Hrvatski Telekom d.d. · ZSE:HT

Hrvatski Telekom d.d — Hrvatski Telekom — FY2014 Earnings Presentation

28 slides from Hrvatski Telekom d.d's earnings presentation, Feb 12, 2015

  1. Slide 1: Business and Financial Review January–December 2014

    BUSINESS AND FINANCIAL REVIEW JANUARY – DECEMBER 2014 Analyst presentation 12 FEBRUARY 2015

  2. Slide 2: Disclaimer

    Disclaimer  These materials and the oral presentation do not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company nor should they or any part of them or the fact of their distribution form t

  3. Slide 3: 1. Summary

    1. summary 3

  4. Slide 4: Highlights

    Highlights Headline Operational  Leading market position across all areas of business maintained despite continued challenging environment  Our fiber proposition on the market increased overall competitiveness; mobile data usage trend up strongly  Significant investments planned for 2015 in fixed

  5. Slide 5: FY 2014 outlook and results

    FY 2014 outlook and results Outlook Results delivered (as of 30 Oct 2014) Revenue Decline of around 2% Decline of 1.9% EBITDA before exceptional items Between 39% - 41% 40.3% CAPEX Over HRK 1 billion HRK 1.1 billion Regional expansion HT is monitoring and evaluating potential M&A opportunities 5

  6. Slide 6: 2. Overview 2014

    2. Overview 2014 6

  7. Slide 7: Fixed and mobile voice market in Croatia still shrinking

    Fixed and mobile voice market in Croatia Annual change still shrinking… Revenue Number of subscribers HRK million Million -17%  13 active operators in -6% market Fixed voice 2,072 1,716  Minutes of use 1.45 1.37 decreased by 14.6% in Jan-Sep 2014 Jan-Sep 2013 Jan-Sep 2014 End-Q3 2013 End-Q3 2014 -

  8. Slide 8: Partially offset by growth in fixed and mobile broadband and IPTV

    … partially offset by growth in fixed and Annual change mobile Broadband and IN PayTV Revenue Number of subscribers HRK million Million  Fixed Broadband +27% 0% lines at 944k in Q3 Fixed 2014 (+3.1% yoy); and Fixed BB household Mobile 2,363 1.38 1.38 penetration at 61% Broad- 1,867 band  HT Smartp

  9. Slide 9: Revenue decline slows to 1.9% compared to 6.8% in 2013

    revenue decline slows to 1.9% compared to 6.8% in 2013, helped by mobile growth in H2 2014  Optima Telekom consolidated as of 1 July 2014 Revenue breakdown  Fixed telephony down due to general usage trends HRK million 7,042 -1.9%  Mobile revenue almost stable due to strong 6,908 increase in mobil

  10. Slide 10: EBITDA margin solid at 40.3%

    DESPITE worsening economic environment, company transformation initiatives and changes in revenue structure – EBITDA margin solid at 40.3% All in HRK million, except where stated differently EBITDA before except. items1 Net profit  EBITDA decline slowed compared to 2013 (-9.1% vs - -9.1 % -20.7% 12

  11. Slide 11: Successful value strategy in mobile; focus on data mobile bundles

    Successful value strategy in mobile; focus on data mobile bundles T-HT market share by subscribers1) Number of subscribers Thousands Prepaid Postpaid Data +0.2pp -2.2% 46.6% 46.8% 2,303 2,252 +8.1% 1,232 1,153 1,303 1,409 1,070 1,099 End-2013 End-2014 End-2013 End-2014 End-2013 End-2014 ARPU2)  Ave

  12. Slide 12: Number of fixed lines and ARPA decline; Optima consolidation

    Number of fixed lines and ARPA decline; ht stabilises overall telecom market Number of mainlines1 Optima consolidation Thousands -6.9% Wholesale Agreement on conversion of rights into share 1,251 1,166 Retail capital, resulting in an increase of share capital of 118 116 Optima Telekom, was signed on

  13. Slide 13: Number of BB and TV customers continues to grow

    Number of BB and TV customers continues to grow; ht leads in convergent offers and content No. of broadband access lines Broadband retail ARPA Thousands +2.6% Wholesale1 HRK 670 687 Retail2 -0.7% 41 73 628 614 127 126 End-2013 End-2014 2013 2014 Number of TV customers  New fiber proposition Ultra M

  14. Slide 14: Residential segment revenue stable

    residential segment revenue stable; Miscellaneous decrease in voice partially offset by Terminal equipment Other service increase in non-voice, terminal Non voice revenue equipment and miscellaneous revenue Voice revenue Revenue breakdown1  Revenue down mainly as a result of HRK millions 11.9% lowe

