Magyar Telekom Telecommunications Plc · BET:MTELEKOM

Magyar Telekom Telecommunications — Magyar Telekom — Q2 2016 Earnings Presentation

31 slides from Magyar Telekom Telecommunications's earnings presentation, August 2016

  1. Slide 1: Magyar Telekom Group Investor Presentation

    MAGYAR TELEKOM GROUP INVESTOR PRESENTATION AUGUST, 2016

  2. Slide 2: Strategy and Market Position

    STRATEGY AND MARKET POSITION

  3. Slide 3: Overview – Magyar Telekom at a Glance

    OVERVIEW – MAGYAR TELEKOM AT A GLANCE International presence Hungary Revenue (FY2015) 8% Czech Republic 5% Slovakia Austria Moldova Hungary Hungary 87% Slovenia Croatia Budapest Croatia Romania Romania EBITDA (FY2015) BiH Serbia Serbia 11% Montenegro Kosovo Bulgaria Bulgaria 6% Macedonia Macedonia A

  4. Slide 4: Market Position in Hungary

    MARKET POSITION IN HUNGARY Total mobile market* Fixed voice market** Subscribers -0.5% Vodafone Subscribers Other 12,000,000 3,500,000 +0.1% Telenor Invitel 10,000,000 22.8% 24.1% 24.8% MT 3,000,000 5.8% 5.8% 3.1% DIGI 12.6% 12.7% 13.2% 2,500,000 UPC 8,000,000 9.7% 10.4% 11.4% 30.0% 28.1% 27.8% MT 2

  5. Slide 5: Market Leader in IT Services in Hungary

    MARKET LEADER IN IT SERVICES IN HUNGARY DUE TO WIDE RANGE OF IT SOLUTIONS BOTH IN IT PROJECTS AND IT OUTSOURCING Total Hungarian IT services market Revenue based SYSTEM INTEGRATION IT INFRASTRUCTURE SI & IT market shares* Package Custom System IT App. OS & Infra. OS & Infra. proj. Hosting Cloud (201

  6. Slide 6: Strategy Overview: Building a Growing ICT Company Serving Satisfied Customers

    STRATEGY OVERVIEW: WITH OUR ENGAGED PEOPLE WE ARE BUILDING A GROWING ICT COMPANY SERVING SATISFIED CUSTOMERS Strategic pillars Strategic goals Main KPIs for 2016 1 We all listen to our customers Improve customer satisfaction  Cut number of complaints  Improve customer satisfaction index (TRIM) and

  7. Slide 7: Q2 2016 Strategic Highlights: Hungarian Segment

    Q2 2016 STRATEGIC HIGHLIGHTS: HUNGARIAN SEGMENT CONTINUES TO DRIVE GROUP PERFORMANCE  Decline due to partial energy exit and lower SI/IT revenues; excl. energy and SI/IT, REVENUE revenues up by 2.2% driven by growth in mobile and fixed line revenues  EBITDA down by 2.0% as higher other operating e

  8. Slide 8: Turnaround Story of Magyar Telekom

    TURNAROUND STORY OF MAGYAR TELEKOM Major financial and strategic milestones Integrated Telco Multiplay ICT provider Diversified service provider Digital service company and SI/IT operator 2007-2009 2010 2011 2012 2013 2014 2015 2016-2018 Continuous decline Change in strategy Execution of Topline rev

  9. Slide 9: Telekom as the Leading Operator and Brand in Hungary

    TELEKOM AS THE LEADEING OPERATOR AND BRAND IN HUNGARY Our vision Our mission OUR MISSION IS TO MAKE THE DIGITAL FIRST NOW FIRST FOREVER WORLD MORE UNDERSTANDABLE AND ACCESSIBLE FOR EVERYONE. WE ENABLE PEOPLE TO HAVE A MORE EFFORTLESS, COLOURFUL AND SUCCESSFUL LIFE. Brand awareness* and brand values

  10. Slide 10: Hungarian Economic Environment

    HUNGARIAN ECONOMIC ENVIRONMENT Growth strucutre Domestic demand 6%  Domestic demand improved as economy 4% 3.6 recovers 3.0 2.8 3.0 1.8 1.5  Governmental measures support consumer 2% spending 0%  Investment levels show strong volatility due to -1.5 EU fund cycles -2%  MT is expected to benefit f

  11. Slide 11: Hungarian Mobile Spectrum Situation

    HUNGARIAN MOBILE SPECTRUM SITUATION Current spectrum situation after auction in 2014 FDD (2x1 MHz) BAND Magyar Telekom 800 MHz 10 10 10 Telenor Vodafone Digi 900 MHz 2 10 1 10 2 10 1800 MHz 15 5 5 5 15 30 2100 MHz 15 15 15 2600 MHz 30 20 20 11

