27 slides from Magyar Telekom Telecommunications's earnings presentation, March 2017
Slide 1: Magyar Telekom Group Investor Presentation
MAGYAR TELEKOM GROUP INVESTOR PRESENTATION MARCH, 2017
Slide 2: Strategy and Market Position
STRATEGY AND MARKET POSITION
Slide 3: Overview – Magyar Telekom at a Glance
OVERVIEW – MAGYAR TELEKOM AT A GLANCE International presence Hungary Revenue (FY2016) 8.9% Czech Republic 4.8% Slovakia Austria Moldova Hungary Hungary 86.4% Slovenia Croatia Budapest Croatia Romania Romania EBITDA (FY2016) BiH Serbia Serbia 9.7% Montenegro Kosovo Bulgaria Bulgaria 4.8% Macedonia Ma
Slide 4: Market Position in Hungary
MARKET POSITION IN HUNGARY Total mobile market* Fixed voice market** Vodafone Other Subscribers -0.9% Subscribers Telenor +0.8% Invitel 12,000,000 3,500,000 MT DIGI 22.9% 24.5% 25.3% 3,000,000 3.9% 3.2% 3.2% UPC 9,000,000 12.9% 12.8% 13.1% 2,500,000 11.1% 11.9% MT 10.2% 30.0% 27.6% 27.7% 2,000,000 1
Slide 5: IT Services Market Leader in Hungary
IT SERVICES MARKET LEADER IN HUNGARY Total Hungarian IT services market Revenue based SYSTEM INTEGRATION IT INFRASTRUCTURE SI & IT market shares* Package Custom System IT App. OS & Infra. OS & Infra. proj. Hosting Cloud (2015) application app. Dev. integration consulting operation operation service
Slide 6: Strategy Overview: Building a Growing ICT Company Serving Satisfied Customers
STRATEGY OVERVIEW: WITH OUR ENGAGED PEOPLE, WE ARE BUILDING A GROWING ICT COMPANY SERVING SATISFIED CUSTOMERS Strategic pillars Strategic goals 1 Together. Increase customer satisfaction For We listen: customer and colleague opinions form an Improve customer service level our important part of our d
Slide 7: Hungarian Economic Environment
HUNGARIAN ECONOMIC ENVIRONMENT Growth structure Domestic demand 6% Domestic demand improved as economy 3.7 3.6 3.7 recovered 4% 3.4 2.8 Governmental measures support consumer 2% 1.5 spending Investment levels show volatility due to EU 0% fund cycles MT leveraged positive trends of domestic -
Slide 8: Hungarian Mobile Spectrum Allocation
HUNGARIAN MOBILE SPECTRUM ALLOCATION Current spectrum allocation (MHz) BAND Magyar Telekom Telenor 700 MHz 2x5 2x5 2x5 2x5 2x5 2x5 Vodafone Digi Free 800 MHz 2x10 2x10 2x10 900 MHz 2x11.8 2x11 2x12 1800 MHz 2x15 2x5 2x25 2x30 2100 MHz 2x15 2x15 2x15 2x5 2x5 2x5 2600 MHz 2x30 2x20 + 1x25 2x20 3.4 - 3
Slide 9: Full Year Results, Guidance and Dividend
FULL YEAR RESULTS, GUIDANCE AND DIVIDEND
Slide 10: 2016 Financial Results
2016 FINANCIAL RESULTS 2016 RESULTS 2016 TARGETS REVENUE HUF 602.7 bn (-8.2%) around HUF 595 bn Decline due to partial exit from the energy business and lower SI/IT revenues Revenue growth in mobile driven by mobile data and equipment sales due to 4G push Slight decline in fixed revenues with
Slide 11: 2016 Results and Public Targets for 2017
2016 RESULTS AND PUBLIC TARGETS FOR 2017 2017 2016 RESULTS 2016 RESULTS without CT NEW TARGETS with CT Excluding CT financials REVENUE HUF 602.7 bn HUF 574.0 bn around HUF 560 bn EBITDA HUF 197.0 bn HUF 188.1 bn around HUF 182 bn CAPEX1 HUF 104.8 bn HUF 97.9 bn around HUF 85 bn FCF HUF 50.0 bn HUF 5
Slide 12: Dividend Policy
DIVIDEND POLICY Dividend payment and net debt ratio developments Highlights Net debt ratio* Dividend per share (HUF) 50% 70 Aiming to maintain net debt ratio (net 45.7% debt/total capital) target of 30% - 40% 43.8% 42.9% 39.3% 60 HUF 15 dividend paid on 2015 earnings 40% 34.1% 34.3% in May 2016
Slide 13: Q4 2016 Results
Q4 2016 RESULTS
Slide 14: Hungary
HUNGARY Revenue* EBITDA HUF bn HUF bn -14.6% +3.5% 165 162.1 -1.7 1.1 -0.9 40 0.9 -0.1 0.1 -2.1 3.8 -1.5 -9.8 39 160 38 37.6 155 -11.1 37 150 36.3 -1.2 36 0.1 145 35 140 138.5 1 0 0 4Q Mobile Mobile Mobile Fixed Fixed TV Fixed SI/IT Energy 4Q 4Q 2015 Gross profit Special tax Employee Other op. 4Q 20
Slide 15: Hungary – Fixed Voice, Broadband and TV
