Magyar Telekom Telecommunications Plc · BET:MTELEKOM
Magyar Telekom Telecommunications — Magyar Telekom — FY2007 Earnings Presentation
17 slides from Magyar Telekom Telecommunications's earnings presentation, March 2008
Slide 1: Presentation Full year 2007 results
Presentation Full year 2007 results Strong cash generation, public guidance met
Slide 2: Agenda
Agenda Overview Public targets for 2007 and 2008 2007 summary and segment analysis Regulatory snapshot Key strategic priorities Organizational changes and integration Dividend policy Abbreviations: IC: interconnection, NRA: National Regulatory Authority, CPI: consumer price index, WS: wholesale, SMP
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, EUR 3.4bn market capitalization Macedonia and Montenegro alternative/wholesale operations in Romania, Stock exchange listing Bulgaria and Ukraine listed on NYSE and Budapest
Slide 4: Public targets for 2007 and 2008
Public targets for 2007 and 2008 2007 public targets and results 2008 public targets Revenue Flat over 2006 +0.8% 9 Flat over 2007 competitive landscape sluggish economic growth limits disposable income Underlying EBITDA Flat over 2006 +2.9%* 9 Slight decline over 2007 *Excluding investigation-
Slide 5: Full year 2007 summary
Full year 2007 summary Revenues EBITDA EBITDA margin Group HUF 676.7bn +0.8% HUF 243.9bn -5.7% 36.0% Underlying** HUF 277.1bn +2.9% 40.9% T-Com HUF 307.7bn -2.4% HUF 111.6bn -9.9% 36.3% underlying HUF 127.7bn 0% 41.5% T-Mobile HUF 346.9bn -0.8% HUF 149.3bn +6.7% 43.0% Segments* underlying HUF 151.2b
Slide 6: T-Com: Hungarian operations
T-Com: Hungarian operations Focus on customer retention Voice revenues under threat from HUF million Revenue breakdown competition 300 000 -2.7% strong mobile substitution as mobility 250 000 premium diminishes 200 000 cable operators offering VoCaTV & 3Play 150 000 alternative operators takin
Slide 7: T-Com: Hungarian operations
T-Com: Hungarian operations Continued focus on broadband Cable services Incentives to increase customer base Second player on the cable market low-end offer from HUF 3,900 (~EUR 16) T-Kábel market share c. 19% based on cableTV bundled 2Play and 3Play offers customers (~419,000) decline in br
Slide 8: 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 9.5%) Subscribers acquisition cost/new RPC grew by 5% to HUF 5 000 000 4 000 000 37% 6,554 as fo
Slide 9: T-Mobile: Hungarian operations & TETRA
T-Mobile: Hungarian operations & TETRA Solid operational performance Usage increase supports ARPU Usage and ARPU trends MOU increased by 5% y-o-y to 149 ARPU (HUF) MOU ARPU down by 5% to HUF 4,542 (~EUR 18) 6 000 160 growing importance of VAS (15% of ARPU) 5 500 150 5 000 140 4 500 130 Mobile
Slide 10: T-Systems
T-Systems Growing importance of SI/IT services Declining traditional revenues Leading position in the Hungarian SI / IT intense competition from alternative service providers market strong mobile substitution with closed-user-group full scale IT service portfolio offered offers consolidation
Slide 11: T-Com: international operations
T-Com: international operations Macedonia Montenegro Limited top line opportunities Saturated fixed line market strong mobile substitution increasing role of mobile substitution competition from altnets and cables fixed line penetration at 30.6% (down 0.8ppt) fixed line penetration was 22.
Slide 12: T-Mobile: international operations
T-Mobile: international operations Macedonia Montenegro Subscribers (th) Subscribers (th) 68% 70% 73% 81% 93% Penetration 104% 107% 121% 164% 169% Penetration 2 500 000 1 200 1 000 2 000 000 16% 25% 8% 800 1 500 000 4% 48% 30% 600 41% 34% 33% 57% 58% 34% 58% 1 000 000 33% 400 200 42% 43% 42% 36% 34%
Slide 13: Regulatory snapshot
Regulatory snapshot Fixed-line Mobile Hungary – in line with EU regulatory framework geographic number portability since January 2004 mobile number portability since May 2004 WS naked ADSL offered to ISPs since end-March 2007 EU roaming regulation adopted IC fees close to EU average NRA
Slide 14: Key strategic priorities
Key strategic priorities Current direction maintained, strengthened focus on 3 key areas Excellence Expansion stronger customer focus seeking value-accretive acquisitions both in Hungary improved service quality and the region integrated sales and call-center services strengthening positio
Slide 15: Changes in organization, headcount reduction
Changes in organization, headcount reduction New organizational structure Headcount rationalization Structural changes in the telecom industry: Agreement with trade unions reached on technological development and innovation October 1, 2007 convergence throughout the industry changes in custome
Slide 16: Integration steps within the Magyar Telekom Group
Integration steps within the Magyar Telekom Group Integration within T-Systems segment Integration of T-Online and Emitel integration into three divisions: Infocom, IT Decision made in June 2007, integrated since October Infrastructure and IT Applications 2007 number of subsidiaries decreased fr
Slide 17: Dividend policy
Dividend policy Net debt ratio and dividend yield Net debt ratio** Dividend yield*** 50% 9.1% 9.2% 10% 46.6% 8.7% 8.7% 8.7% 40% 38.8% 8% 32.9% 33.2% 31.7% 31.0% Targeted net 31.6% debt ratio range 30% 6% 20% 4% 10% 2.3% 2% 1.4% 0% 0% 2001 2002 2003 2004 2005 Q1 2007* 2007 2008 2009 * 2006 dividend p