Magyar Telekom Telecommunications Plc · BET:MTELEKOM

Magyar Telekom Telecommunications — Magyar Telekom — H1 2009 Earnings Presentation

23 slides from Magyar Telekom Telecommunications's earnings presentation, 2009

  1. Slide 1: Magyar Telekom 2009 Interim Results

    Presentation Magyar Telekom 2009 Interim Results Continued focus on cost cutting and customer retention, revised 2009 guidance 1

  2. Slide 2: Abbreviations

    Abbreviations: 3G: third generation, ARPU: average revenue per user, BB: broadband, CBC: call-by-call, CPS: carrier pre-selection, HQ: headquarters, HSDPA: high-speed downlink packet access, IC: interconnection, IP: internet protocol, IT: information technology, LTO: local telecommunication operator

  3. Slide 3: Magyar Telekom Group at a glance

    Overview Magyar Telekom Group at a glance Local concession areas in Hungary Integrated operations in Hungary, Macedonia and Montenegro „ 39 of 54 local concession areas in Hungary „ leading telecommunications service provider in all three countries „ leading SI/IT service provider in Hungary Magyar

  4. Slide 4: Service excellence: leaner organization, simpler brand structure

    Service excellence Leaner organization, simpler brand structure Customer segment-focused organization Clear brand structure CBU BBU TBU HQ ƒ “T” as our corporate brand identifies the Magyar Telekom Macedonia Montenegro Group New organization since January 1, 2008 Consumer Services Business Services

  5. Slide 5: Improving service quality and portfolio

    Improving service quality and portfolio Reinforcing technological leadership New generation access roll-out Launch of satellite TV service Households coverage plans Number of customers 1 200 000 90 000 800 000 780 000 60 000 88 000 400 000 100 000 160 000 30 000 47 000 350 000 350 000 380 000 17 000

  6. Slide 6: Focus on efficiency: headcount rationalization

    Focus on efficiency Headcount rationalization Headcount reduction Total Workforce expense in Hungary 12 262 11 723 CAGR HUF million 12 500 -2.6% 10 809 64 000 10 439 -4.9% 10 000 48 000 -3.6% 7 500 32 000 5 000 -2.2% 2 500 16 000 0 0 June 2007 Dec 2007 Dec 2008 June 2009 H1 2008 H1 2009 Magyar Telek

  7. Slide 7: Addressing market challenges

    Addressing market challenges Changing trends require continued efficiency improvement Change in revenue mix Strong focus on profitability EBITDA margin* ROA** HUF million 615 054 671 196 676 661 673 056 CAGR 18% 700 000 45% 42.5% 41.9% 1% 6% +66.2% 40.9% 40% 39.5% 560 000 16% 46% 49% +5.1% 420 000 3

  8. Slide 8: Expansion strategy

    Expansion strategy Selective further acquisitions in the SEE region and Hungary International presence Hungary Leading position in the SI/IT market through acquisitions; further consolidation underway ƒ 2005 – Dataplex Ukraine ƒ 2006 – KFKI Moldova ƒ 2007 – T-Systems Hungary Hungary ƒ 2009 – KFKI Di

  9. Slide 9: Dividend policy

    Dividend policy Delivering value to shareholders Balance sheet structure Usage of free cash flow Net debt ratio* DPS (HUF) % of the generated free cash 50% 70 73 74 74 80 70 125% 40% 36% 33.2% 60 100% 38% 1% 31.7% 31.0% 29.7% Target 14% 30% 13% 1% 1% 75% 40 14% 20% 50% 74% 78% 79% 20 59% 10% 25% 0%

  10. Slide 10: Economic downturn: impact on Magyar Telekom

    Economic downturn Impact on Magyar Telekom 2008 2009 2010 and beyond Persistently weaker currency, higher interest rates Economic recession ƒ higher financing costs ƒ higher churn rates and lower usage mainly in the ƒ impact of the weaker Forint: residential segment Impacts ƒ net EBITDA effect (cons

  11. Slide 11: Regulatory snapshot

    Regulatory snapshot Regulation in line with EU recommendations in all three countries „ Hungary: fully in line with the EU Regulatory Framework „ Macedonia: liberalization of fixed line market in progress, regulated mobile termination rates „ Montenegro: new telecommunication law adopted in 2008 – f

