Telekom Austria Ag · VIE:TKA

Telekom Austria — FY2009 Earnings Presentation

57 slides from Telekom Austria's earnings presentation, Feb 24, 2010

  1. Slide 1: Results for the Financial Year and 4Q 2009

    Telekom Austria Group Results for the Financial Year and 4Q 2009 Vienna, February 24, 2010

  2. Slide 2: Cautionary Statement

    Cautionary Statement “This presentation contains certain forward-looking statements. Actual results may differ materially from those projected or implied in such forward-looking statements. Forward-looking information involves risks and uncertainties that could significantly affect expected results.

  3. Slide 3: Agenda

    Agenda ƒ Key Developments ƒ Fixed Net ƒ Mobile Communication ƒ Financial Overview ƒ Outlook ƒ Merger of Domestic Operations Results for the Financial Year 2009 3

  4. Slide 4: Key Developments

    Key Developments Results for the Financial Year 2009 4

  5. Slide 5: Telekom Austria Group – Full Year 2009

    Telekom Austria Group – Full Year 2009 ƒ Mobile Communication customer base grew by 6.4% to 18.9 million customers despite a difficult economic environment ƒ Increase in access lines in the Fixed Net segment during 4Q 09 for the first time in more than a decade ƒ Revenues declined by 7.1% to EUR 4.8

  6. Slide 6: Full Year 2009 Operating Performance

    Telekom Austria Group - Full Year 2009 Operating Performance Revenues EBITDA (EUR million) (EUR million) -7.1% +40.1% 5,170.3 1,794.0 4,802.0 1,280.8 FY 09 FY 08 FY 09 FY 08* Net Income/Loss Earnings/Loss per Share (EUR million) (EUR) 94.9 0.22 FY 09** -48.8* FY 09** -0.11 FY 08* FY 08* *EUR 632.1 m

  7. Slide 7: Fourth Quarter 2009 Operating Performance

    Telekom Austria Group - Fourth Quarter 2009 Operating Performance Revenues EBITDA (EUR million) -211.6 (EUR million) 399.4 -9.6% 1,181.5 1,306.5 4Q 09 4Q 08 -211.6 4Q 09 4Q 08 4Q 08* Net Income/Loss Earnings/Loss per Share (EUR million) (EUR) 63.6 0.14 4Q 09 -437.7 4Q 09 -0.99 4Q 08* *EUR 632.1 mn r

  8. Slide 8: Fixed Net

    Fixed Net Results for the Financial Year 2009 8

  9. Slide 9: Successful Cost Reduction Softens Impact of Lower Revenues on EBITDA

    Successful Cost Reduction Softens Impact of Lower Revenues on EBITDA Revenues ƒ Fixed Net broadband line subscribers grew (EUR million) -7.0% by 15.5% and exceeded the 1.0 mn 498.1 customer mark at the end of December 09 463.0 ƒ Revenues declined by 7.0% due to lower voice volumes and the disposal o

  10. Slide 10: Access Line Net Adds for the First Time in a Decade in 4Q

    Access Line Net Adds for the First Time in a Decade in 4Q 09 Line Loss / Gain ƒ Access line net adds in 4Q 09 due (in 000) to successful marketing of product 4.4 bundles 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 ƒ Access line loss decelerated on a -2.4 -7.0 -8.0 year on year basis -12.6 ƒ Average revenues per a

  11. Slide 11: Increases Combined Broadband Market Share by 1.7%-Points

    Telekom Austria Group Increases Combined Broadband Market Share by 1.7%-Points Broadband Market Shares ƒ The market share of Fixed Net retail broadband is stable at 30.0% 21.8% 26.7% Mobile Broadband other operators ƒ Telekom Austria Group has a 10.2% 8.2% Others total market share of 48.7% 16.4% 21