  12. Slide 12: Dividend and Guidance

    DIVIDEND AND GUIDANCE

  13. Slide 13: Dividend Policy

    DIVIDEND POLICY Dividend payment and net debt ratio developments Highlights Net debt ratio* Dividend per share (HUF) 50% 70  Aiming to maintain net debt ratio (net 45.7% debt/total capital) target of 30% - 40% 43.8% 42.9% 42.4% 60  HUF 15 dividend paid on 2015 earnings 40% 34.1% 34.3% in May 2016

  14. Slide 14: Public Guidance: Continues Growth

    PUBLIC GUIDANCE: CONTINUES GROWTH 2015 RESULTS 2016 TARGETS 2017 TARGETS REVENUE HUF 656bn* (+4.8%) HUF 580 - 590bn HUF 585 - 595bn EBITDA HUF 187bn (+3.4%) HUF 187 - 191bn HUF 189 - 193bn CAPEX** HUF 110bn ca. 10% yoy decline ca. 10% yoy decline FCF HUF 27bn Surpassing HUF 50bn*** DIVIDEND HUF 15 p

  15. Slide 15: H1 2016 Financial Highlights and Targets

    H1 2016 FINANCIAL HIGHLIGHTS AND TARGETS H1 2016 RESULTS vs. H1 2015 2016 TARGETS 2017 TARGETS REVENUE HUF 293.2 (-7.0%) HUF 580 - 590bn HUF 585 - 595bn  Decline due to partial energy exit and lower SI/IT revenues; excl. energy and SI/IT, revenues up by 0.9% driven by growth in mobile and fixed lin

  16. Slide 16: Q2 2016 Results

    Q2 2016 RESULTS

  17. Slide 17: Hungary

    HUNGARY Revenue* EBITDA HUF bn HUF bn +1.6% -7.2% 142 0.7 0.5 -4.5 48 1.5 -2.8 2.2 -0.7 0.2 140 1.1 137.7 -0.5 47 138 -9.0 0.4 136 1.6 46 134 44.9 132 45 44.2 130 44 127.7 128 0 0 2Q Mobile Mobile Mobile Fixed Fixed TV Fixed SI/IT Energy 2Q 2Q 2015 Gross Special tax Employee Other op. 2Q 2016 2015 v

  18. Slide 18: Hungary – Mobile

    HUNGARY – MOBILE Mobile SIMs Mobile ARPU ‘000 HUF -2.4% 6,000 5,476 5,482 5,504 5,372 5,344 Prepaid 2Q 2015 3,216 5,000 Postpaid Blended +3.1% 2Q 2016 3,315 44.2% 44.0% 43.6% 42.3% 41.8% 4,000 1,133 3,000 +55 Prepaid -0.1% 1,132 2,000 55.8% 56.0% 56.4% 57.7% 58.2% 4,895 1,000 Postpaid +0.1% 4,898 0

  19. Slide 19: Hungary – Mobile Broadband

    HUNGARY – MOBILE BROADBAND Mobile broadband development Smartphone penetration ‘000 LTE cov. % 8,0% Non-LTE 95% 97% 97% 98% 100 3.500 91% 100 LTE 3.000 80 2.360 2.366 2.423 80 2.500 2.258 2.315 58 60 60 60 52 2.000 44 1.500 40 40 34 1.000 +474 21 47% 20 20 500 33% 40% 44% 30% 0 0 0 2Q 2015 3Q 2015 4

  20. Slide 20: Hungary – Fixed Broadband and TV

    HUNGARY – FIXED BROADBAND AND TV Fixed BB RPC Pay TV RPC ‘000 ‘000 +3.2% +3.7% 971 1,200 1,000 941 952 962 964 972 984 996 1,001 1,009 <10Mbps Sat 1,000 7% 6% 6% 5% 10Mbps -30Mbps 800 32% 32% 32% 32% 31% Cable 9% 800 >30Mbps IPTV 600 17% 16% 15% 15% 65% 64% 18% 600 67% 68% 66% +61 400 400 +84 50% 50

  21. Slide 21: Hungary – Fixed Voice and Energy

    HUNGARY – FIXED VOICE AND ENERGY Fixed voice customer number Fixed voice ARPU ‘000 -2.1% HUF 1,472 1,467 1,461 1,448 1,441 PSTN 1,500 16% IP based* 2,768 32% 27% 23% Blended -4.3% 37% 2,649 +278 1,000 77% 84% 2Q 2015 500 68% 73% 63% 2Q 2016 0 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 Energy revenues H

