Telekom Austria Ag · VIE:TKA

Telekom Austria — A1 Telekom Austria Group — H1 2020 Earnings Presentation

32 slides from Telekom Austria's earnings presentation, Jul 14, 2020

1. Slide 1: Results for the first half and second quarter 2020

   Results for the first half and second quarter 2020 July 14, 2020, Vienna

2. Slide 2: Cautionary statement

   Cautionary statement 'This presentation contains forward-looking statements. These forward-looking statements are usually accompanied by words such as 'believe', 'intend', 'anticipate', 'plan', 'expect' and similar expressions. Actual events may differ materially from those anticipated in these forw

3. Slide 3: Operational and financial highlights for the first half and second quarter 2020

   Operational and financial highlights for the first half and second quarter 2020

4. Slide 4: Highlights Q2 2020

   Highlights Q2 2020  Group total revenue decline of -2.4% (excl. FX and one-off effects: -0.2%) and EBITDA before restructuring growth of 0.5% (excl. FX and one-off effects: +3.9%)  Stable service revenues (-0.4%) despite roaming losses and unfavorable FX development  Mobile contract customer base

5. Slide 5: EBITDA growth due to cost savings outweighing roaming losses and negative FX effects

   EBITDA growth due to diligent cost savings outweighing roaming losses from travel restrictions and negative FX effects Group (in EUR million) Q2 2020 Q2 2019 % change Total revenues 1,095.7 1,122.6 -2.4% Service revenues 939.5 943.7 -0.4% EBITDA before restructuring* 415.1 413.2 0.5% CAPEX 147.3 256

6. Slide 6: Austria and international operations in Q2 2020

   Austria and international operations in Q2 2020 Total revenues Service Revenues EBITDA before restructuring (in EUR mn) (in EUR mn) (in EUR mn) 1,122.6 -22.6 -10.3 1,095.7 -14.4 excl. one-off +6.1 excl. FX 943.7 -2.5 -7.5 939.5 +0.5% -2.4% +4.7 1.0 -1.6 415.1 excl. FX 413.2 +9.2 -0.4% +5.5 excl. one

7. Slide 7: Austria: EBITDA growth as mobile service revenues rose despite roaming losses

   Austria: EBITDA growth as mobile service revenues rose despite roaming losses; cost reductions were also crucial Operational data ARPU ARPL  +1.6% contract subscribers which were again driven by ongoing strong (in EUR) (in EUR) demand for mobile WiFi routers and high-value tariffs Δ: +3.9%  Strong

8. Slide 8: CEE: Negative FX effect and roaming losses mitigated by fixed-line growth and cost savings

   CEE: Negative FX effect and roaming losses mitigated by fixed- line service revenue growth and cost savings Highlights CEE EBITDA Bulgaria: (in EUR mn; Q2 %-change vs. PY)  Ongoing strong service revenue growth (+6.0%) mainly driven by fixed-line revenues due to customized corporate solutions, upse

9. Slide 9: 1-6M 2020: Strong free cash flow generation

   1-6M 2020: Strong free cash flow generation (in EUR million) Q2 2020 Q2 2019 % change 1-6 M 2020 1-6 M 2019 % change Net cash flow from operating activities 386.3 360.7 7.1% 758.9 668.8 13.5% Capital expenditures paid -165.1 -257.1 35.8% -370.3 -473.2 21.7% Lease principal paid -29.8 -31.0 4.1% -85.

10. Slide 10: Focus Points

    Telekom Austria

11. Slide 11: Austria: Successful fixed-line broadband promotions reintroduced

    Austria: Successful fixed-line broadband promotions reintroduced, getting gross additions back on track During lockdown Fixed-line promotions  Huge demand for mobile WiFi routers  Regional offers: Pushing higher fixed-line  Less demand for fixed-line installations bandwidths through a flatter pri

12. Slide 12: Q2 2020: Update of Covid-19 impact on key financials and KPIs

    Q2 2020: Update of Covid-19 impact on key financials and KPIs • Strong traffic decline • Strong FCF generation Roaming • Border openings since June Liquidity • Capex and opex cuts to Large impact • Negative EBITDA impact: ~5% Strong guarantee flexibility in Q2 • Positive development in ICT • Gross a

13. Slide 13: Long-term business opportunities for a world after Covid-19

    Long-term business opportunities for a world after Covid-19: Trends towards digitalization will continue to accelerate Opportunities in the e-learning Demand for cyber security solutions market Boost in remote work and video- Growth in health monitoring, conferencing telemedicine & self-diagnostics

14. Slide 14: Outlook for the full year 2020

    Outlook for the full year 2020

15. Slide 15: New A1 Telekom Austria Group outlook for the full year 2020

    New A1 Telekom Austria Group outlook for the full year 2020 July 14, 2020 February 11, 2020 Consensus 2020 Total revenues ~ -2% +1-2% -0.9% CAPEX ~ -25% ~ EUR 770 mn EUR 742 mn* (vs. initial outlook) *CAPEX consensus excl. spectrum  Outlook based on reported figures; assumed devaluation of approx.

