Magyar Telekom Telecommunications Plc · BET:MTELEKOM
Magyar Telekom Telecommunications — Magyar Telekom — Q2 2021 Earnings Presentation
26 slides from Magyar Telekom Telecommunications's earnings presentation, October 2021
Slide 1: Magyar Telekom Group Investor Presentation
MAGYAR TELEKOM GROUP INVESTOR PRESENTATION October 2021
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
STRATEGY AND MARKET POSITION
Slide 4: Overview – Magyar Telekom at a Glance
OVERVIEW – MAGYAR TELEKOM AT A GLANCE Overview Pillars of transformation ▪ Integrated operations in Hungary and North 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 Techno
Slide 5: H1 2021 operational delivery underpins strong financial results
H1 2021 operational delivery underpins strong financial results Network Customers Resilience Sustainability ▪ Fixed network rollout: coverage ▪ Highest ever mobile data traffic ▪ Agile transformation in progress ▪ 2016-2020 sustainability strategy expanded to 2.75 million gigabit recorded on our net
Slide 6: Hungarian Telco Market Positions
HUNGARIAN TELCO MARKET POSITIONS Mobile voice market1 Mobile data market1 SIMs (mn) SIMs (mn) Others Digi 9.7 9.6 9.7 9.8 9.8 10 Vodafone 8 7.0 7.1 Others 0.5% 0.7% 0.7% 1.3% 1.9% 6.6 25.8% 25.6% 26.4% 26.7% 26.9% Telenor 5.9 2.3% 2.5% 0.2% Vodafone 8 1.1% Magyar Telekom 6 5.4 1.1% 26.8% 27.6% 28.4%
Slide 7: IT Market in Hungary: 2020-2025
IT MARKET IN HUNGARY: 2020-2025 Total B2B1 IT market (HW&SW and IT services)1 Revenue IT EBITDA 1 Services market shares (by revenue)3 HUF bn +5.8% SYSTEM INTEGRATION IT INFRASTR. SI & 987 1,000 +3.8% 937 Pack- Custo IT Apps. OS Infra. proj. IT 890 age m app. & IT Infra. OS 900 834 60 appl. 60 dev.
Slide 8: Hungarian Economic Environment
HUNGARIAN ECONOMIC ENVIRONMENT Growth structure Domestic demand 8% 6% 5.1% 4.9% ▪ Magyar Telekom leveraged positive trends of domestic demand 4.0% 4% 2.0% ▪ Investment levels show volatility due to EU fund cycles 2% 0% ▪ H1 2021 GDP showed a 7.6% yer-on-year growth, mostly on the -2% back of strong
Slide 9: 2021-24 Outlook
2021-24 OUTLOOK
Slide 10: 2021 Guidance - Revenue and EBITDA AL Growth Targets Upgraded
2021 GUIDANCE - REVENUE AND EBITDA AL GROWTH TARGETS UPGRADED FOR 2021 AFTER STRONG H1 PERFORMANCE Upgraded 2021 guidance 2020 results (vs 2020) Grow REVENUE HUF 673.0bn around 3% # upgraded Grow EBITDA (AL) HUF 202.6bn at least 3% CAPEX AL1 HUF 106.0bn Broadly stable Broadly stable / slight FCF1 HU
Slide 11: Strong Start to 2021 Provides Further Upside to 2021-24 Outlook
STRONG START TO 2021 PROVIDES FURTHER UPSIDE POTENTIAL TO 2021-24 OUTLOOK 2020 results 2021-24 outlook (vs 2020)2 Increase potential REVENUE HUF 673.0bn of ~1% with further upside # upgraded Increase potential EBITDA (AL) HUF 202.6bn of ~1% with further upside Increase potential FCF1 HUF 69.5bn of 1
Slide 12: Q2 2021 Results
Q2 2021 RESULTS
Slide 13: Revenue and EBITDA AL in H1 2021 significantly ahead of original targets
Revenue and EBITDA AL in H1 2021 significantly ahead of original targets H1 2021 results 2021 delivery H1 2020 results (YoY change) status HUF 328.4 bn REVENUE HUF 316.5 bn +3.8% HUF 97.4 bn EBITDA AL HUF 91.0 bn +7.0% HUF 43.2 bn CAPEX AL1 HUF 48.5 bn -11.0% HUF 10.3 bn FCF 1 HUF 3.4 bn +202% (1) E
Slide 14: Revenue Growth Driving Positive Momentum in EBITDA AL in Q2 2021
REVENUE GROWTH DRIVING POSITIVE MOMENTUM IN EBITDA AL IN Q2 2021 Quarterly revenue changes YoY (%) Quarterly EBITDA AL changes YoY (%) 5.7 9.9 8.1 3.6 6.1 1.8 1.9 1.5 -2.2 -2.5 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 14
Slide 15: Broad-Based Revenue Expansion in Q2 and H1 2021
BROAD-BASED REVENUE EXPANSION IN Q2 AND H1 2021 Revenue, Q2 2021 vs Q2 2020 Revenue, H1 2021 vs H1 2020 HUF bn +5.7% HUF bn +3.8% 2.5 0.7 166.1 2.5 0.7 328.4 -0.4 2.3 -0.7 1.4 7.1 4.8 157.2 316.5 Q2 2020 Mobile Fixed Equipment SI/IT Other Q2 2021 H1 2020 Mobile Fixed Equipment SI/IT Other H1 2021 se
