Telekom Austria Ag · VIE:TKA
Telekom Austria — A1 Telekom Austria Group — Q2 2022 Earnings Presentation
42 slides from Telekom Austria's earnings presentation, 2022
Slide 1: Roadshow Presentation
Roadshow Presentation Results for the first half and the second quarter 2022
Slide 2: Cautionary statement
Cautionary statement 'This presentation contains forward-looking statements. These forward-looking statements are usually accompanied by words such as 'believe', 'intend', 'anticipate', 'plan', 'expect' and similar expressions. Actual events may differ materially from those anticipated in these forw
Slide 3: A1 Telekom Austria Group key facts
Key Facts A1 Telekom Austria Group key facts Revenues by segment(a) 4.75 BN Bulgaria 11.5% 56.3% Croatia Austria 9.5% Revenues as of year-end 2021 8.8% Belarus 4.4% 1.71 BN Slovenia North Macedonia 6.6% 2.8% Serbia EBITDA by segment(a) EBITDA as of year-end 2021 12.4% Bulgaria 26 MN Austria 56.5% 8.
Slide 4: The leading regional communications player providing convergent telecommunication services
A1 Telekom Austria Group: The leading regional communications player providing convergent telecommunication services as of June 30, 2022 (in ‘000) Austria Bulgaria Croatia Mo bile market position #1 Mo bile market position: #1 Mo bile market position #2 Mo bile subscribers: Mo bile subscribers: Mo b
Slide 5: Shareholder structure
Ownership structure Shareholder structure Two strong core shareholders Freefloat by nationality as of December 31, 2021 as of December 31, 2021 Unidentified France 7% 6% Employee Stocks/Treasury Shares Free Float; 20.58% Switzerland 1% UK & Ireland North America 4% 36% Rest of Europe 4% América Movi
Slide 6: Reasons to invest
Equity Story Reasons to invest ▪ Solid #1 and #2 positions in a diversified footprint: Leveraging megatrend ▪ Strong and reliable business in Austria, growth markets in CEE digitalization as leading ▪ Providing best-in class customer service and well-recognized network quality telco provider in CEE
Slide 7: Strong growth performance within peer group
A1 Peer Group Comparison Strong growth performance within peer group Revenues EBITDA AL adj.* growth Net debt/EBITDA* CAGR, 2018-2021 CAGR, 2018-2021 End of 2021** A1 Group 2.3% A1 Group 4.8% OTE 0.5 Telia (SEK) 1.9% Deutsche Telekom (w/o US) 4.0% A1 Group 1.3 Deutsche Telekom (w/o US) 1.1% KPN 0.8%
Slide 8: Constant further improvement in balance sheet structure
Balance sheet structure Constant further improvement in balance sheet structure Debt ratio sharply Equity ratio Rating improved reduced significantly increased Reimbursement of Ne t Debt / EBITDA (pre IFRS 16) hybrid bond Baa1/BBB+ 4 0 0 34.9 38.5 32.6 34 36.1 Baa2/BBB 0.4 0.4 31.2 (positive outlook
Slide 9: Operational and financial highlights for the first half and the second quarter 2022
Operational and financial highlights for the first half and the second quarter 2022 9
Slide 10: Highlights for the second quarter 2022
Highlights for the second quarter 2022 Group (in EUR million) Q2 2022 Q2 2021 % change Total revenues 1,208.4 1,165.8 3.7% Service revenues 1,025.7 976.4 5.0% EBITDA before restructuring* 477.1 448.6 6.3% CAPEX 211.1 238.1 -11.4% ▪ Total revenues increased by 3.7%, driven by service ▪ Increased mobi
Slide 11: Austria and CEE markets in Q2 2022
Austria and CEE markets in Q2 2022 Total revenues Service revenues EBITDA before restructuring (in EUR mn) (in EUR mn) (in EUR mn) +3.7% +5.0% +6.3% 36.9 1208.4 1165.8 9.9 12.1 39.9 1025.7 976.4 477.1 448.6 8.5 19.6 Revenues Austria CEE markets Revenues Service Austria CEE markets Service EBITDA Aus
Slide 12: Austria: Solid EBITDA growth driven by higher service revenues
Austria: Solid EBITDA growth driven by higher service revenues despite some effects of cost inflation Total revenues Operational data (in EUR mn) Δ: +1.5% ▪ Solid development in high-value as well as SIM-only segment. ▪ 5G tariffs continued to be sold with the premium over LTE tariffs; availability
Slide 13: CEE: continued positive trends resulted in service revenues and EBITDA growth
