Telekom Austria Ag · VIE:TKA
Telekom Austria — A1 Telekom Austria Group — FY2020 Earnings Presentation
46 slides from Telekom Austria's earnings presentation, Feb 9, 2021
Slide 1: Results for the full year and fourth quarter 2020
Results for the full year and fourth quarter 2020 Vienna, February 9, 2021
Slide 2: Cautionary statement
Cautionary statement 'This presentation contains forward-looking statements. These forward-looking statements are usually accompanied by words such as 'believe', 'intend', 'anticipate', 'plan', 'expect' and similar expressions. Actual events may differ materially from those anticipated in these forw
Slide 3: Operational and financial highlights for the full year 2020
Operational and financial highlights for the full year 2020 3
Slide 4: Highlights FY 2020
Highlights FY 2020 The operational and financial development was largely impacted by COVID-19 in 2020 Service revenues remained stable as roaming and FX losses were fully compensated by strong demand for mobile and fixed broadband services EBITDA before restructuring grew by +1.0% (excl. FX an
Slide 5: Austria and CEE markets in FY 2020
Austria and CEE markets in FY 2020 Total revenues Service revenues EBITDA before restructuring (in EUR mn) (in EUR mn) (in EUR mn) 4,565.2 -26.0 -1.7 4,549.4 +81.7 excl. FX 3,805.5 -3.1 -10.8 3,804.5 +49.7 -0.3% excl. FX +1.0% 15.8 -3.7 1,661.3 -0.0% 1,644.7 +31.5 excl. FX Revenues Austria CEE marke
Slide 6: FY 2020: Resilience of service revenues and strong focus on operational efficiencies
FY 2020: Resilience of service revenues throughout the year and strong focus on operational efficiencies enabled EBITDA growth Group (in EUR million) 2020 2019 % change Total revenues 4,549.4 4,565.2 -0.3% Service revenues 3,804.5 3,805.5 0.0% EBITDA before restructuring* 1,661.3 1,644.7 1.0% Net Re
Slide 7: FY 2020: EBITDA benefitting from strong underlying trends in service revenues
FY 2020: EBITDA benefitting from strong underlying trends in service revenues and operational efficiency measures Equipment Service revenues OOI OPEX Non-operating effects margin 1,661.3 1,644.7 EUR mn Results for the full year and fourth quarter 2020 7
Slide 8: Successful reductions in 2020, further efficiency improvements enable cost savings
Successful reductions in 2020, further efficiency improvements and digital transformation will enable additional cost savings OPEX* development 2020 Current and future savings initiatives Strong focus on operational efficiency to offset regular and demand-driven OPEX increases (i.e. collective bar
Slide 9: Operational and financial highlights for the fourth quarter 2020
Operational and financial highlights for the fourth quarter 2020 9
Slide 10: Austria and CEE markets in Q4 2020
Austria and CEE markets in Q4 2020 Total revenues Service revenues EBITDA before restructuring (in EUR mn) (in EUR mn) (in EUR mn) 1,200.4 -3.6 -11.9 1,185.6 962.7 5.8 -7.7 961.4 +23.0 excl. FX +17.3 excl. FX +2.8% -1.2% -0.1% 9.5 -1.9 387.0 376.5 +12.1 excl. FX Revenues Austria CEE markets Revenues
Slide 11: Q4 2020: Solid EBITDA growth enabled by resilient service revenue trends
Q4 2020: Solid EBITDA growth enabled by resilient service revenue trends and operational efficiencies Group (in EUR million) Q4 2020 Q4 2019 % change Total revenues 1,185.6 1,200.4 -1.2% Service revenues 961.4 962.7 -0.1% EBITDA before restructuring* 387.0 376.5 2.8% CAPEX 202.9 279.7 -27.5% Group
Slide 12: Austria: Increasing service revenues and cost savings translated into solid EBITDA growth
