Magyar Telekom Telecommunications Plc · BET:MTELEKOM
Magyar Telekom Telecommunications — Magyar Telekom — Q4 2021 Earnings Presentation
27 slides from Magyar Telekom Telecommunications's earnings presentation, March 2021
Slide 1: Magyar Telekom Group Investor Presentation
MAGYAR TELEKOM GROUP INVESTOR PRESENTATION March 2021
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: Strategy and Market Position
STRATEGY AND MARKET POSITION
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: Focus on Seamless Connectivity and Customer Centricity
FOCUS ON SEAMLESS CONNECTIVITY AND CUSTOMER CENTRICITY Network Customers Resilience ▪ Fixed network rollout: coverage expanded to ▪ Further improvement in customer satisfaction ▪ HUF 4 billion savings in indirect costs* 3m gigabit capable access points in 2021 ▪ Continued strong momentum in mobile d
Slide 6: Hungarian Telco Market Positions
HUNGARIAN TELCO MARKET POSITIONS Mobile voice market1 Mobile data market1 SIMs (mn) SIMs (mn) Others Digi 9.7 9.6 9.7 9.8 9.8 9.6 7.5 10 Vodafone 8 7.1 7.4 Others 0.5% 0.7% 0.7% 1.4% 1.9% 1.9% 6.6 2.2% Telenor 2.2% 2.4% 0.2% 0.3% Vodafone 8 25.8% 25.6% 26.4% 26.7% 26.9% 27.4% 5.9 1.1% 27.2% 6 5.4 1.
Slide 7: IT Market in Hungary: 2020-2025
IT MARKET IN HUNGARY: 2020-2025 Total B2B IT market (HW&SW and IT services)1 IT Services market shares (by revenue)3 HUF bn +5.8% SYSTEM INTEGRATION IT INFRASTR. SI & 987 1,000 +3.8% 937 Pack- age Custo m app. IT Apps. OS & IT Infra. OS Infra. proj. IT 890 900 834 60 appl. 60 dev. 60 SI 60 Outsourc.
Slide 8: Hungarian Economic Environment
HUNGARIAN ECONOMIC ENVIRONMENT Growth structure & Domestic demand 8% 7.1% 6% 5.1% 4.9% ▪ Magyar Telekom leveraged positive trends of domestic demand 4.0% 4% 2.0% ▪ Investment levels show volatility due to EU fund cycles 2% 0% ▪ 2021 GDP showed a 7.1% year-on-year growth, mostly on the back -2% of st
Slide 9: Guidance, Outlook and Shareholder Remuneration 2022-2024
GUIDANCE, OUTLOOK AND SHAREHOLDER REMUNERATION 2022-2024
Slide 10: 2022 Public Targets and 2023-2024 Outlook Reflects Strong Commercial Momentum
2022 PUBLIC TARGETS AND 2023-2024 OUTLOOK REFLECTS STRONG COMMERCIAL MOMENTUM 2021 results 2022 guidance 2023 – 2024 outlook REVENUE HUF 700.1 bn 1%-3% growth moderate annual growth EBITDA AL HUF 216.3 bn 3%-5% growth moderate annual growth CAPEX AL1 HUF 109.3 bn broadly stable FCF 1 HUF 56.2 bn at
Slide 11: 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 12: 2021 Results
2021 RESULTS
Slide 13: Delivery Against 2021 Financial Targets
DELIVERY AGAINST 2021 FINANCIAL TARGETS 2021 guidance 2021 results 2021 guidance 2020 results (vs 2020) (YoY change) delivery Grow HUF 700.1 bn REVENUE HUF 673.0 bn around 3% +4.0% Grow HUF 216.3 bn EBITDA AL HUF 202.6 bn at least 3% +6.7% HUF 109.3 bn CAPEX AL1 HUF 106.0 bn Broadly stable +3.0% Bro
Slide 14: ARPU Growth in Hungary Driven by Favorable Subscriber Base Trends and Strong Data Usage
ARPU GROWTH IN HUNGARY DRIVEN BY FAVORABLE SUBSCRIBER BASE TRENDS AND STRONG DATA USAGE Mobile SIMs1 Mobile ARPU1 ‘000 HUF +3.8% M2M Q4 2020 5,427 5,634 Prepaid 3,592 Q4 2021 Blended +4.5% 7.9% 10.3% Postpaid 3,754 28.2% 25.8% 5,079 Postpaid +5.2% 5,341 63.9% 64.0% 1,155 Prepaid +3.3% 1,193 Q4 2020
Slide 15: Fixed Line Performance Supported by Customer Base Expansion
FIXED LINE PERFORMANCE SUPPORTED BY CUSTOMER BASE EXPANSION AND POSITIVE BB AND TV ARPU TRENDS IN HUNGARY Fixed line multiplay residential subscribers Fixed Voice, BB1 and TV ARPU ‘000 HUF +3.7% Q4 2020 2,100 Q4 2021 1,481 1,536 Fixed voice -7.0% 1,952 19% 17% 1Play 2Play 3,413 36% 38% Fixed BB +8.5
Slide 16: Revenue Growth in Q4 and FY 2021