  12. Slide 12: Restructuring Target Exceeded

    Original Restructuring Target Exceeded ∑ = 1,481 +18.5% Target Social plan (231 FTE) Social plan 594 FTE 400 FTE by end 2010 Split between 1,250 Staff FTE released Staff from work Staff released released 850 FTE from work from 687 FTE work 887 FTE Status as of Dec 31, 2009 Results for the Financial

  13. Slide 13: Cost Cutting Program exceeded

    Cost Cutting Program exceeded Cost savings 2009 ƒ In 2008, Telekom Austria started a cost cutting program with the ∑ = EUR 167.5 mn intention to save EUR 140 mn to Target 09 EUR 150.0 mn in 2009 exceeded by EUR 17.5 mn ƒ Cost cutting program was outperformed by EUR 17.5 mn Target: EUR 140 mn - 2009:

  14. Slide 14: Mobile Communication

    Mobile Communication Results for the Financial Year 2009 14

  15. Slide 15: Mobile Communication: Increasing EBITDA-Margin Due to Cost Savings

    Mobile Communication: Increasing EBITDA-Margin Due to Cost Savings Revenues ƒ Mobile Communication’s subscriber (EUR million) FX translation effect base grew by 6.4% to 18.9 mn 35.3 customers -11.5% 884.4 782.8 ƒ Revenues declined because of lower prices for voice, data and termination as well as lo

  16. Slide 16: Successful Cost Cutting Program Across Mobile Operations

    Successful Cost Cutting Program Introduced Across all Mobile Communication Operations OPEX (EUR million) -14.3% 596.2 -55.3 -7.7 -9.3 -9.9 -11.2 7.8 510.7 mobilkom Si.mobil Mobiltel Velcom Vipnet OPEX 4Q OPEX 4Q Others austria 08 09 Results for the Financial Year 2009 16

  17. Slide 17: mobilkom austria Showed EBITDA Growth and Higher EBITDA Margin

    mobilkom austria Showed EBITDA Growth and Higher EBITDA Margin Revenues ƒ Challenging and competitive market (EUR million) environment in Austria remains -12.6% 441.6 ƒ mobilkom austria’s customer base grew 385.9 by 7.5% to 4.8 mn subscribers 4Q 09 4Q 08 ƒ Lower roaming and interconnection tariffs i

  18. Slide 18: mobilkom austria Continues to Grow Mobile Broadband Subscriber Base

    mobilkom austria Continues to Grow Mobile Broadband Subscriber Base Market Shares ƒ Leading market position with As of Dec 2009 42.6% slightly increased market share 30.2% from 42.5% to 42.6% 19.6% ƒ Mobile broadband subscriber base 7.6% grew by 35.0% to 540,000 4Q 07 2Q 08 4Q 08 2Q 09 4Q 09 ƒ Growt

  19. Slide 19: Bulgaria: Successful Cost Savings Softened Pressure on Revenues

    Bulgaria: Successful Cost Savings Softened Pressure on Revenues Revenues ƒ Mobiltel’s customer base remained (EUR million) almost stable at 5.3 mn subscribers -11.4% 149.2 168.4 ƒ 4Q 09 revenues were impacted by reduction of MTRs, roaming regulation, competitive environment 4Q 09 4Q 08 and economic

  20. Slide 20: Belarus: Strong EBITDA and Revenues Growth

    Belarus: Strong EBITDA and Revenues Growth on a like-for-like basis Revenues ƒ Velcom’s customer base grew by (EUR million) FX translation effect 10.9% to 4.1 mn subscribers 30.8 -19.0% 92.3 ƒ Market share was slightly lower at 74.8 42.7% at the end of 4Q 09 ƒ Entry of an aggressive third market pla

  21. Slide 21: Croatia and Slovenia: Cost Savings protected EBITDA Margin

    Croatia and Slovenia: Cost Savings protected EBITDA Margin Vipnet Croatia Revenues Vipnet ƒ Subscriber base grew by 4.7% to 2.6 mn (EUR million) customers -9.7% 121.1 ƒ EBITDA was EUR 32.6 mn and declined 109.4 by 6.6%, EBITDA margin rose in spite of 9.7% lower revenues 4Q 09 4Q 08 Si.mobil Slovenia

