Slide 1: Results for the first nine months and third quarter 2016
Results for the first nine months and third quarter 2016 Vienna, 27 October 2016
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. Actual events may differ materially from those anticipated in these forw
Slide 3: Operational and financial highlights for the first nine months and third quarter 2016
Operational and financial highlights for the first nine months and third quarter 2016 Results for the first nine months and third quarter 2016 3
Slide 4: Q3 2016: Focus on efficiency supports EBITDA despite challenges from roaming and FX
Q3 2016: Focus on efficiency supports EBITDA despite challenges from roaming and FX Reported Proforma* Group (in EUR million) Q3 16 Q3 15 % change Total revenues 1,073.2 1,058.8 1.4% EBITDA 415.5 386.3 7.5% CAPEX 196.5 178.8 9.9% > Group total revenues grew by 1.4% year-on-year on a proforma basis*
Slide 5: Austria: Stable revenues despite roaming impact, EBITDA driven by one-off effect and restructuring
Austria: Stable revenues despite roaming impact, EBITDA driven by one-off effect and restructuring ARPU ARPL Operational data (in EUR) (in EUR) > 0.7% y-o-y mobile subscriber growth (excl. M2M) Δ: -1.4% 28.3 27.9 due to increase in high-value segments Δ: -6.4% > Excluding roaming and M2M, stable ARP
Slide 6: CEE: Challenges remain but operations increasingly benefit from continuous initiatives
CEE: Challenges remain but operations increasingly benefit from continuous initiatives EBITDA Highlights CEE (reported, in EUR mn) Bulgaria: > Higher equipment revenues as well as stabilisation of EUR 36.1 mn EUR 31.1 mn EUR 41.4 mn domestic wireless and fixed-line service revenues allow 4.7% growth
Slide 7: Build-up in working capital stabilised in Q3 in a year-on-year comparison
Build-up in working capital stabilised in Q3 in a year-on-year comparison (in EUR million) Q3 2016 Q3 2015 % change 1-9 M 2016 1-9 M 2015 % change Net cash flow from operating activities 305.6 309.1 -1.1% 867.8 1,000.0 -13.2% Capital expenditures paid -205.1 -171.5 n.m. -622.0 -525.8 n.m. Proceeds f
Slide 8: Focus points
Focus points Results for the first nine months and third quarter 2016 8
Slide 9: Austria: Hybrid modem launched to boost fixed-line bandwidth and exploit upselling potential
Austria: Hybrid modem launched to boost fixed-line bandwidth and exploit upselling potential Hybrid modem at a glance Households passed (households passed in mn, coverage in %) > High-speed fixed-line broadband 4.4 Fixed-line network product 78% Hybrid potential > Fixed-line access required > Combin
Slide 10: Croatia: Better mobile positioning, cross-and upselling drive service revenue improvement
Croatia: Better mobile positioning, cross-and upselling drive service revenue improvement External effects > Overall market stabilisation after a threefold increase in frequency usage fee in 2014 > General fixed-line market consolidation after Vipnet’s acquisitions in 2015 and 2013 > Improvement in
Slide 11: Outlook for the full year 2016
Outlook for the full year 2016 Results for the first nine months and third quarter 2016 11
Slide 12: Telekom Austria Group outlook for the full year 2016 unchanged
