Magyar Telekom Telecommunications Plc · BET:MTELEKOM
Magyar Telekom Telecommunications — Magyar Telekom — Investor Presentation (December 2022)
31 slides from Magyar Telekom Telecommunications's investor presentation, December 2022
Slide 1: Magyar Telekom Group Investor Presentation
MAGYAR TELEKOM GROUP INVESTOR PRESENTATION December 2022
Slide 2: Disclaimer
DISCLAIMER This investor presentation contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore should n
Slide 3: Strategic Priorities
‘STRATEGICPRIORITIES ~ . a a
Slide 4: Overview – Magyar Telekom at a Glance
OVERVIEW – MAGYAR TELEKOM AT A GLANCE Overview Pillars of transformation ▪ Integrated operations in Hungary and North Macedonia GROW ▪ Leading telecommunications service provider in both countries Lead In Customer Lead in Lead in Business ▪ Leading SI/IT service provider in Hungary Experience Techno
Slide 5: Hungarian Economic Environment
HUNGARIAN ECONOMIC ENVIRONMENT Growth structure & Domestic demand ▪ Magyar Telekom leveraged positive trends of domestic demand 8% 7.1% 5.1% 4.9% in the past periods 6% 4.0% 4% 2.0% ▪ Investment levels show volatility due to EU fund cycles 2% 0% ▪ GDP growth is expected to slow down in H2 2022 (H1 2
Slide 6: Strong Performance Underpinned by Successful Strategic Priorities
STRONG PERFORMANCE UNDERPINNED BY SUCCESSFUL STRATEGICAL PRIORITIES RESILIENCE CUSTOMERS NETWORK 6
Slide 7: Network - Continued Focus on Network Developments
NETWORK - CONTINUED FOCUS ON NETWORK DEVELOPMENTS Gigabit capable fixed network development Mobile data traffic developments # of access points (th) Total monthly mobile traffic (GB) 4 500 4 314 4 333 4 356 4 374 4 385 4 400 4 415 45 000 000 4 259 4 000 40 000 000 27.2% 24.8% 30.8% 29.4% 3 500 38.9%
Slide 8: Focus on Seamless Service Experience and Customer Satisfaction
FOCUS ON SEAMLESS SERVICE EXPERIENCE AND CUSTOMER SATISFACTION LEADING TO GROWING CUSTOMER BASE Fixed line multiplay residential subscribers Mobile SIMs ‘000 ‘000 +2.9% +5.9% 1,558 5,914 M2M 1,514 5,582 15% 12.5% Prepaid 18% 1Play 10.1% Postpaid 2Play 26.3% 24.0% 37% 40% 3Play 63.6% 63.5% 45% 45% Q3
Slide 9: More-for-More Pricing and Successful Network Monetization
MORE-FOR-MORE PRICING AND SUCCESSFUL NETWORK MONETIZATION CONTRIBUTING TO ARPU GROWTH Fixed Voice, BB and TV ARPU Mobile ARPU HUF HUF Q3 2021 Q3 2021 Q3 2022 Q3 2022 1,974 3,774 Fixed voice -5.7% Blended* +2.2% 1,861 3,856 3,656 5,351 Fixed BB +5.2% Postpaid* +3.0% 3,845 5,514 3,364 1,248 Pay TV +2.