  22. Slide 22: Greenfield Operations Show Strong Growth of Subscriber Base

    Greenfield Operations Show Strong Growth of Subscriber Base Vip mobile in Serbia Revenues Vip mobile (EUR million) ƒ Market share increased by 2.9 percentage points to 12.0% 31.5% 24.2 18.4 ƒ Subscriber base grew by 27.1% to 1.2 mn customers ƒ Since June 2009 an additional 10.0% 4Q 09 4Q 08 tax on m

  23. Slide 23: Financial Overview

    Financial Overview Results for the Financial Year 2009 23

  24. Slide 24: Higher EBITDA Margin Despite Lower Revenues Due to Strict Cost Management

    Higher EBITDA Margin Despite Lower Revenues Due to Strict Cost Management (EUR million) 4Q 09 4Q 08* % change FY 2009** FY 2008* % change Revenues 1,181.5 1,306.5 -9.6% 4,802.0 5,170.3 -7.1% EBITDA 399.4 -211.6 -288.8% 1,794.0 1,280.8 40.1% EBITDA margin 33.8% -16.2% 37.4% 24.8% Depreciation & -279.

  25. Slide 25: Cash Flow Impacted by Seasonal Shift in CAPEX

    Cash Flow Impacted by Seasonal Shift in CAPEX (EUR million) 4Q 09 4Q 08 % change FY 2009 FY 2008 % change Cash Flow from operations before 354.0 388.6 -8.9% 1,569.8 1,693.7 -7.3% working capital adjustments Change in working capital 68.5 69.5 -1.4% -184.4 -129.9 42.0% Ordinary capital expenditures -

  26. Slide 26: Group Capex Rise Due to Fixed Net Shift from H1 09

    Group Capex Rise Due to Fixed Net Shift from H1 09, Decline in Mobile Communication (EUR million) 4Q 09 4Q 08 % change FY 2009 FY 2008 % change Fixed Net 131.9 82.3 60.3% 288.8 263.5 9.6% Mobile Communication 159.7 193.2 -17.3% 422.6 546.3 -22.6% Others & elimination 0.0 -2.2 n.a. 0.0 -2.2 n.a. Tota

  27. Slide 27: Deleveraging Continues with Net Debt Decreasing by EUR 378.5 mn

    Deleveraging Continues with Net Debt Decreasing by EUR 378.5 mn (EUR million) Dec 31, 09 Dec 31, 08 % change Long-term assets 6,474.9 7,452.0 -13.1% Current assets 2,023.8 1,545.4 31.0% Total assets 8,498.7 8,997.4 -5.5% Current liabilities 2,679.5 2,220.5 20.7% Long-term liabilities 4,205.1 4,621.3

  28. Slide 28: Outlook

    Outlook Results for the Financial Year 2009 28

  29. Slide 29: Outlook on Constant Currency Basis

    Outlook on Constant Currency Basis* Telekom Austria Group 2010 on a constant currency basis Revenues ~ EUR 4.7 bn EBITDA ~ EUR 1.6 bn CAPEX ~ EUR 0.8 bn Operating Free Cash Flow** ~ EUR 0.8 bn Dividend DPS of 75 cents minimum *Excluding Impact from Merger of Domestic Operations **Operating Free Cash

  30. Slide 30: Merger of Domestic Operations

    Merger of Domestic Operations Results for the Financial Year 2009 30

  31. Slide 31: Trend Towards Integrated Telecom-Operators in Europe

    Trend Towards Integrated Telecom-Operators in Europe Status as of 01.01.2006 Current Status Fixed Net and Mobile Integration ongoing1),2) Communication separated 1) TeliaSonera, Magyar Telekom and Telekom Slovenije partially integrated 2) Eircom, TP Poland and Makedonski Telekom currently examining

