Magyar Telekom Telecommunications Plc · BET:MTELEKOM

Magyar Telekom Telecommunications — Magyar Telekom — FY2014 Earnings Presentation

23 slides from Magyar Telekom Telecommunications's earnings presentation, Feb 26, 2015

  1. Slide 1: Magyar Telekom Group Full Year and Q4 2014 Results Presentation

    MAGYAR TELEKOM GROUP FULL YEAR AND Q4 2014 RESULTS PRESENTATION FEBRUARY 26, 2015

  2. Slide 2: Full Year Results, Outlook and Guidance

    FULL YEAR RESULTS, OUTLOOK AND GUIDANCE

  3. Slide 3: Highlights

    HIGHLIGHTS  We are now market leaders in all segments of the Hungarian telecommunication market STRENGTHENED MARKET  Acquisition of crucial frequencies in 2014 coupled with the network and frequency sharing agreement with Telenor on the 800MHz spectrum strongly supports our mobile market leadershi

  4. Slide 4: Market Positions on the Hungarian Telecommunication Market

    MARKET POSITIONS ON THE HUNGARIAN TELECOMMUNICATION MARKET TOTAL MOBILE MOBILE BROADBAND subscribers subscribers +1% +1% 6,000,000 2,500,000 +17% +27% 4,500,000 2,000,000 1,500,000 3,000,000 1,000,000 1,500,000 500,000 0 0 2012 2013 2014 2012 2013 2014 FIXED VOICE FIXED BROADBAND PAY TV subscribers

  5. Slide 5: 2014 Group Results – Revenues and EBITDA

    2014 GROUP RESULTS – REVENUES AND EBITDA GROUP REVENUES GROUP EBITDA HUF bn HUF bn -1.7% 3.1 -8.1 184 1.0% 640 637.5 -6.1 4.8 -2.1 4.9 3.6 -4.8 635 1.9 -4.8 182 2.1 -3.0 181.2 630 -0.7 180 626.4 179.5 625 0 0 2013 Mobile Mobile Mobile Fixed Fixed TV SI/IT Energy Other 2014 2013 gross margin bad debt

  6. Slide 6: 2014 Group Results – Capex and FCF

    2014 GROUP RESULTS – CAPEX AND FCF GROUP CAPEX GROUP FCF* HUF bn HUF +38.2bn HUF bn 200 6.5 184.4 30 38.9 HUF -14.4bn 146.1 -41.1 15.8 -17.6 150 58.7 15 -17.5 100 -7.2 1.8 0.6 0 50 -4.4 -7.4 0 -15 -2.6 -13.8 2013 Spect. Annual STB in Spect. Annual Other 2014 licenses freq. fee 2013 licenses freq. fe

  7. Slide 7: Financial Outlook

    FINANCIAL OUTLOOK 2014 RESULTS 2015 TARGETS 2017 TARGETS roughly stable compared REVENUE HUF 626.4bn (-1.7%) up to 3% increase to 2014 level EBITDA HUF 181.2bn (+1.0%) up to 3% decline surpassing HUF 185bn CAPEX* HUF 86.8bn around HUF 105bn around HUF 80bn FCF** ca. HUF -19.0bn surpassing HUF 50bn *

  8. Slide 8: Revenue Growth Driven by Successful Rebalancing

    REVENUE GROWTH DRIVEN BY SUCCESSFUL REBALANCING GROUP REVENUE DEVELOPMENTS HUF bn 750  0-3% revenue growth anticipated for 2015 vs. 2014 600  2017 revenues to be roughly stable compared to the 2014 level due to the 450 fall out of business energy revenues  Mobile broadband growth mostly 300 compe

  9. Slide 9: Disciplined Cost Management

    DISCIPLINED COST MANAGEMENT EBITDA AND COST DEVELOPMENTS (RELATIVE TO REVENUES) 100%  2015 EBITDA to decline by a maximum 3% vs. 2014 level 32% 37% 36% 37% 37%  2017 EBITDA expected to surpass 80% HUF 185 billion  2015 indirect costs include the 60% 31% expected ca. HUF 8 billion severance 29% 30

  10. Slide 10: Efficiency Investments Free Up Capex for New Technologies and Services

    EFFICIENCY INVESTMENTS FREE UP CAPEX FOR NEW TECHNOLOGIES AND SERVICES CAPEX DEVELOPMENTS*  Ca. HUF 105 billion Capex earmarked for 2015 HUF bn 120  Fixed access: focus on increasing HSI 15% 14% 14% 16% 13% coverage 100  Mobile access: 4G population coverage to reach 97% by end 2015 80  Efficien

  11. Slide 11: Dividend Policy

    DIVIDEND POLICY DIVIDEND PAYMENT AND NET DEBT RATIO DEVELOPMENTS Net debt ratio* Dividend per share (HUF) 50% 70  Maintain net debt ratio (net debt/total 45.7% 43.8% capital) target of 30% - 40% 60 40%  Board of Directors proposes no 34.1% 34.3% dividend payment on 2014 earnings 32.7% TARGET 50 fo

