Telekom Austria Ag · VIE:TKA

Telekom Austria — A1 Telekom Austria Group — Q3 2020 Earnings Presentation

34 slides from Telekom Austria's earnings presentation, Oct 20, 2020

  1. Slide 1: Results for the first nine months and third quarter 2020

    Results for the first nine months and third quarter 2020 Vienna, October 20, 2020

  2. 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. Actual events may differ materially from those anticipated in these forw

  3. Slide 3: Operational and financial highlights for the first nine months and third quarter 2020

    Operational and financial highlights for the first nine months and third quarter 2020 3

  4. Slide 4: Highlights Q3 2020

    Highlights Q3 2020  Group total revenues decline of -0.9% (excl. FX and one-off effects: +1.7%) and EBITDA before restructuring growth of +0.5% (excl. FX and one-off effects: +4.3%)  Roaming losses as the main negative Covid-19 impact in Q3 2020 (~ -2% on total revenues; ~ -5% on EBITDA) and also

  5. Slide 5: EBITDA growth due to continued operational efficiencies outweighing roaming losses and negative FX effects

    EBITDA growth due to continued operational efficiencies outweighing roaming losses and negative FX effects Group (in EUR million) Q3 2020 Q3 2019 % change Total revenues 1,142.1 1,152.7 -0.9% Service revenues 953.8 974.7 -2.1% EBITDA before restructuring* 462.5 460.0 0.5% CAPEX 125.0 185.5 -32.6% 

  6. Slide 6: Austria and CEE markets in Q3 2020

    Austria and CEE markets in Q3 2020 Total revenues Service revenues EBITDA before restructuring (in EUR mn) (in EUR mn) (in EUR mn) 1,152.7 -0.6 -11.9 1,142.1 974.7 -6.7 +18.1 excl. FX -17.9 953.8 +0.5% -0.9% +3.7 excl. FX 13.0 -10.7 -2.1% 460.0 462.5 +2.6 excl. FX Revenues Austria CEE markets Revenu

  7. Slide 7: Austria: EBITDA growth despite roaming losses, due to increased operational efficiencies

    Austria: EBITDA growth despite roaming losses, due to increased operational efficiencies ARPU ARPL Operational data (in EUR) (in EUR)  +1.0% contract subscribers which were again driven by ongoing strong demand Δ: +3.7% Δ: +4.4% for mobile WiFi routers and high-value tariffs 32.5 31.1  Strong dema

  8. Slide 8: CEE: Negative FX effect and roaming losses mitigated by fixed-line service revenue growth

    CEE: Negative FX effect and roaming losses mitigated by fixed- line service revenue growth and operational efficiencies EBITDA Highlights CEE (in EUR mn; Q3 %-change vs. PY) Bulgaria:  Service revenue growth (+3.0%) was driven by the fixed-line business owing to customized corporate solutions and u

  9. Slide 9: 1-9M 2020: Strong free cash flow generation

    1-9M 2020: Strong free cash flow generation (in EUR million) Q3 2020 Q3 2019 % cha nge 1-9 M 2020 1-9 M 2019 % cha nge EBITDA 441,6 439,0 0,6% 1.212,3 1.205,2 0,6% Restructuring charges and cost of labor obligations 25,0 21,8 14,4% 68,3 67,9 0,6% Lease principal and interest paid -37,7 -37,4 -0,8% -

  10. Slide 10: Focus Points

    V / VZ Focus Points V At :

  11. Slide 11: Multiband auction in Austria: Securing and expanding the excellent frequency spectrum

    Multiband auction in Austria: Securing and expanding the excellent frequency spectrum  The multiband auction in Austria ended in September with a result of EUR 65.6 mn for A1  30 MHz in the new 1500 MHz TDD band  Increase of the spectrum in the existing 2100 MHz FDD band from 20 to 25 MHz Total s

  12. Slide 12: Austria: Increasing share of higher bandwidth products and ongoing strong demand for mobile WiFi routers

    Austria: Increasing share of higher bandwidth products and ongoing strong demand for mobile WiFi routers Increased share of high bandwidth Stable mobile service revenues Fixed Mobile products despite heavy roaming losses Gross Adds Speed distribution in the base 69% 61%  Strong demand for mobile Wi

