Magyar Telekom Telecommunications Plc · BET:MTELEKOM
Magyar Telekom Telecommunications — Magyar Telekom — Q1 2009 Earnings Presentation
23 slides from Magyar Telekom Telecommunications's earnings presentation, 2009
Slide 1: Magyar Telekom First Quarter 2009 Results
Presentation Magyar Telekom First Quarter 2009 Results Public guidance maintained despite recessionary impact 1
Slide 2: Abbreviations and investigation disclosure
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
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 local concession areas of 54 in Hungary leading telecommunications service provider in all three countries leading SI/IT service provider in Hungary Magyar
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 ABCD TBU HQ “T” as our corporate brand identifies the Magyar Telekom Macedonia Montenegro Group New organization since January 1, 2008 Consumer Services Business Serv
Slide 5: Improving service quality and portfolio
Improving service quality and portfolio Reinforcing technological leadership New generation access strategy Launch of satellite TV service Households coverage plans Number of customers 1 200 000 60 000 800 000 780 000 40 000 400 000 200 000 47 000 40 000 20 000 350 000 350 000 380 000 17 000 0 0 Q1
Slide 6: Focus on efficiency: headcount rationalization
Focus on efficiency Headcount rationalization Headcount reduction Total Workforce expense in Hungary 12 341 12 262 11 723 HUF million 12 500 CAGR 40 000 10 439 -8.0% 10 000 -1% 30 000 7 500 -1% 20 000 5 000 -1% 2 500 10 000 0 0 Dec 2006 June 2007 Dec 2007 Dec 2008 Q1 2008 Q1 2009 Magyar Telekom Plc.
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 671 196 676 661 673 056 CAGR 45% 18% 700 000 42.5% 615 054 40.9% 41.9% +66.2% 40% 39.5% 560 000 16% +5.1% 35% 420 000 15.3% 14% 2
Slide 8: Expansion strategy: selective further acquisitions
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 2005 – Dataplex Ukraine 2006 – KFKI Moldova 2007 – T-Systems Hungary Hungary 2009 – KFKI Di
Slide 9: Dividend policy: delivering value to shareholders
Dividend policy Delivering value to shareholders Net debt ratio and dividend payment 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% 60 100% 38% 1% 33.2% 31.7% 31.0% Target 29.7% 14% 30% 13% 1% 1% 75% 40 14% 20% 50% 74% 78% 80% 20 60
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 higher financing costs higher churn rates and lower usage mainly in the Impact of the weaker Forint: residential segment Impacts Net EBITDA effect (cons
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
Slide 12: Public targets for 2009 maintained
Public targets for 2009 maintained 2009 public targets 2009 Q1 results Revenue 1% decline compared to 2008 2% decline significant drop in disposable income expected new initiatives (launch of satellite TV, as a result of recession fibre optic roll-out) aim to ensure FY intensifying competition
Slide 13: First quarter 2009 results: Business Unit analysis
First quarter 2009 results Business Unit analysis Revenue development EBITDA development 164 000 70 000 162 640 68 9 35 162 000 68 000 1 005 883 1 635 70 160 000 1 344 159 409 66 000 1 815 380 158 000 2 344 421 4 530 64 570 14 215 64 000 2 648 156 000 4 474 154 000 62 000 ia ia gy ro gy ro r r U U H
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 -7% -5% 40 000 50 000 +11% -15% 30 000 40 000 +5% -10% 30 000 20 000 -9% 20 000 -5% 10 000 10 000 0 0 Q1 2008 Q1 2009 Q1 2008 Q1 2009 Voice Internet TV Other Voice Non-voice Other C
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 +17% line, cable and mobile) 600 000 n.a. 400 000 +191% new, simple and competitive offers launched under the T- 0% Home brand last September 200 000 new packages include more fa
Slide 16: CBU - mobile operations
CBU - mobile operations Mobile market shares Despite stable market shares, competition is Subscribers 112% Penetration strong 121% 12 000 000 continuously declining tariff levels 21% increasing penetration 21% +9.5% 9 000 000 35% +6.0% 35% 6 000 000 Tariff erosion 3 000 000 44% +8.5% 44% broad
Slide 17: CBU - mobile KPIs
CBU - mobile KPIs Continuing tariff decline ARPU MOU average tariff levels declining due to extensive use of closed-user-group offers HUF min mobile termination rate cuts also negatively affect 4 000 150 3 377 -12% 2 987 125 -5% 119 ARPU 3 000 100 recessionary impact seen in declining MOU tren
Slide 18: Business Services Business Unit (BBU) - Financials
Business Services Business Unit (BBU) - Financials BBU revenues Revenue increase driven by focus on SI/IT services HUF million declining voice revenues due to intense competition from 50 000 alternative service providers and declining mobile tariffs +4% 40 000 increasing contribution of low-marg
Slide 19: BBU KPIs
BBU KPIs Fixed voice access DSL customers Subscribers Subscribers 450 000 250 000 -5.0% -2.5% 360 000 200 000 -4% 270 000 150 000 -3% 180 000 100 000 90 000 -17% 50 000 -7% +4% 0 0 Q1 2008 Q1 2009 Q1 2008 Q1 2009 Business lines Managed lease lines ISDN channels Retail DSL customers Wholesale DSL acc
Slide 20: Macedonia
Macedonia Macedonia revenues Limited top line growth opportunities HUF million +13% strong mobile substitution, competition from altnets, 24 000 cables and one mobile operator offering fixed line 20 000 +14% service 16 000 decreasing fixed tariff levels +24% financials supported by significant
Slide 21: Montenegro
Montenegro Montenegro revenues Fixed voice revenues decline HUF million 9 000 +5% drop in wholesale revenues driven by Promonte’s traffic rerouting through Serbia 7 500 -2% 6 000 +9% Rapid growth in broadband market 4 500 +27% ADSL customers up 70% to close to 41,000 3 000 1 500 -5% Increasing m
Slide 22: International KPIs: Macedonia and Montenegro
International KPIs Macedonia Fixed voice access ADSL customer growth Mobile subscribers 22.3% Penetration 20.1% Subscribers 96% Penetration 111% Subscribers 120 000 Subscribers 480 000 2 500 000 100 000 12% 400 000 2 000 000 9% 80 000 30% 320 000 -11% +58% 1 500 000 30% 240 000 60 000 457 593 106 26
Slide 23: Thank you for your attention!
Thank you for your attention! 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