Magyar Telekom Telecommunications Plc · BET:MTELEKOM
Magyar Telekom Telecommunications — Magyar Telekom — FY2010 Earnings Presentation
25 slides from Magyar Telekom Telecommunications's earnings presentation, 2011
Slide 1: Magyar Telekom Full Year 2010 results
Presentation Magyar Telekom Full Year 2010 results Public targets achieved, some signs of recovery
Slide 2: Abbreviations and investigation notes
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 3: 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 Moldova Hungary Slovenia Croatia leading SI/IT service provider in Hungary Croatia Romania BiH
Slide 4: Market environment – Economic policy and regulation
Market environment – Economic policy and regulation B d t deficit Budget d fi it plans l Fi l policy Fiscal li tot focus f on budget b d t ddeficit fi it managementt 6% focus on meeting deficit targets agreed with international 4.9% 4.2% 2.7% 3.9% lenders (IMF, EU) 3% 1.2% increasing tax burden
Slide 5: Market environment - Impact on telecommunications
Market environment - Impact on telecommunications Hungarian macroeconomic indicators Economic indicators influence telecommunication 4% 6% spending in different ways despite a return to GDP growth in 2010, household 0% 8% consumption remains under pressure telecommunication spending is more clos
Slide 6: Market environment – Infrastructure based-competition
Market environment – Infrastructure based-competition Wireline voice subscriber trends Pay TV trends 100% 100% 80% 30% 31% 31% 32% 32% 15% 16% 17% 22% 23% 80% 16% 60% 17% 19% 20% 21% 60% 85% 40% 40% 84% 83% 78% 77% 54% 52% 50% 48% 47% 20% 20% 0% 0% Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q4 2009 Q1
Slide 7: 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 shares* 100% 100% 13% 14% 12% 12% 12% 5% 5% 5% 21% 22% 22% 23% 23% 80% 6% 5% 80% 23% 23% 24% 25% 26% 60% 60% 34% 33% 34% 33% 32% 40% 32% 31% 31% 30% 29% 40% 20% 20% 45% 45% 44% 44% 45% 26% 27% 28% 28
Slide 8: xPlay and bundling as growth driver & retention tool in the residential segment
xPlay and bundling as growth driver & retention tool in the g residential segment Fixed voice access Strong focus on multi-Play and bundling on all networks (fixed line, cable and mobile) Subscribers -9% 1 800 000 +13% 1 600 000 new packages include improved VoIP solutions +15% ratio of xPlay cu
Slide 9: Market environment – Technology trends
Market environment – Technology trends Mobile broadband and TV innovation attract large g proportion p p of R&D investment Mobile broadband technology is changing rapidly (3G, LTE) new devices launched (iPhone4, iPad, Samsung Galaxy) smartphones priced below EUR 100 expected soon growth pote
Slide 10: Changing trends require continued efficiency improvements
Changing trends require continued efficiency improvements Change in revenue mix Underlying TWM expense in Hungary 100% Annual SI/IT: 1% wage 5.5% 5.6% 1.5% 4% New increase SI/IT >10% 80% revenue HUF billion sources New 150 < 20% revenue 121 115 114 60% sources 106 > 30% 100 Voice 40% revenues > 70%
Slide 11: Free cash flow generation and dividend policy
Free cash flow generation and dividend policy Free cash flow* generation Historical dividend payments HUF million 90 000 Net debt ratio** DPS (HUF) 82 043 12 301 2 473 77 495 50% 70 74 74 74 80 -14 504 22 928 40% 60 000 31,0% 30,8% 32,7% 50* 60 Target 29,7% 30% 40 -27 746 20% 20 30 000 10% 0% 0 0 20
Slide 12: Public targets for 2010 and 2011
Public targets for 2010 and 2011 2010 public targets and results 2011 public targets Revenue 66-8% 8% decline (prev. 55-7% 7% ) -5.3% 33-5% 5% decline recessionary impacts, pressure on consumer intense competition partly offset by slightly spending improving macroeconomic environment intense c
Slide 13: 2010 results – Business Unit analysis
2010 results – Business Unit analysis Full year revenue development Full year underlying EBITDA* development HUF million HUF million 650 000 265 000 643 989 262 808 640 000 -1 1 061 260 000 -7 563 630 000 -11 718 255 000 620 000 -3 507 -1 111 -1 664 -8 613 609 579 610 000 250 000 -1 821 - 323 -8 847
