Telekom Austria Ag · VIE:TKA
Telekom Austria — Debt Investor Presentation (March 2012)
40 slides from Telekom Austria's debt investor presentation, March 2012
Slide 1: Telekom Austria Group Bond Investor Presentation
Telekom Austria Group Bond Investor Presentation March, 2012
Slide 2: Disclaimer
Disclaimer IMPORTANT NOTICE This information is neither an offer nor a solicitation for an offer to purchase notes (the "Notes") of Telekom Austria AG and/or Telekom Finanzmanagement GmbH (each an "Issuer"). Offers of Notes (each an "Offer") is solely made on the basis of a base prospectus dated 23
Slide 3: Agenda
Agenda > Group Overview > Financial Overview > Focus Points > Financial Policy > Appendix 3
Slide 4: Group Overview
Group Overview 4
Slide 5: Telekom Austria Group Is a Leading Telco Provider in Fixed and Mobile Market
Telekom Austria Group Is a Leading Telco Provider in Fixed and Mobile Market as of Full Year 2011 Belarus > Mobile market share: 41.1% > Mobile market share: 41.0% > Access lines: 2.3 mn > Mobile market share: 16.5% Austria > Mobile market share: 15.7% Liechtenstein Slovenia Croatia Serbia > Mobile
Slide 6: Operational Excellence and Three Strategic Pillars Meet Future Challenges
Operational Excellence and Three Strategic Pillars Meet Future Challenges Strategy Telekom Austria Group 3. Value enhancing growth 1. Market consolidation 2. Convergence opportunities >Strong potential for >Continuation of >Realization of growth value creation through integration in Austria will opp
Slide 7: Financial Overview
Financial Overview 7
Slide 8: Full Year 2011 Results in Line with Guidance
Full Year 2011 Results in Line with Guidance* Guidance Reported Hyperinflation Excluding and FX in Hyperinflation Belarus and FX in Belarus approx. Revenues EUR 4.45 bn EUR 213.6 mn EUR 4.67 bn EUR 4.50 bn up to EBITDA comparable EUR 1.53 bn EUR 90.0 mn EUR 1.62 bn EUR 1.55 bn CAPEX EUR 0.75 bn
Slide 9: Convergence and Contributions from Additional Markets Mitigate Revenue Pressure
Convergence and Contributions from Additional Markets Mitigate Revenue Pressure In EUR mn - 4.2% + 0.5% clean* Austria FY 2011: EUR 2,942.1 mn; -4.0% yoy Additional Markets FY 2011: EUR 396.mn; +23.5% yoy -122 Bulgaria FY 2011: EUR 527.6 mn; -6.5% yoy Croatia FY 2011: EUR 420.7 mn; -6.9% yoy -37 Bel
Slide 10: Favorable EBITDA Comparable Trends Despite Macro-Economic and Foreign Exchange Setbacks
Favorable EBITDA Comparable Trends Despite Macro-Economic and Foreign Exchange Setbacks In EUR mn - 7.2% - 1.6% clean* Austria FY 2011: EUR 972.6 mn; -5.8% yoy -60 Additional Markets FY 2011: EUR 90.4 mn; +120.0% yoy Bulgaria FY 2011. EUR 261.9 mn; -12.3% yoy Croatia FY 2011: EUR 134.5 mn; -10.6% yo
Slide 11: Stable Group EBITDA Margin Despite Competition, FX-Adjustments in Belarus and Regulation
Stable Group EBITDA Margin Despite Competition, FX-Adjustments in Belarus and Regulation (in EUR mn) FY 2011 FY 2010 % change Revenues 4.454,6 4.650,8 -4,2% > On a clean basis revenues increased by 0,5% and EBITDA comparable decreased EBITDA comparable* 1.527,3 1.645,9 -7,2% by 1,6% EBITDA comparabl
Slide 12: Free Cash Flow Driven by FX-Adjustments and Lower CAPEX
Free Cash Flow Driven by FX-Adjustments and Lower CAPEX in EUR mn FY 2011 FY 2010 % change Gross cash flow 1,339.6 1,478.6 -9.4% Change in working capital -126.4 -81.0 56.0% Ordinary capital expenditures -739.0 -763.6 -3.2% Proceeds from sale of equipment 4.9 11.0 -55.5% Free cash flow 479.2 645.0 -
Slide 13: Telekom Austria Group – Net Debt
Telekom Austria Group – Net Debt Net debt (in EUR million) Dec. 31, 2011 Dec. 31, 2010 % change Long-term debt 2,960.4 3,146.4 -5.9% Short-term borrowings 1,052.4 522.6 101.4% Cash and cash equivalents, short-term and long term investments, finance lease receivables -657.7 -355.0 85.3% Derivate fina
Slide 14: Focus Points
Focus Points 14
Slide 15: Announced Acquisition of Orange Austria Assets in Line With Group Strategy
Announced Acquisition of Orange Austria Assets in Line With Group Strategy Frequencies Base stations YESSS! ONE A total of 2 x 13.2 MHz of 100% of the mobile phone Intellectual property Up to 634 base stations paired frequencies operator YESSS! rights on the brand “ONE” Purchase price maximum EUR 39
Slide 16: New Ambition Program – Operating Free Cash Flow Target Achieved Through Operational Excellence
