Magyar Telekom Telecommunications Plc · BET:MTELEKOM
Magyar Telekom Telecommunications — Magyar Telekom — Q1 2010 Earnings Presentation
25 slides from Magyar Telekom Telecommunications's earnings presentation, 2010
Slide 1: Magyar Telekom First Quarter 2010 results
Presentation Magyar Telekom First Quarter 2010 results Economic difficulties continue to exert downward pressures
Slide 2: Overview – Magyar Telekom Group at a glance
Overview – Magyar Telekom Group at a glance International presence Integrated operations in Hungary, Macedonia and Montenegro leading telecommunications service provider in all three Ukraine countries leading SI/IT service provider in Hungary Moldova Hungary Slovenia Croatia Croatia Romania BiH
Slide 3: Change in organizational structure
Change in organizational structure New organizational structure – effective from July 1, 2010 CEO Finance Technology Human Strategy & Legal & Sales & Service Marketing Business Resources Business Corporate Services Development Affairs improve effectiveness in responding to quickly changing market
Slide 4: Hungarian market – infrastructure based-competition
Hungarian market – infrastructure based-competition Wireline voice traffic trends Mobile subscriber trends 100% Penetration 121% 119% 118% 118% 119% 7% 7% 7% 7% 7% 100% 10% 11% 14% 18% 19% 80% 80% 60% 59% 58% 57% 56% 60% 60% 40% 83% 82% 78% 75% 74% 40% 20% 20% 40% 41% 42% 43% 44% 0% 0% Q1 2009 Q2 20
Slide 5: Strong positions across all segments of the Hungarian market
Strong positions across all segments of the Hungarian market TV market shares Mobile voice market shares** 100% 100% 14% 13% 13% 14% 6% 6% 5% 21% 21% 22% 22% 23% 80% 7% 80% 24% 24% 23% 23% 60% 60% 34% 34% 33% 34% 33% 40% 33% 33% 32% 31% 40% 20% 20% 45% 45% 45% 44% 44% 22% 24% 26% 27% 0% 0% Q2 2009 Q
Slide 6: 3Play as growth engine & retention tool in the residential segment
3Play as growth engine & retention tool in the residential segment Fixed voice access Strong focus on triple play on all networks (fixed Subscribers line, cable and mobile) -9% 2 000 000 +26% 1 800 000 +26% 1 600 000 the launch of Sat TV enabled country-wide offerings New generation access roll-ou
Slide 7: Changing trends require continued efficiency improvements
Changing trends require continued efficiency improvements Change in revenue mix Underlying TWM expense in Hungary Annual wage 100% SI/IT: 1% increase 5.5% 5.6% 1.5% New HUF billion revenue SI/IT >10% 80% New 150 sources -5% < 20% revenue 121 114 sources 60% > 30% 100 Voice 40% revenues > 70% Voice 5
Slide 8: Economic environment – still a drag on Magyar Telekom
Economic environment – still a drag on Magyar Telekom Group revenues and Hungarian GDP Economic indicators influence telecommunication 2% spending in different ways 0% in 2009 all components of economic activity suffered a meaningful decline in Hungary -2% telecommunication spending lags GDP tre
Slide 9: Dividend policy
Dividend policy Historical dividend payments Usage of free cash flow Net debt ratio* DPS (HUF) % of the generated free cash 50% 73 74 74 74 80 70 70 125% 6% 36% 38% 40% 100% 1% 33.2% 60 16% 31.7% 31.0% 29.7% 30.8% Target 17% 30% 13% 1% 1% 75% 40 14% 20% 50% 91% 74% 78% 79% 20 59% 10% 25% 0% 0 0% 200
Slide 10: Public targets for 2010 maintained
Public targets for 2010 maintained 2010 public targets 2010 Q1 results Revenue 5-7% decline 7.5% decline decreasing consumer spending continued recessionary impacts rationalization in the business sector intense competition stronger HUF compared to average 2009 saturated core markets FX
Slide 11: Q1 2010 results – Business Unit analysis
Q1 2010 results – Business Unit analysis Revenue development Underlying EBITDA development HUF million HUF million 68 000 66,622 170,000 159,409 -3,132 150,000 -3,294 147,374 64 000 -2,120 -918 -137 -2,178 -2,376 -1,486 100 130,000 60 000 -2,595 59,207 - 919 -395 110,000 56 000 90,000 r ct ia o U 09
Slide 12: Consumer Services Business Unit (CBU) - Financials
Consumer Services Business Unit (CBU) - Financials Fixed line revenues Mobile revenues HUF million HUF million 35,000 33,858 -5% 32,099 45,085 -3% 43,712 50,000 +53% 28,000 +19% +18% 40,000 +3% 21,000 -1% 30,000 14,000 20,000 -6% 7,000 -15% 10,000 0 0 Q1 2009 Q1 2010 Q1 2009 Q1 2010 Voice Internet T