  32. Slide 32: Trend Towards Product Bundles Continues

    Trend Towards Product Bundles Continues Strong Growth of Product Bundles* ƒ The success of product bundles highlights the need for a joint market approach of Fixed Net and Mobile ~50% Communications ƒ An integrated company allows innovative and more efficient services for the customer - all products

  33. Slide 33: Positive Effect on Cash Flow in 2012, Payback in 2014/2015

    Positive Effect on Cash Flow in 2012, Payback in 2014/2015 ƒ In 2010 initial costs will affect cash flow by EUR 80.0 mn ƒ Break even in 2012 expected ƒ Based on preliminary forecasts, Telekom Austria Group expects this merger to generate an ongoing positive cash flow of approximately EUR 100.0 mn p.

  34. Slide 34: Efficient Group Structure Through Merger, Shortened Reporting Lines

    Efficient Group Structure Through Merger, Shortened Reporting Lines Actual Group Structure New Group Structure after Merger Telekom Austria Group Telekom Austria Group (Finance-Holding) (Management Holding incl. mags*) Telekom Austria mobilkom austria Fixed Net A1 mags* Telekom FL1 Austria ƒ Merger

  35. Slide 35: Appendix

    Appendix Results for the Financial Year 2009 35

  36. Slide 36: Regulatory Issues – Key Aspects (1)

    Regulatory Issues – Key Aspects (1) Next Generation Networks: The European Commission had launched its 2nd public consultation on the regulatory treatment of next generation access in June 09. Previous guidelines of the former Commission have partly contradicted the terms adopted by the European Par

  37. Slide 37: Regulatory Issues – Key Aspects (2)

    Regulatory Issues – Key Aspects (2) International roaming charges: on July 1, 2009 the extension of the existing roaming regulation entered into force. The regulation includes: ƒ Extension of the voice roaming regulation at both wholesale and retail level due to expire in July 2012. ƒ Per-second bil

  38. Slide 38: Development of Revenues 4Q vs. 4Q

    Development of Revenues 4Q 09 vs. 4Q 08 Revenues (EUR million) 1,306.5 -35.1 -55.7 -19.2 -17.5 -11.7 10.5 1,181.5 -4.8 5.8 2.7 Eliminations Vip mobile mobilkom Si.mobil Mobiltel Fixed Net Velcom Vipnet operator Corporate, Revenues Revenues austria Others & 4Q 08 4Q 09 Vip Results for the Financial Y

  39. Slide 39: Development of EBITDA 4Q vs. 4Q 08

    Development of EBITDA 4Q 09 vs. 4Q 08* EBITDA (EUR million) 420.5 -14.9 6.7 -9.0 -6.8 -2.3 1.2 -1.1 1.7 3.4 399.4 430 425 420 415 410 405 400 395 390 385 380 375 370 365 360 355 350 345 340 335 330 325 320 315 310 305 300 295 290 285 280 275 270 265 260 255 250 245 240 235 230 225 220 215 210 205 20

  40. Slide 40: Fixed Net - Access Lines

    Fixed Net - Access Lines (in 000) 4Q 09 4Q 08 % change Access lines (without broadband lines) 1,290.9 1,451.1 -11.0% Fixed Net broadband retail lines 967.2 818.9 18.1% Fixed Net broadband wholesale lines 55.4 66.8 -17.1% Fixed Net broadband lines 1,022.6 885.7 15.5% Total access lines 2,313.5 2,336.