Slide 10: Strong Performance Underpinned by Successful Strategy Execution
STRONG PERFORMENCE UNDERPINNED BY SUCCESSFULL STRATEGY EXECUTION ~90% Employees in Budapest HQ working Magyar Telekom Group EBITDA / EBITDA AL Adj development under agile framework HUF bn 6% saving 220 210 200 2.4% 190 in electricity consumption YoY 180 0 Other operating expenses 2013 2014 2015 2016
Slide 11: Guidance, Outlook and Shareholder Remuneration 2022-2024
GUIDANCE, OUTLOOK AND SHAREHOLDER REMUNERATION 2022-2024
Slide 12: 2022 Public Targets and 2023-2024 Outlook
2022 PUBLIC TARGETS AND 2023-2024 OUTLOOK REFLECTS STRONG COMMERCIAL MOMENTUM 2021 results 2022 guidance 2023 – 2024 outlook REVENUE HUF 700.1 bn1 ca 5% growth2 moderate annual growth EBITDA AL HUF 216.3 bn moderate decline moderate annual growth CAPEX AL3 HUF 109.3 bn broadly stable FCF 3 HUF 56.2
Slide 13: Shareholder Remuneration After 2021 Results and Policy for 2022-2024
SHAREHOLDER REMUNERATION AFTER 2021 RESULTS AND POLICY FOR 2022-2024 Shareholder remuneration Shareholder remuneration policy for 2022-2024 HUF bn 29.6 ▪ The Board of Directors approved the shareholder 25.5 remuneration policy for 2022-2024 ▪ Goal is to increase transparency, visibility and reliabil
Slide 14: Q3 2022 Results
Q3 2022 RESULTS
Slide 15: Revenue Growth Driven by Sustained Commercial Momentum
REVENUE GROWTH DRIVEN BY SUSTAINED COMMERCIAL MOMENTUM Revenue, Q3 2022 vs Q3 2021* ▪ Growth in mobile service revenues driven by HUF bn +9.0% strong data demand 5.1 1.6 190.9 3.3 ▪ Fixed service growth attributable to strong -0.4 6.4 demand for broadband and TV services 175.1 ▪ Increase in equipmen
Slide 16: EBITDA AL Performance Impacted by Supplementary Telecommunication Tax
EBITDA AL PERFORMANCE STRONGLY IMPACTED BY NEW SUPPLEMENTARY TELECOMMUNICATION TAX EBITDA AL, Q3 2022 vs Q3 2021 ▪ Increase in gross profit attributable to positive HUF bn -2.8% underlying telecommunication service 8.7 developments -3.4 60.3 -6.5 58.6 ▪ Recently imposed supplementary -0.5 telecommun
Slide 17: Supplementary Telecommunication Tax and Weakening Forint Weigh on Net Profit
SUPPLEMENTARY TELECOMMUNICATION TAX AND WEAKENING FORINT WEIGH ON NET PROFIT Net income (and adjusted net income), Q3 2022 vs Q3 2021 ▪ Lower D&A reflects copper network retirement, HUF bn lower SW-related D&A expenses and lower -4.5% 3.0 20.1 spectrum-related amortization in Hungary 17.9 0.1 17.1 -
Slide 18: Continued Focus on Network Development
CONTINUED FOCUS ON NETWORK DEVELOPMENT CAPEX AL, 9M 2022 vs 9M 2021 HUF bn 154.5 3.1 86.1 +16.2% ▪ Increased investment in fixed network 2.5 83.0 driven by continued fiber rollout efforts 2.2 3.5 ▪ RAN modernization in Hungary continued 3.5 ▪ Increase in other investments led by higher 71.4 spending
Slide 19: Free Cashflow Reflects Strong Underlying Results
FREE CASHFLOW REFLECTS STRONG UNDERLYING RESULTS; SUPPLEMENTARY TELECOMMUNICATION TAX DUE IN Q4 2022 Free cashflow, 9M 2022 vs 9M 2021 HUF bn +54% 19.5 5.5 2.1 52.9 6.0 4.5 6.1 34.4 5.6 47.4 9M 2021 EBITDA w/o Working Other op. Capex Disposal of Other changes 9M 2022 excl. spectrum 9M 2022 with Pan-
Slide 20: Back-up
BACK-UP
Slide 21: Hungarian Telco Market Positions
HUNGARIAN TELCO MARKET POSITIONS Mobile voice market1 Mobile data market1 SIMs (mn) SIMs (mn) Others Others 9.7 9.8 9.8 9.6 8.0 10 Vodafone 8 7.1 7.4 4iG/Digi 0.7% 1.4% 1.9% 2.1% 6.6 2.2% 0.3% 2.4% 0.2% 26.4% 26.7% 26.9% 26.5% Yettel 2.2% 29.4% Vodafone 8 1.1% 27.2% 6 26.9% 27.3% Magyar Telekom Yett
