Magyar Telekom Telecommunications Plc · BET:MTELEKOM

Magyar Telekom Telecommunications — Magyar Telekom — Q1 2015 Earnings Presentation

34 slides from Magyar Telekom Telecommunications's earnings presentation, 2015

  1. Slide 1: Magyar Telekom Group Investor Presentation

    MAGYAR TELEKOM GROUP INVESTOR PRESENTATION

  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 International presence Hungary Revenue (FY2014) Czech Republic 18% Slovakia 4% 5% Austria Moldova Hungary Hungary 73% Slovenia Croatia Croatia Romania Romania BiH EBITDA (FY2014) Serbia Serbia 7% Montenegro Kosovo Bulgaria Bulgaria Macedonia 13% Macedonia Albani

  4. Slide 4: Strategy Overview

    STRATEGY OVERVIEW Telekom 2017 strategy Bundling strategy BEYOND 1 LEADING INTEGRATED QUALITY BRAND CORE BEST CUSTOMER EXPERIENCE IT/SYSTEM 2 EFFORTLESS PRODUCTS & SIMPLIFIED PROCESSES INTEGRATION PUSH IN B2B 3 ONLINE CUSTOMER SERVICING DIGITAL SERVICE 4 INTEGRATED ALL-IP NETWORK COMPANY REBALANCING

  5. Slide 5: Strategic Highlights

    STRATEGIC HIGHLIGHTS SPECTRUM  Extension of existing spectrum licenses on 900 MHz and 1800 MHz in Hungary in 2013 ACQUISITIONS  Acquisition of necessary spectrum blocks in 2014 to reinforce mobile market leadership MOBILE NETWORK  Agreement with Telenor Hungary to develop and maintain shared 4G n

  6. Slide 6: Hungarian Economic Environment

    HUNGARIAN ECONOMIC ENVIRONMENT Growth strucutre Domestic demand 8%  Domestic demand shows signs of 6% improvement as economy recovers 4%  Governmental measures support consumer 2% spending 0%  Investment levels show strong volatility due to EU fund cycles -2%  MT is expected to benefit from posi

  7. Slide 7: Hungarian Mobile Spectrum Situation

    HUNGARIAN MOBILE SPECTRUM SITUATION Current spectrum situation FDD (2x1 MHz) BAND Magyar Telekom 800 MHz 10 10 10 Telenor Vodafone Digi 900 MHz 2 10 1 10 2 10 Available 1800 MHz 15 5 5 5 15 30 2100 MHz 15 15 15 15 2600 MHz 30 20 20 7

  8. Slide 8: Telekom as the Leading Operator and Brand in Hungary

    TELEKOM AS THE LEADEING OPERATOR AND BRAND IN HUNGARY Our vision Our mission OUR MISSION IS TO MAKE THE DIGITAL FIRST NOW FIRST FOREVER WORLD MORE UNDERSTANDABLE AND ACCESSIBLE FOR EVERYONE. WE ENABLE PEOPLE TO HAVE A MORE EFFORTLESS, COLOURFUL AND SUCCESSFUL LIFE. Brand awareness* Our brand values

  9. Slide 9: Hungary Market Positions

    HUNGARY MARKET POSITIONS Total mobile market* Fixed voice market** Subscribers Vodafone Subscribers Other 12,000,000 3,500,000 +0.4% Telenor Invitel 10,000,000 22.7% 22.4% Telekom 3,000,000 5.8% 5.8% 5.8% DIGI 13.0% 12.6% 12.7% UPC 2,500,000 8,000,000 9.1% 9.7% 10.2% 30.9% 30.8% MT 2,000,000 13.3% 1

  10. Slide 10: Wide Range of Telecom Services, System Integration and IT Infrastructure at T-Systems Hungary

    WIDE RANGE OF TELECOM SERVICES, SYSTEM INTEGRATION AND IT INFRASTRUCTURE COMPETENCES AT T-SYSTEMS HUNGARY Connectivity 43.0% of total revenue 65% of total margin* Fixed voice Fixed data Fixed internet Mobile voice Mobile internet Mobile data System integration 17.5% of total revenue 31% of total mar

  11. Slide 11: Market Leader in IT Services

    MARKET LEADER IN IT SERVICES DUE TO WIDE RANGE OF IT SOLUTIONS BOTH IN IT PROJECTS AND IT OUTSOURCING Total SI/IT market Revenue based SYSTEM INTEGRATION IT INFRASTRUCTURE SI & IT market shares* Package Custom System IT App. OS & Infra. OS & Infra. proj. Hosting Cloud (H1 2014) application app. Dev.