  41. Slide 41: Fixed Net – Voice & Broadband Market Shares

    Fixed Net – Voice & Broadband Market Shares Market Share Voice Minutes 78.3% Mobile 75.0% 8.2% Other Fixed Net 9.3% 13.5% TA Fixed Net 15.7% 4Q 09 4Q 08 Market Share Broadband Lines Mobile Broadband 21.8% 26.7% other operators 10.2% 8.2% Others 16.4% Cable 21.0% Mobile Broadband 17.0% mobilkom austr

  42. Slide 42: Fixed Net Key Performance Indicators

    Fixed Net Key Performance Indicators Average Revenues per Access Line Fixed Net Broadband Net Adds incl. Wholesale (in EUR) (in 000) 36.5 50.4 49.9 35.7 34.9 34.5 34.7 40.0 22.7 24.2 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 Fixed Broadband Access Lines (in 000) 895.8 926.0 967.2 8

  43. Slide 43: Fixed Net - Minutes

    Fixed Net - Minutes (in million minutes) 4Q 09 4Q 08 % change National 571 657 -13.1% Fixed-to-mobile 168 182 -8.0% International 82 98 -15.8% Total voice minutes 821 937 -12.4% Total Fixed Net minutes 847 1,005 -15.7% (in million minutes) 4Q 09 4Q 08 % change National wholesale 1,646 1,783 -7.7% In

  44. Slide 44: Mobile Subscribers

    Mobile Subscribers (in 000) 4Q 09 4Q 08 % change Austria 4,834.2 4,496.3 7.5% Market share 42.6% 42.5% Bulgaria 5,352.5 5,396.2 -0.8% Market share 49.8% 50.0% Belarus 4,102.4 3,697.9 10.9% Market share 42.7% 44.8% Croatia 2,603.0 2,486.6 4.7% Market share 42.6% 42.2% Slovenia 589.4 570.6 3.3% Market

  45. Slide 45: Operational Data – mobilkom austria

    Operational Data – mobilkom austria MoU per Subscriber ARPU (in minutes) (in EUR) 175.0 168.3 163.8 159.9 165.3 28.6 25.5 25.5 24.3 23.6 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 Quarterly Churn SAC per Gross Add (in EUR) 7.8% 7.5% 55.0 56.9 57.4 59.8 41.6 3.5% 3.6% 1.5% 2.2% 4Q 08

  46. Slide 46: Mobile Data - mobilkom austria

    Mobile Data - mobilkom austria Mobile Broadband Customers Number of SMS (in 000) (in million) 666 621 595 593 585 465 500 540 400 441 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 Data ARPU Data in % of Revenues ( in EUR) 37.4% 38.9% 33.9% 35.1% 36.7% 7.3 7.2 7.0 6.7 6.9 4Q 08 1Q 09 2Q

  47. Slide 47: ARPU & MoU per Subscriber for Selected Mobile Operations

    ARPU & MoU per Subscriber for Selected Mobile Communication Operations MoU per Subscriber (in minutes) 175.0 165.3 159.6 156.4 137.6 154.1 95.6 98.6 85.7 74.7 mobilkom Mobiltel Velcom Vipnet Si.mobil austria 4Q 08 4Q 09 ARPU (in EUR) 28.6 23.6 23.2 20.8 13.912.0 9.6 9.0 8.2 5.5 6.2 6.1 4.0 6.2 mobil

  48. Slide 48: Headcount Development

    Headcount* Development (Average period) 4Q 09 4Q 08 change Fixed Net** 8,006 9,030 -1,024 Mobile Communciation 8,674 8,385 289 Telekom Austria Group 16,680 17,415 -735 (End of period) 4Q 09 4Q 08 change Fixed Net** 7,893 8,571 -678 Mobile Communciation 8,680 8,383 297 Telekom Austria Group 16,573 16

  49. Slide 49: Revenues by Segment

    Revenues by Segment (EUR million) 4Q 09 4Q 08 % change FY 09 FY 08 % change Fixed Net revenues 463.0 498.1 -7.0% 1,860.1 2,038.8 -8.8% Mobile Communication revenues 782.8 884.4 -11.5% 3,205.5 3,390.9 -5.5% Corporate, Other & Eliminations -64.3 -76.0 -15.4% -263.6 -259.4 1.6% Revenues Telekom Austria

