Telekom Austria Ag · VIE:TKA
Telekom Austria — Investor Presentation (October 2024)
38 slides from Telekom Austria's investor presentation, October 2024
Slide 1: Investor Presentation October 2024
Investor Presentation October 2024
Slide 2: Cautionary statement
Cautionary statement This presentation contains forward-looking statements. These forward-looking statements are usually accompanied by words such as ›believe‹, ›intend‹, ›anticipate‹, ›plan‹, ›expect‹ and similar expressions or by ›outlook‹. Actual events may differ materially from those anticipate
Slide 3: Promoting a more sustainable way of life through digitalization
Promoting a more sustainable way of life through digitalization • Leading telco across CEE • System-critical infrastructure: fixed-line and mobile networks, data centers • Leverage the potential provided by megatrend digitalization • Strong market positions, award winning network and top-rated brand
Slide 4: A1 at a glance
A1 at a glance Former Austrian incumbent and a platform for growth in Eastern Europe Belarus 5.3 bn 1.9 bn 37 % Total revenues EBITDA EBITDA margin Austria Slovenia Croatia 25.2 mn 6.3 mn 36 EurC Serbia Bulgaria Fixed RGUs Dividend, ~10% CAGR in North Wireless subscribers Macedonia last 6 years #1 #
Slide 5: Well-balanced performance across geographic footprint
Well-balanced performance across geographic footprint Revenue split (FY 2023) Growth driver CEE EBITDA split (FY 2023) Bulgaria 14% YoY Growth rate 2023 Bulgaria 16% Croatia 10% 8.7% Croatia 10% Belarus 8% Belarus 10% Slovenia Slovenia 5% 1.7% 3% Serbia Serbia 7% 7% Austria N-Macedonia Austria +1.4%
Slide 6: Financials
Financials 6
Slide 7: Financial performance
Financial performance (Unless otherwise stated, in € mn) Revenues EBITDA Free cash flow +5% +5% -41% 5,005 5,251 4,748 603 1,838 1,924 1,706 487 354 35.9% 36.7% 36.6% 2021 2022 2023 2021 2022 2023 2021 2022 2023 EBITDA margin 2023 incl. € 133 mn investments in spectrum (2022: € 10 mn) CAPEX (incl fr
Slide 8: Sustainable growth and strong free cash flow
Sustainable growth and strong free cash flow Revenues consistently growing EBITDA increased significantly Robust free cash flow CAGR CAGR Avg. 3.6% 5.4% € 458 mn/yr 5,005 5,251 1,838 1,924 4,565 4,549 4,748 1,706 603 1,561 1,577 504 487 344 354 34% 35% 36% 37% 37% 11% 10% 12% 8% 7% 2019 2020 2021 20
Slide 9: A1 has decreased net debt significantly
A1 has decreased net debt significantly Robust free cash flow Sustainable dividend policy Net debt reduction 0.95 0.97 EPS Avg. € 458 mn/yr 0.76 0.73 0.91 0.58 0.58 0.68 FCF/ 2.3 603 0.48 0.52 0.58 share 2.0 504 487 0.49 0.53 1.7 0.36 0.36 1.3 344 354 0.28 0.32 DPS 1.9 1.3 1.3 0.21 0.23 0.25 1.7 0.2
Slide 10: Strong growth performance within peer group
Strong growth performance within peer group Revenues, CAGR EBITDAaL adj., CAGR Standard & Poor’s rating 2019-2023 2021-2023 2019-2023 2021-2023 A1 Group +3.6% +5.2% +5.3% +5.3% Telia (SEK) AA+ Orange AA AA- Telenor (NOK) A+ Proximus A Swisscom* + Telefonica A- A1 Group Telenor + (w/o LatAm) BBB+ Ora
Slide 11: Performance recap first nine months 2024
Performance recap first nine months 2024 3,937mEUR 3,346mEUR 1,506mEUR 348mEUR +1.4% +3.4% +4.4% +28.7% Total revenues Service Revenues EBITDA Free cash flow Service revenue growth drivers, YTD Total revenues growth – Group and International, YTD +3.4% 3,346 +4.7% +5.9% in CCY in CCY +7.9% +5.2% +3.
