Telekom Austria Ag · VIE:TKA
Telekom Austria — Investor Presentation (July 2024)
35 slides from Telekom Austria's investor presentation, July 2024
Slide 1: Investor Presentation July 2024
Investor Presentation July 2024
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 or by ›outlook‹. Actual events may differ materially from those anticipate
Slide 3: Promoting a more sustainable way of life through digitalization
Promoting a more sustainable way of life through digitalization • Leading telco across CEE • System-critical infrastructure: fixed-line and mobile networks, data centers • Leverage the potential provided by megatrend digitalization • Strong growth performance, solid balance sheet structure • Well-ba
Slide 4: Regional coverage
Regional coverage Inhabitants GDP/capita Mobile subscribers RGUs (million; market position) (million; market position) (million) (in $) Austria 9.0 67,900 5.2 #1 2.9 #1 Bulgaria 6.5 33,800 3.8 #1 1.2 #2 Croatia 3.9 40,200 2.0 #2 0.7 #2 Belarus 9.2 22,600 4.9 #2 0.8 #2 Serbia 6.7 23,900 2.4 #3 - Slov
Slide 5: Strategy
Stra tegy 5 Investor presentation | July 2024
Slide 6: Trends that influence telcos and A1's strategy
Trends that influence telcos and A1’s strategy Broadband Competitive rollout is landscape is Data traffic progressing expanding growing strongly ESG aspects Sustainability Ecosystems AI and the a mandatory a factor in are future analytical use requirement to decision drivers of of data are compete i
Slide 7: Key performance drivers
Key performance drivers IT services e.g., applications, data centers, analytics Security data/mobile/object security Communication e.g., private branch exchange, healthcare Unified B2B Integrated sector solutions Brand Digital e.g., smart metering, IoT Commercial One One to all approach Upselling th
Slide 8: Strategy follows the vision: Empowering digital life
Strategy follows the vision: Empowering digital life Evolve the core Explore the new Transparency & Growth & Autonomy Inspiration • From network to • Scaling-up the portfolio connectivity plus Take Learn & • Develop eco-systems and • From product driven to ownership innovate partnerships to enrich c
Slide 9: Financials
Finan cials 9 Investor presentation | July 2024
Slide 10: Financial performance
Financial performance (Unless otherwise stated, in € mn) Revenues EBITDA Free cash flow* +5% +5% -41% 5,005 5,251 4,748 603 1,838 1,924 1,706 487 354 35.9% 36.7% 36.6% 2021 2022 2023 2021 2022 2023 2021 2022 2023 EBITDA margin * 2023 incl. € 133 mn investments in spectrum (2022: € 10 mn) CAPEX (incl
Slide 11: Well-balanced performance across geographic footprint
Well-balanced performance across geographic footprint Revenue split (FY 2023) Growth driver CEE EBITDA split (FY 2023) Bulgaria 14% Bulgaria 16% Croatia 10% Croatia 10% +8.7% Belarus 8% Belarus 10% International Slovenia 5% Slovenia 3% Serbia +1.7% Serbia 7% Austria 7% Austria N-Macedonia Austria N-
Slide 12: Sustainable growth and strong free cash flow development
Sustainable growth and strong free cash flow development (Unless otherwise stated, in € mn) Revenues consistently growing EBITDA increased significantly Robust free cash flow CAGR CAGR Avg. 3.4% 4.4% € 446 mn/yr 5,005 5,251 1,838 1,924 4,435 4,565 4,549 4,748 1,549 1,561 1,577 1,706 603 504 487 384
Slide 13: A1 has decreased net debt significantly
A1 has decreased net debt significantly (Unless otherwise stated, in € mn) Robust free cash flow Sustainable dividend policy Net debt reduction Avg. € 446 mn/yr 0.95 0.97 EPS 0.76 0.91 603 0.73 2.3 2.0 504 487 0.58 0.58 0.68 1.7 384 FCF/ 1.3 1.3 344 354 0.48 0.52 0.58 share 1.9 1.7 0.53 0.36 0.49 0.
