Magyar Telekom Telecommunications Plc · BET:MTELEKOM
Magyar Telekom Telecommunications — Magyar Telekom — Q2 2020 Earnings Presentation
21 slides from Magyar Telekom Telecommunications's earnings presentation, September 2020
Slide 1: Magyar Telekom group investor presentation
Magyar telekom group investor presentation September 2020
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
01 Strategy and market position 3
Slide 4: Overview – Magyar Telekom at a glance
Overview – Magyar Telekom at a glance Overview Pillars of transformation ▪ Integrated operations in Hungary and 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 Technology P
Slide 5: Highlights: seamless operations despite COVID-19
HIGHLIGHTS: SEAMLESS OPERATIONS DESPITE COVID-19 Network Customers Efficiency & optimisation Communities ▪ Accelerated fiber rollout: 2.2mn ▪ Mobile broadband data usage up by ▪ Over HUF 2bn efficiency ▪ Enhancing digital cooperation in gigabit capable access points over 60% in Q2 2020 improvement d
Slide 6: Wide-ranging effects of COVID-19 in H1 2020
WIDE-RANGING AFFECTS OF COVID-19 IN H1 2020 Affected areas H1 2020 trends Financial impact Cost savings ▪ Lower travel costs and other OPEX ▪ Bandwidth upgrades in fixed BB; 2X10GB customer offer somewhat limited Data traffic monetization ▪ Higher market shares in fixed BB and TV as well as improvem
Slide 7: Hungarian telco market positions
Hungarian telco market positions Total mobile market1 Fixed voice market1 Subscribers (mn) Subscribers (mn) Others 4 Other 11.2 11.0 11.1 11.4 Vodafone INVITEL 12 3. 1 3. 1 3. 0 2. 9 2. 9 0.3% 0.7% 0.7% 1.3% 3 3.2% 3.3% 3.5% 26.0% 26.7% Telenor 13.1% 12.3% 3.6% 3.5% DIGI 25.6% 26.4% 23.8% Magyar Tel
Slide 8: IT market in Hungary: 2019-2024
IT MARKET IN Hungary: 2019-2024 Total Revenue B2B1 IT market (HW&SW and IT services)1 EBITDA IT Services 1 market shares (by revenue)3 HUF bn SYSTEM INTEGRATION IT INFRASTR. SI & + 4.1% 900 -1.1% 816 853 Pack- age Custom app. IT Apps. OS & IT Infra. OS Infra. proj. IT 782 800 735 727 749 60 appl. 60
Slide 9: Hungarian economic environment
Hungarian economic environment Growth structure Domestic demand 8% 6% 5.1% 4.9% ▪ Magyar Telekom leveraged positive trends of domestic demand 3.7% 4.0% 4% 3.4% ▪ Investment levels show volatility due to EU fund cycles 1.5% 2.0% 2% ▪ Q2 2020 GDP down by 13.6% YoY (following 2.2% growth in Q1 2020) 0%
Slide 10: Network developments in Hungary
network developments in Hungary Mobile Revenuenetwork 1 coverage (population based) EBITDA Fixed network 1 (access points) ‘000 % 4 500 100 97% 98% 99% 97% 99% 97% 99% 4 014 4 090 4 194 4 225 3 925 3 964 86% 87% 4 000 83% 13% 3 500 17% 20% 25% 80 47% 51% 3 000 60 2 500 2 000 40 84% 87% 89% 85% 89% 8
Slide 11: Hungarian mobile spectrum
Hungarian mobile spectrum Current spectrum allocation (MHz) 700 10 10 5 25 800 10 10 10 30 900 2 10 1 10 10 2 35 1800 15 5 10 15 3 15 12 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 Telenor Digi not allocated 11
Slide 12: Results and public targets
03 results and public targets 12
Slide 13: Revenues affected by lower SI/IT contribution both in Q2 and H1 2020
