Magyar Telekom Telecommunications Plc · BET:MTELEKOM
Magyar Telekom Telecommunications — Magyar Telekom — Q3 2017 Earnings Presentation
27 slides from Magyar Telekom Telecommunications's earnings presentation, November 2017
Slide 1: Magyar Telekom Group Investor Presentation
MAGYAR TELEKOM GROUP INVESTOR PRESENTATION NOVEMBER, 2017
Slide 2: Strategy and Market Position
STRATEGY AND MARKET POSITION
Slide 3: Overview – Magyar Telekom at a Glance
OVERVIEW – MAGYAR TELEKOM AT A GLANCE Overview International presence Revenue (FY2016) Integrated operations in Hungary and Macedonia* 8.9% leading telecommunications service provider in both 4.8% countries 86.4% leading SI/IT service provider in Hungary EBITDA (FY2016) Majority owned by Deu
Slide 4: Market Positions in the Hungarian Telco Market
MARKET POSITIONS IN THE HUNGARIAN TELCO MARKET Total mobile market* Fixed voice market** Vodafone Other Subscribers -0.5% Subscribers 12,000,000 Telenor 3,500,000 +0.6% Invitel MT DIGI 24.1% 24.7% 24.9% 3,000,000 3.8% 3.2% 3.3% 13.1% 12.4% UPC 9,000,000 12.9% 2,500,000 11.5% 12.4% MT 10.7% 28.1% 28.
Slide 5: IT Market in Hungary
IT MARKET IN HUNGARY Total IT market (HW&SW and IT services)* IT Services market shares (by revenue)* HUF bn SYSTEM INTEGRATION IT INFRASTRUCTURE SI&IT 800 +4.0% 742 Package Custom System IT App. OS & Infra. OS & Infra. proj. Hosting Cloud 721 appl. app. dev. integration consulting operation operati
Slide 6: Strategy Overview: Building a Growing ICT Company Serving Satisfied Customers
STRATEGY OVERVIEW: WITH OUR ENGAGED PEOPLE, WE ARE BUILDING A GROWING ICT COMPANY SERVING SATISFIED CUSTOMERS Strategic pillars Strategic goals 1 Together. Increase customer satisfaction For We listen: customer and colleague opinions form an Improve customer service level our important part of our d
Slide 7: Hungarian Economic Environment
HUNGARIAN ECONOMIC ENVIRONMENT Growth structure Domestic demand 6% Domestic demand improved as economy 3.7% 3.6% 3.7% recovered 4% 3.4% Governmental measures support consumer 2.0% 2% 1.5% spending Investment levels show volatility due to EU 0% fund cycles MT leveraged positive trends of dome
Slide 8: Network Developments in Hungary
NETWORK DEVELOPMENTS IN HUNGARY Mobile network coverage (population based) Fixed network (Households covered) % HHs ths 97% 98% 99% 4,000 100 93% 83% 83% 86% 78% 80 3,000 33% 38% 43% 4% 60 2,000 36% 28% 40 84% 76% 87% 82% 89% 40% 71% 65% 71% 43% 1,000 34% 22% 20 7% 2% 25% 17% 15% 12% 0 0 2014 2015 2
Slide 9: Hungarian Mobile Spectrum Allocation
HUNGARIAN MOBILE SPECTRUM ALLOCATION Current spectrum allocation (MHz) BAND Magyar Telekom Telenor 700 MHz 2x5 2x5 2x5 2x5 2x5 2x5 Vodafone Digi Free 800 MHz 2x10 2x10 2x10 900 MHz 2x11.8 2x11 2x12 1800 MHz 2x15 2x5 2x25 2x30 2100 MHz 2x15 2x15 2x15 2x5 2x5 2x5 2600 MHz 2x30 2x20 + 1x25 2x20 3.4 - 3
Slide 10: 9 Months 2017 Results, Guidance and Dividend
9 MONTHS 2017 RESULTS, GUIDANCE AND DIVIDEND
Slide 11: 9 Months 2017 Financial Results and 2017 Targets
9 MONTHS 2017 FINANCIAL RESULTS AND 2017 TARGETS* FY 2016 9M 2017 2017 RESULTS RESULTS TARGETS Continued growth in mobile service revenue Higher Hungarian SI/IT revenues driven by uptick in EU fund around REVENUE HUF 574.0 bn HUF 449.4bn inflows HUF 580 bn One-off project boosted fixed line da
Slide 12: Dividend Policy
DIVIDEND POLICY Dividend payment and net debt ratio developments Highlights Net debt ratio* Dividend per share (HUF) 50% 70 Aiming to maintain net debt ratio (net 45.7% debt/total capital) target of 30% - 40% 43.8% 42.9% 39.1% 60 HUF 25 dividend per share payment 40% 34.1% 34.3% based on 2016 re
Slide 13: Q3 Results
Q3 RESULTS
Slide 14: Q3 2017 Strategic Highlights
Q3 2017 STRATEGIC HIGHLIGHTS Launch of new postpaid tariff system in March drove demand for larger data packages MOBILE Introduction of EU Roam Like Home legislation had limited revenue and EBITDA impacts thanks to increase in visitor data usage New broadband portfolio with increased download
Slide 15: Hungary
