Magyar Telekom Telecommunications Plc · BET:MTELEKOM
Magyar Telekom Telecommunications — Magyar Telekom — H1 2007 Earnings Presentation
17 slides from Magyar Telekom Telecommunications's earnings presentation, August 2007
Slide 1: Presentation 2007 interim results
Presentation 2007 interim results Acquisition-driven top line growth with solid underlying profitability and healthy operating cash flow
Slide 2: Agenda
Agenda Overview First half 2007 summary and segment analysis Regulatory snapshot Integration and organizational changes 2007 public targets and 2008 outlook Key strategic priorities Dividend policy Abbreviations: IC: interconnection, NRA: National Regulatory Authority, CPI: consumer price index, WS:
Slide 3: Magyar Telekom Group at a glance
Magyar Telekom Group at a glance Market leader in all core businesses Stock information Integrated operations in Hungary, Cca. EUR 4bn market capitalization Macedonia and Montenegro alternative/wholesale operations in Romania, Stock exchange listing Bulgaria and Ukraine listed on NYSE and Budape
Slide 4: First half 2007 summary
First half 2007 summary Revenues EBITDA EBITDA margin Group HUF 328,441m +5.0% HUF 128,746m 0.0% 39.2% T-Com HUF 152,381m -2.0% HUF 59,961m -6.0% 39.3% T-Mobile HUF 165,710m +6.0% HUF 71,949m +7.7% 43.4% Segments* T-Systems HUF 36,864m +24.2% HUF 8,056m -1.2% 21.9% HQ & shared services HUF 11,728m -
Slide 5: T-Com: Hungarian operations
T-Com: Hungarian operations Focus on customer retention Voice revenues under threat from HUF million Revenue breakdown competition 150,000 -2.0% strong mobile substitution as mobility 125,000 premium diminishes 100,000 alternative operators taking advantage of 75,000 CBC, CPS and unbundling ca
Slide 6: T-Com: Hungarian operations
T-Com: Hungarian operations Continued focus on broadband Cable services Incentives to increase customer base Triple play offers favourable summer offers stable cable customer base (411,500) bandwidth doubled from February cable penetration ~60% in our service area naked DSL introduced T-
Slide 7: T-Mobile: Hungarian operations
T-Mobile: Hungarian operations Competitive environment Increasing focus on retention clear market leadership position maintained Breakdown of T-Mobile customer base continued growth in RPC base (up 6%), though Subscribers market close to saturation 5,000,000 4,000,000 acquisition cost/new RPC
Slide 8: T-Mobile: Hungarian operations & TETRA
T-Mobile: Hungarian operations & TETRA Solid operational performance Usage increase supports ARPU Usage and ARPU trends MOU increased by 7% y-o-y to 145 ARPU (HUF) MOU ARPU down to HUF 4,508 (~EUR 18) 6,000 160 continuously improving customer mix 5,500 150 5,000 140 growing importance of VAS
Slide 9: T-Systems
T-Systems Declining traditional revenues Growing importance of SI/IT services intense competition from alternative service full scale of IT service portfolio offered, increasing providers presence in the Hungarian SI / IT market strong mobile substitution driven by negative integrated outsou
Slide 10: T-Com: international operations
T-Com: international operations Macedonia Montenegro Limited top line opportunities Saturated fixed line market strong mobile substitution increasing role of mobile substitution competition from altnets and cables fixed line penetration at 30.7% (down 0.5ppt) fixed penetration 23.1% (down
Slide 11: T-Mobile: international operations
T-Mobile: international operations Macedonia Montenegro Subscribers (th) Subscribers (th) 135% 141% Penetration 900 109% 130% 1,600 48% 54% 61% 64% 68% 73% Penetration 90% 800 79% 1,400 ProMonte 700 59% 60% 1,200 33% 34% 59% 31% 32% 600 1,000 28% 500 60% 800 24% 400 59% 59% 600 69% 68% 67% 66% 300 7
Slide 12: Regulatory snapshot
Regulatory snapshot Fixed-line Mobile geographic number portability since January 2004 mobile number portability since May 2004 WS naked ADSL offered to ISPs since end-March 2007 EU roaming regulation adopted IC fees close to EU average approx 14% cut in average traffic fees announced in
Slide 13: Integration steps within the Magyar Telekom Group
Integration steps within the Magyar Telekom Group Integration of T-Mobile Hungary Integration of T-Online and Emitel Decision made in December 2005, integration since Decision made in June 2007, integration since October March 2006 2007 Benefits to come from unified shop network, integrated call-c
Slide 14: Changes in organization, headcount reduction
Changes in organization, headcount reduction New organizational structure Headcount rationalization Structural changes in the telecom industry: Agreement with trade unions reached on technological development and innovation October 1, 2007 convergence throughout the industry changes in custome
Slide 15: 2007 public targets and 2008 outlook
2007 public targets and 2008 outlook Stable revenue compared to 2006 Stable EBITDA compared to 2006 4.5% compound average growth rate over 2005 HUF 2bn growth over 2005 level Flat over 2006 due to: Flat over 2006 due to: c. HUF 11bn lower TETRA revenues than in 2006 c. HUF 3bn lower TETRA EBITDA
Slide 16: Key strategic priorities
Key strategic priorities Current direction maintained, strengthened focus on 3 key areas Excellence Expansion stronger customer focus seeking value-accretive acquisitions both in Hungary improved service quality and the region integrated sales and call-center services integrated operations
Slide 17: Dividend policy
Dividend policy Net debt ratio and dividend yield Net debt ratio** Dividend yield*** 50% 46,6% 7,3% 7,3% 7,6% 7,3% 8% 40% 38,8% 32,9% 33,1% 31,7% 35,1% Targeted net 6% 31,6% debt ratio range 30% 4% 20% 1,9% 2% 10% 1,1% 0% 0% 2001 2002 2003 2004 2005 Q1 2007* Q2 2007 2007 2008 * dividends for 2005 fi