Magyar Telekom Telecommunications Plc · BET:MTELEKOM
Magyar Telekom Telecommunications — Magyar Telekom — Investor Presentation (April 2023)
29 slides from Magyar Telekom Telecommunications's investor presentation, April 2023
Slide 1: Magyar Telekom Group Investor Presentation
MAGYAR TELEKOM GROUP INVESTOR PRESENTATION April 2023
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: 2022 Strategic Priorities
2022 STRATEGIC PRIORITIES Network Customers Resilience ▪ Gigabit network rollout: additional 370 ▪ Continued strong momentum in mobile data and ▪ Inflation-based fee adjustment clause thousand new access points expand coverage gigabit broadband demand effective in customer contracts to 3.4m ▪ Succes
Slide 6: 2023 Strategic Objectives and Targets
2023 STRATEGIC OBJECTIVES AND TARGETS #1 CHOICE OF DIGITALLY NATIVE CUSTOMERS BUSINESS MOST ADMIRED UNDISRUPTABLE COMMUNITY TELEKOM 6
Slide 7: IT Market in Hungary: 2020-2026
IT MARKET IN HUNGARY: 2020-2026 Total B2B IT market 2 IT Services market shares1,2 HUF bn Magyar Telekom Group +5.7% 1,200 1,158 12.0% 1,090 1,100 +14.5% 1,035 NISZ 977 24% 1,000 922 23% 8.5% 900 877 21% 19% 14% 17% 800 766 700 11% 29% 29% 8.2% 4iG Plc. 29% 29% 29% 29% 600 28% 500 2.4% 3.6% 13% 13%
Slide 8: Network Developments in Hungary
NETWORK DEVELOPMENTS IN HUNGARY Fixed network developments Mobile data usage developments # of access points (th) Total monthly mobile traffic (GB thousand) 4 374 4 435 4 500 4 194 4 259 4 014 4 000 23.2% 50 000 30.9% 3 500 40.7% 3 000 51.6% 19.8% 40 000 2 500 74.3% 19.9% 30 000 18.2% 2 000 15.7% 1
Slide 9: Hungarian Economic Environment
HUNGARIAN ECONOMIC ENVIRONMENT Growth structure & Domestic demand 14.6% 15% ▪ Magyar Telekom leveraged positive trends of domestic demand in 10% 7.1% the past periods 4.0% 5.1% 4.9% 4.6% 5% ▪ Investment levels show volatility due to EU fund cycles 0% ▪ GDP growth slowed down in H2 2022 due to pressu
Slide 10: Guidance, Outlook and Shareholder Remuneration
GUIDANCE, OUTLOOK AND SHAREHOLDER REMUNERATION
Slide 11: 2023 Public Guidance and 2024 Outlook
2023 PUBLIC GUIDANCE AND 2024 OUTLOOK 2022 results 2023 guidance 2024 outlook REVENUE HUF 746.7 bn 5%-10% growth mid-single digit growth EBITDA AL HUF 221.5 bn 5%-10% growth dynamic growth Adjusted net income HUF 63.0 bn moderate growth dynamic growth FCF 1 HUF 50.9 bn ca HUF 60bn dynamic growth 1 E
Slide 12: Shareholder Remuneration After 2022 Results
SHAREHOLDER REMUNERATION AFTER 2022 RESULTS On the 23rd of February 2022, The Board of Directors of Magyar Telekom Nyrt. (the ”Company”) approved the shareholder remuneration policy applicable for earnings in 2022-2024 which envisages growth in annual shareholder remuneration as a combination of div
Slide 13: Q4 2022 Results
Q4 2022 RESULTS
Slide 14: Growing Demand for Data Continues to Drive Positive ARPU Momentum
GROWING DEMAND FOR DATA CONTINUES TO DRIVE POSITIVE ARPU MOMENTUM Mobile SIMs Mobile ARPU ‘000 HUF +5.6% M2M Q4 2021 5,950 Prepaid 3,752 Q4 2022 5,634 Blended* +3.1% 12.7% 3,870 10.3% Postpaid 25.8% 23.7% 5,336 Postpaid* +4.2% 5,562 64.0% 63.7% 1,193 Prepaid +3.4% 1,234 Q4 2021 Q4 2022 Mobile data S
Slide 15: Continued Customer Base Expansion Fuelled by Growing Fiber Penetration
CONTINUED CUSTOMER BASE EXPANSION FUELLED BY GROWING FIBER PENETRATION Fixed line multiplay residential subscribers Fixed Voice, BB and TV ARPU ‘000 HUF +3.4% Q4 2021 1,530 1,582 1,952 Q4 2022 Fixed voice -5.5% 15% 1,844 17% 1Play 41% 2Play 3,702 38% Fixed BB +6.1% 3,926 3Play 44% 3,360 45% Pay TV +
Slide 16: Revenue Growth Driven by Sustained Commercial Momentum
REVENUE GROWTH DRIVEN BY SUSTAINED COMMERCIAL MOMENTUM Revenue, Q4 2022 vs Q4 2021* ▪ Growth in mobile service revenues driven by HUF bn +3.6% 3.2 strong demand for data 7.0 3.8 199.2 -2.3 ▪ Fixed service growth attributable to strong 192.3 -4.7 demand for broadband and TV services ▪ Increased avera
Slide 17: EBITDA AL Performance Impacted by External Headwinds