HUNGARY Revenue* EBITDA HUF bn HUF bn +13.0% +10.0% 5.7 0.4 51.0 145 51 4.6 141.9 50 -0.3 140 -0.1 49 1.3 0.9 48 4.4 0.4 135 47 -0.8 3.5 46 45.1 130 129.0 45 44 -1.1 1 0 0 3Q Mobile Mobile Mobile Fixed Fixed TV Fixed SI/IT Energy 3Q 3Q 2016 Gross profit Employee Other op. 3Q 2017 2016 voice non- oth
Slide 16: Hungary – Mobile
HUNGARY – MOBILE Mobile SIMs Mobile ARPU ‘000 HUF -3.3% +1.9% 6,000 5,482 5,401 3,354 5,301 Prepaid Blended +2.7% 5,000 3,446 Postpaid 44.0% 41.1% 37.4% 4,000 1,197 Prepaid -11.2% 3,000 1,063 2,000 4,882 56.0% 58.9% 62.6% Postpaid +0.3% 4,899 1,000 0 Sep 2015 Sep 2016 Sep 2017 3Q 2016 3Q 2017 New po
Slide 17: Hungary – Mobile Broadband
HUNGARY – MOBILE BROADBAND Mobile broadband user developments Smartphone penetration ‘000 % +23.8% 75 66 3,000 +8.8% 2,835 61 Non-4G 60 55 2,500 2,290 4G 2,104 35% 2,000 45 45% 1,500 63% 30 1,000 65% 55% 15 500 37% 0 0 Sep 2015 Sep 2016 Sep 2017 Sep 2015 Sep 2016 Sep 2017 Mobile broadband usage deve
Slide 18: Hungary – Fixed Voice, Broadband and TV
HUNGARY – FIXED VOICE, BROADBAND AND TV Fixed BB customer number Pay TV customer number ‘000 ‘000 +3.5% +4.3% +3.8% 1,200 1,200 +2.9% 1,019 1,063 DSL 1,016 Sat TV 984 952 979 1,000 Cable 1,000 Cable TV Fiber 31% 27% IPTV 800 52% 800 32% 59% 57% 12% 600 600 14% 17% 400 400 34% 34% 34% 56% 60% 200 50%
Slide 19: Hungary – Multiplay
HUNGARY – MULTIPLAY Fixed line multiplay residential subs. development Fixed line multiplay residential ARPU development ‘000 HUF Annual churn 1,500 1,410 5,823 1,387 1,366 Blended +4.4% 12% 1Play 6,081 36% 32% 29% 2Play 3Play 3,071 1,000 1Play +4.3% 15% 3,203 29% 28% 30% 5,704 500 2Play +1.5% 12% 5
Slide 20: Hungary – SI/IT
HUNGARY – SI/IT SI/IT revenue developments SI/IT revenue breakdown by vertical segments* HUF bn HUF bn Market Share* 100 Finance 13% Hardware & Software Manufacturing 6% 80 w/o mobile devices IT Infrastructure Retail&WS 6% 60 50% services Prof. Services 11% 39% 43% System Integration / Telco+Media 1
Slide 21: Macedonia
MACEDONIA Financials Mobile market Revenues (HUF bn) EBITDA (HUF bn) Subscribers One (T. Slovenia)* +4.5% +0.4% +1.9% VIP (T. Austria) 14.2 -3.3% 6.4 2,500,000 14.0 0.0 0.4 6.2 One.Vip 14.0 6.2 2,000,000 25.0% Telekom 49.5% 50.7% 13.8 5.9 1,500,000 6.0 27.8% -0.2 13.6 13.5 5.8 1,000,000 -0.2 -0.1 13
Slide 22: Appendix
APPENDIX
Slide 23: Q3 2017 Group Segmental Revenue and EBITDA
Q3 2017 GROUP SEGMENTAL REVENUE AND EBITDA Group segmental revenues Group segmental EBITDA HUF bn HUF bn 160 +8.8% +12.1% 58 0.4 57.2 4.5 0.0 -0.2 -0.2 155.4 0.2 -0.1 5.7 155 1.8 56 6.7 150 54 145 142.9 52 51.1 0 0 3Q 2016 Mobile Fix SI/IT & Mobile Fix SI/IT 3Q 2017 3Q 2016 Gross profit Indirect Gro
Slide 24: Magyar Telekom – Consolidated Income Statement
MAGYAR TELEKOM – CONSOLIDATED INCOME STATEMENT HUF million Q3 2016 Q3 2017 Change Mobile revenues 78,810 85,531 8.5% Fixed line revenues 47,336 48,913 3.3% System Integration/Information Technology revenues 15,260 19,590 28.4% Revenue from energy services 1,459 1,347 -7.7% Revenues 142,865 155,381 8
Slide 25: Magyar Telekom – Consolidated Balance Sheet
MAGYAR TELEKOM – CONSOLIDATED BALANCE SHEET HUF million Dec 31, 2016 Sep 30, 2017 Change Current assets 193,978 181,670 -6.3% Cash and cash equivalents 10,805 6,294 -41.7% Other current financial assets 5,104 2,195 -57.0% Non current assets 981,551 919,836 -6.3% Property, plant and equipment - net 4
Slide 26: Magyar Telekom – Consolidated Cash Flow Statement
MAGYAR TELEKOM – CONSOLIDATED CASH FLOW STATEMENT HUF million Sep 30, 2016 Sep 30, 2017 Change Net cash generated from operating activities 100,759 95,536 -5.2% Investments in tangible and intangible assets (55,700) (56,595) -1.6% Adjustments to cash purchases (12,736) (4,591) 64.0% Purchase of subs
Slide 27: For further questions please contact the IR department
For further questions please contact the IR department: Linda László Rita Walfisch Head of Investor Relations Investor Relations Manager Phone: +36 1 481-7676 Phone: +36 1 457-6084 e-mail: laszlo.linda@telekom.hu e-mail: walfisch.rita@telekom.hu DISCLAIMER This investor presentation contains forward