Telekom Austria Ag · VIE:TKA

Telekom Austria — Q1 2008 Earnings Presentation

26 slides from Telekom Austria's earnings presentation, May 14, 2008

  1. Slide 1: Telekom Austria Group Results for the First Quarter 2008

    Telekom Austria Group Results for the First Quarter 2008 Vienna, May 14, 2008 Cautionary Statement “This presentation contains certain forward-looking statements. Actual results may differ materially from those projected or implied in such forward-looking statements. Forward-looking information invo

  2. Slide 2: Agenda / Key Developments

    Agenda ƒ Key Developments ƒ Fixed Net ƒ Mobile Communication ƒ Financial Overview ƒ Outlook Results for the First Quarter 2008 3 Key Developments Results for the First Quarter 2008 4 2

  3. Slide 3: Telekom Austria Group – Highlights 1Q 2008

    Telekom Austria Group – Highlights 1Q 2008 ƒ Both segments contribute to revenue growth of 9.9% to EUR 1,259.6 million ƒ EBITDA grows by 4.7% to EUR 498.6 million driven by strong mobile operations and consolidation of MDC ƒ Mobile communication subscriber base rises by 50.2% to 15.9 million custome

  4. Slide 4: Fixed Net: Revenue Growth, Extraordinary Costs Impact EBITDA

    Fixed Net Results for the First Quarter 2008 7 Revenue Growth, Extraordinary Costs Impact EBITDA ƒ Revenue increase driven by Revenues (in EUR Mio.) consolidation of eTel 521.9 2.2% ƒ Promotion of KombiPaket proves 510.8 effective in slowing down access line loss 1Q 08 1Q 07 ƒ One-off expense in the

  5. Slide 5: Triple Play Bundle KombiPaket Halves Line Loss in 1Q 08

    Successful Introduction of Triple Play Bundle KombiPaket Halves Line Loss in 1Q 08 Line Loss ƒ Triple play product bundle KombiPaket (in 000) launched in 4Q 07 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 ƒ Aimed to slow down access line loss and change perception on pricing and -32 advantages of fixed net broadba

  6. Slide 6: Product Portfolio Reshaped; Cost Saving Program

    Product Portfolio Reshaped to Rebuild Unique Selling Proposition of Fixed Net ƒ Double, triple & quadruple play bundles with significant higher speeds launched ƒ Triple and quadruple play offer download speeds of up to 8 Mbit/s ƒ Option to upgrade download speed to up to 16 Mbit/s launched ƒ aonFlex

  7. Slide 7: Mobile Communication

    Mobile Communication Results for the First Quarter 2008 13 Subscriber Base Grows by 50.2% and Profitability Increases to 43.4% ƒ Subscriber base grows by 50.2% to Revenues (in EUR Mio.) 15.9 mn customers 14.8% 796.5 ƒ Revenues grow by 14.8% 694.1 ƒ EBITDA grows by 20.4% to EUR 345.9 mn 1Q 08 1Q 07 ƒ

  8. Slide 8: Mobile Broadband mobilkom austria; Strong Margin Expansion

    Mobile Broadband mobilkom austria: Innovations Secure Market Leadership Mobile Broadband ƒ Strength of data business evidenced Subscribers by mobile broadband subscriber (in 000) base growth of 82.4% 290 310 210 250 ƒ Provides growth potential and 170 increases share of wallet 1Q 07 2Q 07 3Q 07 4Q 0

  9. Slide 9: Mobiltel in Bulgaria; Newly Acquired Belarusian MDC

    Mobiltel in Bulgaria Grows Revenues and Increases Profitability Revenues ƒ Subscriber base grows by 13.7% to (in EUR Mio.) 5.1 mn customers 8.9% 154.4 141.8 ƒ Revenues grow by 8.9% driven by traffic and rental revenues 1Q 08 1Q 07 ƒ EBITDA increases by 13.4% to EUR EBITDA 92.8 mn (in EUR Mio.) 13.4%