Austria: Increasing service revenues and cost savings translated into solid EBITDA growth in Q4 2020 ARPU ARPL Operational data (in EUR) (in EUR) +1.7% contract subscribers which were driven by strong demand for mobile Δ: +5.0% Δ: +5.8% WiFi routers and high-value tariffs 33.4 31.6 ARPU: growth
Slide 13: CEE: Negative FX effects and roaming losses mitigated by fixed-line growth
CEE: Negative FX effects and roaming losses mitigated by fixed- line service revenue growth and operational efficiencies Highlights CEE EBITDA (in EUR mn; Q4 %-change vs. PY) Bulgaria: Strong service revenue growth continued (+6.2%), driven by both the mobile and the fixed-line business Fixed-li
Slide 14: FY 2020: Strong free cash flow generation
FY 2020: Strong free cash flow generation (in EUR million) Q4 2020 Q4 2019 % change FY 2020 FY 2019 % change EBITDA 364.5 355.5 2.5% 1,576.8 1,560.6 1.0% Restructuring charges and cost of labor obligations 24.1 20.3 18.3% 92.4 91.9 0.5% Lease paid (principal, interest and prepayments) -41.4 -37.8 -9
Slide 15: Focus Points
Focus Points Results for the full year and fourth quarter 2020 15
Slide 16: Q4/FY 2020: Update of Covid-19 impact on key financials and KPIs
Q4/FY 2020: Update of Covid-19 impact on key financials and KPIs Gross adds Roaming CAPEX/OPEX Bad debt Churn Strong traffic decline Delivered on CAPEX guidance Internet@home products No observed deterioration following the lockdown gross adds above prior in collection measures starting in
Slide 17: Digital First: mid-term transformation program with focus on operational efficiency
Digital First: mid-term transformation program with a focus on operational efficiency to strengthen free cash flow Selected fields of initiatives More than 300 initiatives Network automation Customer care automation Automation of network operations via Decrease of manual steps via robotic process au
Slide 18: Bulgaria: Strong service revenue growth continued in 2020
Bulgaria: Strong service revenue growth continued in 2020 despite a challenging environment Strong fixed-line growth driven by TV and broadband Strong TV proposition (sports content) Solid growth in broadband services driven by upselling and constant growth of broadband RGUs (CAGR 16-20: +2.7%);
Slide 19: Austria: A1 5Giganet with largest fiber network and fastest 5G (fixed-line)
Austria: A1 5Giganet with a unique combination of largest fiber network and fastest 5G technology I Development in the fixed-line business: Increasing demand for higher bandwidths and speed upgrades Home office and home schooling during the lockdown periods led to an increased demand for higher ba
Slide 20: Austria: A1 5Giganet with largest fiber network and fastest 5G (mobile)
Austria: A1 5Giganet with a unique combination of largest fiber network and fastest 5G technology II Development in the mobile business: Growth potential from 5G services Launch of 5G network in January 2020 Introduction of 5G unlimited postpaid tariffs and 5G mobile WiFi routers 5G consumer p
Slide 21: Outlook for the full year 2021
Outlook for the full year 2021 Results for the full year and fourth quarter 2020 21
Slide 22: Outlook for the full year 2021
Outlook for the full year 2021 February 9, 2021 Consensus 2021 Total revenues ~ +1% EUR 4,583 mn CAPEX ~ 800 mn EUR EUR 786 mn* *CAPEX consensus excl. spectrum Outlook based on reported figures; assumed depreciation of ~ 15% avg. BYN vs. EUR FX rate CAPEX: does not include investments in spectru