  13. Slide 13: Belarus: Political crisis weighs on FX; increasing macroeconomic risks and negative outlook revision

    Belarus: Political crisis weighs on FX; increasing macroeconomic risks and negative outlook revision of the country’s credit rating Service revenue growth continues in local Operations currency  Successful redesign of tariff plans  Stable mobile subscriber base year-on-year 16.9% 14.0%  Service r

  14. Slide 14: Q3 2020: Update of Covid-19 impact on key financials and KPIs

    Q3 2020: Update of Covid-19 impact on key financials and KPIs Gross adds Roaming CAPEX/OPEX Bad debt Churn  Traffic decline, but impact  Delivering on CAPEX  Gross adds improved for  No observed deterioration in Q3 slightly lower than guidance Internet@home products in collection anticipated  S

  15. Slide 15: Outlook for the full year 2020

    Outlook for the full year 2020 15

  16. Slide 16: Outlook for the full year 2020 unchanged

    Outlook for the full year 2020 unchanged October 20, 2020 Consensus 2020 Total revenues ~ -2% -1.6% CAPEX ~ -25% EUR 599 mn* (vs. initial outlook) *CAPEX consensus excl. spectrum  Outlook based on reported figures; assumed devaluation of > 15% avg. BYN vs. EUR FX rate, with an especially strong adv

  17. Slide 17: Appendix 1: Additional information on KPIs and financials

    Appendix 1 Additional information on KPIs and financials 17

  18. Slide 18: A1 Telekom Austria Group: The leading regional communications player providing convergent telecommunication services

    A1 Telekom Austria Group: The leading regional communications player providing convergent telecommunication services as of September 30, 2020 (in ‘000) Austria Bulgaria Croatia Mobile market position #1 Mobile market position: #1 Mobile market position #2 Mobile subscribers: Mobile subscribers: Mobi

  19. Slide 19: A1 Telekom Austria Group: Profit and Loss

    A1 Telekom Austria Group: Profit and Loss (in EUR million) Q3 2020 Q3 2019 % cha nge Service Revenues 953.8 974.7 -2.1% Equipment Revenues 168.9 157.6 7.2% Other operating income 19.4 20.4 -5.0% Tota l Revenues 1,142.1 1,152.7 -0.9% Cost of Service -316.6 -324.8 2.5% Cost of Equipment -165.6 -154.1

  20. Slide 20: A1 Telekom Austria Group: Total revenues & costs and expenses per segment

    A1 Telekom Austria Group: Total revenues & costs and expenses per segment Tota l Revenues (in EUR million) Q3 2020 Q3 2019 % cha nge Austria 657.1 657.7 -0.1% Bulgaria 127.9 122.0 4.8% Croatia 111.8 114.9 -2.7% Belarus 99.0 113.2 -12.6% Slovenia 52.7 52.5 0.4% Serbia 73.7 73.9 -0.2% North Macedonia

  21. Slide 21: A1 Telekom Austria Group: Workforce development

    A1 Telekom Austria Group: Workforce development FTE (Average Period) Q3 2020 Q3 2019 % cha nge Austria 7,424 7,793 -4.7% International 10,334 10,263 0.7% Corporate 365 384 -4.8% A1 Telekom Austria G roup 18,123 18,439 -1.7% FTE (End of Period) Q3 2020 Q3 2019 % cha nge Austria 7,414 7,787 -4.8% Inte

  22. Slide 22: A1 Telekom Austria Group: Capital expenditure split

    A1 Telekom Austria Group: Capital expenditure split Capital Expenditures (in EUR million) Q3 2020 Q3 2019 % cha nge Austria 85.3 119.5 -28.6% Bulgaria 10.4 20.7 -49.7% Croatia 7.7 15.0 -48.9% Belarus 4.9 8.4 -41.4% Slovenia 4.2 5.7 -25.8% Serbia 8.6 9.5 -9.5% North Macedonia 2.8 6.1 -53.3% Corporate

