower wholesale revenues driven by 43% cut Mobile

  21. Slide 21: Financials

    FINANCIALS

  22. Slide 22: Magyar Telekom – Consolidated Income Statement

    MAGYAR TELEKOM – CONSOLIDATED INCOME STATEMENT HUF million 1Q 2012 1Q 2013 Change Mobile revenues 73 586 73 213 -0.5% Fixed line revenues 55 449 54 047 -2.5% System Integration/Information Technology revenues 11 656 14 012 20.2% Revenue from Energy Services 5 957 15 337 157.5% Revenues 146 648 156 6

  23. Slide 23: Magyar Telekom – Consolidated Balance Sheet

    MAGYAR TELEKOM - CONSOLIDATED BALANCE SHEET HUF million Mar 31, 2012 Mar 31, 2013 Change Current assets 223 028 231 042 3.6% Cash and cash equivalents 41 364 34 799 -15.9% Other current financial assets 38 259 42 560 11.2% Non current assets 863 704 845 670 -2.1% Property, plant and equipment - net

  24. Slide 24: Magyar Telekom – Consolidated Cashflow Statement

    MAGYAR TELEKOM - CONSOLIDATED CASHFLOW STATEMENT HUF million Mar 31, 2012 Mar 31, 2013 Change Net cash generated from operating activities 22 255 13 003 -41.6% Investments in tangible and intangible assets (23 841) (16 712) -29.9% Adjustments to cash purchases (13 974) (3 875) -72.3% Purchase of sub

  25. 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: headquart

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