16. Slide 16: Appendix 1

    Appendix 1 All figures are stated according to IFRS 16 on a reported basis

17. Slide 17: The leading regional communications player providing convergent telecommunication services

    The leading regional communications player providing convergent telecommunication services as of June 30, 2020 (in ‘000) Austria Bulgaria Croatia Mobile market position #1 Mobile market position: #1 Mobile market position #2 Mobile subscribers: Mobile subscribers: Mobile subscribers:  5,004 (Q2 201

18. Slide 18: A1 Telekom Austria Group – Profit and Loss

    A1 Telekom Austria Group – Profit and Loss (in EUR million) Q2 2020 Q2 2019 % change Service Revenues 939.5 943.7 -0.4% Equipment Revenues 136.7 149.8 -8.7% Other operating income 19.5 29.1 -33.2% Total Revenues 1,095.7 1,122.6 -2.4% Cost of Service -322.0 -325.2 1.0% Cost of Equipment -134.5 -143.8

19. Slide 19: Total revenues & costs and expenses per segment

    A1 Telekom Austria Group – Total revenues & costs and expenses per segment Total Revenues (in EUR million) Q2 2020 Q2 2019 % change Austria 635.9 658.5 -3.4% Bulgaria 121.5 115.4 5.3% Croatia 99.3 106.5 -6.8% Belarus 98.3 105.2 -6.5% Slovenia 50.8 51.5 -1.4% Serbia 68.1 68.9 -1.2% North Macedonia 28

20. Slide 20: A1 Telekom Austria Group – workforce development

    A1 Telekom Austria Group – workforce development FTE (Average Period) Q2 2020 Q2 2019 % change Austria 7,514 7,905 -4.9% International 10,331 10,297 0.3% Corporate 376 388 -3.2% A1 Telekom Austria Group 18,221 18,590 -2.0% FTE (End of Period) Q2 2020 Q2 2019 % change Austria 7,493 7,875 -4.8% Intern

21. Slide 21: A1 Telekom Austria Group – Capital expenditure split

    A1 Telekom Austria Group – Capital expenditure split Capital Expenditures (in EUR million) Q2 2020 Q2 2019 % change Austria 96.0 181.4 -47.1% Bulgaria 14.9 16.3 -8.7% Croatia 13.6 21.6 -37.3% Belarus 7.5 20.5 -63.7% Slovenia 4.6 3.9 17.2% Serbia 7.6 7.7 -1.1% North Macedonia 2.5 3.9 -37.4% Corporate

22. Slide 22: A1 Telekom Austria Group – Net debt

    A1 Telekom Austria Group – Net debt as of June 30, 2020 Net Debt (excl. Leases) (in EUR million) 30 June 2020 31 December 2019 % change Long-term Debt 2,541.1 2,539.6 0.1% Short-term Borrowings 0.0 123.0 -100.0% Cash and Cash Equivalents -141.0 -140.3 -0.5% Net Debt (excl. Leases) of A1 Telekom Aust

23. Slide 23: A1 Telekom Austria Group – Financial debt maturity profile

    A1 Telekom Austria Group – Financial debt maturity profile as of June 30, 2020 748.5 748.0 745.4 299.2 0.0 0.0 0.0 2020 2021 2022 2023 2024 2025 2026  EUR 2,541.1 mn short- and long-term debt as of June 30, 2020  Average cost of debt of 2.95%  Cash and cash equivalents of EUR 141.0 mn  Average t

24. Slide 24: A1 Telekom Austria Group – Debt profile

    A1 Telekom Austria Group – Debt profile as of June 30, 2020 Overview debt instruments Fixed/floating mix 0% 0% 100% 100% Bonds Loans Fixed Floating Lines of credit Ratings  Undrawn committed credit lines  S&P: BBB+ (stable outlook) amounting to EUR 1,115 mn  Moody’s: Baa1 (stable outlook)  Avera

25. Slide 25: Appendix – Regulatory topics

    Appendix 2 – Regulatory topics

26. Slide 26: Glide Path of Mobile Termination Rates

    Glide Path of Mobile Termination Rates Jul Jan Jul Jan Jul Jan Mar Jan April 2015 2016 2016 2017 2017 2018 2019 2020 2020 **** Austria (EUR) 0.008049 0.008049 0.008049 0.008049 0.008049 0.008049 0.008049 0.008049 0.008049 Bulgaria (BGN) 0.019 0.019 0.019 0.014 0.014 0.014 0.014 0.014 0.014 Croatia (

27. Slide 27: Upcoming spectrum tenders/prolongations/assignments

    Upcoming spectrum tenders/prolongations/ assignments* Expected Comments Austria's second 5G auction (scheduled for April) postponed due to Covid-19 crisis to Austria 2020 (700, 1500, 2100 MHz) start in 2nd half of August. 2020 (700, 2600, 3400-3800 MHz) Bulgaria 2021 (800 MHz) Croatia 2020 (3500 MHz

28. Slide 28: EU roaming price regulation

    EU roaming price regulation RETAIL (in EURc) July 2014 April 30, 2016 June 15, 2017 Data (per MB) 20 domestic tariff + 5* domestic tariff Voice-calls made 19 domestic tariff + 5* domestic tariff (per minute) Voice-calls received 5 weighted average MTR 0 (per minute) SMS (per SMS) 6 domestic tariff +

29. Slide 29: Appendix – Personnel restructuring in Austria

    Appendix 3 – Personnel restructuring in Austria

30. Slide 30: Overview – Restructuring charges and provision vs. FTE

    Overview – Restructuring charges and provision vs. FTE Overview restructuring charges FTEs addressed (in EUR million) 2013 2014 2015 2016 2017 2018 2019 Q1 20 Q2 20 2013 2014 2015 2016 2017 2018 2019 Q1 20 Q2 20 FTE reduction 149.0 86.4 69.5 95.0 9.1 70.1 100.2 17.7 36.6 Transfer to government 22 52

31. Slide 31: Appendix – Corporate sustainability

    Appendix 4 – Corporate sustainability

32. Slide 32: Key figures – Corporate Sustainability

    Key figures – Corporate Sustainability Selected group-wide KPIs Ratings Environment 2019 Total CO2 emissions (Scope 1+2 market-based in tonnes) 215,981 Energy efficiency index (in Mwh/terabyte) 0.17 Paper consumption (in kg) 1,273,562 Collected old mobile phones (in pcs) 64,504 Employees 2019 Share

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