Magyar Telekom Telecommunications PLC · BET:MTELEKOM

Magyar Telekom Telecommunications — Magyar Telekom (Matáv) — 9M 2004 Earnings Presentation

15 slides from Magyar Telekom Telecommunications's earnings presentation, November 2004

  1. Slide 1: Leading market positions maintained despite intensifying competition

    Leading market positions maintained despite intensifying competition 1 Nine months 2004 results ••••••• 1

  2. Slide 2: Agenda

    Agenda Overview, nine months 2004 highlights Segment analysis, 2004 outlook Mid-term strategic targets, dividend policy This presentation contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statem

  3. Slide 3: Matáv at a glance

    Matáv at a glance l EUR 3bn market capitalisation Ownership structure* Törvényi változások l Market leader in all core businesses Foreign institutions Domestic l fixed line incumbent operator 30% institutions l 100% stake in the leading Hungarian 7% Other mobile operator 4% l full scale telecommunic

  4. Slide 4: Nine months 2004 summary

    Nine months 2004 summary Revenues EBITDA EBITDA margin HUF HUF Group 449,725m -0.5% 182,884m -6.2% 40.7%* / 41.4%** Fixed-line l Strengthening competitive 228,288 -7.0% 81,535 -12.5% 35.7% pressure l Successful broadband rollout Mobile l Improving customer mix l Healthy financials despite 195,137 +4

  5. Slide 5: Regulatory snapshot

    Regulatory snapshot Fixed-line Mobile l Market analysis is ongoing l Market analysis completed l retail markets completed, draft resolution l from 2005, Vodafone identified as implies CPI cap on residential access significant market power in mobile termination in the draft resolution l IC fees appro

  6. Slide 6: Fixed-line: active role in intensifying competition

    Fixed-line: active role in intensifying competition l Strengthening competitive pressure Fixed-line erosion Törvényi to be halted változások l Tele2 on the Hungarian market since April l fixed-line geographical number portability in Change effect since January in line # 30,000 - mainly affects busin

  7. Slide 7: Data: steady growth in the broadband business

    Data: steady growth in the broadband business l Axelero Group had nearly 245,000 ADSL became a mass market product subscribers (up 32.3% y/y) l ~43% share of the dial-up market No. of ADSL lines 162,106 l increasing proportion of broadband 150,000 142,430 subscribers 125,000 103,564 l Data and lease

  8. Slide 8: Mobile: actively maintaining leadership position

    Mobile: actively maintaining leadership position Mobile market Törvényi shares (%) változások l Strong tariff competition Mobile l prepaid: periodic discounts offered by subs mn competitors 8 l postpaid: cheap flat rate packages launched 7 in Q2-Q3 2004 by all three operators 47.6 6 47.4 5 49.6 l Su

  9. Slide 9: Mobile: solid financial and operational indicators

    Mobile: solid financial and operational indicators Breakdown of the customer base l Stable EBITDA margin of 39.7% YTD l EBITDA level up 6.2% y/y customers 4 (mn) 30% l Gross additions and MOU grew 27% 28% l rebranding related marketing campaign 26% 26% 26% 3 25% l success of Relax, attractive handse

  10. Slide 10: MakTel: leading positions on all markets

    MakTel: leading positions on all markets l Unfavourable macro environment Penetration (%) andváltozások Törvényi MakTel subscibers l low income, stagnating GDP levels, high unemployment, no recovery seen as yet 50% 44% l Fixed-line è 693,097 40% l liberalisation to commence next year - new services:

  11. Slide 11: MakTel: Productivity is the main focus

    MakTel: Productivity is the main focus Increasing workforce efficiency l Revenues remained broadly flat fixed lines/ headcount l growing mobile revenues offset by lower employee reduction fixed-line revenues 300 800 l Major restructuring to improve efficiency 250 l headcount reduction of 757 this ye

  12. Slide 12: Public targets and guidance set for 2004

    Public targets and guidance set for 2004 Revenue in the region of HUF 600 billion EBITDA margin around 40% (before restructuring charges) Gross additions to tangible and around HUF 90 billion intangible assets (excl. potential acquisitions and UMTS) Fixed line churn zero erosion D&A guidance in the

  13. Slide 13: Mid-term strategic targets

    Mid-term strategic targets Segmental targets Fixed line Mobile International l PSTN preservation l increase profitability l improve cost efficiency l initiatives in Matáv/non-Matáv l maintain leading position l major restructuring areas l 400,000 ADSL by 2006 Financial targets for 2005-2006 Revenue

  14. Slide 14: Workforce efficiency improvement

    Workforce efficiency improvement l Internal efficiency improvement Fixed line/employee ratio improvement Efficiency Headcount Total 600 above target affected expense 500 500 Parent >500 lines/ ~2,600 incl. HUF 16bn company employee ~800 outsource 400 354 316 315 300 264 257 240 Existing 17.3% 201 ~1

  15. Slide 15: Dividend policy and acquisition driven growth

    Dividend policy and acquisition driven growth Net debt ratio and dividend yield Acquisition driven growth Dividend Net debt 10% yield ratio 60% l Future priority remains growth through 8.0% further value-accretive acquisitions 47% 50% 8% 39% 40% l Target selection criteria 6% Targeted net 32% 33% l

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