Magyar Telekom Telecommunications Plc · BET:MTELEKOM

Magyar Telekom Telecommunications — Magyar Telekom — Q1 2017 Earnings Presentation

26 slides from Magyar Telekom Telecommunications's earnings presentation, June 2017

  1. Slide 1: Magyar Telekom Group Investor Presentation

    MAGYAR TELEKOM GROUP INVESTOR PRESENTATION JUNE, 2017

  2. Slide 2: Strategy and Market Position

    STRATEGY AND MARKET POSITION

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

    OVERVIEW – MAGYAR TELEKOM AT A GLANCE Overview International presence Revenue (FY2016)  Integrated operations in Hungary and Macedonia* 8.9%  leading telecommunications service provider in both 4.8% countries 86.4%  leading SI/IT service provider in Hungary EBITDA (FY2016)  Majority owned by Deu

  4. Slide 4: Market Positions in the Hungarian Telco Market

    MARKET POSITIONS IN THE HUNGARIAN TELCO MARKET Total mobile market* Fixed voice market** Vodafone Other Subscribers -0.9% Subscribers Telenor +0.5% Invitel 12,000,000 3,500,000 MT DIGI 22.9% 24.5% 25.3% 3,000,000 3.9% 3.1% 3.0% UPC 9,000,000 12.9% 13.3% 12.7% 2,500,000 11.1% 12.1% MT 10.4% 30.0% 27.

  5. Slide 5: IT Market in Hungary

    IT MARKET IN HUNGARY Total IT market (HW&SW and IT services)* IT Services market shares (by revenue)* HUF bn SYSTEM INTEGRATION IT INFRASTRUCTURE SI&IT 800 +4.0% 742 Package Custom System IT App. OS & Infra. OS & Infra. proj. Hosting Cloud 721 appl. app. dev. integration consulting operation operati

  6. Slide 6: Strategy Overview: Building a Growing ICT Company Serving Satisfied Customers

    STRATEGY OVERVIEW: WITH OUR ENGAGED PEOPLE, WE ARE BUILDING A GROWING ICT COMPANY SERVING SATISFIED CUSTOMERS Strategic pillars Strategic goals 1 Together. Increase customer satisfaction For We listen: customer and colleague opinions form an Improve customer service level our important part of our d

  7. Slide 7: Hungarian Economic Environment

    HUNGARIAN ECONOMIC ENVIRONMENT Growth structure Domestic demand 6%  Domestic demand improved as economy 3.7% 3.6% 3.7% recovered 4% 3.4% 2.8%  Governmental measures support consumer 2% 1.5% spending  Investment levels show volatility due to EU 0% fund cycles  MT leveraged positive trends of dome

  8. Slide 8: Network Developments in Hungary

    NETWORK DEVELOPMENTS IN HUNGARY Mobile network coverage (population based) Fixed network (Households covered) % HHs ths 97% 98% 99% 4,000 100 93% 83% 83% 86% 78% 80 3,000 33% 38% 43% 4% 60 2,000 36% 28% 40 84% 76% 87% 82% 89% 40% 71% 65% 71% 43% 1,000 34% 22% 20 7% 2% 25% 17% 15% 12% 0 0 2014 2015 2

  9. Slide 9: Hungarian Mobile Spectrum Allocation

    HUNGARIAN MOBILE SPECTRUM ALLOCATION Current spectrum allocation (MHz) BAND Magyar Telekom Telenor 700 MHz 2x5 2x5 2x5 2x5 2x5 2x5 Vodafone Digi Free 800 MHz 2x10 2x10 2x10 900 MHz 2x11.8 2x11 2x12 1800 MHz 2x15 2x5 2x25 2x30 2100 MHz 2x15 2x15 2x15 2x5 2x5 2x5 2600 MHz 2x30 2x20 + 1x25 2x20 3.4 - 3

  10. Slide 10: Q1 2017 Results, Guidance and Dividend

    Q1 2017 RESULTS, GUIDANCE AND DIVIDEND

  11. Slide 11: Q1 2017 Financial Results and 2017 Targets

    Q1 2017 FINANCIAL RESULTS AND 2017 TARGETS* Q1 2017 vs. Q1 2016 2016 FY RESULTS 2017 TARGETS REVENUE HUF 140.5 bn (+1.6%) HUF 574.0 bn around HUF 560 bn  Revenue growth in mobile driven by mobile data and equipment sales following sales push  Slight decline in fixed line revenues with higher TV an

  12. Slide 12: Dividend Policy

    DIVIDEND POLICY Dividend payment and net debt ratio developments Highlights Net debt ratio* Dividend per share (HUF) 50% 70  Aiming to maintain net debt ratio (net 45.7% debt/total capital) target of 30% - 40% 43.8% 42.9% 39.3% 60  HUF 25 dividend per share payment 40% 34.1% 34.3% based on 2016 re

  13. Slide 13: Q1 Results

    Q1 RESULTS

  14. Slide 14: Hungary

    HUNGARY Revenue* EBITDA HUF bn HUF bn 1.8% -19.8% 129 1.8 -0.7 42 41.3 -1.3 128.1 -3.0 128 40 1.6 -0.8 0.8 -0.3 127 -0.1 38 -2.1 125.8 -1.7 1.8 36 -0.2 0.1 -1.7 126 34 33.1 125 32 124 2 0 0 1Q Mobile Mobile Mobile Fixed Fixed TV Fixed SI/IT Energy 1Q 1Q 2016 Gross Sale of Sale of Utility tax Employe

