Magyar Telekom Telecommunications Plc · BET:MTELEKOM
Magyar Telekom Telecommunications — Magyar Telekom — Q2 2022 Earnings Presentation
28 slides from Magyar Telekom Telecommunications's earnings presentation, September 2022
Slide 1: Magyar Telekom Group Investor Presentation
MAGYAR TELEKOM GROUP INVESTOR PRESENTATION September 2022
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: Progress Against Strategic Priorities Amid External Challenges
PROGRESS AGAINST STRATEGIC PRIORITIES AMID EXTERNAL CHALLENGES Network Customers Resilience ▪ Continued fiber rollout to provide seamless ▪ Continued strong momentum in mobile data and ▪ Price increase initiatives introduced to connectivity to expanding customer base gigabit broadband demand tackle
Slide 6: Hungarian Telco Market Positions
HUNGARIAN TELCO MARKET POSITIONS Mobile voice market1 Mobile data market1 SIMs (mn) SIMs (mn) Others Others 9.7 9.8 9.8 9.6 8.0 10 Vodafone 8 7.1 7.4 4iG/Digi 0.7% 1.4% 1.9% 2.1% 6.6 2.2% 0.3% 2.4% 0.2% 26.4% 26.7% 26.9% 26.5% Yettel 2.2% 29.4% Vodafone 8 1.1% 27.2% Magyar Telekom 6 26.9% 27.3% Yett
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: Hungarian Economic Environment
HUNGARIAN ECONOMIC ENVIRONMENT Growth structure & Domestic demand ▪ Magyar Telekom leveraged positive trends of domestic demand 8% 7.1% 5.1% 4.9% in the past periods 6% 4.0% 4% 2.0% ▪ Investment levels show volatility due to EU fund cycles 2% 0% ▪ GDP growth is expected to slow down in H2 2022 (H1 2
Slide 9: Guidance, Outlook and Shareholder Remuneration 2022-2024
GUIDANCE, OUTLOOK AND SHAREHOLDER REMUNERATION 2022-2024
Slide 10: 2022 Public Targets and 2023-2024 Outlook Reflects Strong Commercial Momentum
2022 PUBLIC TARGETS AND 2023-2024 OUTLOOK REFLECTS STRONG COMMERCIAL MOMENTUM 2021 results 2022 guidance 2023 – 2024 outlook REVENUE HUF 700.1 bn 1%-3% growth moderate annual growth EBITDA AL HUF 216.3 bn moderate decline2 moderate annual growth CAPEX AL1 HUF 109.3 bn broadly stable FCF 1 HUF 56.2 b
Slide 11: Shareholder Remuneration After 2021 Results and Policy for 2022-2024
SHAREHOLDER REMUNERATION AFTER 2021 RESULTS AND POLICY FOR 2022-2024 Shareholder remuneration Shareholder remuneration policy for 2022-2024 HUF bn 29.6 ▪ The Board of Directors approved the shareholder 25.5 remuneration policy for 2022-2024 ▪ Goal is to increase transparency, visibility and reliabil
Slide 12: Q2 2022 Results
Q2 2022 RESULTS
Slide 13: ARPU Growth in Hungary Driven by Growing Data Usage
ARPU GROWTH IN HUNGARY DRIVEN BY GROWING DATA USAGE Mobile SIMs Mobile ARPU ‘000 HUF +5.6% M2M Q2 2021 5,811 Prepaid 3,689 5,503 Blended +2.7% Q2 2022 12.0% 3,788 9.5% Postpaid 26.8% 24.6% 5,233 Postpaid +3.4% 5,409 63.7% 63.4% 1,185 Prepaid +6.8% 1,265 Q2 2021 Q2 2022 Mobile data SIMs Mobile broadb
Slide 14: Growing Customer Base Coupled with BB and TV ARPU Driving Hungarian Fixed Line Performance
GROWING CUSTOMER BASE COUPLED WITH BB AND TV ARPU DRIVING HUNGARIAN FIXED LINE PERFORMANCE Fixed line multiplay residential subscribers Fixed Voice, BB and TV ARPU ‘000 HUF +3.4% Q2 2021 1,550 2,037 Q2 2022 1,499 Fixed voice -8.0% 1,874 18% 16% 1Play 2Play 3,441 37% 39% Fixed BB +9.8% 3,777 3Play 3,
Slide 15: Revenue Growth Driven by Sustained Commercial Momentum
REVENUE GROWTH DRIVEN BY SUSTAINED COMMERCIAL MOMENTUM Revenue, Q2 2022 vs Q2 2021 HUF bn +10.9% ▪ Growth in mobile service revenues driven by strong 2.4 2.0 184.2 4.6 data demand which continues to offset lower voice 3.3 5.8 revenue contribution 166.1 ▪ Fixed service growth driven by broadband and
Slide 16: EBITDA AL Performance Strongly Impacted by New Supplementary Telecommunication Tax
EBITDA AL PERFORMANCE STRONGLY IMPACTED BY NEW SUPPLEMENTARY TELECOMMUNICATION TAX EBITDA AL, Q2 2022 vs Q2 2021 ▪ Strong increase in gross profit attributable to HUF bn positive underlying telecommunication service -3.5% 9.0 developments 53.2 2.0 51.4 ▪ Recently imposed supplementary -12.4 -0.5 tel
Slide 17: 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), Q2 2022 vs Q2 2021 ▪ Lower D&A reflects copper network retirement HUF bn and lower spectrum related amortization in -21.7% Hungary, partly offset by increases in North 13.5 1.5 10.6 10.
