Magyar Telekom Telecommunications Plc · BET:MTELEKOM

Magyar Telekom Telecommunications — Magyar Telekom — Q1 2011 Earnings Presentation

20 slides from Magyar Telekom Telecommunications's earnings presentation, 2011

  1. Slide 1: Magyar Telekom Q1 2011 results

    Presentation Magyar Telekom Q1 2011results Slow macro-economic recovery reflected in the underlying business trends

  2. Slide 2: New reporting structure from January 1, 2011

    New reporting structure from January 1, 2011 New Hungary T-Systems Macedonia Montenegro structure  Residential, Soho, SMB  Mid-size business and customers enterprise clients (SMB  Wholesale partners moved to Hungary)  Media subsidiaries (Internet  Key local and public and other content) governm

  3. Slide 3: Q1 highlights

    Q1 highlights  Slow economic recovery (Q1 GDP up by 2% in Q1 2011, unemployment Revenues under pressure, still flat at 11%) down by 3.3%  Fixed voice and internet revenues declined driven by falling price levels  Increasing TV and mobile internet revenues  Savings in employee-related and other o

  4. Slide 4: Q1 2011 Group results

    Q1 2011 Group results Group revenues Group EBITDA HUF million HUF million 150 000 60 000 57 666 147 374 53 246 3 731 145 000 142 507 - 6 341 1 160 - 3 332 1 335 248 50 000 967 -2 970 140 000 - 3 296 -789 40 000 135 000 130 000 30 000 3.3% revenue decline driven by competition and 7.7% EBITDA decline

  5. Slide 5: Magyar Telekom Group and Hungarian macro-economy trends

    Magyar Telekom Group and Hungarian macro-economy trends 2009-2011 6,0% GDP Hungary Revenues Underlying Ebitda 3,8% 4,0% 1,6% 2,0% 0,0% -2,1% -0,6% -2,0% -3,3% -2,0% -2,9% -4,0% -2,4% -3,3% -4,0% -5,6% -4,2% -6,6% -3,9% -6,0% -7,5% -8,0% -7,9% -8,6% -10,0% -11,1% -12,0% 2009 Q1 2009 Q2 2009 Q3 2009 Q

  6. Slide 6: Hungary – Q1 2011 Financial performance

    Hungary – Q1 2011 Financial performance Fixed line revenues Mobile revenues HUF million 48,675 -7% 45,211 HUF million 56 034 no change 55 921 50 000 60 000 -5% +4% 37 500 +13% +14% 40 000 25 000 -7% 20 000 12 500 -4% -14% 0 0 Q1 2010 Q1 2011 Q1 2010 Q1 2011 Voice Internet TV Other Voice Non-voice Ot

  7. Slide 7: Fixed voice market – focus on retention

    Fixed voice market – focus on retention Hungary fixed voice subscribers Hungary fixed voice churn subscribers 10% 9% 2 000 000 1 500 000 Fixed voice 1 000 000 Churn  slight decline in fixed voice churn 500 000 thanks to retention and bundling offers 0  growing importance of VoIP and Q1 2010 Q1 201

  8. Slide 8: Fixed broadband market – stable market position

    Fixed broadband market – stable market position Fixed broadband market developments in Hungary T-Home retail fixed BB market share subscribers 36% 36% 2 000 000 Fixed broadband 1 500 000 Market share 1 000 000  Market growth driven by cable and fiber growth, while ADSL market 500 000 growth is slow

  9. Slide 9: TV market – significant growth achieved

    TV market – significant growth achieved TV market growth T-Home market share subscribers 27% 28% 3 200 000 TV customer growth 3 000 000 2 800 000  TV service is the most highly valued service in Hungary 2 600 000  Number of TV customers exceeded 2 400 000 750th, stable market position with Q1 2010

  10. Slide 10: Mobile voice market – Stable market share

    Mobile voice market – Stable market share Mobile voice market shares (based on active SIM cards) Penetration subscribers 119% 119% 12 000 000 Mobile voice 22% 23% 9 000 000  SIM card penetration at 119% 6 000 000 33% 33%  Some improvements in the mobile voice market 3 000 000 45% 44%  churn level

  11. Slide 11: Mobile broadband market – major growth driver

    Mobile broadband market – major growth driver Mobile broadband market developments* Penetration subscribers 7% 10% 1 200 000 Mobile broadband 900 000 27% 600 000 25% 24%  Leading market position with 49% market 25% share despite fierce competition 300 000 49% 49%  3G/HSDPA network covering ca.75%

  12. Slide 12: T-Systems – Financial performance

    T-Systems – Financial performance Revenues T-Systems HUF million 29,375 -4% 28,071 30 000 Falling voice and data revenues -1%  Private clients still very cautious, while 20 000 public sector clients still facing budget cuts -5% 10 000  high churn among fixed voice, data and internet customers -9%

  13. Slide 13: Macedonia – Financial performance

    Macedonia – Financial performance Revenues Macedonia HUF million 18,384 -7% 17,126 20 000 Increasing fixed line revenues -12% 15 000  decreasing fixed retail voice revenues -5% due to cable competition and strong 10 000 mobile substitution +2% 5 000  higher wholesale voice revenues driven -8% by h

  14. Slide 14: Montenegro – Financial performance

    Montenegro – Financial performance Revenues Montenegro HUF million -1% 7,359 8 000 7,448 Fixed voice revenues under pressure +45%  deterioration in retail voice revenues driven 6 000 by strong mobile substitution -12% 4 000  lower international incoming traffic volume +12% affecting wholesale voic

  15. Slide 15: Backup – Financial results

    Backup – Financial results 15

  16. Slide 16: Magyar Telekom - Consolidated Income Statement

    Magyar Telekom - Consolidated Income Statement HUF million Mar 31, 2010 Mar 31, 2011 Change Fixed line revenues 62 352 59 113 -5,2% Mobile revenues 74 193 72 449 -2,4% System Integration/Information Technology revenues 10 829 10 945 1,1% Revenues 147 374 142 507 -3,3% Direct costs (36 668) (34 771)

  17. Slide 17: Magyar Telekom - Consolidated Balance Sheet

    Magyar Telekom - Consolidated Balance Sheet HUF million Dec 31, 2010 Mar 31, 2011 Change Current assets 200 574 211 673 5.5% Cash and cash equivalents 15 841 25 968 63.9% Other current financial assets 56 560 59 210 4.7% Non current assets 908 432 888 730 -2.2% Property, plant and equipment - net 54

  18. Slide 18: Magyar Telekom - Consolidated Cashflow Statement

    Magyar Telekom - Consolidated Cashflow Statement HUF million Mar 31, 2010 Mar 31, 2011 Change Net cash generated from operating activities 39 817 44 620 12,1% Investments in tangible and intangible assets (15 669) (12 314) -21,4% Adjustments to cash purchases (6 103) (8 097) 32,7% Purchase of subsid

  19. Slide 19: Investigation into contracts identified in the 2005 audit

    In the course of conducting their audit of the Company’s 2005 financial statements, PricewaterhouseCoopers, the Company’s auditors, identified two contracts the nature and business purposes of which were not readily apparent to them. In February 2006, the Company’s Audit Committee retained White & C

  20. Slide 20: For further questions please contact the IR department

    For further questions please contact the IR department: Investor Relations Phone: +36 1 458-0423 Fax: +36 1 458-0443 e-mail: investor.relations@telekom.hu Abbreviations: 3G: third generation, ARPU: average revenue per user, BB: broadband, CBC: call-by-call, CPS: carrier pre-selection, HQ: headquarte

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