Magyar Telekom Telecommunications Plc · BET:MTELEKOM
Magyar Telekom Telecommunications — Magyar Telekom — H1 2010 Earnings Presentation
26 slides from Magyar Telekom Telecommunications's earnings presentation, 2010
Slide 1: Magyar Telekom First Half 2010 results
Presentation Magyar Telekom First Half 2010 results Strong cash flow generation despite continued top line pressure; guidance revised
Slide 2: Overview – Magyar Telekom Group at a glance
Overview – Magyar Telekom Group at a glance International presence Integrated operations in Hungary, Macedonia and Montenegro leading telecommunications service provider in all three Ukraine countries leading SI/IT service provider in Hungary Moldova Hungary Slovenia Croatia Croatia Romania BiH
Slide 3: Change in organizational structure
Change in organizational structure New organizational structure – effective from July 1, 2010 CEO Finance Technology Human Strategy & Business Sales & Service Marketing Legal & R Resources B i Business S i Services C Corporate Development Affairs Rationale: improved effectiveness in responding to
Slide 4: Hungarian market – infrastructure based-competition
Hungarian market – infrastructure based-competition Wireline voice traffic trends Mobile subscriber trends 100% Penetration 119% 118% 118% 119% 119% 7% 7% 7% 7% 6% 100% 11% 14% 18% 80% 20% 23% 80% 59% 58% 57% 56% 55% 60% 60% 40% 83% 78% 75% 73% 71% 40% 20% 20% 41% 42% 43% 44% 45% 0% 0% Q2 2009 Q3 20
Slide 5: Strong positions in all segments of the Hungarian market
Strong positions in all segments of the Hungarian market TV market shares Mobile voice market shares* 100% 100% 14% 13% 13% 14% 12% 6% 6% 5% 5% 21% 22% 22% 22% 22% 80% 7% 80% 24% 24% 23% 23% 24% 60% 60% 34% 33% 34% 34% 33% 40% 33% 32% 31% 31% 33% 40% 20% 20% 45% 45% 44% 44% 45% 22% 24% 26% 27% 28% 0
Slide 6: 3Play as growth engine & retention tool in the residential segment
3Play as growth engine & retention tool in the residential segment Fi d voice Fixed i access Strong focus on triple play on all networks (fixed Subscribers line, cable and mobile) -9% 2,000,000 +22% 1 800 000 1,800,000 new packages include more favorable VoIP solutions +17% 1,600,000 triple play
Slide 7: Regulatory snapshot
Regulatory snapshot Regulation in line with EU recommendations in all three countries Hungary: fully in line with the EU Regulatory Framework Macedonia: liberalization of fixed line market in progress, regulated mobile termination rates Montenegro: new telecommunication law adopted in 2008 – f
Slide 8: Magyar Telekom’s major challenges
Magyar Telekom’s major challenges Change in revenue mix 2009 CAPEX breakdown 100% SI/IT: 1% New revenue / >10% SI/IT 11% 80% sources New 20% < 20% revenue sources 60% > 30% Voice 31% 40% revenues > 70% Voice 38% revenues 20% < 50% 0% International Maintenance and BAU 2005 2009 2012 New revenue sourc
Slide 9: Changing trends require continued efficiency improvements
Changing trends require continued efficiency improvements U d l i TWM expense iin H Underlying Hungary HUF billion 135 121 115 114 106 90 45 0 2008 2009 2010 2011 Employee-related Other workforce Headcount reduction in 2010 Headcount reduction in 2011 400+ employee redundancies at the parent compa
Slide 10: Economic environment continues to affect Magyar Telekom
Economic environment continues to affect Magyar Telekom G Group revenues and d Hungarian H i GDP Economic indicators influence f telecommunication 2% spending in different ways 0% in 2009 all components of economic activity suffered a meaningful decline in Hungary -2% telecommunication spending
Slide 11: Dividend policy
Dividend policy Historical dividend payments Usage of free cash flow Net debt ratio* DPS (HUF) % of the generated free cash 50% 73 74 74 74 80 70 70 125% 6% 36% 38% 40% 100% 1% 33.2% Target 60 16% 31.7% 31.0% 29.7% 30.8% 17% 30% 13% 1% 1% 75% 40 14% 20% 50% 91% 74% 78% 79% 20 59% 10% 25% 0% 0 0% 200
Slide 12: Public targets for 2010 revised
Public targets for 2010 revised revised 2010 public targets 2010 H1 results Revenue 66-8% 8% decline (prev (prev. 5-7% 5 7% ) 7 1% decline 7.1% decreasing consumer spending continued recessionary impacts rationalization in the business sector intense competition stronger forint compared to
Slide 13: H1 2010 results – Business Unit analysis
H1 2010 results – Business Unit analysis Revenue development Underlying EBITDA development HUF million HUF million 330,000 140,000 320,504 135,701 320,000 133,000 -2,098 -5,485 310,000 -2,500 -5,260 162 -1,745 -624 -3,196 -3,612 126,000 -1,693 300,000 297,834 122 333 122,333 -5,944 -4,042 290,000 11