  23. Slide 23: A1 Telekom Austria Group: Net debt

    A1 Telekom Austria Group: Net debt as of September 30, 2020 Net Debt (excl. Leases) (in EUR million) 30 September 2020 31 December 2019 % cha nge Long-term Debt 2.541,9 2.539,6 0,1% Short-term Borrowings 0,0 123,0 -100,0% Cash and Cash Equivalents -306,5 -50,2 n.m. Net Debt (excl. Lea ses) of A1 Tel

  24. Slide 24: A1 Telekom Austria Group: Financial debt maturity profile

    A1 Telekom Austria Group: Financial debt maturity profile as of September 30, 2020 (in EUR mn) 748.8 748.3 745.6 299.3 0.0 0.0 0.0 2020 2021 2022 2023 2024 2025 2026  EUR 2,541.9 mn short- and long-term Lines of credit Ratings debt as of September 30, 2020  Undrawn committed  S&P: BBB+ (stable 

  25. Slide 25: Appendix 2: Reconciliation of Free Cash Flow

    Appendix 2 Reconciliation of Free Cash Flow 25

  26. Slide 26: 1-9 M 2020: Reconciliation free cash flow - operating view

    1-9 M 2020: Reconciliation free cash flow - operating view 1-9 M 2020 1-9 M 2019 % change FCF after social plans new 429.2 253.8 69.1% Social plans new funded 77.4 67.9 Total social plans paid* -74.3 -70.4 FCF - previously reported 432.3 251.2 72.0% *In the previous view all payments for all social

  27. Slide 27: Appendix 3: Regulatory Topics

    Appendix 3 Regulatory Topics 27

  28. Slide 28: Glide Path of Mobile Termination Rates

    Glide Path of Mobile Termination Rates Jul Jan Jul Jan Jul Jan Mar Jan April 2015 2016 2016 2017 2017 2018 2019 2020 2020 **** Austria (EUR) 0.008049 0.008049 0.008049 0.008049 0.008049 0.008049 0.008049 0.008049 0.008049 Bulgaria (BGN) 0.019 0.019 0.019 0.014 0.014 0.014 0.014 0.014 0.014 Croatia (

  29. Slide 29: Upcoming spectrum tenders/prolongations/assignments

    Upcoming spectrum tenders/prolongations/assignments* Expected Comments Austria Bulgaria 2021 (700, 800, 2600, 3400-3800 MHz) NRA opened the public consultation regarding the allocation of 700 MHz. 2021 (3500/700 MHz, 26GHz) Croatia NRA postponed auction for 5G spectrum to the first half of 2021. 202

  30. Slide 30: EU roaming price regulation

    EU roaming price regulation RETAIL (in EURc) July 2014 April 30, 2016 June 15, 2017 Data (per MB) 20 domestic tariff + 5* domestic tariff Voice-calls made 19 domestic tariff + 5* domestic tariff (per minute) Voice-calls received 5 weighted average MTR 0 (per minute) SMS (per SMS) 6 domestic tariff +

  31. Slide 31: Appendix 4: Personnel restructuring in Austria

    Appendix 4 Personnel restructuring in Austria 31

  32. Slide 32: Overview: Restructuring charges and provision vs. FTE

    Overview: Restructuring charges and provision vs. FTE Overview restructuring charges FTEs addressed (in EUR million) 2013 2014 2015 2016 2017 2018 2019 Q1 20 Q2 20 Q3 20 2013 2014 2015 2016 2017 2018 2019 Q1 20 Q2 20 Q3 20 FTE reduction 149.0 86.4 69.5 95.0 9.1 70.1 100.2 17.7 36.6 19.5 Transfer to

  33. Slide 33: Appendix 5: ESG

    Vv / Vz Appendix 5 7 ESG At |

  34. Slide 34: ESG: Key figures

    ESG: Key figures Selected group-wide KPIs Ratings Environment 2019 Total CO2 emissions (Scope 1+2 market-based in tonnes) 215,981 Energy efficiency index (in MWh/terabyte) 0.17 Collected old mobile phones (in pcs) 64,504 Socia l 2019 Participations in trainings on media literacy G overna nce 2019 In

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