  10. Slide 10: Croatia and Slovenia; Greenfield Operations

    Strong EBITDA and Customer Growth in Croatia and Slovenia Vipnet in Croatia EBITDA Vipnet (in EUR Mio.) ƒ Subscriber base grows by 11.5% 11.9% to 2.2 million customers 42.4 37.9 ƒ EBITDA increases by 11.9% to EUR 42.4 mn 1Q 08 1Q 07 Si.mobil in Slovenia EBITDA Si.mobil ƒ Subscriber base grows by 15.

  11. Slide 11: Financial Overview

    Financial Overview Results for the First Quarter 2008 21 Improved Operational Performance, Higher Net Interest Expenses Following Acquisition of MDC (EUR million) 1Q 08 1Q 07 % change Revenues 1,259.6 1,145.8 9.9% EBITDA* 498.6 476.3 4.7% Operating income* 215.2 212.1 1.5% Financial Result* -48.9 -2

  12. Slide 12: Free Cash Flow; Capital Expenditures

    Free Cash Flow Impacted by Payments of Accounts Payable and Prepaid Expenses (EUR million) 1Q 08 1Q 07 % change Cash Flow from operations before 420.4 430.9 -2.4% working capital adjustments Change in working capital -115.3 -55.5 107.7% Ordinary capital expenditures -159.6 -150.5 6.1% Free cash flow

  13. Slide 13: Balance Sheet and Deleveraging to 2.0x Net Debt/EBITDA

    Repayment of Long-Term Financial Liabilities and Impact of FX-Translation Impact Asset Base (EUR million) March 31, 08 Dec. 31, 07 % change Long-term assets 7,416.2 7,677.5 -3.4% Current assets 1,318.2 1,326.2 -0.6% Total assets 8,734.4 9,003.7 -3.0% Current liabilities 2,746.0 2,557.2 7.4% Long-ter

  14. Slide 14: Outlook for Full Year 2008

    Outlook Results for the First Quarter 2008 27 Telekom Austria Group Fully Reiterates Outlook for the Full Year 2008 Group ƒ Revenue growth of approximately 5% ƒ EBITDA growth of approximately 3% ƒ Net income decline by approximately 12% due to higher interest expenses ƒ Operating free cash flow grow

  15. Slide 15: Dividend and Appendix

    Plan to Keep 2008 Dividend at Least Stable at 75 Cent per Share Dividend ƒ Strong cash flow allows to increase (in EUR) payout ratio to compensate for 0.55 0.75 0.75 0.75 temporarily lower net income 0.24 ƒ Management plans to propose a 2004 2005 2006 2007E 2008E dividend of at least 75 cent per sha

  16. Slide 16: Regulatory Issues – Key Aspects

    Regulatory Issues – Key Aspects (1) Mobile termination rates: On October 15, 2007 the Austrian regulatory authority adopted the final schedule for the reduction of termination charges between mobile operators in Austria. The regulator adheres to the successive abolishment of the asymmetry between Au

  17. Slide 17: Regulatory Issues (3); Development of Revenues

    Regulatory Issues – Key Aspects (3) International roaming charges: EU-Commissioner Reding called on the mobile industry to lower retail prices for international data roaming, including SMS and MMS, before July 1, 2008, otherwise regulation will be proposed. In the view of the Commissioner prices sho

  18. Slide 18: Development of EBITDA; Fixed Net Access Lines

    Development of EBITDA EBITDA* (in EUR Mio.) 3.4 -7.3 498.6 4.5 12.9 32.0 -6.0 476.3 -37.0 11.0 8.8 consolidation Eliminations Vip mobile Mobiltel Si.mobil Vip operator Fixed Net mobilkom change Vip net change change Corporate, EBITDA EBITDA change change 1Q 07 1Q 08 austria change Others & change MD