  50. Slide 50: EBITDA and Operating Income by Segment

    EBITDA and Operating Income by Segment (EUR million) 4Q 09 4Q 08 * % change FY 09** FY 08 * % change Fixed Net EBITDA 118.0 -499.2 n.a. 575.7 -20.8 n.a. Mobile Communciation EBITDA 288.8 295.7 -2.3% 1,246.3 1,325.3 -6.0% Corporate, Other & Eliminations -7.4 -8.1 -8.6% -28.0 -23.7 18.1% EBITDA Teleko

  51. Slide 51: Fixed Net - Revenue Breakdown

    Fixed Net - Revenue Breakdown (EUR million) 4Q 09 4Q 08 % change FY 09 FY 08 % change Access, Voice and Broadband 240.5 261.3 -8.0% 972.2 1,080.7 -10.0% Data & ICT-Solutions 102.1 115.0 -11.2% 394.2 439.2 -10.3% Wholesale Voice & Internet 82.9 90.7 -8.6% 351.2 405.6 -13.4% Others 37.5 31.1 20.6% 142

  52. Slide 52: Fixed Net – Expense Breakdown

    Fixed Net – Expense Breakdown (EUR million) 4Q 09 4Q 08 % change FY 09 FY 08 % change Material expense 18.6 19.1 -2.6% 70.2 86.4 -18.8% Employee costs 148.0 769.7* -80.8% 528.4 1,186.1 -55.5% Depreciation, amortization and impairment charges 123.0 131.5 -6.5% 459.6 509.5 -9.8% Interconnection 69.0 8

  53. Slide 53: Mobile Communication - Revenue Breakdown

    Mobile Communication - Revenue Breakdown (EUR million) 4Q 09 4Q 08 % change FY 09 FY 08 % change Subscription and Traffic 577.7 625.0 -7.6% 2,329.9 2,413.4 -3.5% Equipment 60.5 84.2 -28.1% 228.3 269.8 -15.4% Roaming 22.8 29.6 -23.0% 136.5 182.1 -25.0% Interconnection 114.0 143.3 -20.4% 480.0 510.8 -

  54. Slide 54: Mobile Communication – Expense Breakdown

    Mobile Communication – Expense Breakdown (EUR million) 4Q 09 4Q 08 % change FY 09 FY 08 % change Material expense 94.3 116.2 -18.8% 347.9 360.3 -3.4% Employee costs 68.1 74.0 -8.0% 276.5 266.8 3.6% Depreciation, amortization and impairment charges 156.6 173.0 -9.5% 991.2 651.3 52.2% Interconnection

  55. Slide 55: Capital Expenditures by Segment

    Capital Expenditures by Segment (EUR million) 4Q 09 4Q 08 % change FY 09 FY 08 % change Fixed Net 131.9 82.3 60.3% 288.8 263.5 9.6% Mobile Communication 159.7 193.2 -17.3% 422.6 546.3 -22.6% Total Capex Telekom Austria Group 291.6 273.3 6.7% 711.4 807.6 -11.9% Thereof tangible 207.5 176.2 17.8% 516.

  56. Slide 56: Net Debt - Telekom Austria Group

    Net Debt - Telekom Austria Group (EUR million) Dez 31, 2009 Dez 31, 2008 % change Long-term debt 3,234.8 3,599.5 -10.1% Short-term debt 1,501.6 961.5 56.2% Cash and cash equivalents, short-term and long term investments, financing with related parties -1,099.0 -513.1 114.2% Derivate financial instru

  57. Slide 57: Debt Maturity Profile

    Debt Maturity Profile (EUR million) 1,502 Ratings: 1,292 769 938 ƒ Moody‘s: A3 (stable) ƒ S&P: BBB+ (Credit watch 215 negative) 2010 2011 2012 2013 there after Lines of Credit ƒ Undrawn committed lines of credit amounting to EUR 1.1 bn ƒ Average life of 3 years ƒ Provided by 20 Banks Results for the

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