Telekom Austria Group outlook for the full year 2016 unchanged 27 October 2016 Consensus Total revenues approx. +1% EUR 4,168.0 mn CAPEX approx. EUR 750 mn EUR 761.7 mn Proposed dividend EUR 0.20 / share - > Outlook based on reported figures and constant currencies except for Belarus (assumed 20%) >
Slide 13: Appendix
Appendix 1 Results for the first nine months and third quarter 2016 13
Slide 14: The leading regional communications player providing convergent telecommunication services
The leading regional communications player providing convergent telecommunication services as of 30 September 2016 (in ‘000) Austria Slovenia Belarus Mobile market position #1 Mobile market position #2 Mobile market position #2 Mobile subscriber: Mobile subscriber: Mobile subscriber: > 5,919 (Q3 201
Slide 15: Telekom Austria Group – Profit and Loss
Telekom Austria Group – Profit and Loss (in EUR million) Q3 2016 Q3 2015 % change Service Revenues 961.6 933.5 3.0% Equipment Revenues 111.6 91.9 21.4% Total Revenues 1,073.2 1,025.5 4.7% Cost of Service -329.0 -321.5 n.m. Cost of Equipment -126.3 -106.0 n.m. Selling, General & Administrative Expens
Slide 16: Telekom Austria Group – Revenues and OPEX per segment
Telekom Austria Group – Revenues and OPEX per segment Telekom Austria Group - Revenue Split Revenues (in EUR million) Q3 2016 Q3 2015 % change Austria 648.7 647.1 0.2% Bulgaria 106.4 89.8 18.5% Croatia 108.1 98.2 10.0% Belarus 85.4 85.3 0.1% Slovenia 55.0 49.4 11.3% Republic of Serbia 56.1 53.3 5.2%
Slide 17: Telekom Austria Group – Headcount development
Telekom Austria Group – Headcount development FTE (Average Period) Q3 2016 Q3 2015 % change Austria 8,437 8,657 -2.5% International 9,023 7,288 23.8% Corporate 219 180 21.8% Telekom Austria Group 17,679 16,124 9.6% FTE (End of Period) Q3 2016 Q3 2015 % change Austria 8,422 8,628 -2.4% International
Slide 18: Telekom Austria Group – Capital expenditure split
Telekom Austria Group – Capital expenditure split Capital Expenditures (in EUR million) Q3 2016 Q3 2015 % change Austria 132.4 123.8 7.0% Bulgaria 13.8 13.9 -0.8% Croatia 19.3 13.0 48.1% Belarus 14.3 12.1 17.7% Slovenia 6.2 1.9 226.5% Republic of Serbia 6.7 5.5 22.3% Republic of Macedonia 5.7 4.5 27
Slide 19: Telekom Austria Group – Net debt
Telekom Austria Group – Net debt Net Debt* (in EUR million) 30 September 2016 31 December 2015 % change Long-term Debt 1,986.6 2,584.1 -23.1% Short-term Borrowings 499.9 810.4 -38.3% Cash and Cash Equivalents and Short-term Investments -69.2 -911.5 n.m. Net Debt of Telekom Austria Group 2,417.3 2,48
Slide 20: Telekom Austria Group – Debt maturity profile
Telekom Austria Group – Debt maturity profile Debt maturity profile* (in EUR million) 744.6 743.6 499.9 298.3 200.0 0.0 0.0 0.0 2016 2017 2018 2019 2020 2021 2022 2023 > EUR 2.486.50** mn short-and long-term borrowings as of 30 September 2016 > Average cost of debt of approximately 3.67% > Cash and
Slide 21: Telekom Austria Group – Debt profile
Telekom Austria Group – Debt profile Overview debt instruments Fixed/floating mix 8.0% 92.0% 100.0% Loans Bonds Fixed Lines of credit Ratings > Undrawn committed credit lines > S&P: BBB (outlook stable) amounting to EUR 1,000 mn > Moody’s: Baa2 (outlook stable) > Average term to maturity of approx.