Slide 14: Consumer Services Business Unit (CBU) - Financials
Consumer Services Business Unit (CBU) - Financials Fi d liline revenues Fixed M bil revenues Mobile HUF million 70,000 66,959 -5% 63,528 HUF million 92,536 -2% 90,482 100,000 +49% +14% 56,000 , +15% 80 000 80,000 +6% 6% 42,000 -1% 60,000 28,000 40,000 -5% -14% 14 000 14,000 20,000 0 0 H1 2009 H1 201
Slide 15: CBU – mobile operations
CBU – mobile operations ARPU MOU Mobile internet development HUF min leading market position with 51% market share 4,000 160 number of subscribers exceeded 500,000 at the 3 090 3,090 3 144 3,144 122 134 3,000 +2% 120 +10% end of H1 2010 3G/HSDPA network covering ~75% of population 2,000 80 1,0
Slide 16: CBU KPIs
CBU KPIs Fixed Fixed & mobile broadband Voice ARPA Broadband ARPU Customer growth Subscribers +28% HUF HUF 1,000,000 4,500 6,000 3,615 3,433 4,570 4,040 750,000 +78% -5% -12% 3,000 4,000 +15% 500,000 1 500 1,500 2 000 2,000 250,000 +6% 0 0 0 H1 2009 H1 2010 H1 2009 H1 2010 June 2009 June 2010 ADSL C
Slide 17: Business Services Business Unit (BBU) - Financials
Business Services Business Unit (BBU) - Financials Revenues Falling voice and data revenues HUF million -6% 79,271 rationalization and cost cutting initiatives at our key corporate 84,531 90,000 clients resulting in reduction in telecom spending -3% strong pressure on clients to renegotiate cont
Slide 18: BBU KPIs
BBU KPIs Fixed voice access DSL connections Subscribers Subscribers 390,540 -13% 340,636 211,714 -18% 172,885 420,000 240,000 180,000 280,000 -12% -21% 120,000 140 000 140,000 -29% 60,000 -14% -6% 0 0 June 2009 June 2010 June 2009 June 2010 B siness lines Business Managed leased lines ISDN channels
Slide 19: Macedonia - Financials
Macedonia - Financials R Revenues R lt negatively Results ti l iimpacted t d bby FX trend t d HUF million 42,300 -10% 37,977 HUF strengthened on average by 6.4% to the Macedonian 45,000 Denar in H1 2010 -16% excluding FX impact revenues were down by 4% and EBITDA 30,000 was down by 14% -6% 15,00
Slide 20: Montenegro - Financials
Montenegro - Financials Revenues Results negatively impacted by FX trend HUF million HUF strengthened on average by 6.4% to the Euro in H1 2010 16,870 -10% 15,212 18,000 excluding FX impact, revenues were down by 4% but -8% underlying EBITDA increased by 3% 12,000 HUF 0.9bn 0 9b special i l in
Slide 21: International KPIs Macedonia Montenegro
International KPIs Macedonia Fixed voice access ADSL/IPTV customer growth Mobile subscribers Subscribers Subscribers Penetration 19.5% Penetration 17.8% 67% 81% 111% 116% 119% 160,000 , S b ib Subscribers 21 071 21,071 2,500,000 450,000 +287% 12% 16% 17% 120,000 5,449 2,000,000 8% 360,000 28% 29% -1
Slide 22: Magyar Telekom - Consolidated Income Statement
Magyar Telekom - Consolidated Income Statement HUF million Jan-June 2009 Jan-June 2010 Change Fixed line revenues 139,712 123,969 -11.3% Mobile revenues 158,872 152,445 -4.0% System Integration/Information Technology revenues 21,920 21,420 -2.3% Revenues 320,504 297,834 -7.1% Total expenses directly
Slide 23: Magyar Telekom - Consolidated Balance Sheet
Magyar Telekom - Consolidated Balance Sheet HUF million 31 Dec 2009 30 June 2010 Change Current assets 249,366 234,736 -5.9% Cash and cash equivalents 34,270 33,679 -1.7% Other current financial assets 87,611 75,871 -13.4% Non current assets 917,011 908,988 -0.9% Property, plant and equipment - net
Slide 24: Magyar Telekom - Consolidated Cashflow Statement
Magyar Telekom - Consolidated Cashflow Statement HUF million Jan-June 2009 Jan-June 2010 Change Net cash generated from operating activities 89,008 92,353 3.8% Investments in tangible and intangible assets (49,194) (36,176) -26.5% Adjustments to cash purchases (10,226) (3,797) -62.9% Purchase of sub
Slide 25: Abbreviations
Abbreviations: 3G: third generation, ARPU: average revenue per user, BB: broadband, CBC: call-by-call, CPS: carrier pre-selection, HQ: headquarters, HSDPA: high-speed downlink packet access, IC: interconnection, IP: internet protocol, IT: information technology, LTO: local telecommunication operator
Slide 26: 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 In addition to figures prepared in accordance with IFRS, Magyar Telekom also presents non-GAAP financial performance measures, including, among o