Magyar Telekom Telecommunications Plc · BET:MTELEKOM

Magyar Telekom Telecommunications — Q1 2007 Earnings Presentation

16 slides from Magyar Telekom Telecommunications's earnings presentation, May 2007

  1. Slide 1: Presentation First quarter 2007 results

    Presentation First quarter 2007 results Solid underlying performance boosted by growing system integration & IT contribution

  2. Slide 2: Agenda

    Agenda Overview First quarter 2007 summary and segment analysis Regulatory snapshot Public targets for 2007 Key strategic priorities Dividend policy Abbreviations: IC: interconnection, NRA: National Regulatory Authority, CPI: consumer price index, WS: wholesale, SMP: significant market power, MakTel

  3. 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, Ca. EUR 4bn market capitalization Macedonia and Montenegro „ alternative/wholesale operations in Romania, Stock exchange listing Bulgaria and Ukraine „ listed on NYSE and Budapes

  4. Slide 4: First quarter 2007 summary

    First quarter 2007 summary Revenues EBITDA EBITDA margin Group HUF 161,125m +6.1% HUF 62,992m -1.7% 39.1% T-Com HUF 75,293m -2.3% HUF 30,553m -5.7% 40.6% T-Mobile HUF 80,752m +7.6% HUF 34,443m +5.7% 42.7% Segments* T-Systems HUF 17,977m +36.4% HUF 4,151m +0.6% 23.1% HQ & shared services HUF 5,737m -

  5. Slide 5: T-Com: Hungarian operations

    T-Com: Hungarian operations Focus on customer retention Voice revenues under threat from HUF million Revenue breakdown competition 70,000 -2.4% 60,000 „ strong mobile substitution as mobility premium diminishes 50,000 „ alternative operators taking advantage of 40,000 CBC, CPS and unbundling 30,000

  6. Slide 6: T-Com: Hungarian operations

    T-Com: Hungarian operations Continued focus on broadband T-Kábel Incentives to increase customer base Triple play offers „ bandwidth doubled from February „ cable customer base rose by 2% to 413k „ naked DSL introduced „ cable penetration ~60% in our service area „ IPTV launched in November „ T-Kábe

  7. 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

  8. Slide 8: T-Mobile: Hungarian operations & TETRA

    T-Mobile: Hungarian operations & TETRA Solid operational performance Usage growth helped by price elasticity Usage increase helping ARPU „ MOU increased by 9% y-o-y to 140 ARPU (HUF) MOU „ ARPU down to HUF 4,444 (~EUR 17) 6 000 150 „ continuously improving customer mix 5 500 140 5 000 „ growing impo

  9. 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 „ new integrated ou

  10. Slide 10: T-Com: international operations

    T-Com: international operations Macedonia Montenegro Limited top line opportunities Saturated fixed line market „ strong mobile substitution „ seasonality heavily impacts segment performance „ competition from altnets and cables „ increasing role of mobile substitution „ fixed penetration 23.4% (dow

  11. Slide 11: T-Mobile: international operations

    T-Mobile: international operations Macedonia Montenegro Subscribers (th) 134% Penetration 59% 62% 66% 70% Penetration Subscribers (th) 79% 79% 90% 109% 130% 1,600 44% 51% 1,400 7 00 1,200 33% 34% 600 59% ProMonte 31% 32% 59% 1,000 500 60% 26% 800 22% 400 59% 600 57% 59% 300 400 74% 69% 68% 67% 66% 2

  12. 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 IC fees close to EU average „ approx 14% cut in average traffic fees announced in „ NRA resolution aims to eliminat

  13. Slide 13: 2007 public targets

    2007 public targets 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 than planned „ f

  14. Slide 14: Merger of T-Mobile Hungary and Magyar Telekom

    Merger of T-Mobile Hungary and Magyar Telekom Synergies Financial benefits Front office /sales /communication Following full implementation, we expect „ unified shop network significant financial benefits from: „ integrated call-center „ increased revenue unified business client „ improved cost effi

  15. Slide 15: Key strategic priorities

    Key strategic priorities Current direction maintained, strengthened focus on 3 key areas Excellence Expansion ƒ stronger customer focus „ seeking value-accretive acquisitions both in Hungary ƒ improved service quality and the region ƒ integrated sales and call-center services „ integrated operations

  16. Slide 16: Dividend policy

    Dividend policy Net debt ratio and dividend yield Net debt ratio** Dividend yield*** 50% 7.3% 7.3% 7.6% 7.3% 8% 46.6% 40% 38.8% 32.9% 33.1% Targeted net 6% 31.6% 31.7% debt ratio range 30% 4% 20% 1.9% 2% 10% 1.1% 0% 0% 2001 2002 2003 2004 2005 Q1 2007* 2007 2008 * dividends for 2005 financials were

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