  12. Slide 12: Q4 2014 Results

    Q4 2014 RESULTS

  13. Slide 13: Q4 2014 Group Results – Revenues and EBITDA

    Q4 2014 GROUP RESULTS – REVENUES AND EBITDA GROUP REVENUES GROUP EBITDA HUF bn HUF bn +8.0% 171 -0.3% 42 0.7 0.0 41.9 3.9 -2.4 3.0 170 0.8 -1.4 41 169 0.7 -1.9 40 168 167 39 38.8 -0.6 1.5 -0.8 166 165.7 -0.9 165.3 38 165 130 0 Q4 Mobile M. Mobile Fixed Fixed TV SI/IT Energy Other Q4 Q4 2013 Gross ma

  14. Slide 14: Q4 2014 Segment Results – Revenues and EBITDA

    Q4 2014 SEGMENT RESULTS – REVENUES AND EBITDA SEGMENTS’ REVENUE DEVELOPMENTS SEGMENTS’ EBITDA DEVELOPMENT HUF bn HUF bn 8.0% 168 42 0.4 0.1 41.9 -0.3% 0.6 -3.7 0.9 0.1 166 165.7 3.2 165.3 41 1.7 164 -0.4 40 -0.2 162 39 38.8 0 0 Q4 2013 T-HU T-Systems Maced. Monten. Elim. Q4 2014 Q4 2013 T-HU T-Syste

  15. Slide 15: Telekom Hungary – Fixed Line Market

    TELEKOM HUNGARY – FIXED LINE MARKET TELEKOM HUNGARY FIXED VOICE SUBSCRIBERS FIXED BROADBAND SUBSCRIBER BREAKDOWN Subscribers 2,000,000 +5% -1% VoCa 1,000,000 921,711 969,102 VoIP 6% 1,500,000 1,430,280 1,418,207 6% Fiber 12% PSTN 14% 750,000 32% Cable BB 31% 17% 22% ADSL 1,000,000 500,000 Wholesale

  16. Slide 16: Telekom Hungary – Energy Retail

    TELEKOM HUNGARY – ENERGY RETAIL GAS AND ELECTRICITY POINTS OF DELIVERY (POD) RETAIL ENERGY BUSINESS PODs (thousand)  Discounts offered to residential customers compared 200 Gas Electricity to the regulated universal service prices were cut to 2-3% from 5-8% to mitigate the unfavorable changes 150 6

  17. Slide 17: Telekom Hungary – Mobile Market

    TELEKOM HUNGARY – MOBILE MARKET TELEKOM SMARTPHONE PENETRATION MOBILE BUSINESS % of total handsets  Smartphone sales reached 95% of postpaid 49.8 % 50 % handsets in Q4 2014 41.1 % 40 %  Mobile broadband subscription attach rate at ca. 31.3 % 90% 30 %  78% population-based countrywide 4G coverage

  18. Slide 18: Macedonia and Montenegro

    MACEDONIA AND MONTENEGRO MACEDONIAN MOBILE MARKET One (T. Slovenia) MONTENEGRIN MOBILE MARKET Telenor VIP (T. Austria) Subscribers m:tel (T. Serbia) Subscribers T-Mobile +4% T-Mobile -8% 0% -1% 1,500,000 2,500,000 -6% -14% 24% 22% 1,200,000 0% +2% 2,000,000 24% 24% 25% 40% 20% 26% 900,000 41% 1,500,

  19. Slide 19: Financials

    FINANCIALS

  20. Slide 20: Magyar Telekom – Consolidated Income Statement

    MAGYAR TELEKOM – CONSOLIDATED INCOME STATEMENT HUF million Q4 2013 Q4 2014 Change Mobile revenues 78,753 84,375 7.1% Fixed line revenues 54,867 52,093 -5.1% System Integration/Information Technology revenues 18,223 16,828 -7.7% Revenue from Energy Services 13,898 11,968 -13.9% Revenues 165,741 165,2

  21. Slide 21: Magyar Telekom – Consolidated Balance Sheet

    MAGYAR TELEKOM - CONSOLIDATED BALANCE SHEET HUF million Dec 31, 2013 Dec 31, 2014 Change Current assets 193,941 197,897 2.0% Cash and cash equivalents 14,633 14,625 -0.1% Other current financial assets 28,615 23,690 -17.2% Non current assets 897,307 992,879 10.7% Property, plant and equipment - net

  22. Slide 22: Magyar Telekom – Consolidated Cash Flow Statement

    MAGYAR TELEKOM - CONSOLIDATED CASH FLOW STATEMENT HUF million Dec 31, 2013 Dec 31, 2014 Change Net cash generated from operating activities 131,612 145,495 10.5% Investments in tangible and intangible assets (146,122) (184,364) 26.2% Adjustments to cash purchases 25,984 42,211 62.4% Purchase of subs

  23. Slide 23: For further questions please contact the IR department

    For further questions please contact the IR department: Investor Relations Phone: +36 1 458-0424 Fax : +36 1 458-0443 e-mail: investor.relations@telekom.hu Abbreviations: 3G: third generation, 4G: fourth generation, ARPU: average revenue per user, BB: broadband, IP: internet protocol, IT: informatio

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