  15. Slide 15: Hungary – Mobile

    HUNGARY – MOBILE Mobile SIMs Mobile ARPU ‘000 HUF -1.3% 3,216 6,000 5,372 5,344 5,332 Blended +2.3% 5,301 5,304 Prepaid 3,289 5,000 Postpaid 42.3% 41.8% 41.1% 40.8% 39.9% 1,066 4,000 Prepaid -3.3% 1,031 3,000 4,831 2,000 Postpaid -0.3% 57.7% 58.2% 58.9% 59.2% 60.1% 4,817 1,000 0 Mar 2016 Jun 2016 Se

  16. Slide 16: Hungary – Mobile Broadband

    HUNGARY – MOBILE BROADBAND Mobile broadband user developments Smartphone penetration ‘000 % +11.3% 75 3,000 64 2,555 2,635 Non-4G 58 2,366 2,423 2,469 2,500 60 52 4G 2,000 44 45 34 1,500 +268 30 1,000 57% 58% 15 500 44% 47% 51% 0 0 Mar 2013 Mar 2014 Mar 2015 Mar 2016 Mar 2017 Mar 2016 Jun 2016 Sep 2

  17. Slide 17: Hungary – Fixed Voice, Broadband and TV

    HUNGARY – FIXED VOICE, BROADBAND AND TV Fixed BB customer number Pay TV customer number ‘000 ‘000 +2.2% +2.9% 964 971 979 969 985 1,200 1,000 1,001 1,009 1,018 1,016 1,030 <10Mbps Sat TV 1,000 6% 5% 5% 4% 4% 32% 31% 31% 30% 29% 10Mbps -30Mbps 800 Cable TV 800 >30Mbps 13% IPTV 57% 600 15% 15% 14% 13%

  18. Slide 18: Hungary – Multiplay

    HUNGARY – MULTIPLAY Fixed line multiplay residential subs. development Fixed line multiplay residential ARPU development ‘000 1Play HUF Annual churn 1,395 1,391 1,382 1,370 2Play 5,809 1,400 1,364 Blended +1.5% 12% 3Play 5,899 1,200 34% 33% 32% 32% 31% 1,000 3,010 1Play +2.9% 15% 3,098 800 29% 30% 3

  19. Slide 19: Hungary – SI/IT

    HUNGARY – SI/IT SI/IT revenue developments SI/IT revenue breakdown by vertical segments* HUF bn Market Share* 100 Finance 13% Hardware & Software Manufacturing 6% 80 w/o mobile devices IT Infrastructure Retail&WS 6% 50% services Prof. Services 11% 60 39% System Integration / Telco+Media 10% 43% 40 I

  20. Slide 20: Macedonia

    MACEDONIA Financials Mobile KPIs Revenues (HUF bn) EBITDA (HUF bn) Subscribers One (T. Slovenia)* 13.2 -1.4% 5.4 2,500,000 -0.9% +0.7% VIP (T. Austria) -2.1% One.Vip 13.0 0.3 -0.4 5.2 2,000,000 0.2 -0.3 25.5% Telekom 12.8 52.1% 50.0% 12.6 5.0 4.9 1,500,000 12.6 0.0 28.1% 12.4 4.8 12.4 4.8 1,000,000

  21. Slide 21: Appendix

    APPENDIX

  22. Slide 22: Q1 2017 Group Segmental Revenue and EBITDA

    Q1 2017 GROUP SEGMENTAL REVENUE AND EBITDA Group segmental revenues Group segmental EBITDA HUF bn HUF bn 142 +1.6% 48 -16.5% 45.9 -1.3 0.3 -0.4 46 141 1.1 -6.9 0.0 140.5 44 1.7 -0.4 140 42 139 40 138.3 0.2 -0.3 0.7 38.3 38 138 0 0 1Q 2016 Mobile Fix SI/IT & Mobile Fix SI/IT 1Q 2017 1Q 2016 Gross Ind

  23. Slide 23: Magyar Telekom – Consolidated Income Statement

    MAGYAR TELEKOM – CONSOLIDATED INCOME STATEMENT HUF million Q1 2016 Q1 2017 Change Mobile revenues 72,287 74,250 2.7% Fixed line revenues 48,346 47,548 -1.7% System Integration/Information Technology revenues 15,380 17,129 11.4% Revenue from energy services 2,313 1,580 -31.7% Revenues 138,326 140,507

  24. Slide 24: Magyar Telekom – Consolidated Balance Sheet

    MAGYAR TELEKOM – CONSOLIDATED BALANCE SHEET HUF million Dec 31, 2016 Mar 31, 2017 Change Current assets 193,978 183,255 -5.5% Cash and cash equivalents 10,805 8,999 -16.7% Other current financial assets 5,104 6,008 17.7% Non current assets 981,551 926,128 -5.6% Property, plant and equipment - net 48

  25. Slide 25: Magyar Telekom – Consolidated Cash Flow Statement

    MAGYAR TELEKOM – CONSOLIDATED CASH FLOW STATEMENT HUF million Q1 2016 Q1 2017 Change Net cash generated from operating activities 24,878 27,639 11.1% Investments in tangible and intangible assets (11,100) (15,452) 39.2% Adjustments to cash purchases (14,192) (8,829) -37.8% Purchase of subsidiaries a

  26. Slide 26: For further questions please contact the IR department

    For further questions please contact the IR department: Linda László Rita Walfisch Head of Investor Relations Investor Relations Manager Phone: +36 1 481-7676 Phone: +36 1 457-6084 e-mail: laszlo.linda@telekom.hu e-mail: walfisch.rita@telekom.hu DISCLAIMER This investor presentation contains forward

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