EBITDA AL PERFORMANCE IMPACTED BY EXTERNAL HEADWINDS EBITDA AL, Q4 2022 vs Q4 2021 ▪ Increase in gross profit attributable to positive HUF bn -4.9% underlying telecommunication service developments 8.6 ▪ Recently imposed supplementary telecommunication 58.6 -5.7 55.7 tax booked in relation to revenu
Slide 18: Supplementary Telecommunication Tax and Weakening Forint Weigh on Net Profit
SUPPLEMENTARY TELECOMMUNICATION TAX AND WEAKENING FORINT WEIGH ON NET PROFIT Net income (and adjusted net income), Q4 2022 vs Q4 2021 HUF bn ▪ Lower D&A reflects copper network retirement, -9.9% 5.0 lower SW-related D&A expenses and lower 18.7 0.6 16.9 0.3 17.1 spectrum-related amortization in Hunga
Slide 19: Capex Pressure from Weakening Forint and Cost Inflation
CAPEX PRESSURE FROM WEAKENING FORINT AND COST INFLATION CAPEX AL, 2022 vs 2021 HUF bn 193.4 +15.9% 3.1 129.7 7.4 126.7 3.3 1.2 2.3 4.1 109.3 -84.2 -1.0 2021 w/ spectrum 2021 w/o Fixed Mobile Other Fiber Other North Mac. 2022 w/o spectrum 2022 w/ spectrum licenses spectrum network network network pro
Slide 20: Free Cashflow Reflects Challenging External Environment
FREE CASHFLOW REFLECTS CHALLENGING EXTERNAL ENVIRONMENT Free cashflow, 2022 vs 2021 HUF bn -9.4% 2.4 7.2 55.2 1.1 56.2 8.3 50.9 5.1 1.4 3.6 47.4 2021 Spectrum 2021 w/o EBITDA Change of Capex Repayment of Other changes 2022 w/o Spectrum 2022 payments Spectrum working payments lease liabilities Spectr
Slide 21: Delivery Against 2022 Financial Targets
DELIVERY AGAINST 2022 FINANCIAL TARGETS 2022 results 2021 results 2022 guidance (change YoY) HUF 746.7 bn REVENUE HUF 692.8 bn ca 5% growth (+7.8%) HUF221.5 bn EBITDA AL HUF 216.3 bn moderate decline (+2.4%) HUF 126.7 bn CAPEX AL1 HUF 109.3 bn broadly stable (+15.9%) HUF 50.9 bn FCF 1 HUF 56.2 bn mo
Slide 22: Back-up
Back-up ?
Slide 23: North Macedonia: Q4 and Full Year 2022 Results
NORTH MACEDONIA: Q4 AND FULL YEAR 2022 RESULTS Revenues, Q4 2022 vs Q4 2021* EBITDA AL, Q4 2022 vs Q4 2021 HUF mn +17.4% HUF mn +10.0% 528 1,725 19,690 2,588 -199 6,801 16,773 -1,073 -32 6,181 Q4 2021 Mobile Fixed SI/IT Q4 2022 Q4 2021 Gross profit Indirect costs IFRS 16 impact Q4 2022 Revenues, FY
Slide 24: Sustainability Strategy 2016-2021 and Achievements
SUSTAINABILITY STRATEGY 2016-2021 AND ACHIEVEMENTS ▪ Diversity: comprehensive targets safeguarding ▪ Climate protection: decreasing operational emission and governance, diversity and inclusion, workplace offering green products to customers flexibility and others Diversity & Climate ✓ carbon neutral
Slide 25: Sustainability Strategy 2021 - 2025 - 2030
SUSTAINABILITY STRATEGY 2021 - 2025 - 2030 2025 2030 Target Target Scope 1 + 2 • keep at net zero (by an overall 16% decrease in • keep at net zero (by 84% decrease compared I. Climate (direct & indirect emissions) consumption) to 2015) protection Scope 3 (emissions of our suppliers & • decrease by
Slide 26: 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 AAA Magyar Telekom remains a constituent of the FTSE4Good Index Series following a recent index review with a 99-percentile rank in telecommunications ▪ „B” Rating with „Prime” status
Slide 27: Other Awards and Recognitions in 2022
OTHER AWARDS AND RECOGNITIONS IN 2022 ▪ Zyntern.com #1 most attractive employer ▪ PwC Hungary – Most Attractive Workplace (Telecommunication category) ▪ Randstad Most Attractive Workplace (Telecommunication sector) ▪ Open Minded Companies Award „Most Tolerant Company” Prize ▪ IPRA Golden World Award
Slide 28: Hungarian Mobile Spectrum
HUNGARIAN MOBILE SPECTRUM Spectrum allocation (MHz) 700 10 10 5 25 800 10 10 10 30 900 15 10 10 35 1800 15 5 10 20 5 20 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 Yettel Digi not allocated 28
Slide 29: For further questions please contact the IR department
For further questions please contact the IR department: Diana Párkányi-Várkonyi Rita Walfisch Capital Market Relations Hub Lead Investor Relations Manager Phone: +36 1 481-7676 Phone: +36 1 457-6084 e-mail: varkonyi.diana.annamaria@telekom.hu e-mail: walfisch.rita@telekom.hu