  15. Slide 15: Business segment revenue down due to wholesale decline

    BUSINESS SEGMENT revenue down mainly Miscellaneous due to 30.7% decline in wholesale; Terminal equipment Other service GROWTH IN ICT SOFTENs impact of Non voice revenue DECREASE IN VOICE and non voice REVENUE Voice revenue Revenue breakdown1 HRK millions 3,051 -10.0%  26.4% lower voice revenue, in

  16. Slide 16: 3. Outlook

    3. outlook 16

  17. Slide 17: Clear strategy to maintain strong profitability

    CLEAR strategy to maintain strong profitability: focus in 2015 on customers & on network investments Mid-term strategic direction  Enhancing value from the market  Leveraging infrastructure  Further strict cost management 2014: Build 2015: Customers and foundation network  Deliver 2014 Outlook 

  18. Slide 18: Environment remains challenging; HT will leverage key opportunities

    ENVIRONMENT remains CHALLENGING; ht will leverage key opportunities Opportunities Threats  Increasing demand for bundled offers  Croatian economy still in recession  GDP  Development of fixed mobile converged services  Unemployment available on multiple platforms and devices  Regulation  Incr

  19. Slide 19: HT aims to change topline trend while maintaining above average margins

    HT aims TO change TOPLINE TREND WHILE maintaining ABOVE AVeRAGE MARGINS Revenue 2015 outlook HRK million Stable  Downward trend, which started in 2009, expected to halt in 8,067 7,555 7,042 6,908 2015 following expected positive development in core telco and growth areas 2011 2012 2013 2014 2015F C

  20. Slide 20: 3 major areas of focus in 2015 and beyond

    3 major areAs of focus in 2015 and beyond Value enhancement through further transformation  Transformation activities started in early 2014 with first tangible effects in the same year – full impact in 2015  Mid-term transformation programme “Horizont” launched, including additional measures to pr

  21. Slide 21: 2015 and beyond: results impacted by transformation initiatives

    2015 and beyond: results to be strongly impacted by TRANSFORMATION initiatives *Yearly EBITDA impact in HRK million; 2015-17 vs 2014 Completed initiatives from 2014* Continuing initiatives in 2015  Indirect opex >25  Outsourcing >20  Headcount restructuring >32  Collective agreement >8  New gro

  22. Slide 22: Fixed and mobile BB investments to enhance long term positioning

    FIXED AND MOBILE BB INVESTMENTS WILL help Enhance OVERALL long term POSITIONING OF ht and maintain overall market share CAPEX plan  Significantly increased CAPEX in 2015 HRK million will be dedicated mainly to fixed and 26% mobile broadband. That will help 1,350 Croatia in fulfilling Europe 2020 di

  23. Slide 23: Group 2015 Outlook

    Group 2015 Outlook 2014 Results Outlook 2015 vs 2014 Revenue HRK 6,908 million Revenue stabilisation EBITDA before exceptional items Margin of 40.3% Margin of around 40% CAPEX HRK 1,073 million Around HRK 1,350 million Regional expansion HT is monitoring and evaluating HT is monitoring and evaluatin

  24. Slide 24: Appendix

    Appendix 24

  25. Slide 25: Consolidated income statement

    Consolidated income statement HRK million % of change in HRK million (IFRS) 2013 2014 A14/A13 Mobile 2,839 2,805 -1.2% Fixed telephony 1,431 1,213 -15.2% Wholesale 567 393 -30.7% IP Revenue 1,565 1,577 0.8% Data 101 83 -17.2% ICT 498 564 13.3% Miscellaneous 43 255 494.8% Energy 0 12 - Other non telc

  26. Slide 26: Consolidated balance sheet

    Consolidated balance sheet HRK million At 31 Dec At 31 Dec % of change in HRK million (IFRS) 2013 2014 A14/A13 Intangible assets 1,358 1,716 26.4% Property, plant and equipment 5,570 5,577 0.1% Non-current financial assets 616 735 19.4% Receivables 126 121 -4.2% Deferred tax asset 60 51 -14.8% Total

  27. Slide 27: Consolidated cash flow statement

    Consolidated cash flow statement HRK million % of change in HRK million (IFRS) 2013 2014 A14/A13 Profit before tax 1,629 1,185 -27.2% Depreciation and amortization 1,366 1,411 3.3% Increase / decrease of current liabilities -73 159 318.6% Increase / decrease of current receivables -56 -98 -74.7% Inc

  28. Slide 28: Investor relations contact

    Investor relations contact  Marina Bengez Sedmak  Elvis Knežević Tel: + 385 1 4911 114  e-mail: ir@t.ht.hr  www.t.ht.hr/eng/investors/ Zagreb Stock Exchange Share trading symbol: HT-R-A Reuters: HT.ZA Bloomberg: HTRA CZ 28

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