Magyar Telekom Telecommunications Plc · BET:MTELEKOM
Magyar Telekom Telecommunications — Magyar Telekom — Q3 2021 Earnings Presentation
25 slides from Magyar Telekom Telecommunications's earnings presentation, December 2021
Slide 1: Magyar Telekom Group Investor Presentation
MAGYAR TELEKOM GROUP INVESTOR PRESENTATION December 2021
Slide 2: Disclaimer
DISCLAIMER This investor presentation contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore should n
Slide 3: Strategy and Market Position
STRATEGY AND MARKET POSITION
Slide 4: Overview – Magyar Telekom at a Glance
OVERVIEW – MAGYAR TELEKOM AT A GLANCE Overview Pillars of transformation ▪ Integrated operations in Hungary and North Macedonia GROW ▪ Leading telecommunications service provider in both countries Lead In Customer Lead in Lead in Business ▪ Leading SI/IT service provider in Hungary Experience Techno
Slide 5: Continued Network Monetization
CONTINUED NETWORK MONETIZATION Network Customers Resilience ▪ Fixed network rollout: coverage expanded to ▪ Further improvement in customer satisfaction ▪ BBB+ rating with stable outlook affirmed 2.9m gigabit capable access points as of by Scope Ratings ▪ Sharply rising mobile data usage trend conti
Slide 6: Hungarian Telco Market Positions
HUNGARIAN TELCO MARKET POSITIONS Mobile voice market1 Mobile data market1 SIMs (mn) SIMs (mn) Others Digi 9.7 9.6 9.7 9.8 9.8 10 Vodafone 8 7.0 7.1 Others 0.5% 0.7% 0.7% 1.3% 1.9% 6.6 25.8% 25.6% 26.4% 26.7% 26.9% Telenor 5.9 2.3% 2.5% 0.2% Vodafone 8 1.1% 6 5.4 1.1% 26.8% 27.6% 28.4% Magyar Telekom
Slide 7: IT Market in Hungary: 2020-2025
IT MARKET IN HUNGARY: 2020-2025 Total B2B IT market (HW&SW and IT services)1 IT Services market shares (by revenue)3 HUF bn +5.8% SYSTEM INTEGRATION IT INFRASTR. SI & 987 1,000 +3.8% 937 Pack- age Custo m app. IT Apps. OS & IT Infra. OS Infra. proj. IT 890 900 834 60 appl. 60 dev. 60 SI 60 Outsourc.
Slide 8: Hungarian Economic Environment
HUNGARIAN ECONOMIC ENVIRONMENT Growth structure & Domestic demand 8% 6% 5.1% 4.9% ▪ Magyar Telekom leveraged positive trends of domestic demand 4.0% 4% 2.0% ▪ Investment levels show volatility due to EU fund cycles 2% 0% ▪ Q1-3 2021 GDP showed a 6.8% yer-on-year growth, mostly on the -2% back of str
Slide 9: 2021 Guidance and 2021-2024 Outlook
2021 GUIDANCE AND 2021-2024 OUTLOOK
Slide 10: 2021 Public Guidance
2021 PUBLIC GUIDANCE 2020 results 2021 guidance (vs 2020) Grow REVENUE HUF 673.0bn around 3% Grow EBITDA (AL) HUF 202.6bn at least 3% CAPEX AL1 HUF 106.0bn Broadly stable Broadly stable / slight FCF1 HUF 69.5bn increase 1 EXCLUDING SPECTRUM LICENSE FEES (1) Excluding spectrum license fees 10
Slide 11: 2021-24 Outlook
2021-24 OUTLOOK 2020 results 2021-24 outlook (vs 2020)2 Increase potential REVENUE HUF 673.0bn of ~1% with further upside Increase potential EBITDA (AL) HUF 202.6bn of ~1% with further upside Increase potential FCF1 HUF 69.5bn of 1%-2% Total shareholder 25 HUF per share To grow in line with FCF remu
Slide 12: Q3 2021 Results
Q3 2021 RESULTS
Slide 13: Strong Revenue and EBITDA AL Performance in 9M 2021
STRONG REVENUE AND EBITDA AL PERFORMANCE IN 9M 2021 9M 2021 results 2021 public guidance (YoY change) (vs 2020) HUF 506.5 bn REVENUE +4.6% Grow by around 3% HUF 157.7 bn EBITDA AL +8.0% Grow by at least 3% HUF 71.4 bn CAPEX AL1 -4.8% Broadly stable HUF 34.4 bn FCF 1 +4.7% Broadly stable / slight inc
Slide 14: ARPU Growth in Hungary Driven by Customer Composition and Data Usage
ARPU GROWTH IN HUNGARY DRIVEN BY FAVORABLE CUSTOMER COMPOSITION TRENDS AND STRONG DATA USAGE Mobile SIMs1 Mobile ARPU1 ‘000 HUF +2.9% M2M Q3 2020 5,425 5,582 Prepaid 3,634 Q3 2021 Blended +3.9% 7.8% 10.1% Postpaid 3,777 29.0% 26.3% 5,140 Postpaid +4.2% 5,356 63.1% 63.6% 1,239 Prepaid +0.7% 1,248 Q3