Slide 13: CBU – mobile operations
CBU – mobile operations ARPU MOU Mobile internet development HUF min leading market position with 49% market share 4,000 150 131 number of subscribers exceeded 460,000 at end of 2,987 3,042 119 3,000 +2% +10% Q1 2010 100 2,000 3G/HSDPA network covering ~75% of population 50 1,000 0 0 Mobile te
Slide 14: CBU KPIs
CBU KPIs Fixed Fixed & mobile broadband Voice ARPA Broadband ARPU Customer growth Subscribers +29% HUF HUF 1,000,000 4,500 6,000 3,628 3,428 4,680 4,142 750,000 +84% -6% -11% 3,000 4,000 500,000 +18% 1,500 2,000 250,000 +7% 0 0 0 Q1 2009 Q1 2010 Q1 2009 Q1 2010 March 2009 March 2010 ADSL Cable Mobil
Slide 15: Regulatory snapshot
Regulatory snapshot Regulation in line with EU recommendations in all three countries Hungary: fully in line with the EU Regulatory Framework Macedonia: liberalization of fixed line market in progress, regulated mobile termination rates Montenegro: new telecommunication law adopted in 2008 – f
Slide 16: Business Services Business Unit (BBU) - Financials
Business Services Business Unit (BBU) - Financials Revenues Falling voice and data revenues HUF million -8% 39,603 rationalization and cost cutting initiatives at our key corporate 42,897 45,000 clients lead to reduction in their telecom spending -7% both private and public sector affected by ec
Slide 17: BBU KPIs
BBU KPIs Fixed voice access DSL connections Subscribers Subscribers 420,000 397,322 -12% 348,154 220,719 -18% 180,704 240,000 180,000 280,000 -12% -20% 120,000 140,000 -25% 60,000 -13% -4% 0 0 March 2009 March 2010 March 2009 March 2010 Business lines Managed leased lines ISDN channels Retail DSL cu
Slide 18: Macedonia - Financials
Macedonia - Financials Revenues Results negatively impacted by FX impact HUF million 20,848 -12% 18,384 HUF strengthened on average by 7.8% to the Macedonian 21,000 Denar in Q1 2010 -13% excluding FX impact revenues were down by 4% 14,000 excluding FX impact underlying EBITDA down by 23% (driv
Slide 19: Montenegro - Financials
Montenegro - Financials Revenues Results negatively impacted by FX impact HUF million 8,217 -9% 7,448 HUF strengthened on average by 7.8% to the Euro in Q1 2010 9,000 excluding FX impact, revenues were down by 4% but -1% underlying EBITDA increased by 3% 6,000 HUF 0.9bn special influences due
Slide 20: International KPIs Macedonia Montenegro
International KPIs Macedonia Fixed voice access ADSL/IPTV customer growth Mobile subscribers Subscribers 111% Penetration 118% 20.1% Penetration 18.1% Subscribers 160,000 Subscribers 17,392 2,500,000 450,000 12% 16% 120,000 +322% 2,000,000 360,000 4,120 -11% 30% 29% 80,000 1,500,000 270,000 137,761
Slide 21: Magyar Telekom - Consolidated Income Statement
Magyar Telekom - Consolidated Income Statement HUF million Jan-March 2009 Jan-March 2010 Change Fixed line revenues 70,802 62,352 -11.9% Mobile revenues 77,041 74,193 -3.7% System Integration/Information Technology revenues 11,566 10,829 -6.4% Revenues 159,409 147,374 -7.5% Total expenses directly r
Slide 22: Magyar Telekom - Consolidated Balance Sheet
Magyar Telekom - Consolidated Balance Sheet HUF million 31 Dec 2009 31 March 2010 Change Current assets 249,366 218,781 -12.3% Cash and cash equivalents 34,270 45,634 33.2% Other current financial assets 87,611 45,373 -48.2% Non current assets 917,011 904,924 -1.3% Property, plant and equipment - ne
Slide 23: Magyar Telekom - Consolidated Cashflow Statement
Magyar Telekom - Consolidated Cashflow Statement HUF million Jan-March 2009 Jan-March 2010 Change Net cash generated from operating activities 50 536 39 817 -21,2% Investments in tangible and intangible assets (19 864) (15 669) -21,1% Adjustments to cash purchases (9 858) (6 103) -38,1% Purchase of
Slide 24: Abbreviations
Abbreviations: 3G: third generation, ARPU: average revenue per user, BB: broadband, CBC: call-by-call, CPS: carrier pre-selection, HQ: headquarters, HSDPA: high-speed downlink packet access, IC: interconnection, IP: internet protocol, IT: information technology, LTO: local telecommunication operator
Slide 25: 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 In addition to figures prepared in accordance with IFRS, Magyar Telekom also presents non-GAAP financial performance measures, including, among o