  19. Slide 19: Fixed Net Voice Market Shares; Broadband Revenues and ARPU

    Fixed Net – Voice Market Shares 70% 65% 60% 55% 50% 45% 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 Local + National long distance traffic Fixed to mobile International Results for the First Quarter 2008 37 Fixed Net Broadband – Revenues and Residential ARPU Broadband Revenues (incl. Whole

  20. Slide 20: Fixed Net Minutes and Tariffs; Mobile Subscribers

    Fixed Net - Minutes and Average Tariffs (in million minutes) 1Q 08 1Q 07 % change National 732 799 -8.4% Fixed-to-mobile 189 183 3.1% International 106 101 5.3% Total voice minutes 1,028 1,084 -5.2% Internet dial-up 119 247 -51.8% Total Fixed Net minutes 1,147 1,331 -13.8% (Average tariffs in EUR) 1

  21. Slide 21: Operational Data – mobilkom austria

    Operational Data – mobilkom austria MoU per Subscriber ARPU & Data ARPU (in minutes) (in EUR) 186.1 183.4 174.4 174.0 171.0 31.7 32.0 31.4 28.4 28.7 6.2 6.3 6.6 7.1 7.0 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 Blended ARPU Data ARPU Quarterly Churn SAC per Gross Add* (in EUR) 7.9%

  22. Slide 22: ARPU & MoU per Subscriber; Headcount Development

    ARPU & MoU per Subscriber – Mobile Operations ARPU (in EUR) 31.7 28.7 21.1 23.3 14.6 14.4 9.9 9.4 6.5 n.a. mobilkom Mobiltel MDC Vipnet Si.Mobil austria 1Q 07 1Q 08 MoU per Subscriber 183.4 (in minutes) 171.0 147.7 138.6 117.6 79.2 83.6 87.1 62.1 n.a. mobilkom Mobiltel MDC Vipnet Si.Mobil austria 1Q

  23. Slide 23: Fixed Net Revenue and Expense Breakdown

    Fixed Net - Revenue Breakdown (EUR million) 1Q 08 1Q 07 % change Switched voice base traffic 83.9 86.7 -3.2% Switched voice monthly & other voice revenues 116.7 121.4 -3.9% Payphones & VAS 11.0 11.1 -0.9% Wholesale data & IT-solutions 108.3 105.0 3.1% Internet access & media 60.9 68.7 -11.4% Wholesa

  24. Slide 24: Mobile Communication Revenue and Expense Breakdown

    Mobile Communication - Revenue Breakdown (EUR million) 1Q 08 1Q 07 % change Traffic revenues 380.1 336.9 12.8% Monthly rental 182.7 138.4 32.0% Equipment 61.1 54.6 11.9% Roaming 50.4 57.6 -12.5% Interconnection 114.9 103.6 10.9% Other 17.3 16.0 8.1% Discounts -10.0 -13.0 -23.1% Mobile Communication

  25. Slide 25: Revenues, EBITDA and Operating Income by Segment

    Revenues, EBITDA and Operating Income by Segment (EUR million) 1Q 08 1Q 07 % change Fixed Net revenues 521.9 510.8 2.2% Mobile Communication revenues 796.5 694.1 14.8% Corporate, Other & Eliminations -58.8 -59.1 -0.5% Operating revenues Telekom Austria Group 1,259.6 1,145.8 9.9% (EUR million) 1Q 08

  26. Slide 26: Net Debt and Debt Maturity Profile

    Net Debt - Telekom Austria Group (EUR million) March 31, 2008 Dec 31, 2007 % change Long-term debt 2,911.9 3,389.3 -14.1% Short-term debt 1,525.0 1,236.1 23.4% - Short-term portion of capital and cross border lease obligations -27.5 -8.7 216.1% + Capital lease obligations 0.9 1.0 n.a. Cash and cash

Telekom Austria Group — Q1 2008 Earnings Presentation on 6ix