Slide 15: Fixed Line Performance Supported by Customer Base Expansion
FIXED LINE PERFORMANCE SUPPORTED BY CUSTOMER BASE EXPANSION AND POSITIVE BB AND TV ARPU TRENDS IN HUNGARY Fixed line multiplay residential subscribers Fixed Voice, BB1 and TV ARPU ‘000 HUF +3.3% Q3 2020 2,109 Q3 2021 1,466 1,514 Fixed voice -6.4% 1,974 20% 18% 1Play 2Play 3,456 35% 37% Fixed BB +5.8
Slide 16: Revenue Growth in Q3 and 9M 2021
REVENUE GROWTH IN Q3 AND 9M 2021 Revenue, Q3 2021 vs Q3 2020 Revenue, 9M 2021 vs 9M 2020 HUF bn HUF bn +4.6% 2.2 506.5 2.5 1.2 4.3 +6.2% 12.2 1.5 178.1 3.2 2.0 5.1 -1.3 484.2 167.7 Q3 2020 Mobile Fixed Equipment SI/IT Other Q3 2021 9M 2020 Mobile Fixed Equipment SI/IT Other 9M 2021 service service s
Slide 17: EBITDA AL Expansion Driven by Gross Profit Growth
EBITDA AL EXPANSION DRIVEN BY GROSS PROFIT GROWTH EBITDA AL, Q3 2021 vs Q3 2020 EBITDA AL, 9M 2021 vs 9M 2020 HUF bn HUF bn 8.0% 13.7 0.3 157.7 -1.4 -0.9 9.7% 6.4 1.0 60.3 -0.3 -1.8 146.0 54.9 Q3 2020 Gross profit Employee Other op. IFRS 16 Q3 2021 9M 2020 Gross profit Employee Other op. IFRS 16 9M
Slide 18: Total Profit Impacted by Net Financial Result
TOTAL PROFIT IMPACTED BY NET FINANCIAL RESULT Net income, Q3 2021 vs Q3 2020 Net income, 9M 2021 vs 9M 2020 HUF bn HUF bn 46.2% 6.5 -3.9% 12.6 40.3 5.6 -1.1 -0.9 -1.5 -4.3 18.6 0.0 27.6 17.9 -4.3 -0.5 Q3 2020 EBITDA D&A Net financial Income tax Non-contr. Q3 2021 9M 2020 EBITDA D&A Net financial Inc
Slide 19: Network Development Continues
NETWORK DEVELOPMENT CONTINUES CAPEX AL, 9M 2021 vs 9M 2020 Gigabit capable fixed network development HUF bn # of access points (th) 4 500 4 238 4 259 4 314 4 333 4 356 83.1 154.5 4 164 4 194 4 209 4 224 4 000 -4.8% 33.7% 3 500 38.9% 36.5% 44.9% 40.7% 75.0 2.0 71.4 51.6% 50.3% 48.1% 3 000 70.3% -3.9
Slide 20: Broadly Stable Year-to-Date FCF Generation
BROADLY STABLE YEAR-TO-DATE FCF GENERATION DESPITE DIFFERENT ANNUAL DYNAMICS 9M 2020 HUF bn 163.3 7.2 29.2 126.8 75.0 19.0 32.9 -54.2 -21.4 EBITDA Working capital Taxes, financial Operating CF CAPEX AL Cash CAPEX, lease and FCF excl. Spectrum licenses FCF charges and others excl. spectrum other adju
Slide 21: Back-up
BACK-UP ? For further questions please contact the IR department: Diana Várkonyi Rita Walfisch Capital Market Relations Hub Lead Investor Relations Expert Phone: +36 1 481-7676 Phone: +36 1 457-6084 e-mail: varkonyi.diana.annamaria@telekom.hu e-mail: walfisch.rita@telekom.hu
Slide 22: North Macedonia: Q3 2021 Financial Highlights
NORTH MACEDONIA: Q3 2021 FINANCIAL HIGHLIGHTS Revenues, Q3 2021 vs Q3 2020 EBITDA AL, Q3 2021 vs Q3 2020 HUF mn HUF mn +8.7% 260 17,267 224 903 +15.2% 196 7,689 835 -17 15,880 6,675 Q3 2020 Mobile Fixed SI/IT Q3 2021 Q3 2020 Gross profit Operating expenses IFRS 16 impact Q3 2021 22
Slide 23: MTelekom Sustainability Framework
MTELEKOM SUSTAINABILITY FRAMEWORK Our approach towards sustainability rest on 4 pillars Current sustainability strategy cycle covered the 2016-2020 period ▪ Climate protection: Climate ▪ carbon neutral operation for the 6th year in a row (Scope 1, 2) Diversity protection ▪ approved 1.5°C science-bas
Slide 24: Company's ESG Efforts Continue to Gain External Recognition
COMPANY’S ESG EFFORTS CONTINUE TO GAIN EXTERNAL RECOGNITION Ratings Index inclusion ▪ Outstanding MSCI ESG rating of AA Magyar Telekom remains a constituent of the maintained for the 3rd year in a row FTSE4Good Index Series following a recent index review with a 99 percentile rank in telecommunicati
Slide 25: Hungarian Mobile Spectrum
HUNGARIAN MOBILE SPECTRUM Current spectrum allocation (MHz) 700 10 10 5 25 800 10 10 10 30 Magyart Telekom to hold 900 2 10 1 10 10 2 35 10MHz from April 2022 Magyart Telekom to hold 1800 15 5 10 15 3 15 12 75 30MHz from April 2022 2100 15 15 15 5 10 60 2600 30 20 20 70 1500 40 2600 5 25 15 5 50 350