Slide 16: Revenue Growth in Hungary Driven by Rising ARPU
REVENUE GROWTH IN HUNGARY DRIVEN BY RISING ARPU ON THE BACK OF STRONG DATA USAGE AND MOBILE SIM GROWTH Mobile SIMs1 Mobile ARPU1 ‘000 +1.9% HUF M2M Q2 2020 5,398 5,503 Prepaid 3,494 Q2 2021 Blended +5.6% 7.6% 9.5% Postpaid 3,689 29.7% 26.8% 5,043 Postpaid +3.8% 5,233 62.7% 63.7% 984 Prepaid +20.5% 1
Slide 17: Fixed Line Performance Supported by Growing Customer Base
FIXED LINE PERFORMANCE SUPPORTED BY GROWING CUSTOMER BASE; BB ARPU TEMPORARILY UNDER PRESSURE IN HUNGARY Fixed line multiplay residential subscribers Fixed Voice, BB1 and TV ARPU ‘000 +3.4% HUF Q2 2020 1,499 2,145 Q2 2021 1,450 Fixed voice -5.0% 18% 1Play 2,037 21% 2Play 3,444 34% 37% 3Play Fixed BB
Slide 18: Top Line Driven EBITDA AL Expansion
TOP LINE DRIVEN EBITDA AL EXPANSION EBITDA AL, Q2 2021 vs Q2 2020 EBITDA AL, H1 2021 vs H1 2020 HUF bn HUF bn 6.1% 7.0% 6.3 3.2 7.2 0.8 0.5 0.6 97.4 0.0 0.1 53.2 50.2 91.0 Q2 2020 Gross profit Indirect Other op. IFRS 16 Q2 2021 H1 2020 Gross profit Indirect Other op. IFRS 16 H1 2021 costs income imp
Slide 19: Network Development Continues at Pace Covering 2.75 Million Access Points
NETWORK DEVELOPMENT CONTINUES AT PACE COVERING 2.75 MILLION ACCESS POINTS WITH GIGABIT CAPABLE NETWORK CAPEX AL, H1 2021 vs H1 2020 Gigabit capable fixed network development 83.1 126.3 # of HUF bn access 4 500 4 194 4 209 4 224 4 238 4 259 4 314 4 333 4 139 4 164 -11.0% points (th) 4 000 48.5 4.2 3
Slide 20: Net Profit Improvement of HUF 13.5bn
NET PROFIT IMPROVEMENT OF HUF 13.5BN DRIVEN BY LOWER NET FINANCING COSTS AND IMPROVING EBITDA EBIT(DA), earnings, H1 2021 6.8% 4.0% 12.4% 65.6% 88.0% -17.0% 26.2% 150% HUF bn 109.5 71.8 After lease impact 12.1 EBITDA AL 97.4 37.7 5.6 32.0 7.4 2.2 22.4 EBITDA D&A Operating profit Net financial result
Slide 21: HUF 10.3bn FCF Generation in H1 2021
HUF 10.3BN FCF GENERATION IN H1 2021 LARGELY IN LINE WITH EBITDA TREND EBITDA and cash-flow, H1 2021 HUF bn 6.8% 18.0% -11.0% 202% 109.5 13.9 After lease impact 12.1 15.8 79.9 43.2 EBITDA AL 97.4 26.3 10.3 10.3 0.0 EBITDA Working capital Taxes, financial Operating CF CAPEX AL Cash CAPEX, FCF excl. S
Slide 22: Back-up
BACK-UP ? For further questions please contact the IR department: Diana Várkonyi Rita Walfisch Capital Market Relations Hub Lead Investor Relations Expert Phone: +36 1 481-7676 Phone: +36 1 457-6084 e-mail: varkonyi.diana.annamaria@telekom.hu e-mail: walfisch.rita@telekom.hu
Slide 23: North Macedonia: Q2 2021 Results
NORTH MACEDONIA: Q2 2021 RESULTS Revenues EBITDA AL (MKD mn) (MKD mn) +5.9% -2.0% 116 66 2,720 -32 116 -61 1,121 2,569 0 1,099 -77 Q2 2020 Mobile Fixed SI/IT Q2 2021 Q2 2020 Gross profit Employee Other opex (net) IFRS 16 impact Q2 2021 related expenses 23
Slide 24: MTelekom Sustainability Framework
MTELEKOM SUSTAINABILITY FRAMEWORK Our approach towards sustainability rest on 4 pillars Current sustainability strategy cycle covered the 2016-2020 period ▪ Climate protection: Climate ▪ carbon neutral operation for the 6th year in a row (Scope 1, 2) Diversity protection ▪ approved 1.5°C science-bas
Slide 25: Company's ESG Efforts Continue to Gain External Recognition
COMPANY’S ESG EFFORTS CONTINUE TO GAIN EXTERNAL RECOGNITION Ratings Index inclusion ▪ Outstanding MSCI ESG rating of AA Magyar Telekom remains a constituent of the maintained for the 3rd year in a row FTSE4Good Index Series following a recent index review with a 99 percentile rank in telecommunicati
Slide 26: Hungarian Mobile Spectrum
HUNGARIAN MOBILE SPECTRUM Current spectrum allocation (MHz) 700 10 10 5 25 800 10 10 10 30 Magyart Telekom to hold 900 2 10 1 10 10 2 35 10MHz from April 2022 Magyart Telekom to hold 1800 15 5 10 15 3 15 12 75 30MHz from April 2022 2100 15 15 15 5 10 60 2600 30 20 20 70 1500 40 2600 5 25 15 5 50 350