Magyar Telekom Telecommunications Plc · BET:MTELEKOM

Magyar Telekom Telecommunications — Magyar Telekom — Q4 2020 Earnings Presentation

21 slides from Magyar Telekom Telecommunications's earnings presentation, Feb 25, 2021

  1. Slide 1: Magyar Telekom Group Q4 2020 Results Presentation

    MAGYAR TELEKOM GROUP Q4 2020 RESULTS PRESENTATION February 25, 2021

  2. 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

  3. Slide 3: Q4 / FY 2020 results

    pres Ss results | > - ry of & @® 226 ad 2 ®o . . Be > — ~ =: .e# Se é > > - > . - > ~~ “ a ° 2 . 6 -«

  4. Slide 4: Nearly all 2020 targets achieved despite COVID-19 challenges

    NEARLY ALL 2020 TARGETS ACHIEVED DESPITE COVID-19 CHALLENGES 2020 targets 2019 results 2020 results 2020 delivery (vs 2019) REVENUE HUF 666.7 bn Broadly stable HUF 673.0 bn Increase of EBITDA AL HUF 197.6 bn 1%-2% HUF 202.6 bn Up by around CAPEX AL* HUF 89.6 bn 10% HUF 106.0 bn FCF * HUF 65.1 bn Bro

  5. Slide 5: Significant milestones passed in 2020 amid turbulent external conditions

    SIGNIFICANT MILESTONES PASSED IN 2020 AMID TURBULENT EXTERNAL CONDITIONS Network Customers Resilience Sustainability ▪ Fixed network rollout: just under ▪ Successfully leveraging more-for- ▪ Notable efficiency improvements ▪ Enhancing the digital operations of 2.5m gigabit capable access more strate

  6. Slide 6: Robust 2020 performance, COVID-19 impact most pronounced in Q2

    ROBUST 2020 PERFORMANCE, COVID-19 IMPACT MOST PRONOUNCED IN Q2 Quarterly revenue changes YoY (%) Quarterly EBITDA (AL)1 changes YoY (%) 4.1 12.4 3.6 9.9 1.8 0.2 1.5 1.1 -2.2 -2.5 Q4 2019 Q1 2020 Q2 2002 Q3 2020 Q4 2020 Q4 2019 Q1 2020 Q2 2002 Q3 2020 Q4 2020 6 (1) 2019 YoY quarterly changes reflect

  7. Slide 7: Positive momentum in revenues maintained

    POSITIVE MOMENTUM IN REVENUES MAINTAINED Revenue, Q4 2020 vs Q4 2019 Revenue, FY 2020 vs FY 2019 HUF bn +3.6% HUF bn +1.0% 2.7 0.2 6.7 188.9 -0.8 7.6 2.2 -10.2 673.0 2.2 6.2 -3.8 182.3 666.7 Q4 2019 Mobile Fixed Equipment SI/IT Other Q4 2020 2019 Mobile Fixed Equipment SI/IT Other 2020 service servi

  8. Slide 8: Revenue growth in Hungary driven by increase in mobile SIMs and ARPU

    REVENUE GROWTH IN HUNGARY DRIVEN BY INCREASE IN MOBILE SIMS AND ARPU Mobile SIMs Mobile ARPU ‘000 +1.1% HUF M2M Q4 2019 5,369 5,427 Prepaid 3,559 Blended +0.9% Q4 2020 5.1% 6.5% 3,592 Postpaid 30.5% 28.2% 1,094 Prepaid +5.5% 1,154 5,015 Postpaid -0.6% 4,983 64.4% 65.3% 628 M2M -21.5% 493 Q4 2019 Q4

  9. Slide 9: Fixed line performance supported by growing customer base and favorable ARPU

    FIXED LINE PERFORMANCE SUPPORTED BY GROWING CUSTOMER BASE AND FAVORABLE ARPU DEVELOPMENTS IN HUNGARY Fixed line multiplay residential subscribers Fixed Voice, BB and TV ARPU ‘000 +3.6% HUF Q4 2019 1,481 2,132 Q4 2020 1,428 Fixed voice -1.5% 1Play 2,100 22% 19% 2Play 3,496 32% 36% 3Play Fixed BB +2.0

  10. Slide 10: 2020 EBITDA AL increase driven by cost optimization and margin expansion

    2020 EBITDA AL INCREASE DRIVEN BY COST OPTIMIZATION AND MARGIN EXPANSION EBITDA AL, Q4 2020 vs Q4 2019 EBITDA AL, FY 2020 vs FY 2019 HUF bn +9.9% HUF bn +2.5% 5.7 0.2 0.1 56.6 0.9 3.9 202.6 1.7 0.3 1.3 51.5 197.6 Q4 2019 Gross profit Indirect costs Other op. IFRS 16 Q4 2020 2019 Gross profit Indirec