REVENUES AFFECTED BY LOWER SI/IT CONTRIBUTION BOTH IN Q2 AND H1 2020 Revenue YoY, Q2 2020 vs Q2 2019 Revenue YTD, H1 2020 vs H1 2019 HUF bn -2.2% -1.0% HUF bn 1.2 1.1 3.3 1.8 0.2 2.8 160.8 319.7 -5.1 -8.1 157.2 316.5 -1.6 -2.2 Q2 2019 Mobile service Fixed service Equipment SI/IT Other Q2 2020 H1 201
Slide 14: Increase in mobile SIMs supported moderate revenue growth in Q2 2020
increase in mobile sIMs supported moderate revenue growth in Q2 2020 Mobile SIMs Mobile ARPU +1.2% HUF ‘000 M2M Q2 2019 5, 332 5, 398 Prepaid 3,546 Q2 2020 Blended -1.5% 5.0% 5.5% 3,494 Postpaid 31.4% 29.7% 1,125 Prepaid -12.5% 984 5,038 Postpaid -2.7% 4,900 63.6% 64.8% M2M 644 -8.5% 589 Q2 2019 Q2
Slide 15: Subscriptions and broadband ARPU growth drives increasing fixed line contribution
subsciptions and broadband arpu growth drives increasing fixed line contribution Fixed line multiplay residential subscribers Fixed Voice, BB and TV ARPU +3.2% ‘000 Q2 2019 1, 405 1, 450 2,217 Q2 2020 21% Fixed voice -3.2% 24% 1Play 2,145 2Play 31% 34% 3,494 3Play Fixed BB +2.4% 3,579 45% 46% 3,301
Slide 16: Lower indirect costs offset gross profit decline both in Q2 and H1 2020
LOWER INDIRECT COSTS OFFSET GROSS PROFIT DECLINE BOTH IN Q2 AND H1 2020 EBITDA AL YoY, Q2 2020 vs Q2 2019 EBITDA AL YTD, H1 2020 vs H1 2019 HUF bn HUF bn -2.5% -0.9% 51.5 2.5 91.9 2.4 91.0 1.0 50.2 1.5 0.1 0.5 2.7 3.2 Q2 2019 Gross profit Indirect costs Other op. IFRS 16 impact Q2 2020 H1 2019 Gross
Slide 17: Capex growth of 2020 driven by fiber roll-out and mobile network modernization
CAPEX GROWTH OF 2020 DRIVEN BY FIBER ROLL-OUT AND MOBILE NETWORK MODERNIZATION CAPEX AL (w/o spectrum licenses) YTD, H1 2020 vs H1 2019 CAPEX AL (w/o spectrum licenses), FY 2020 HUF bn Up by ca. 10% +43.7% Broadly stable (vs 2019) 48.5 89.6 (vs 2019) 33.8 H1 2019 H1 2020 2019 Original guidance (2020
Slide 18: Net profit under pressure mainly due to higher D&A and financial charges in H1 2020
NET PROFIT UNDER PRESSURE MAINLY DUE TO HIGHER D&A AND FINANCIAL CHARGES IN H1 2020 EBITDA, earnings, H1 2020 -1% -5% -10% -35% -33% +8% -14% -46% HUF bn 102.5 69.0 33.5 16.4 17.1 6.4 1.7 9.0 EBITDA D&A Operating profit Net financial result PBT Income tax Non-controlling interests PAT ▪ D&A: slightl
Slide 19: H1 2020 cash generation covered investments and seasonal uplift in working capital
H1 2020 CASH GENERATION COVERED INVESTMENTS (EXCL. SPECTRUM) AND SEASONAL UPLIFT IN WORKING CAPITAL AND EBITDA AL and cash-flow, H1 2020 HUF bn -1% +58% +44% -12% 91.0 23.3 67.7 48.5 15.8 3.4 54.2 -50.8 EBITDA AL Working capital and Operating CF CAPEX AL excl. spectrum Lease and other FCF excl. Spec
Slide 20: Q&A – For further questions please contact the IR department
Q&A ? For further questions please contact the IR department: Zoltán Pandi Rita Walfisch Head of Investor Relations Investor Relations Manager Phone: +36 1 481-7676 Phone: +36 1 457-6084 e-mail: pandi.zoltan@telekom.hu e-mail: walfisch.rita@telekom.hu
Slide 21: North Macedonia
North Macedonia Revenues EBITDA AL (MKD mn) (MKD mn) -2.9% -2.6% 2,646 1,151 22 1 1,121 12 7 2,569 -65 -81 -2 Q2 2019 Mobile Fixed SI/IT Q2 2020 Q2 2019 Gross profit Employee Other operating IFRS 16 impacts Q2 2020 related exp. exp (net) KPIs (mobile/fixed voice/fixed BB/TV) ▪ COVID-19 unfavorable i