Slide 22: Segment Austria – Fixed-line key performance indicators
Segment Austria – Fixed-line key performance indicators ARPL & ARPL-relevant revenues Total RGUs (in EUR, in EUR million) (in ‘000) 3,521.2 3,534.4 3,530.8 3,513.2 3,501.4 28.3 28.7 28.1 28.0 27.9 189.3 192.5 188.3 186.9 184.9 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 ARPL ARPL-rel
Slide 23: Segment Austria – Mobile key performance indicators
Segment Austria – Mobile key performance indicators ARPU & Service revenues Churn rate (in EUR, in EUR million) (in %) 16.0 15.3 1.6 1.6 14.9 14.5 14.9 1.4 1.4 1.3 271.4 263.4 259.1 255.3 264.3 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 ARPU Service Revenues Subsidies Mobile penetra
Slide 24: Segment Austria – Broadband market split
Segment Austria – Broadband market split Market share total broadband Market share mobile broadband (in %) (in %) 0.4 2.8 3.6 21.8 21.3 Others Hofer Mobile T-Mobile Broadband Other 40.3 40.6 32.6 33.9 Operators Hutchison Unbundled Lines A1 4.1 35.1 34.1 3.8 Cable 16.1 16.1 Q3 15 Q3 16 A1 Mobile Broa
Slide 25: Segment Austria – Voice market split
Segment Austria – Voice market split Market share total minutes Market share voice RGUs (in %) (in %) 13.0 13.0 3.5 3.2 Mobile 22.7 23.2 Others 88.0 88.9 Fixed Line Others UPC Tele2/UTA Fixed Line Telekom A1 Austria 60.9 60.5 4.7 4.4 7.3 6.7 Q3 15 Q3 16 Q3 15 Q3 16 Results for the first nine months
Slide 26: Segment Bulgaria – Fixed-line key performance indicators
Segment Bulgaria – Fixed-line key performance indicators ARPL & ARPL-relevant revenues Total RGUs (in EUR, in EUR million) (in ‘000) 1,011.9 1,019.1 1,025.5 1,019.3 12.5 12.3 10.8 10.8 10.9 285.0 5.9 17.5 17.4 17.6 17.7 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 ARPL ARPL-relevant r
Slide 27: Segment Bulgaria – Mobile key performance indicators
Segment Bulgaria – Mobile key performance indicators ARPU & Service revenues Churn rate (in EUR, in EUR million) (in %) 2.3 2.1 2.0 5.5 5.5 5.8 1.8 1.6 5.3 5.3 71.2 67.2 67.5 71.1 65.9 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 ARPU Service Revenues Subsidies Mobile penetration (in
Slide 28: Segment Croatia – Fixed-line key performance indicators
Segment Croatia – Fixed-line key performance indicators ARPL & ARPL-relevant revenues Total RGUs (in EUR, in EUR million) (in ‘000) 24.2 23.6 23.3 23.6 23.6 576.8 593.7 607.4 535.8 553.0 16.0 17.9 18.4 19.4 19.7 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 ARPL ARPL-relevant revenues
Slide 29: Segment Croatia – Mobile key performance indicators
Segment Croatia – Mobile key performance indicators ARPU & Service revenues Churn rate (in EUR, in EUR million) (in %) 12.8 13.3 11.9 3.6 11.1 11.1 2.4 2.4 2.1 2.0 68.8 58.7 57.1 61.3 71.5 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 ARPU Service Revenues Subsidies Mobile penetration
Slide 30: Segment Belarus – Mobile key performance indicators
Segment Belarus – Mobile key performance indicators ARPU & Service revenues Churn rate (in EUR, in EUR million) (in %) 4.5 4.3 4.2 4.1 1.6 1.6 1.6 3.5 1.3 1.4 66.8 61.9 52.0 59.6 63.2 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 ARPU Service Revenues Subsidies Mobile penetration (in E
Slide 31: Segment Slovenia – Fixed-line key performance indicators
Segment Slovenia – Fixed-line key performance indicators ARPL & ARPL-relevant revenues Total RGUs (in EUR, in EUR million) (in ‘000) 170.7 172.0 147.5 147.6 159.7 38.4 37.7 36.5 36.6 34.2 7.4 7.4 7.7 7.3 2.5 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 ARPL ARPL-relevant revenues Fixe
Slide 32: Segment Slovenia – Mobile key performance indicators
Segment Slovenia – Mobile key performance indicators ARPU & Service revenues Churn rate (in EUR, in EUR million) (in %) 17.5 16.7 15.8 15.3 15.9 1.5 1.5 1.6 1.3 1.3 36.6 33.5 32.6 34.2 35.9 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 ARPU Service Revenues Subsidies Mobile penetration
Slide 33: Segment Serbia – Mobile key performance indicators