REVENUE GROWTH IN Q4 AND FY 2021 Revenue, Q4 2021 vs Q4 2020 Revenue, FY 2021 vs FY 2020 HUF bn HUF bn +4.0% 4.5 1.3 700.1 7.0 -2.6 +2.5% 16.9 3.3 2.7 4.7 193.6 -5.1 -0.8 673.0 188.9 Q4 2020 Mobile Fixed Equipment SI/IT Other Q4 2021 2020 Mobile Fixed Equipment SI/IT Other 2021 service service servi
Slide 17: Growth in EBITDA AL Driven by Favorable Business Trends and Cost Optimization
GROWTH IN EBITDA AL DRIVEN BY FAVORABLE BUSINESS TRENDS AND COST OPTIMIZATION EBITDA AL, Q4 2021 vs Q4 2020 EBITDA AL, FY 2021 vs FY 2020 HUF bn HUF bn 6.7% 3.9 12.9 216.3 -1.9 -1.3 3.4% 5.4 58.6 -2.3 -0.4 202.6 56.6 -0.8 Q4 2020 Gross profit Indirect Other op. IFRS 16 Q4 2021 2020 Gross profit Indi
Slide 18: Total Profit Impacted by Net Financial Result
TOTAL PROFIT IMPACTED BY NET FINANCIAL RESULT Net income, Q4 2021 vs Q4 2020 Net income, FY 2021 vs FY 2020 HUF bn HUF bn 39.3% 10.2 0.1 59.0 14.9 -1.7 26.4% 3.7 1.0 18.7 -6.9 2.3 -0.6 42.4 14.8 -2.6 Q4 2020 EBITDA D&A Net financial Income tax Non-contr. Q4 2021 FY 2020 EBITDA D&A Net financial Inco
Slide 19: Continued Focus on Network Development
CONTINUED FOCUS ON NETWORK DEVELOPMENT CAPEX AL, 2021 vs 2020 Gigabit capable fixed network development HUF bn # of access points (th) 4 333 4 356 4 374 197.6 91.6 4 500 4 194 4 209 4 224 4 238 4 259 4 314 4 000 30.8% +3.0% 3 500 38.9% 36.5% 33.7% 84.2 193.4 44.9% 40.7% 3 000 51.6% 50.3% 48.1% 2.8 1
Slide 20: 2021 Free Cashflow Reflects Strong Investment Levels
2021 FREE CASHFLOW REFLECTS STRONG INVESTMENT LEVELS Free cashflow, 2021 vs 2020 HUF bn ▪ Improvements in EBITDA offset by -19.1% 14.9 − Less favorable working capital development due to higher receivable balances 7.5 − Increased capex outpayments 54.2 69.5 stemming from different timing of investme
Slide 21: Back-up
BACK-UP ? For further questions please contact the IR department: Diana Várkonyi Rita Walfisch Capital Market Relations Hub Lead Investor Relations Expert Phone: +36 1 481-7676 Phone: +36 1 457-6084 e-mail: varkonyi.diana.annamaria@telekom.hu e-mail: walfisch.rita@telekom.hu
Slide 22: Focus on Seamless Connectivity and Customer Centricity
FOCUS ON SEAMLESS CONNECTIVITY AND CUSTOMER CENTRICITY Network Customers Resilience ▪ Fixed network rollout: coverage expanded to ▪ Further improvement in customer satisfaction ▪ HUF 4 billion savings in indirect costs* in 3m gigabit capable access points 2021 ▪ Continued strong momentum in mobile d
Slide 23: North Macedonia: Q4 and FY 2021 Results
NORTH MACEDONIA: Q4 AND FY 2021 RESULTS Revenues, Q4 2021 vs Q4 2020 Revenues, 2021 vs 2020 HUF mn HUF mn +2.8% -9.6% 18,654 1,387 200 1,872 65,603 -526 -1,445 16,864 63,789 -1,464 Q4 2020 Mobile Fixed SI/IT Q4 2021 2020 Mobile Fixed SI/IT 2021 EBITDA AL, Q4 2021 vs Q4 2020 EBITDA AL, 2021 vs 2020 H
Slide 24: 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 25: MTelekom Sustainability Framework
MTELEKOM SUSTAINABILITY FRAMEWORK Our approach towards sustainability rest on 4 pillars Current sustainability strategy cycle covered the 2016-2020 period ▪ Climate protection: Climate ▪ carbon neutral operation for the 6th year in a row (Scope 1, 2) Diversity protection ▪ approved 1.5°C science-bas
Slide 26: 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 Magyar Telekom remains a constituent of the maintained for the 3rd year in a row FTSE4Good Index Series following a recent index review with a 99 percentile rank in telecommunicati
Slide 27: Hungarian Mobile Spectrum
HUNGARIAN MOBILE SPECTRUM Current spectrum allocation (MHz) 700 10 10 5 25 800 10 10 10 30 Magyart Telekom to hold 900 2 10 1 10 10 2 35 10MHz from April 2022 Magyart Telekom to hold 1800 15 5 10 15 3 15 12 75 30MHz from April 2022 2100 15 15 15 5 10 60 2600 30 20 20 70 1500 40 2600 5 25 15 5 50 350