  12. Slide 12: First half 2009 results: Business Unit analysis

    First half 2009 results Business Unit analysis Revenue development Underlying EBITDA development 330 000 142 000 141 355 327 3 27 231 231 44725 725 139 000 326 000 1 1074 074 497 3 734 136 000 135 701 322 000 11687 687 320 3 2 0504 504 5 390 825 6 6173 173 133 000 318 000 88040 040 3 670 130 000 314

  13. Slide 13: Public targets for 2009 revised

    Public targets for 2009 revised Revised 2009 public targets 2009 H1 results Revenue Around 2% decline compared to 2008 2.1% decline „ excluding IC fees related „ revised from 1% decline „ strong decline in traditional voice reversal of provisions in 2008 „ recessionary impacts: lower usage and reven

  14. Slide 14: Consumer Services Business Unit (CBU) - Financials

    Consumer Services Business Unit (CBU) - Financials CBU Fixed line revenues CBU Mobile revenues HUF million HUF million -6% -4% 75 000 100 000 -19% -6% 60 000 +13% 80 000 +7% 45 000 -9% 60 000 30 000 40 000 -5% -9% 15 000 20 000 0 0 H1 2008 H1 2009 H1 2008 H2 2009 Voice* Internet TV Other Voice Non-v

  15. Slide 15: CBU – focus on triple play services

    CBU – focus on triple play services TV customer growth Strong focus on triple play on all networks (fixed Subscribers +26% line, cable and mobile) 600 000 n.a. 400 000 +183% ƒ new, simple and competitive offers launched under the T- -1% Home brand in September 2008 200 000 ƒ new packages include mor

  16. Slide 16: CBU - mobile operations

    CBU - mobile operations Mobile market shares Recessionary impact can also be felt in the Subscribers 115% Penetration mobile market 119% 12 000 000 „ due to lower disposable income customers became 21% +4.6% 21% more cost sensitive, increased churn levels 9 000 000 „ usage and tariff levels are also

  17. Slide 17: CBU - mobile KPIs

    CBU - mobile KPIs Continuing tariff decline ARPU MOU „ average tariff levels declining „ recession negatively influencing price elasticity, HUF min 4 000 150 MOU declines 3 397 3 195 127 125 „ mobile termination rate cuts also negatively affect 3 000 -6% -2% 100 ARPU 2 000 1 000 50 Mobile internet d

  18. Slide 18: Business Services Business Unit (BBU) - Financials

    Business Services Business Unit (BBU) - Financials BBU revenues Falling voice revenues counterbalanced by HUF million increasing SI/IT service revenues 100 000 2% „ decline in voice revenues accelerated by recession 80 000 „ strong competition causes decline in mobile tariffs +25% „ increasing contr

  19. Slide 19: BBU KPIs

    BBU KPIs Fixed voice access DSL customers Subscribers Subscribers 450 000 240 000 -5.6% -6.9% 360 000 -4% 180 000 270 000 -9% 120 000 180 000 90 000 -19% 60 000 -9% +3% 0 0 June 2008 June 2009 June 2008 June 2009 Business lines Managed leased lines ISDN channels Retail DSL customers Wholesale DSL ac

  20. Slide 20: Macedonia

    Macedonia Revenues Results supported by significant FX impact HUF million +13% „ HUF weakened on average by 14.0% to the 48 000 Macedonian Denar yoy in the first half of 2009 40 000 +20% 32 000 Declining traditional fixed line voice revenues 24 000 +21% „ strong mobile substitution, competition from

  21. Slide 21: Montenegro

    Montenegro Revenues Results supported by significant FX impact HUF million „ HUF weakened on average by 14.3% to the Euro in the first +7% half yoy 18 000 15 000 +5% Fixed voice revenues remained flat due to FX impact 12 000 +6% „ high mobile substitution puts significant pressure on voice 9 000 +31

  22. Slide 22: International KPIs: Macedonia, Montenegro

    International KPIs Macedonia Fixed voice access ADSL customer growth Mobile subscribers 22.1% Penetration 19.5% Subscribers 100% Penetration 112% Subscribers 120 000 Subscribers 480 000 2 500 000 100 000 11% 400 000 2 000 000 10% 80 000 30% 320 000 -14% +47% 1 500 000 30% 240 000 60 000 113 374 454

  23. Slide 23: For further questions please contact the IR department

    For further questions please contact the IR department: Investor Relations Phone: +36 1 458-0423 Fax: +36 1 458-0443 e-mail: investor.relations@telekom.hu 23

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