HUNGARY – FIXED VOICE, BROADBAND AND TV Fixed BB customer number Pay TV customer number ‘000 ‘000 +0.8% +1.9% 962 964 971 979 969 1,200 1,000 996 1,009 1,009 1,019 1,016 <10Mbps Sat 1,000 6% 6% 5% 5% 4% 10Mbps -30Mbps 800 32% 32% 31% 31% 30% Cable 800 >30Mbps IPTV 600 16% 15% 15% 14% 13% 65% 64% 62%
Slide 16: Hungary – Mobile
HUNGARY – MOBILE Mobile SIMs Mobile ARPU ‘000 HUF -3.1% 6,000 5,504 5,372 5,344 5,301 5,332 Prepaid 4Q 2015 3,278 5,000 Postpaid Blended +1.5% 4Q 2016 3,326 43.6% 42.3% 41.8% 41.1% 40.8% 4,000 1,154 3,000 Prepaid -6.0% 1,085 2,000 56.4% 57.7% 58.2% 58.9% 59.2% 4,927 1,000 Postpaid -0.9% 4,882 0 Dec
Slide 17: Hungary – Mobile Broadband
HUNGARY – MOBILE BROADBAND Mobile broadband development Smartphone penetration ‘000 % Non-4G +8.3% 75 3,000 4G 2,555 62 2,360 2,366 2,423 2,469 57 60 50 2,000 45 41 31 +506 30 1,000 51% 57% 15 40% 44% 47% 0 0 Dec 2015 Mar 2016 Jun 2016 Sep 2016 Dec 2016 Dec 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 T
Slide 18: Hungary – Multiplay
HUNGARY – MULTIPLAY Fixed line multiplay residential subs. development Fixed line multiplay residential ARPU development ‘000 1Play HUF 2Play 5,782 4Q 2015 1,500 1,439 1,432 1,427 1,424 1,400 Blended +1.8% 3Play 5,886 4Q 2016 35% 34% 33% 33% 32% 3,008 1,000 1Play +2.3% 3,079 30% 30% 30% 29% 29% 5,83
Slide 19: Hungary – SI/IT
HUNGARY – SI/IT Total Hungarian IT services market development* Market share** HUF bn % +5.4% Telekom 300 273 286 259 IT Infrastructure 14% HP 250 239 220 225 services NISZ 39% 39% 7% 200 40% Microsoft 40% System Integration / 41% 40% 4% IT Application services IBM 150 3% 2% 2% MVMI 100 63% 2% 2% 60
Slide 20: Macedonia
MACEDONIA Financials Mobile KPIs Revenues (HUF bn) EBITDA (HUF bn) Subscribers One (T. Slovenia)* 15.0 6.5 2,500,000 -0.3% VIP (T. Austria) -1.9% One.Vip 14.5 6.0 2,000,000 25.5% 0.4 24.7% Telekom 5.5 -5.5% 49.8% 14.0 0.2 1,500,000 13.8 5.0 27.8% 28.0% 13.5 5.0 0.0 4.7 -0.4 1,000,000 13.5 -0.2 4.5 -
Slide 21: Montenegro
MONTENEGRO* Financials Highlights Revenues (HUF bn) EBITDA (HUF bn) Moderate revenue decline driven by OTT push and lower Balkan -2.4% -10.3% roaming rates, partly offset by higher mobile BB revenues 7.6 0.3 -0.6 2.4 2.3 -0.5 Postpaid share in the RPC base up to 51% due to successful 7.4 2.2 4Pl
Slide 22: Appendix
APPENDIX
Slide 23: Q4 2016 Group Segmental Revenue and EBITDA
Q4 2016 GROUP SEGMENTAL REVENUE AND EBITDA Group segmental revenues Group segmental EBITDA HUF bn HUF bn +0.2% -13.2% 1.3 -0.3 185 182.9 -23.6 45.0 -0.2 180 175 -0.7 44.5 170 165 44.0 -0.3 -0.2 43.8 160 0.0 158.8 43.7 0 0.0 4Q 2015 Hungary Macedonia Montenegro Elimination 4Q 2016 4Q 2015 Hungary Mac
Slide 24: Magyar Telekom – Consolidated Income Statement
MAGYAR TELEKOM – CONSOLIDATED INCOME STATEMENT HUF million 2015 2016 Change Mobile revenues 314,033 319,929 1.9% Fixed line revenues 212,032 207,209 -2.3% System Integration/Information Technology revenues 80,997 68,735 -15.1% Revenue from energy services 49,280 6,778 -86.2% Revenues 656,342 602,651
Slide 25: Magyar Telekom – Consolidated Balance Sheet
MAGYAR TELEKOM – CONSOLIDATED BALANCE SHEET HUF million 2015 2016 Change Current assets 210,178 193,978 -7.7% Cash and cash equivalents 17,558 10,805 -38.5% Trade and other receivables 162,762 157,645 -3.1% Other current financial assets 11,052 5,104 -53.8% Non current assets 996,846 966,968 -3.0% P
Slide 26: Magyar Telekom – Consolidated Cash Flow Statement
MAGYAR TELEKOM – CONSOLIDATED CASH FLOW STATEMENT HUF million 2015 2016 Change Net cash generated from operating activities 156,298 154,825 -0.9% Investments in tangible and intangible assets (109,847) (113,255) -3.1% Adjustments to cash purchases 12,992 3,347 -74.2% Purchase of subsidiaries and bus
Slide 27: For further questions please contact the IR department
For further questions please contact the IR department: Investor Relations Linda László Phone: +36 1 458-0424 Head of Investor Relations Fax : +36 1 458-0443 Phone: +36 1 481-7676 e-mail: investor.relations@telekom.hu e-mail: laszlo.linda@telekom.hu Gerda Gáti Investor Relations Manager Phone: +36 1