Slide 18: Continued Focus on Network Development
CONTINUED FOCUS ON NETWORK DEVELOPMENT CAPEX AL, H1 2022 vs H1 2021 Gigabit capable fixed network development HUF bn # of access points (th) 4 500 4 314 4 333 4 356 4 374 4 385 4 400 4 259 126.3 4 000 +21.6% 30.8% 29.4% 27.2% 3 500 36.5% 33.7% 40.7% 38.9% 3.9 52.6 3 000 19.9% 19.9% 2 500 19.9% 19.4%
Slide 19: Free Cashflow Supported by EBITDA and Subsidiary Disposal
FREE CASHFLOW SUPPORTED BY EBITDA AND SUBSIDIARY DISPOSAL; SUPPLEMENTARY TELECOMMUNICATION TAX DUE IN Q4 2022 ▪ Underlying improvements attributable Free cashflow, H1 2022 vs H1 2021 to favorable business performance HUF bn coupled with proceeds from disposal of +214% subsidiary 2.0 32.4 11.3 5.5 ▪
Slide 20: Delivery Against Financial Targets
DELIVERY AGAINST FINANCIAL TARGETS H1 2022 results 2021 results 2022 guidance (change YoY) HUF 360.1 bn REVENUE HUF 700.1 bn 1%-3% growth (+9.6%) HUF107.2 bn EBITDA AL HUF 216.3 bn moderate decline2 (+10.1%) HUF 52.6 bn CAPEX AL1 HUF 109.3 bn broadly stable (+21.6%) HUF 32.4 bn FCF 1 HUF 56.2 bn mod
Slide 21: Back-up
BACK-UP ? For further questions please contact the IR department: Diana Várkonyi Rita Walfisch Capital Market Relations Hub Lead Investor Relations Expert Phone: +36 1 481-7676 Phone: +36 1 457-6084 e-mail: varkonyi.diana.annamaria@telekom.hu e-mail: walfisch.rita@telekom.hu
Slide 22: North Macedonia: Q2 and H1 2022 Results
NORTH MACEDONIA: Q2 AND H1 2022 RESULTS Revenues, Q2 2022 vs Q2 2021 EBITDA AL, Q2 2022 vs Q2 2021 HUF mn +23.7% HUF mn +14.9% 1,757 19,383 1,182 7,265 355 -191 -50 1,604 15,667 6,324 Q2 2021 Mobile Fixed SI/IT Q2 2022 Q2 2021 Gross profit Indirect costs IFRS 16 impact Q2 2022 Revenues, H1 2022 vs H
Slide 23: 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 24: 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 25: 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 AA maintained for the 3rd year in a row Magyar Telekom remains a constituent of the FTSE4Good Index Series following a recent index review with a 99-percentile rank in telecommunicati
Slide 26: Other Awards and Recognitions in 2021
OTHER AWARDS AND RECOGNITIONS IN 2021 ▪ Zyntern.com #2 most attractive employer ▪ PwC Hungary – Most Attractive Workplace (Telecommunication category) ▪ Randstad Most Attractive Workplace (Telecommunication sector) ▪ IPRA Golden World Award ▪ GKI Digital - the biggest turnover online in the mobile p
Slide 27: Further Details on Adjustments on Net Income
FURTHER DETAILS ON ADJUSTMENTS ON NET INCOME ’Adjusted Net Income’* is to be adjusted for major non-cash below EBITDA one-off items that are not part of the underlying performance Such as: ➢ Change in fair value of derivatives ➢ FX result realized on principal of the CCIR (cross currency interest ra
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