CEE: continued positive trends resulted in service revenues and EBITDA growth in almost all markets EBITDA Highlights CEE (in EUR mn; Q2 21%-change vs. PY) Bulgaria: Δ: +14.2% Δ: +2.7% Δ: +16.4% ▪ Upselling to higher broadband speeds in the fixed-line, solid performance of the high value tariffs and
Slide 14: 1-6M 2022: Free cash flow increased by 23.6% yoy
1-6M 2022: Free cash flow increased by 23.6% yoy (in EUR million) Q2 2022 Q2 2021 % change 1-6 M 2022 1-6 M 2021 % change EBITDA 456.9 427.7 6.8% 888.5 826.0 7.6% Restructuring charges and cost of labor obligations 15.5 22.4 -30.8% 38.1 44.0 -13.5% Lease paid (principal, interest and prepayments) -3
Slide 15: Focus Points
V : \Z Focus Points S A 3
Slide 16: International markets: Growth story, successful strategy execution and synergies achieved
International markets: Growth story, successful strategy execution and synergies achieved Encouraging International Markets’ Consistently applied Financial & operational development Synergies between A1 Group & CEE C AGR C AGR Mobile core 5G EUR bn EUR bn + 4.1% + 6.4% On e entertainment tariffs in
Slide 17: Focus on People Sustainability
Focus on People Sustainability –Providing a work environment with Fairness, Dignity, Respect and Security From Diversity to People Sustainability What we have achieved ▪ Diversity, Equity& Inclusion Policy introduced P e ople Sustainability ▪ Hu man Rights Policy published E m ployment H e alth, Saf
Slide 18: Outlook for the full year 2022
Outlook for the full year 2022 18
Slide 19: Outlook for the full year 2022 - confirmed
Outlook for the full year 2022 - confirmed July 12, 2022 Consensus 2022 Total revenues Close to 3% EUR 4,855 mn (+2.2% vs FY ’21) CAPEX Approx. 15% y-o-y EUR 946 mn (+14.4% vs FY ‘21)* *CAPEX consensus excl. spectrum ▪ Total revenue growth expected to be driven by ongoing solid service revenue trend
Slide 20: Appendix 1: ESG
Vv : Vv Appendix 1 7 ESG At |
Slide 21: One.Strategy
One.Strategy “Environmental, Social & Corporate Governance (ESG)” was introduced as Strategy Enabler The A1 Telekom Austria Group aims to foster more efficient, resource- preserving and thus more sustainable ways of working and living. 21 Results for the first half and the second quarter 2022
Slide 22: ESG Strategy – Enabling the potential of digitalization for climate, people and society
ESG Strategy – Enabling the potential of digitalization for climate, people and society Targets – our ambition Climate & Environment - Ambition 2030 E ▪ Reach net carbon neutrality by decreasing the own carbon footprint & switching to energy from renewables1 ▪ Increase energy efficiency by 80% 2 ▪ R
Slide 23: The 'E' of ESG
The ‚E‘ of ESG CO 2-emission 2030 ▪ More than 100 mobile base stations powered by self-generated electricity from wind or solar Reach net carbon neutrality from own power operations by ▪ P hase-out of diesel generators ▪ decreasing the own carbon footprint and ▪ Increase in g roup-wide share of rene
Slide 24: The 'S' of ESG
The ‘S’ of ESG ▪ Since 2011 over 261,000 participants within 15,000 workshops (group-wide) D igital Education 2023 To address 100,000 people – especially children and young people – as part of the ▪ “A1 Internet for All” became the new “A1 digital.campus” in 2021, with a focus on robotics, focus on
Slide 25: The 'G' from ESG
The “G” from ESG ▪ Str ong tone-from-the-Top Compliance messages Maintain a best-practice and externally ▪ F ocus on sanction checks in connection with the Ukraine war cer tified compliance management system ▪ Our hum anitarian aid for Ukrainian refugees led to an increase in donations to safeguard
Slide 26: ESG KPIs
ESG KPIs 2020 2021 Change Environment* CO2-emissions (in t)** 246,990 197,656 -20% E Energy efficiency (in Mwh/Terabyte) 0.14 0.11 -18% 84,880 (only Old devices recycled (No.) mobile) 166,038 n.a. Digital Education*** Participations in media literacy trainings (no.) 9,239 33,190 +259% S Number of Wo
Slide 27: ESG Milestones & Goals
ESG Milestones & Goals Relevant milestones reached ... ... and ambitious goals to achieve Social & Governance Launch Strategy will be extended to Climate targets were Alignment in CO2 “People Sustainability Materiality Analysis to approved by the Science- reporting process & first Strategy” expandin