  12. Slide 12: Guidance and Outlook

    GUIDANCE AND OUTLOOK

  13. Slide 13: Financial Highlights and Targets

    FINANCIAL HIGHLIGHTS AND TARGETS 2014 RESULTS 2015 TARGETS 2017 TARGETS roughly stable REVENUE HUF 626.4bn (-1.7%) up to 3% increase compared to 2014 NEW NEW roughly stable excluding roughly stable energy compared to 2014 EBITDA HUF 181.2bn (+1.0%) up to 3% decline surpassing HUF 185bn CAPEX* HUF 86

  14. Slide 14: Roughly Stable Revenues Excluding Energy

    ROUGHLY STABLE REVENUES EXCLUDING ENERGY Group revenue developments Highlights HUF bn 750  Roughly stable revenue anticipated for 2015 vs. 2014  2017 revenues to be roughly stable 600 compared to the 2014 level due to the fall out of energy revenues 450  Mobile broadband growth mostly compensates

  15. Slide 15: Increasing EBITDA Margin

    INCREASING EBITDA MARGIN EBITDA and cost developments (relative to revenues) Highlights 100%  2015 EBITDA to decline by a maximum 3% vs. 2014 level 80% 37% 36% 37% 37%  2017 EBITDA expected to surpass HUF 185 billion  2015 indirect costs include the 60% expected ca. HUF 8 billion severance 30% 26

  16. Slide 16: Efficiency Investments Free Up Capex for Access Developments

    EFFICIENCY INVESTMENTS FREE UP CAPEX FOR ACCESS DEVELOPMENTS Capex developments* Highlights HUF bn 120  Ca. HUF 105 billion Capex earmarked 14% 14% 16% 13% for 2015 100  Fixed access: focus on increasing HSI coverage 80  Mobile access: 4G population coverage to reach 97% by end 2015 60  Efficien

  17. Slide 17: Dividend Policy

    DIVIDEND POLICY Dividend payment and net debt ratio developments Highlights Net debt ratio* Dividend per share (HUF) 50% 70  Maintain net debt ratio (net debt/total 45.7% capital) target of 30% - 40% 43.8% 60  Board of Directors proposes no dividend 40% 34.1% 34.3% payment on 2014 earnings for app

  18. Slide 18: Q1 2015 Results

    Q1 2015 RESULTS

  19. Slide 19: Strategic Highlights of 1Q 2015

    STRATEGIC HIGHLIGHTS OF 1Q 2015  Strong mobile performance as a result of successful rebalancing MOBILE  Mobile data growth due to attractive device portfolio and strong 4G push supported by the network sharing agreement with Telenor in rural Hungary HUNGARY  Maintained leadership positions in al

  20. Slide 20: Financial Highlights and Targets

    FINANCIAL HIGHLIGHTS AND TARGETS 1Q 2015 RESULTS 2015 TARGETS 2017 TARGETS roughly stable REVENUE +3.3% up to 3% increase compared to 2014  Mobile data growth due to successful rebalancing NEW NEW  Increased device sales  No impact from Hungarian MTR cut roughly stable (effective as of April 2015

  21. Slide 21: Group Segment Revenue and EBITDA

    GROUP SEGMENT REVENUE AND EBITDA Group segmental revenue Group segmental EBITDA HUF bn HUF bn +3.3% +4.8% 7.8 -3.8 3.4 -0.5 160 44 -0.4 158 2.5 157.0 -0.3 43 -0.2 -0.9 156 42.5 -0.6 154 42 151.9 152 41 40.5 0 0 Q1 2014 T-HU T-Systems Maced. Monten. Elim. Q1 2015 Q1 2014 T-HU T-Systems Maced. Monten.

  22. Slide 22: T-Hungary

    T-HUNGARY T-Hungary revenue T-Hungary EBITDA HUF bn +6.9% HUF bn +11.5% 122 3.3 121.5 33 0.9 32.5 120 0.8 -0.7 32 2.6 -0.1 0.6 -0.6 0.8 0.0 118 3.4 31 116 30 113.7 0.3 29.2 114 29 112 2 0 0 1Q Mobile Mobile Mobile Fixed Fixed TV Fixed Si/IT Energy 1Q 1Q 2014 Gross margin Special tax Other expenses Q

  23. Slide 23: T-Hungary – Mobile (1/2)

    T-HUNGARY – MOBILE (1/2) Mobile RPC Mobile ARPU ‘000 +1.4% HUF 4,878 4,898 4,933 4,964 4,948 5,000 Prepaid 3,333 1Q 2014 4,000 Postpaid Blended +3.9% 1Q 2015 50.4% 50.0% 49.6% 3,462 51.3% 50.7% 3,000 1,210 +118 Prepaid -1.2% 1,195 2,000 48.7% 49.3% 49.6% 50.0% 50.4% 5,583 1,000 Postpaid +2.3% 5,710

