Magyar Telekom Telecommunications PLC · BET:MTELEKOM
Magyar Telekom Telecommunications — Magyar Telekom — FY2004 Earnings Presentation
16 slides from Magyar Telekom Telecommunications's earnings presentation, 2005
Slide 1: Public targets met, leading positions maintained despite intense competition
Public targets met, leading positions maintained despite intense competition 1 Full year 2004 results ••••••• 1
Slide 2: Agenda
Agenda Overview, full year 2004 results Segment analysis 2005-2006 public targets and guidance Mid-term strategy: restructuring, dividend, acquisition This presentation contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectati
Slide 3: Matáv at a glance
Matáv at a glance ! EUR 3.7bn market capitalisation Ownership structure* Törvényi változások ! Market leader in all core businesses ! fixed line incumbent operator Deutsche ! 100% stake in the leading Hungarian mobile Telekom 59.2% operator ! full scale telecommunications services in Macedonia Other
Slide 4: Full year 2004 summary
Full year 2004 summary Revenues EBITDA EBITDA margin Based on reported EBITDA Group HUF 601,438m -1.0% HUF 222,930m -11.0% 37.1% 85,639 -26.1% 28.4% Fixed-line ! Competitive pressure 301,717 -7.0% ! Success in line preservation 103,699 +9.2% 39.4% ! Fast broadband rollout ! Efficiency improvement me
Slide 5: Full year 2004 highlights: Matáv met its public targets
Full year 2004 highlights: Matáv met its public targets Public target Reported Revenue in the region of HUF 600bn HUF 601.4bn " EBITDA margin (before restructuring charges) around 40% 40.4% " Gross additions to tangible and intangible assets around HUF 90bn HUF 85bn " (excl. acquisitions and UMTS) F
Slide 6: Regulatory snapshot
Regulatory snapshot Fixed-line Mobile ! Market analysis to be completed ! Market analysis completed ! aggregate CPI price cap on voice access fees (except for mobile roaming) ! draft resolution implies“retail minus” price ! all three mobile operators identified as SMPs regulation for WS national bit
Slide 7: Fixed-line: active role in intensifying competition
Fixed-line: active role in intensifying competition Fixed-line erosion Törvényi minimised változások ! Strengthening competitive pressure ! entry of new players: Tele2, UPC QoQ change total # of lines, in line # million ! fixed-line geographical number portability mainly 25,000 2,9 affects business
Slide 8: Data: steady growth in the broadband business
Data: steady growth in the broadband business 2004 YE ADSL line target achieved ! Incentives to encourage ADSL lines 400,000 broadband usage 400,000 ! new broadband content offers ! free upgrade of ADSL access speed from November 2004 ! traffic based ADSL packages from 203,654 February 2005 200,000
Slide 9: Mobile: strong leader in a shaping environment
Mobile: strong leader in a shaping environment ! UMTS licences awarded ! 3 current operators won licences, no 4th entrant Mobile market Törvényi shares (%) változások ! TMH licence fee: HUF 17bn in 3 instalments Mobile subs mn ! Successful rebranding of Westel to 9 T-Mobile from June 2004 8 7 46.2 !
Slide 10: Mobile: solid financial and operational indicators
Mobile: solid financial and operational indicators Breakdown of the customer base ! EBITDA margin up to 39.4% ! EBITDA level grew by 9.2% customers 4 (mn) 30% ! ARPU: HUF 4,945 (~EUR 20) 29% 28% ! postpaid: HUF 11,828 26% 26% 27% 26% 3 ! prepaid: HUF 2,380 ! enhanced services: 12.4% of ARPU 2 25% 74
Slide 11: MakTel: leading positions on all markets
MakTel: leading positions on all markets ! Unfavourable macro environment MakTel subscribers and penetration Törvényi változások ! low disposable income, stagnating GDP levels, high unemployment 800,000 752,462 ! no obvious sign of recovery # 49% ! Fixed-line 600,000 # 29% 625,858 ! liberalisation t
Slide 12: MakTel: Productivity is the main focus
MakTel: Productivity is the main focus Increasing workforce efficiency ! Slightly decreasing revenues headcount fixed lines/ ! growing mobile revenues offset by reduction employee lower fixed-line revenues 800 756 300 ! Major headcount reduction to 263 contribute to improving efficiency 250 400 ! Ad
Slide 13: Public targets and guidance for 2005-2006
Public targets and guidance for 2005-2006 Revenue low single digit growth (without potential acquisitions) EBITDA margin above 40% (before restructuring charges) Capex / sales below 15% (excl. potential acquisitions and UMTS) Gross additions to tangible and maximum HUF 105bn including intangible ass
Slide 14: Workforce efficiency improvement through restructuring
Workforce efficiency improvement through restructuring Parent co. Subsidiaries* Fixed line/employee ratio Efficiency >500 lines/ 17.3% staff 600 above target employee reduction 500 500 Headcount ~2,600 incl. ~1,150 400 351 365 affected ~800 outsource 316 315 300 264 240 Total HUF 15.8bn HUF 4.4bn 20
Slide 15: Dividend policy and acquisition driven growth
Dividend policy and acquisition driven growth Net debt ratio and dividend yield Priority: acquisition driven growth ! Strategic priority remains growth Dividend Net debt yield ratio through value-accretive acquisitions 10% 60% ! target selection criteria for continuous 7.8% 7.8% monitoring of region
Slide 16: Acquisition of a majority stake in Telekom Montenegro
Acquisition of a majority stake in Telekom Montenegro TCG Group companies 2004 operational and financial figures market penetration (%) customers (‘000) Telekom Montenegro 68 195 179 fixed line operator incumbent 31 50** 100% 51% 8 85% ** approximate data Monet Montecard mobile operator public payph