Slide 14: Strong growth performance within peer group in Europe
Strong growth performance within peer group in Europe Revenues, CAGR EBITDAaL adj., CAGR Standard & Poor’s rating 2019-2023 2021-2023 2019-2023 2021-2023 A1 Group +3.6% +5.2% +5.3% +5.3% Telenor (NOK) AA+ AA Proximus AA- Orange A+ A Swisscom* + Telia (SEK) A- A1 Group Telenor + Telefonica (w/o LatAm
Slide 15: Group revenues
Group revenues Unless otherwise stated, all amounts in EUR mn Q2 2024 Q2 2023 H1 2024 H1 2023 Service revenues 1,124 1,082 +3.9% 2,195 2,120 +3.5% Equipment revenues 168 194 -13.4% 344 389 -11.6% Other operating income 24 23 +3.3% 44 47 -6.5% Total revenues 1,316 1,299 +1.3% 2,583 2,557 +1.0% Servic
Slide 16: The share
The share 16 Investor presentation | July 2024
Slide 17: Shareholder structure
Shareholder structure Two strong shareholders ÖBAG (Österreichische Beteiligungs AG) • ÖBAG: independent holding company of state assets. ÖBAG Mission is to preserve and grow its investments for 28.4% generations. Retail • Investment portfolio includes also: OMV, Verbund, 3.3% Post, Casinos Austria,
Slide 18: Syndicate agreement between América Móvil and ÖBAG
Syndicate agreement between América Móvil and ÖBAG On February 6, 2023, both parties agreed on a new syndicate agreement with a term of 10 years. The publicly known cornerstones of this agreement are the following: General • Headquarters to remain in Austria • Commitment to the listing at the Vienna
Slide 19: Share price
Share price AT0000720008 Tela.VI TKA AV • Shares outstanding: 664,084,841 Institution Rating Price (€) • Listing: Vienna Stock Exchange AlphaValue/Baader Europe Buy 8.55 Bank Pekao Buy 8.60 180 Barclays Hold 8.00 TKA Bernstein Buy 10.00 160 Citigroup Hold 7.00 140 Erste Group Bank Hold 8.70 HSBC Hol
Slide 20: Sustainability
Sustain ability THE USE BY TELEKOM AUSTRIA OF ANY MSCI ESG RESEARCH LLC OR ITS AFFILIATES (“MSCI”) DATA, AND Source Sustainalytics. THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS Sustainalytics, a Morningstar OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A company, is a leading independent SPONSORSHIP,
Slide 21: New ESG Strategy: raised ambition & extended scope of topics
New ESG Strategy: raised ambition & extended scope of topics CO2 emissions Energy efficiency Recycle / Refurbish Waste reduction Product reuse CO2 Net-Zero goal by 2030 80% goal 20% goal Zero-waste to landfill goal Foster reuse projects Scope 1&2: -90% Increase energy efficiency to Increase percenta
Slide 22: Outlook
Out look 22 Investor presentation | July 2024
Slide 23: Guidance 2024
Guidance 2024 Total revenues +3-4% CAPEX (excl. spectrum) Around € 800 million ▪ Revenues: 3-4 % growth expected to be mainly driven by service revenues, both in CEE and Austria: Value-securing measures, upselling in the retail business, and a strong development of the solutions business, overcompen
Slide 24: A1 ambitions 2024-2026
A1 ambitions 2024-2026 Revenues EBITDA CAPEX 3-4% increase p.a. 4-5% increase p.a. € 2.8 bn plus frequencies Based on current inflation and Based on current inflation and exchange exchange rate expectations rate expectations Dividend baseline € 0.32 per share Based on the Group's operational and fin
Slide 25: Investment Case Telekom Austria
Investment Case Telekom Austria Leading telco across CEE • Among top 2 mobile operators in 6 out of 7 core markets • 29 million customers in Europe • >80% of Group EBITDA in investment-grade rated countries Top performing incumbent telco in Europe • Strong growth rates, high profitability, robust FC
Slide 26: Capital allocation follows conservative financial policy for long-term value creation
Capital allocation follows conservative financial policy for long- term value creation within rating framework Ambition to be A- rated (currently: A-/A3) Conservative financial Sustainable dividend Value-accretive M&A policy policy Developing in line with operational I. In market consolidation Ambit
Slide 27: Appendix
App endix 27 Investor presentation | July 2024
Slide 28: Management Board
Management Board Deputy CEO CEO Alejandro Plater (*1967, Argentina) Thomas Arnoldner (*1977, Austria) • Board member since August 2015 • Board member since September 2018 o 2015-2018 as CEO, 2018-2023 as COO o 2018-2023 as CEO • Before A1, senior roles at Ericsson • Before A1, board functions at Alc
Slide 29: Conservative financial policy and investment-grade ratings
Conservative financial policy and investment-grade ratings As of June 30, 2024 Overview (June 30, 2024) Lines of credit (June 30, 2024) Credit ratings • Total financial debt: EUR 748 mn • Total committed lines: EUR 1,315 mn A3/A- • Average cost of debt: 1.50% o Average term to maturity: 1.76 years B
Slide 30: Overview: Restructuring charges and provision vs. FTE
Overview: Restructuring charges and provision vs. FTE Overview restructuring charges (in EUR mn) FTE addressed Overview restructuring provision* (in EUR mn) Provisioned FTEs 30 Investor presentation | July 2024
Slide 31: P&L Q2 2024
P&L Unless otherwise stated, all amounts in EUR mn Q2 2024 Q2 2023 H1 2024 H1 2023 Revenues 1,316 1,299 +1.3% 2,583 2,557 +1.0% Q2 2024 - below EBITDA OPEX (812) (813) –0.2% (1,624) (1,635) –0.6% Restructuring (18) (17) +6.9% (39) (38) 2.6% EBIT declined due to D&A: EBITDA 504 486 +3.8% 959 922 +4.0
Slide 32: Free cash flow
Free cash flow Unless otherwise stated, all amounts in EUR mn Q2 2024 Q2 2023 H1 2024 H1 2023 Free Cash Flow in H1 2024 higher EBITDA 504 486 3.8% 959 922 4.0% due to Restructuring charges, cost of labor 19 18 5.2% 41 41 1.4% obligations • substantially lower CAPEX due to Lease paid (principal, inte
Slide 33: Accelerating internal transformation with a Competence Delivery Center (CDC)
Accelerating internal transformation with a Competence Delivery Center (CDC) • Repurposing costs (indirect to direct) to exploit opportunities & invest in the market • One CDC with different delivery centers (DCs), from 7 local to 1 international team i.e. • Efficiency gains and employee cost reduct
Slide 34: ICT solutions as key growth driver for the future
ICT solutions as key growth driver for the future ICT business in the group Best practice example: ICT in Bulgaria ▪ A1 offers a versatile ICT portfolio including cloud-, security-, ▪ ICT solutions in Bulgaria with above average growth rates as key datacentre-, communication-, network-, IoT & Analyt
Slide 35: Thank you
Telekom Austria AG (A1 Group) — Investor Presentation (July 2024) on 6ix