New Ambition Program – Operating Free Cash Flow* Target Achieved Through Operational Excellence New Ambition Program (NAP) > Expanding on existing strategy, targeting operating free cash flow stabilization > Addresses revenues, OPEX and CAPEX > Measures are to be implemented in 2012 and 2013 > Part
Slide 17: NAP Closes OpFCF Gap Between Guidance and Consensus
NAP Closes OpFCF* Gap of Approx. EUR 130 mn Between Guidance and Consensus New guidance 2012: Capital Market approx. EUR 750 mn Day 2010: approx. EUR 800 mn per annum EUR 788.4 mn EUR 760 mn EUR 710 mn 2011 reported 2012 2013 Consensus** New Ambition Program effect New Ambition Program ensures opera
Slide 18: Telekom Austria Group Outlook for Full Year 2012
Telekom Austria Group Outlook for Full Year 2012* On a constant currency basis for all markets as well as before any effects of potential inflation accounting for the Belarusian segment Revenues approx. EUR 4.4 bn EBITDA comparable approx. EUR 1.5 bn CAPEX approx. EUR 0.75 bn Operating Free Cash Flo
Slide 19: Financing Policy
Financing Policy 19
Slide 20: Telekom Austria Has a Conservative Financial Policy
Telekom Austria Has a Conservative Financial Policy Financial Targets Liquidity Targets > Commitment to a solid > Extension of maturity profile investment grade rating > Operating free cash flow is the > Diversification of debt primary focus of management > Access to international > Prudent liquidit
Slide 21: Conservative Financial Portfolio Combined with Significant Financial Flexibility
Conservative Financial Portfolio Combined with Significant Finacial Flexibility Balanced Debt Maturity Profile Solid Credit Ratings (in EUR million) > S&P: BBB (stable outlook) 1,052* 969** > Moody’s: Baa1 (stable outlook) 806 550 253 205 129 47 2012 2013 2014 2015 2016 2017 2018 2019 Significant Fi
Slide 22: Appendix
Appendix 22
Slide 23: FY 2011 EBITDA - Restructuring and Impairment Charges
FY 2011 EBITDA - Restructuring and Impairment Charges EBITDA comparable FY Effect Comment > Net effect from restructuring provision of EUR -233.7 mn Restructuring EUR 274.4 mn and a reduction of restructuring personnel restructuring Austria charge via servicekom EUR -40.7 mn > No cash flow impact EU
Slide 24: 75 Defined Activities Ensure Success of New Ambition Program
75 Defined Activities Ensure Success of New Ambition Program Revenue Contribution OPEX Contribution CAPEX Contribution 10% > Mobile data monetization 10% > Outsourcing 20% > Life cycle management 10% > Procurement efficiency 30% > Focus on small and 10% > Customer service efficiency medium enterpris
Slide 25: Telekom Austria Group - Mobile Communication Subscriber Base
Telekom Austria Group - Mobile Communication Subscriber Base Mobile Subscribers (in 000) Q4 2011 Q4 2010 % change Austria 5,271 5,105 3.3% Market share 40.0% 41.4% Bulgaria 5,501 5,249 4.8% Market share 48.6% 49.6% Croatia* 2,018 2,028 -0.5% Market share* 39.2% 39.0% Belarus 4,620 4,354 6.1% Market
Slide 26: Segment Austria - Fixed Line Key Performance Indicators
Segment Austria - Fixed Line Key Performance Indicators ARPL & ARPL Relevant Revenues Total Fixed Access Lines & Net Adds (in EUR) (in 000) 40.0 39.5 39.0 250.0 2,322 2,323 2,327 2,336 38.5 38.0 2,325 37.5 37.0 245.0 36.5 36.0 34.0 2,315 35.5 35.0 8.0 34.5 34.0 33.5 32.5 32.2 31.8 32.5 2,315 33.0 32
Slide 27: Segment Austria – Mobile Key Performance Indicators
Segment Austria – Mobile Key Performance Indicators ARPU & ARPU Relevant Revenues MoU per Subscriber (in EUR) (in min) 23.0 355.0 159.7 21.6 22.0 345.0 20.5 21.0 152.0 152.7 335.0 20.1 20.0 149.5 325.0 20.0 146.4 19.2 315.0 326.3 19.0 317.4 300.9 18.0 305.0 309.9 311.9 295.0 17.0 Q4 10 Q1 11 Q2 11 Q
Slide 28: Segment Austria – Broadband Market Split
Segment Austria – Broadband Market Split Market Share Broadband Lines Market Share Voice Minutes (in %) (in %) Mobile 28.2% Broadband 29.5% other operators 7.0% Unbundled lines 6.1% 80.4% Mobile 83.0% 15.4% Cable 14.5% A1 17.8% Mobile broadband 18.4% A1 1.2% fixed wholesale 1.1% A1 Other fixed 30.4%
Slide 29: Segment Bulgaria – Mobile Key Performance Indicators
Segment Bulgaria – Mobile Key Performance Indicators ARPU MoU per Subscriber (in EUR) (in min) 8.7 7.6 7.3 7.0 111.8 7.0 104.2 104.1 98.6 97.5 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Mobile Broadband Customers Mobile Penetration (in 000) (in %) 192.0 151.4% 177.6 161.6 126.2 141.