Slide 28: Appendix 2: Additional information on KPIs and financials
Appendix 2 Additional information on KPIs and financials 28
Slide 29: A1 Telekom Austria Group: Profit and Loss
A1 Telekom Austria Group: Profit and Loss (in EUR million) Q2 2022 Q2 2021 % change Service Revenues 1,025.7 976.4 5.0% Equipment Revenues 161.6 166.8 -3.1% Other operating income 21.1 22.6 -6.5% Total Revenues 1,208.4 1,165.8 3.7% Cost of Service -347.5 -329.2 -5.5% Cost of Equipment -156.1 -162.8
Slide 30: Total revenues & costs and expenses per segment
A1 Telekom Austria Group: Total revenues & costs and expenses per segment Total Revenues (in EUR million) Q2 2022 Q2 2021 % change Austria 676.1 666.2 1.5% Bulgaria 151.3 145.1 4.3% Croatia 113.3 108.7 4.2% Belarus 106.8 95.7 11.6% Slovenia 53.2 51.2 4.0% Serbia 85.7 74.7 14.7% North Macedonia 34.4
Slide 31: A1 Telekom Austria Group: Workforce development
A1 Telekom Austria Group: Workforce development FTE (Average Period) Q2 2022 Q2 2021 % change Austria 7,082 7,319 -3.2% International 10,396 10,315 0.8% Corporate 394 375 5.0% A1 Telekom Austria Group 17,872 18,009 -0.8% FTE (End of Period) Q2 2022 Q2 2021 % change Austria 7,068 7,305 -3.2% Internat
Slide 32: A1 Telekom Austria Group: Net debt
A1 Telekom Austria Group: Net debt as of June 30, 2021 Net Debt (excl. Leases) (in EUR million) 30 June 2022 31 December 2021 % change Long-term Debt 1,046.6 1,046.1 0.0% Short-term Borrowings 1,100.0 1,553.2 -29.2% Cash and Cash Equivalents -415.8 -534.4 22.2% Net Debt (excl. Leases) of A1 Telekom
Slide 33: Financial debt maturity profile
A1 Telekom Austria Group: Financial debt maturity profile as of June 30, 2022 (in EUR mn) 1,100.0 746.9 299.7 0.0 0.0 0.0 2022* 2023 2024 2025 2026 2027 ▪ EUR 2,146.6 mn short- and long-term debt as of June 30, 2022 Lines of credit Ratings ▪ Average cost of debt of 0.88% ▪ Undrawn committed ▪ S&P: B
Slide 34: Appendix 3: Reconciliation of Free Cash Flow
Appendix 3 Reconciliation of Free Cash Flow 34
Slide 35: 1-6M 2022: Reconciliation free cash flow
1-6M 2022: Reconciliation free cash flow 1-6 M 2022 1-6 M 2021 % change FCF after social plans new 368.0 297.8 23.6% Social plans new funded 57.2 47.2 21.1% Total social plans paid* -48.2 -49.7 -3.0% FCF - previously reported 377.0 295.3 27.7% *In the previous view all payments for all social plans
Slide 36: Appendix 4: Regulatory Topics
Appendix 4 Regulatory Topics 36
Slide 37: Mobile Termination Rates
Mobile Termination Rates Jul Jan Mar Jan April Aug Jul Jan 2017 2018 2019 2020 2020 2020 2021 2022 Austria (EUR) 0.008049 0.008049 0.008049 0.008049 0.008049 0.008049 0.007 0.0055 Bulgaria (BGN) 0.014 0.014 0.014 0.014 0.014 0.014 0.007 0.0055 Croatia (HRK)* 0.047 0.047 0.047 0.045 0.045 0.045 0.006
Slide 38: Upcoming spectrum tenders/prolongations/assignments
Upcoming spectrum tenders/prolongations/assignments* Expected Comments There’s an ongoing activity on a new “Spectrum Release Plan for Austria”, as well as Austria 2023 (26 GHz) preparatory works later this year for the allocation of 26 GHz in 2023. Bulgaria 2022 (700MHz, 800 MHz) No further info ye
Slide 39: EU Roaming Regulation (Wholesale Tariffs)
EU Roaming Regulation (Wholesale Tariffs) WHOLESALE July- Dec 22 2023 2024 2025 2026 2027 2028 Data (€/per GB) 2.00 1.80 1.55 1.30 1.10 1 1 Voice (€Cents/per minute) 2.20 2.20 2.20 1.90 1.90 1.90 1.90 SMS (€Cents/per SMS) 0.40 0.40 0.40 0.30 0.30 0.30 0.30 39 Results for the first half and the secon
Slide 40: Appendix 5: Personnel restructuring in Austria
Appendix 5 Personnel restructuring in Austria 40
Slide 41: Quarterly Overview: Restructuring charges and provision vs. FTE
Quarterly Overview: Restructuring charges and provision vs. FTE Overview restructuring charges FTEs addressed ( in EUR million) 2016 2017 2018 2019 2020 2021 Q1 22 Q2 22 FTEs adressed FTE reduction 95.0 9.1 70.1 100.2 91.3 95.1 26.1 38.1 2016 2017 2018 2019 2020 2021 Q1 22 Q2 22 Servicekom contribut
Slide 42: End of Presentation
V : \Z End of Presentation 7 Al
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