  22. Slide 22: Hungary – Multiplay

    HUNGARY – MULTIPLAY Fixed line multiplay residential subs. development Fixed line multiplay residential ARPU development ‘000 1Play HUF 1,389 1,387 1,385 1,379 2Play 5,733 2Q 2015 1,375 1,400 3Play Blended +2.9% 2Q 2016 5,900 1,200 35% 35% 34% 33% 33% 1,000 2,966 1Play +3.5% 3,070 800 30% 30% 30% 30

  23. Slide 23: Hungary – SI/IT

    HUNGARY – SI/IT Total Hungarian IT services market development* Market share** HUF bn % +4.6% Telekom 300 274 262 IT Infrastructure 14% HP 249 250 223 233 NISZ 219 services 40% 40% 7% 200 41% System Integration / Microsoft 42% 42% 41% 4% IT Application services IBM 150 3% 2% 2% MVMI 100 63% 2% 2% 59

  24. Slide 24: Macedonia

    MACEDONIA Financials Mobile KPIs Revenues (HUF bn) EBITDA (HUF bn) Subscribers One (T. Slovenia)* -26.5% +3.2% -1.3% VIP (T. Austria) 2,500,000 5.0 -0.1 One.Vip 13.4 0.4 13.3 5.0 -1.2 2,000,000 25.6% 26.1% Telekom 0.2 -0.2 4.5 1,500,000 51.7% 13.2 One-off: 27.9% 27.9% 4.0 1.3 bn HUF 1,000,000 13.0 1

  25. Slide 25: Montenegro

    MONTENEGRO Financials Mobile KPIs Revenues (HUF bn) EBITDA (HUF bn) Subscribers -9.4% -24.5% 1,200,000 +1.1% 8.0 -0.1 3.2 -0.7 1,000,000 Telenor 8.0 -0.5 3.2 800,000 38.1% 37.6% 37.7% m:tel (T. Serbia) 7.8 3.0 600,000 T-Mobile 7.6 2.8 -0.2 27.6% 28.1% 28.3% 7.4 2.6 -0.1 400,000 7.2 2.4 7.2 2.4 200,0

  26. Slide 26: Appendix

    APPENDIX

  27. Slide 27: Group Segmental Revenue and EBITDA

    GROUP SEGMENTAL REVENUE AND EBITDA Group segmental revenues Group segmental EBITDA HUF bn HUF bn -2.0% -6.5% 160 53.0 0.7 -1.3 158.5 -9.9 158 52.5 156 52.2 154 52.0 -0.8 152 51.5 0.4 51.2 150 0.4 -0.8 0.0 148.2 51.0 148 0 0.0 2Q 2015 Hungary Macedonia Montenegro Elimination 2Q 2016 2Q 2015 Hungary M

  28. Slide 28: Magyar Telekom – Consolidated Income Statement

    MAGYAR TELEKOM – CONSOLIDATED INCOME STATEMENT HUF million Q2 2015 Q2 2016 Change Mobile revenues 76 873 79 761 3,8% Fixed line revenues 52 645 52 660 0,0% System Integration/Information Technology revenues 18 534 14 255 -23,1% Revenue from energy services 10 443 1 490 -85,7% Revenues 158 495 148 16

  29. Slide 29: Magyar Telekom – Consolidated Balance Sheet

    MAGYAR TELEKOM – CONSOLIDATED BALANCE SHEET HUF million December 31, 2015 June 30, 2016 Change Current assets 210 178 197 538 -6,0% Cash and cash equivalents 17 558 14 028 -20,1% Other current financial assets 11 052 13 312 20,4% Non current assets 996 846 967 007 -3,0% Property, plant and equipment

  30. Slide 30: Magyar Telekom – Consolidated Cash Flow Statement

    MAGYAR TELEKOM – CONSOLIDATED CASH FLOW STATEMENT HUF million 1-6 months 2015 1-6 months 2016 Change Net cash generated from operating activities 58 479 62 369 6,7% Investments in tangible and intangible assets (35 088) (35 261) -0,5% Adjustments to cash purchases (6 201) (15 144) 144,2% Purchase of

  31. Slide 31: For further questions please contact the IR department

    For further questions please contact the IR department: Investor Relations Márton Lennert Phone: +36 1 458-0424 Head of Investor Relations Fax : +36 1 458-0443 Phone: +36 1 457-6084 e-mail: investor.relations@telekom.hu e-mail: lennert.marton@telekom.hu Linda László Gerda Gáti Investor Relations Con

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