Slide 12: Strategy
Strategy 12
Slide 13: Strategy follows the vision: Empowering digital life
Strategy follows the vision: Empowering digital life Evolve the core Explore the new Transparency & Growth & Autonomy Inspiration • From network to • Scaling-up the portfolio connectivity plus Take Learn & • Develop eco-systems and • From product driven to ownership innovate partnerships to enrich c
Slide 14: Key performance drivers
Key performance drivers IT services e.g., applications, data centers, analytics Security data/mobile/object security Communication e.g., private branch exchange, healthcare Unified B2B Integrated sector solutions Brand Digital e.g., smart metering, IoT Commercial One One to all approach Upselling th
Slide 15: Accelerating internal transformation with a Competence Delivery Center (CDC)
Accelerating internal transformation with a Competence Delivery Center (CDC) • Repurposing costs (indirect to direct) to invest in the market • One CDC with different delivery centers (DCs), from 7 local to 1 international team i.e. • Efficiency gains and employee cost reduction • Employee cost redu
Slide 16: Unfolding the opportunities
Draft for internal discussion Unfolding the opportunities Unfolding our business opportunities for 2024 Evolve the CORE Evolve Extend Expand Enable Push Scale CORE B2B SME SME Financial Financial the #1 to #1 Digital Services (ICT) Business Services Services 16 16
Slide 17: Unfolding our business opportunities
Unfolding our business opportunities Evolve the CORE to #1 From Product to From Network to Customer Journey Connectivity @Scale Plus 17
Slide 18: Market Shares
Market Shares Austria Bulgaria Croatia Belarus Serbia Slovenia N.-Macedonia 41% 28% 31% Mobile 34% 37% 43% 51% #1/3 #2/3 #2/3 #2/3 #3/3 #2/4 #1/2 12% 7% 32% 30% 59% Launch in 29% 2024 Fix 8% fixed voice #1/3 #2/2 #2/3 #2/2 #3/4 #2/3 Mobile and fixed market positions both based on Service Revenues Ma
Slide 19: Extend B2B Digital Services (ICT)
Extend B2B Digital Services (ICT) Total Revenues Gross mEUR +96 (26%) 466 370 +80% +34% +19% +3% +33% 2022 Security Cloud IT Services Others incl. Equipment 2023 vertical market solutions 24% CAGR 2020-2023 19
Slide 20: B2B Digital Services Acceleration
B2B Digital Services Acceleration Accelerate growth in Replicate expertise to Large Business Small/Med Business (SME) 15% standardized 45% modularized ~99% 58% Increase in Enterprises Level of digitalisation* cyber attacks 40% customized & outsourced SME products and services for A1 footprint + DACH
Slide 21: Sustainability
Sustainability THE USE BY TELEKOM AUSTRIA OF ANY MSCI ESG RESEARCH LLC OR ITS AFFILIATES (“MSCI”) DATA, AND Source Sustainalytics. THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS Sustainalytics, a Morningstar OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A company, is a leading independent SPONSORSHIP,
Slide 22: New ESG Strategy: raised ambition & extended scope of topics
New ESG Strategy: raised ambition & extended scope of topics CO2 emissions Energy efficiency Recycle / Refurbish Waste reduction Product reuse CO2 Net-Zero goal by 2030 80% goal 20% goal Zero-waste to landfill goal Foster reuse projects Scope 1&2: -90% Increase energy efficiency to Increase percenta
Slide 23: The share
The share 23
Slide 24: Shareholder structure
Shareholder structure Two strong shareholders ÖBAG (Österreichische Beteiligungs AG) ÖBAG • ÖBAG: independent holding company of state assets. 28.4% Mission is to preserve and grow its investments for generations. Retail • Investment portfolio includes also: OMV, Verbund, 3.3% Post, Casinos Austria,
Slide 25: Syndicate agreement between América Móvil and ÖBAG