Slide 23: Appendix 1: Additional information on KPIs and financials
Appendix 1 Additional information on KPIs and financials 23
Slide 24: A1 Telekom Austria Group: The leading regional communications player
A1 Telekom Austria Group: The leading regional communications player providing convergent telecommunication services as of December 31, 2020 (in ‘000) Austria Bulgaria Croatia Mobile market position #1 Mobile market position: #1 Mobile market position #2 Mobile subscribers: Mobile subscribers: Mobil
Slide 25: A1 Telekom Austria Group: Profit and Loss
A1 Telekom Austria Group: Profit and Loss (in EUR million) Q4 2020 Q4 2019 % change Service Revenues 961.4 962.7 -0.1% Equipment Revenues 195.7 212.9 -8.1% Other operating income 28.5 24.8 15.1% Total Revenues 1,185.6 1,200.4 -1.2% Cost of Service -346.5 -336.3 -3.0% Cost of Equipment -198.0 -213.1
Slide 26: Total revenues & costs and expenses per segment
A1 Telekom Austria Group: Total revenues & costs and expenses per segment Total Re ve nu e s (in E UR million) Q4 2020 Q4 2019 % change Austria 681.6 685.2 -0.5% Bulgaria 136.9 137.7 -0.6% Croatia 115.8 109.3 6.0% Belarus 95.7 114.0 -16.0% Slovenia 52.9 54.2 -2.4% Serbia 75.7 75.9 -0.2% North Macedo
Slide 27: Workforce development
A1 Telekom Austria Group: Workforce development FTE (Average Period) Q4 2020 Q4 2019 % change Austria 7,319 7,695 -4.9% International 10,261 10,345 -0.8% Corporate 371 374 -0.8% A 1 Te le kom A u s tria G rou p 17,951 18,414 -2.5% FTE (End of Period) Q4 2020 Q4 2019 % change Austria 7,320 7,625 -4.0
Slide 28: Capital expenditure split
A1 Telekom Austria Group: Capital expenditure split Capital Expenditures (in EUR million) Q4 2020 Q4 2019 % change Austria 145.0 117.0 23.9% Bulgaria 17.6 31.4 -44.0% Croatia 14.3 25.2 -43.5% Belarus 5.9 69.5 -91.4% Slovenia 6.6 12.7 -48.4% Serbia 8.1 15.8 -48.7% North Macedonia 3.9 7.7 -49.0% Corpo
Slide 29: Net debt
A1 Telekom Austria Group: Net debt as of December 31, 2020 Net Debt (excl. Leases) (in EUR million) 31 December 2020 31 December 2019 % change Long-term Debt 1,793.7 2,539.6 -29.4% Short-term Borrowings 749.1 123.0 n.m. Cash and Cash Equivalents -210.9 -50.2 n.m. Net Debt (excl. Leases) of A1 Teleko
Slide 30: Financial debt maturity profile
A1 Telekom Austria Group: Financial debt maturity profile as of December 31, 2020 (in EUR mn) 749.0 748.5 745.8 299.4 0.0 0.0 0.0 2021 2022 2023 2024 2025 2026 2027 EUR 2,542.8 mn short- and long-term Lines of credit Ratings debt as of December 31, 2020 Undrawn committed S&P: BBB+ (stable Av
Slide 31: Appendix 2: Reconciliation of Free Cash Flow
Appendix 2 Reconciliation of Free Cash Flow Results for the full year and fourth quarter 2020 31
Slide 32: FY 2020: Reconciliation free cash flow - operating view
FY 2020: Reconciliation free cash flow - operating view FY 2020 FY 2019 % change FCF after social plans new 503.7 343.7 46.5% Social plans new funded 96.7 96.7 0.0% Total social plans paid* -98.5 -99.8 -1.3% FCF - previously reported 501.9 340.6 47.3% *In the previous view all payments for all socia
Slide 33: Appendix 3: Regulatory Topics
Appendix 3 Regulatory Topics Results for the full year and fourth quarter 2020 33
Slide 34: Mobile Termination Rates
Mobile Termination Rates Jan Jul Jan Jul Jan Mar Jan April Aug 2016 2016 2017 2017 2018 2019 2020 2020 2020 Austria (EUR) 0.008049 0.008049 0.008049 0.008049 0.008049 0.008049 0.008049 0.008049 0.008049 Bulgaria (BGN) 0.019 0.019 0.014 0.014 0.014 0.014 0.014 0.014 0.014 Croatia (HRK)* 0.063 0.063 0