Segment Serbia – Mobile key performance indicators ARPU & Service revenues Churn rate (in EUR, in EUR million) (in %) 6.2 6.0 5.5 5.7 5.7 4.1 3.4 3.6 3.1 3.0 39.4 37.9 34.7 35.5 35.8 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 ARPU Service Revenues Subsidies Mobile penetration (in EU
Slide 34: Segment Macedonia – Fixed-line key performance indicators
Segment Macedonia – Fixed-line key performance indicators ARPL & ARPL-relevant revenues Total RGUs (in EUR, in EUR million) (in ‘000) 304.5 307.2 305.7 307.1 13.6 12.0 12.3 12.4 12.5 187.9 3.1 5.6 5.3 5.3 5.3 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 ARPL ARPL-relevant revenues Fix
Slide 35: Segment Macedonia – Mobile key performance indicators
Segment Macedonia – Mobile key performance indicators ARPU & Service revenues Churn rate (in EUR, in EUR million) (in %) 7.2 6.3 6.4 3.3 5.8 6.1 2.6 2.4 2.2 1.7 13.3 20.7 20.2 20.8 21.8 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 ARPU Service Revenues Subsidies Mobile penetration (in
Slide 36: Appendix 2 – Regulatory topics
Appendix 2 – Regulatory topics Results for the first nine months and third quarter 2016 36 36
Slide 37: Glide Path of Mobile Termination Rates
Glide Path of Mobile Termination Rates Jan Jul Jan Jul Jan Jul 2015 2015 2016 2016 2017 2017 Austria (EUR) 0.008049 0.008049 0.008049 0.0080492 0.0080492 0.0080492 Bulgaria (BGN) 0.019 0.019 0.019 0.019 No data No data Croatia (HRK) 0.063* 0.063* 0.063* 0.0631 0.0631 0.0631 MTS 250/125 MTS 250/125 M
Slide 38: EU roaming price regulation
EU roaming price regulation RETAIL (in EURc) Before July 2012 July 2013 July 2014 30 April 2016 15 July 2017 domestic tariff Data (per MB) none 70 45 20 domestic tariff + 5* Voice-calls made domestic tariff 35 29 24 19 domestic tariff (per minute) + 5* Voice-calls received weighted 11 8 7 5 domestic
Slide 39: Upcoming spectrum tenders/prolongations/assignments
Upcoming spectrum tenders/prolongations/ assignments Expected Comments 2019 (2100 MHz) Austria - 2020 (700 MHz) 2018 (800 MHz) NRA opened a hearing procedure in October to evaluate the interest from Bulgaria 2019 (2100 MHz) operators for spectrum in the 800 MHz-band. 2017 (2100 MHz) Croatia - 2020 (
Slide 40: Appendix 3 – Personnel restructuring in Austria
Appendix 3 – Personnel restructuring in Austria Results for the first nine months and third quarter 2016 40
Slide 41: Quartely Overview – Restructuring charges and provision vs. FTE
Quartely Overview – Restructuring charges and provision vs. FTE Overview restructuring charges FTEs addressed (in EUR million) Q1 Q2 Q3 Q1 Q2 Q3 FTE reduction 9.2 21.0 1.8 Transfer to government 0 1 2 Servicekom contribution -18.4 -20.1 -29.6* * Social plans 31 63 16 Interest rate adjustments 9.7 -0
Slide 42: Full Year Overview – Restructuring charges and provision vs. FTE
Full Year Overview – Restructuring charges and provision vs. FTE Overview restructuring charges FTEs addressed (in EUR million) 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 FTE reduction 76.9 274.3 49.9 149.0 86.4* 69.5** Transfer to government 158 106 44 22 52 49 Servicekom contribut
Slide 43: Overview – Cash flow impact of restructuring
Overview – Cash flow impact of restructuring Overview cash flow impact* (in EUR million) Total cash-flow impact > Total cash flow impact comprises 2010 57.9 old and new programmes 2011 93.4 2012 104.0 > Cash flow impact for Q3 2016 of 2013 108.0 EUR 26.6mn 2014 107.1 > Total expected cash flow impac
Slide 44: Appendix 4 – Corporate sustainability
Appendix 4 – Corporate sustainability Results for the first nine months and third quarter 2016 44
Slide 45: Key figures – Corporate Sustainability
Key figures – Corporate Sustainability Selected Group-wide KPIs Ratings Products: Providing Responsible Products 2015 Customer contacts in customer service ('000) 38,175 Environment 2015 ›Classification: B ›Classification: B- Total CO2 Emissions (Scope 1+2 in tonnes) 187,383 (99 points out of 100) E