Syndicate agreement between América Móvil and ÖBAG On February 6, 2023, both parties agreed on a new syndicate agreement with a term of 10 years. The publicly known cornerstones of this agreement are the following: General • Headquarters to remain in Austria • Commitment to the listing at the Vienna
Slide 26: Share price
Share price AT0000720008 Tela.VI TKA AV • Shares outstanding: 664,084,841 • Listing: Vienna Stock Exchange Institution Rating Price (€) AlphaValue/Baader Europe Buy 8.55 Bank Pekao Hold 9.70 Barclays Hold 8.00 Bernstein Buy 10.00 Citigroup Hold 7.00 Erste Group Bank Hold 9.45 HSBC Hold 8.00 JP Morga
Slide 27: Outlook
Outlook Guidance 2024 & Ambitions 2024-26
Slide 28: Guidance 2024
Guidance 2024 Revenues CAPEX ex. spectrum 3-4% increase p.a. Around € 800 million Outlook based on current inflation and exchange rate expectations 28
Slide 29: A1 ambitions 2024-2026
A1 ambitions 2024-2026 Revenues EBITDA CAPEX 3-4% increase p.a. 4-5% increase p.a. € 2.8 bn plus frequencies € 0.32 in FY 2022 Dividend baseline € 0.36 in FY 2023 € 0.32 per share +13% yoy Based on the Group's operational and financial development, the dividend Outlook based on current inflation and
Slide 30: Capital allocation follows conservative financial policy for long-term value creation
Capital allocation follows conservative financial policy for long-term value creation within rating framework Ambition to be A- rated (currently: A-/A3) Conservative Sustainable Value-accretive financial policy dividend policy M&A Developing in line with operational I. In market consolidation Ambiti
Slide 31: Investment Case Telekom Austria
Investment Case Telekom Austria Leading telco across CEE • Among top 2 mobile operators in 6 out of 7 core markets • 29 million customers in Europe • >80% of Group EBITDA in investment-grade rated countries Top performing incumbent telco in Europe • Strong growth rates, high profitability, robust FC
Slide 32: Appendix
Appendix 32
Slide 33: Management Board
Management Board Deputy CEO CEO Alejandro Plater (*1967, Argentina) Thomas Arnoldner (*1977, Austria) • Board member since August 2015 • Board member since September 2018 o 2015-2018 as CEO, 2018-2023 as COO o 2018-2023 as CEO • Before A1, senior roles at Ericsson • Before A1, board functions at Alc
Slide 34: Conservative financial policy and investment-grade ratings
Conservative financial policy and investment-grade ratings As of September 30, 2024 Overview (September 30, 2024) Lines of credit (September 30, 2024) Credit ratings • Total financial debt: EUR 780 mn • Total committed lines: EUR 1,315 mn A3/A- • Average cost of debt: 1.59% o Average term to maturit
Slide 35: Overview: Restructuring charges and provision vs. FTE
Overview: Restructuring charges and provision vs. FTE Overview restructuring charges (in EUR mn) FTE addressed Overview restructuring provision* (in EUR mn) Provisioned FTEs 35 Investor presentation | October 2024
Slide 36: P&L Q3 2024 below EBITDA
P&L Q3 2024 below EBITDA Unless otherwise stated, all amounts in EUR mn Q3 2024 Q3 2023 Δ Q1-Q3 2024 Q1-Q3 2023 Δ • One offs and restructuring almost Revenues 1,354 1,326 +2.1% 3,937 3,882 +1.4% level out. OPEX (806) (805) +0.2% (2,431) (2,440) –0.4% EBITDA 548 521 +5.1% 1,506 1,443 +4.4% • EBIT dec
Slide 37: Free cash flow
Free cash flow Free Cash Flow in Q1-Q3 2024 Unless otherwise stated, all amounts in EUR mn Q3 2024 Q3 2023 Δ Q1-Q3 2024 Q1-Q3 2023 Δ higher due to EBITDA 548 521 5.1% 1,506 1,443 4.4% • higher operational result Restructuring charges, cost of labor obligations 24 13 85.1% 65 53 21.3% • lower CAPEX L
Slide 38: Contacts
Contacts Susanne Aglas-Reindl Head of Investor Relations Telekom Austria AG Lassallestraße 9 1020 Wien M +43 664 66 39420 T +43 50 664 39420 @ susanne.aglas-reindl@A1.group
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