Slide 22: Hungarian 5G Developments
HUNGARIAN 5G DEVELOPMENTS Coverage Tariffs Gigastrong Unlimited Plans Smartworld Travel 2 Smartwatch Entertainment +10 GB EU Tablet +2GB NonEU MultiSIM HUF 8,953 – 12,736 /month on a standalone basis Gigastrong 5G option for HUF 1,600 / month Population based coverage ca 18% countrywide and 5G servi
Slide 23: IT Market in Hungary: 2020-2026
IT MARKET IN HUNGARY: 2020-2026 Total B2B IT market 2 IT Services market shares1,2 HUF bn Magyar Telekom Group +5.7% 1,200 1,158 12.0% 1,090 1,100 +14.5% 1,035 NISZ 977 24% 1,000 922 23% 8.5% 900 877 21% 19% 14% 17% 800 766 700 11% 29% 29% 8.2% 4iG Plc. 29% 29% 29% 29% 600 28% 500 2.4% 3.6% 13% 13%
Slide 24: North Macedonia: Q3 and 9M 2022 Results
NORTH MACEDONIA: Q3 AND 9M 2022 RESULTS Revenues, Q3 2022 vs Q3 2021* EBITDA AL, Q3 2022 vs Q3 2021 HUF mn +16.0% HUF mn -0.1% 685 1,958 19,908 2,238 -178 17,163 7,689 7,680 -1,902 -65 Q3 2021 Mobile Fixed SI/IT Q3 2022 Q3 2021 Gross profit Indirect costs IFRS 16 impact Q3 2022 Revenues, 9M 2022 vs
Slide 25: Sustainability Strategy 2016-2021 and Achievements
SUSTAINABILITY STRATEGY 2016-2021 AND ACHIEVEMENTS ▪ Diversity: comprehensive targets safeguarding ▪ Climate protection: decreasing operational emission and governance, diversity and inclusion, workplace offering green products to customers flexibility and others Diversity & Climate ✓ carbon neutral
Slide 26: Sustainability Strategy 2021 - 2025 - 2030
SUSTAINABILITY STRATEGY 2021 - 2025 - 2030 2025 2030 Target Target Scope 1 + 2 • keep at net zero (by an overall 16% decrease in • keep at net zero (by 84% decrease compared I. Climate (direct & indirect emissions) consumption) to 2015) protection Scope 3 (emissions of our suppliers & • decrease by
Slide 27: Company's ESG Efforts Continue to Gain External Recognition
COMPANY’S ESG EFFORTS CONTINUE TO GAIN EXTERNAL RECOGNITION Ratings Index inclusion ▪ Outstanding MSCI ESG rating of AA maintained for the 3rd year in a row Magyar Telekom remains a constituent of the FTSE4Good Index Series following a recent index review with a 99-percentile rank in telecommunicati
Slide 28: Other Awards and Recognitions in 2021
OTHER AWARDS AND RECOGNITIONS IN 2021 ▪ Zyntern.com #2 most attractive employer ▪ PwC Hungary – Most Attractive Workplace (Telecommunication category) ▪ Randstad Most Attractive Workplace (Telecommunication sector) ▪ IPRA Golden World Award ▪ GKI Digital - the biggest turnover online in the mobile p
Slide 29: Further Details on Adjustments on Net Income
FURTHER DETAILS ON ADJUSTMENTS ON NET INCOME ’Adjusted Net Income’* is to be adjusted for major non-cash below EBITDA one-off items that are not part of the underlying performance Such as: ➢ Change in fair value of derivatives ➢ FX result realized on principal of the CCIR (cross currency interest ra
Slide 30: Hungarian Mobile Spectrum
HUNGARIAN MOBILE SPECTRUM Spectrum allocation (MHz) 700 10 10 5 25 800 10 10 10 30 900 15 10 10 35 1800 15 5 10 20 5 20 75 2100 15 15 15 5 10 60 2600 30 20 20 70 1500 40 2600 5 25 15 5 50 3500 10 60 20 50 60 200 3700 60 140 200 Magyar Telekom Vodafone Yettel Digi not allocated 30
Slide 31: For further questions please contact the IR department
? For further questions please contact the IR department: Diana Várkonyi Rita Walfisch Capital Market Relations Hub Lead Investor Relations Manager Phone: +481-7676 Phone: +36 1 457-6084 e-mail: varkonyi.diana.annamaria@telekom.hu e-mail: walfisch.rita@telekom.hu
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