Slide 30: Segment Croatia – Mobile Key Performance Indicators
Segment Croatia – Mobile Key Performance Indicators ARPU* MoU per Subscriber* (in EUR) (in min) 14.0 97.1 96.5 13.4 13.4 92.6 88.8 89.8 12.5 12.4 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Mobile Broadband Customers* Mobile Penetration* (in 000) (in %) 127.0% 192.9 165.1 170.6 144.8
Slide 31: Segment Belarus – Mobile Key Performance Indicators
Segment Belarus – Mobile Key Performance Indicators ARPU MoU per Subscriber (in EUR) (in min) 6.2 6.1 186.0 183.4 179.8 4.9 176.3 3.5 3.5 168.6 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Mobile Broadband Customers Mobile Penetration (in 000) (in %) 453.1 118.8% 349.6 115.4% 116.0% 1
Slide 32: Segment Additional Markets – Mobile Key Performance Indicators
Segment Additional Markets – Mobile Key Performance Indicators Slovenia - ARPU Slovenia - MoU per Subscriber (in EUR) (in min) 22.7 178.3 21.4 20.4 20.4 168.7 163.9 165.1 19.1 155.4 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Serbia - ARPU Macedonia - ARPU (in EUR) (in EUR) 8.3 7.4 6
Slide 33: Appendix – Personnel Restructuring in Austria
Appendix – Personnel Restructuring in Austria 33
Slide 34: 2011 Restructuring Program Targets Achieved – New Initiatives for 2012
2011 Restructuring Program Targets Achieved – New Initiatives for 2012 Target as of 23 February 2011 Reported as of 31 December 2011 approx. 700 FTE 791 FTE > 75% - 85% to Social Plans > Social plans: 685 FTE (87%) > 15% – 25% Transfer to Government > Transfer to the government: 106 FTE (13%) EUR
Slide 35: Overview – Restructuring Charges and Provision vs. FTE
Overview – Restructuring Charges and Provision vs. FTE Overview Restructuring Charges FTEs Addressed (in EUR million) 2011 2011 2009 2010 Q1 Q2 Q3 Q4 FY 2009 2010 Q1 Q2 Q3 Q4 FY Transfer to government 0 158 24 46 10 26 106 FTE Effect -10.0 76.9 184.1 34.6 6.1 8.9 233.7 Social plans 451 28 514 63 10
Slide 36: Overview – Cash Flow Impact of Restructuring
Overview – Cash Flow Impact of Restructuring Overview Cash Flow Impact (in EUR million) Total cash flow impact > Total cash flow impact comprises 2008 14.7 old as well as new programs 2009 62.0 > Total cash flow impact for 2011 2010 57.9 of EUR 89.0 mn Q1 2011 21.5 Q2 2011 22.9 Q3 2011 21.8 Q4 2011
Slide 37: Restructuring – Explanatory Information
Restructuring – Explanatory Information > The following factors have to be taken in account when comparing “FTEs Addressed” to “Provisioned FTEs”: > FTEs of social plans may include receivers of one-time payments such as golden handshakes and can fluctuate due to retirement > Number of staff release
Slide 38: Appendix – Hyperinflation Accounting
Appendix – Hyperinflation Accounting 38
Slide 39: Impact on Telekom Austria Group Cash Flow and P&L
Impact on Telekom Austria Group Cash Flow and P&L Group Cash Flow > Cash flow will reflect inflated items of Belarus > Monetary Gain/Loss resulting from hyperinflation accounting will be eliminated as non-cash item in gross cash flow and will be allocated to monetary items, such as accounts receivab
Slide 40: Belarus: Impact of Hyperinflation Accounting and Foreign Exchange Translations in Full Year 2011
Belarus: Impact of Hyperinflation Accounting and Foreign Exchange Translations in Full Year 2011 Belarus Profit and Loss Statement for Full Year 2011 Excluding Hyperinflation Hyperinflation and FX Impairment Reported (in EUR million) and FX in Belarus Effects in Belarus Revenues 474.5 -213.6 0.0 260
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