  24. Slide 24: T-Hungary – Mobile (2/2)

    T-HUNGARY – MOBILE (2/2) Smartphone penetration and attach rate Mobile broadband development +16.6% 49.8% 78% 80% 50% 2,500 80 41.1% 2,016 2,047 70 40% 2,000 1,826 1,914 1,755 52% 60 31.3% 51% 30% 1,500 45% 50 78% 74% 40 18.4% 87% 84% 20% 38.9% 1,000 90% 30 32.9% 22.6% 20 10% 18.2% 500 26% 10 16% 22

  25. Slide 25: T-Hungary – Fixed Broadband and TV

    T-HUNGARY – FIXED BROADBAND AND TV Fixed BB RPC Pay TV RPC ‘000 ‘000 +8.5% +4.1% 1,000 922 940 1,000 907 911 925 934 867 877 887 <10Mbps 898 Sat 8% 8% 11% 9% 800 15% 10Mbps -30Mbps 800 33% 33% Cable 34% 34% 34% >30Mbps IPTV 600 600 69% 69% 69% 20% 20% 19% 19% 19% 66% 68% 400 400 +49 200 +52 200 45%

  26. Slide 26: T-Hungary – Fixed Voice, Multiplay and Energy

    T-HUNGARY – FIXED VOICE, MULTIPLAY AND ENERGY Fixed voice RPC Multiplay development among residential customers ‘000 ‘000 1Play -1.2% -1.1% +0.7% 2Play 1,500 1,426 1,421 1,417 1,418 1,408 2,000 -0.7% PSTN 3Play 1,558 1,549 1,524 1,538 1,546 Annual churn rate IP based* 48% 44% 1,500 57% 1,000 64% 61%

  27. Slide 27: T-Systems

    T-SYSTEMS Financials SI/IT revenue and margin Revenues (HUF bn) EBITDA (HUF bn) HUF bn -13.9% -17.2% -18.1% 28 27.3 -0.4 3.5 -0.4 3.2 -0.9 27 -3.0 20 -19.2% 26 3.0 15.4 Revenue 0.4 2.6 15 Gross margin* 25 12.5 24 23.5 2.5 10 23 6.4 5.3 5 0 0.0 0 1Q Mobile Fixed Si/IT 1Q 1Q Gross Other 1Q 1Q 2014 1Q

  28. Slide 28: Macedonia

    MACEDONIA Financials Mobile KPIs Revenues (HUF bn) EBITDA (HUF bn) Subscribers -7.0% -1.1% -6.6% 2,500,000 5.4 -0.8 One (T. Slovenia)* 13.5 13.4 -0.4 5.5 2,000,000 23.7% 24.7% 26.1% VIP (T. Austria) -0.6 0.4 5.0 1,500,000 T-Mobile 13.0 28.1% 28.1% 27.9% 5.0 1,000,000 -36,108 0.1 12.5 12.5 500,000 48

  29. Slide 29: Montenegro

    MONTENEGRO Financials Mobile KPIs Revenues (HUF bn) EBITDA (HUF bn) Subscribers +3.4% -7.7% -10.6% 1,000,000 7.6 -0.2 Telenor 7.6 2.8 2.7 -0.5 37.5% 38.5% 37.5% m:tel (T. Serbia) 7.4 -0.5 2.6 T-Mobile 7.2 0.2 2.4 26.2% 27.5% 28.2% 0.1 7.0 2.4 +9,507 7.0 6.8 2.2 35.3% 35.1% 34.3% 0 1Q 2013 1Q 2014 1Q

  30. Slide 30: Financials

    FINANCIALS

  31. Slide 31: Magyar Telekom – Consolidated Income Statement

    MAGYAR TELEKOM – CONSOLIDATED INCOME STATEMENT HUF million Q1 2014 Q1 2015 Change Mobile revenues 73 616 76 938 4,5% Fixed line revenues 51 579 50 649 -1,8% System Integration/Information Technology revenues 13 189 12 581 -4,6% Revenue from energy services 13 509 16 789 24,3% Revenues 151 893 156 95

  32. Slide 32: Magyar Telekom – Consolidated Balance Sheet

    MAGYAR TELEKOM – CONSOLIDATED BALANCE SHEET HUF million Mar 31, 2014 Mar 31, 2015 Change Current assets 202 910 197 487 -2,7% Cash and cash equivalents 13 748 13 333 -3,0% Other current financial assets 33 916 19 154 -43,5% Non current assets 893 699 971 503 8,7% Property, plant and equipment - net

  33. Slide 33: Magyar Telekom – Consolidated Cash Flow Statement

    MAGYAR TELEKOM – CONSOLIDATED CASH FLOW STATEMENT HUF million Mar 31, 2014 Mar 31, 2015 Change Net cash generated from operating activities 25 263 25 240 -0,1% Investments in tangible and intangible assets (17 292) (12 179) 29,6% Adjustments to cash purchases (8 031) (10 734) 33,7% Purchase of subsi

  34. Slide 34: 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 DISCLAIMER This investor presentation contains forward-looking statements. Statements that are not historical facts, including statements about

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