Slide 14: Consumer Services Business Unit (CBU) – Financial performance
Consumer Services Business Unit (CBU) – Financial performance Fi d liline revenues Fixed M bil revenues Mobile HUF million 133,042 -6% 125,679 HUF million 189,294 no change 189,094 150 000 200 000 +8% +9% +14% 150 000 +11% 100 000 -1% 100 000 50 000 -3% 50 000 -14% 14% 0 0 2009 2010 2009 2010 Voice
Slide 15: CBU – mobile operations
CBU – mobile operations ARPU MOU Mobile internet development HUF +2% min +10% leading market position with 49% market share 4 000 160 138 3,164 3,239 , 126 number of T T-Mobile’s Mobile s subscribers exceeded 3 000 120 624,000 at the end of 2010 2 000 80 3G/HSDPA network covering ~75% of popul
Slide 16: CBU KPIs
CBU KPIs Fixed Fixed & mobile broadband Voice ARPA Broadband ARPU Customer growth Subscribers +25% HUF HUF 1 200 000 4 500 3,630 6 000 3,427 4,427 3,944 900 000 +50% 3 000 -6% 4 000 -11% 600 000 +18% 1 500 2 000 300 000 +9% 0 0 0 en d-2009 en d-2010 2009 2010 2009 2010 ADSL+fiber Cabl e Mobil e Mobi
Slide 17: Business Services Business Unit (BBU) – Financial performance
Business Services Business Unit (BBU) – Financial performance Revenues Falling voice and data revenues strong pressure on clients to renegotiate contract terms HUF m i l l i on 170,989 -7% 159,271 high churn among fixed voice, data and internet customers 180 000 -2% continued pressure on mobil
Slide 18: BBU KPIs
BBU KPIs Fixed voice access DSL connections Subscribers Subscribers -13% 193,628 -17% 375,383 200 000 420 000 161,157 161 157 326,599 150 000 280 000 -13% -19% 100 000 140 000 -27% 50 000 -14% -7% 0 0 end-2009 end-2010 end-2009 end-2010 Business lines Managed leased lines ISDN channels Retail DSL cu
Slide 19: Macedonia – Financial performance
Macedonia – Financial performance R Revenues R lt slightly Results li htl negatively ti l iimpacted t d bby FX ttrendd -6% HUF strengthened on average by 1.5% to the Macedonian HUF million 82,312 77,598 Denar in 2010 90 000 -12% excluding FX impact, impact revenues and EBITDA were down by 4% 60
Slide 20: Montenegro – Financial performance
Montenegro – Financial performance Revenues R lt negatively Results ti l iimpacted t d by b FX trend t d HUF million -5% HUF strengthened on average by 1.4% to the Euro in 2010 40 000 34,442 excluding FX impact, both revenues and EBITDA were down 32,874 -6% by 3% 30 000 -6% 20 000 Fixed voice re
Slide 21: International KPIs Macedonia Montenegro
International KPIs Macedonia Fixed voice access ADSL/IPTV customer growth Mobile subscribers Subscribers Subscribers Penetration Subscribers 18.5% Penetration 17.2% 67% 881% 111% 116% 120% 0 400 000 200 000 2 500 000 16% 19% +113% 30,123 12% 300 000 150 000 2 000 000 8% 14,150 28% -8% 29% 30% 1 500
Slide 22: Magyar Telekom - Consolidated Income Statement
Magyar Telekom - Consolidated Income Statement HUF million 2009 FY 2010 FY Change Fixedd line Fi li revenues 274 080 249 633 -8,9% 8 9% Mobile revenues 325 996 315 173 -3,3% System Integration/Information Technology revenues 43 913 44 773 2,0% Revenues 643 989 609 579 -5,3% Total expenses directly r
Slide 23: Magyar Telekom - Consolidated Balance Sheet
Magyar Telekom - Consolidated Balance Sheet HUF million 31 Dec 2009 31 Dec 2010 Change Currentt assets C t 249 366 200 574 -19,6% 19 6% Cash and cash equivalents 34 270 15 841 -53,8% Other current financial assets 87 611 56 560 -35,4% Non current assets 917 011 908 432 -00,9% 9% Property, plant and
Slide 24: Magyar Telekom - Consolidated Cashflow Statement
Magyar Telekom - Consolidated Cashflow Statement HUF million 2009 FY 2010 FY Change Net cash generated from operating activities 193 795 164 670 -15,0% Investments in tangible and intangible assets (101 866) (91 762) -9,9% Adjustments to cash purchases (8 362) 4 462 -153,4% P h off subsidiaries Purc
Slide 25: 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