Slide 35: Upcoming spectrum tenders/prolongations/assignments
Upcoming spectrum tenders/prolongations/assignments* Expected Comments The NRA has announced a consultation on a new “Spectrum Release Plan for Austria” to start Austria 2021 (No auction) in March/April 2021. The procedure for spectrum allocation in 3.6 GHz, which will lead to the award of 5G spectr
Slide 36: EU roaming price regulation
EU roaming price regulation RETAIL (in EURc) July 2014 April 30, 2016 June 15, 2017 Data (per MB) 20 domestic tariff + 5* domestic tariff Voice-calls made 19 domestic tariff + 5* domestic tariff (per minute) Voice-calls received 5 weighted average MTR 0 (per minute) SMS (per SMS) 6 domestic tariff +
Slide 37: Appendix 4: Personnel restructuring in Austria
Appendix 4 Personnel restructuring in Austria 37
Slide 38: Quarterly Overview: Restructuring charges and provision vs. FTE
Quarterly Overview: Restructuring charges and provision vs. FTE Overview restructuring charges FTEs addressed (in EUR million) Q1 20 Q2 20 Q3 20 Q4 20 Q1 20 Q2 20 Q3 20 Q4 20 FTE reduction 17.7 36.6 19.5 17.5 Transfer to government 0 0 0 0 Servicekom contribution -2.2 -6.5 -3.6 2.4 Social plans 58 1
Slide 39: Full Year Overview: Restructuring charges and provision vs. FTE
Full Year Overview: Restructuring charges and provision vs. FTE Overview restructuring charges FTEs addressed (in EUR million) 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 FTE reduction 69.5 95.0 9.1 70.1 100.2 91.3 Transfer to government 49 6 3 0 0 0 Servicekom contribution -72.0 -96
Slide 40: Appendix 5: Macro Outlook
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Slide 41: Macro Outlook: GDP growth expected to bounce back in 2021
Macro Outlook: GDP growth is expected to bounce back in 2021 but it will take some time to recover to pre-crisis levels Austria Bulgaria Croatia Belarus 18 19 20 21 18 19 20 21 18 19 20 21 18 19 20 21 4,1 5,7 2,6 3,1 3,7 2,6 2,8 2,9 3,0 2,2 1,4 1,2 -3,0 -7,1 -5,1 -9,6 Slovenia Serbia N. Macedonia EU
Slide 42: Appendix 6: ESG
Vv , Vz Appendix 6 7 ESG At |
Slide 43: One.Strategy
One.Strategy “Environmental, Social & Corporate Governance (ESG)” was introduced as Strategy Enabler The A1 Telekom Austria Group aims to foster more efficient, resource- preserving and thus more sustainable ways of working and living. Results for the full year and fourth quarter 2020 43
Slide 44: ESG Strategy – Enabling the potential of digitalization for climate, people and society
ESG Strategy – Enabling the potential of digitalization for climate, people and society Targets – our ambition Climate & Environment - Ambition 2030 E Reach net carbon neutrality by decreasing the own carbon footprint & switching to energy from renewables1 (CO2-emissions: +3% yoy) Increase energ
Slide 45: ESG KPIs
ESG KPIs 2019 2020 Change Environment CO2-emissions (in t)* 240,909 247,705 3% E Energy efficiency (in Mwh/Terabyte) 0.18 0.14 -22% Mobile phones collected (No.) 64,504 84,880 32% Digital Education** S Participations in media literacy trainings (no.) 35,326 9,239 -74% Number of Workshops 2,217 527 -
Slide 46: ESG Milestones & Goals
ESG Milestones & Goals Relevant milestones reached ... ... and ambitious goals to achieve Alignment in CO2 Raise share of renewables Climate targets Science reporting process & first Launch in electricity and reduce based target approved group-wide CO2 audit ESG Website CO2 emissions Anchor ESG Inte
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