  11. Slide 11: Higher investment levels largely driven by accelerated fiber roll-out

    HIGHER INVESTMENT LEVELS LARGELY DRIVEN BY ACCELERATED FIBER ROLL-OUT CAPEX AL, FY 2020 vs FY 2019 Gigabit capable fixed network development # of HUF bn 91.6 197.6 access 4 500 4 119 4 139 4 164 4 194 4 209 4 224 4 238 4 259 4 090 +18.3% points (th) 4 000 3 500 6.3 106.0 46.3% 42.3% 11.6 53.1% 51.7%

  12. Slide 12: Net profit slightly above 2019 level, higher EBITDA partially offset by rising D&A

    NET PROFIT SLIGHTLY ABOVE 2019 LEVEL, HIGHER EBITDA PARTIALLY OFFSET BY RISING D&A EBIT(DA), earnings, FY 2020 2.4% -2.7% 2.0% 1.2% 3.0% 0.3% 17.8% 2.9% HUF bn 225.9 After lease impact 23.3 141.1 84.8 23.9 60.9 EBITDA AL 202.6 14.6 42.4 4.0 EBITDA D&A Operating profit Net financial result PBT Income

  13. Slide 13: Solid FCF (ex-spectrum) generation despite increase in investment

    SOLID FCF (EX-SPECTRUM) GENERATION DESPITE INCREASE IN INVESTMENT EBITDA and cash-flow, FY 2021 HUF bn 2.4% 14.5% 18.3% 6.8% 225.9 3.1 After lease impact 23.3 36.8 186.0 106.0 EBITDA AL 202.6 10.4 69.5 54.2 25.5 15.3 EBITDA Working capital Taxes, financial Operating CF CAPEX AL Lease and other FCF e

  14. Slide 14: Shareholder remuneration proposal: HUF 25.5bn, well above 2020 FCF generation

    SHAREHOLDER REMUNERATION PROPOSAL: HUF 25.5BN, WELL ABOVE 2020 FCF GENERATION Shareholder remuneration1 (payout year, HUF bn) Shareholder remuneration1 considerations Buy-back component ▪ Total shareholder remuneration of HUF 25.5bn Dividend 26.1 26.1 26.1 26.1 25.5 demonstrates resilience in a turb

  15. Slide 15: 2021-24 outlook

    2021-24 outlook

  16. Slide 16: 2021 strategic priorities support financial targets

    2021 STRATEGIC PRIORITIES SUPPORT FINANCIAL TARGETS Network Customers ▪ Roll-out of the fiber network: covering around 350 000 ▪ Monetize favorable market trends (esp. growing data access points demand) through more-for-more approach (mainly in B2C) ▪ Gradual roll-out of 5G network ▪ Leverage unique

  17. Slide 17: EBITDA AL expected to increase by 1%-2% along with broadly stable investment level in 2021

    EBITDA AL IS EXPECTED TO INCRESE BY 1%-2% ALONG WITH BROADLY STABLE INVESTMENT LEVEL IN 2021 2020 results 2021 guidance (vs 2020) Grow REVENUE HUF 673.0bn 1%-2% Grow EBITDA (AL) HUF 202.6bn 1%-2% CAPEX AL1 HUF 106.0bn Broadly stable Broadly stable / slight FCF1 HUF 69.5bn increase 1 EXCLUDING SPECTR

  18. Slide 18: Shareholder remuneration expected to increase through 2021-24

    SHAREHOLDER REMUNERATION EXPECTED TO INCREASE THROUGH 2021-24 2020 results 2021-24 outlook (vs 2020)2 Increase potential REVENUE HUF 673.0bn of ~1% Increase potential EBITDA (AL) HUF 202.6bn of ~1% Increase potential FCF1 HUF 69.5bn of 1%-2% Total shareholder 25 HUF per share To grow in line with FC

  19. Slide 19: Q&A

    Q&A ? For further questions please contact the IR department: Zoltán Pandi Rita Walfisch Head of Investor Relations Investor Relations Manager Phone: +36 1 481-7676 Phone: +36 1 457-6084 e-mail: pandi.zoltan@telekom.hu e-mail: walfisch.rita@telekom.hu

  20. Slide 20: North Macedonia: Q4 2020 highlights

    NORTH MACEDONIA: Q4 2020 HIGHLIGHTS Revenues EBITDA AL (MKD mn) (MKD mn) +8.9% 180 3,178 +19.9% 36 1 7 1,029 32 126 46 2,920 858 Q4 2019 Mobile Fixed SI/IT Q4 2020 Q4 2019 Gross profit Indirect costs Other op. IFRS 16 Q4 2020 income impacts KPIs (mobile/fixed voice/fixed BB/TV) Customer no. ARPU (MK

  21. Slide 21: North Macedonia: FY 2020 results

    NORTH MACEDONIA: FY 2020 RESULTS Revenues EBITDA AL (MKD mn) (MKD mn) +2.1% -0.1% 4,338 276 11,153 14 4,335 17 10,923 0 67 -114 -33 2019 Mobile Fixed SI/IT 2020 2019 Gross profit Indirect costs Other op. IFRS 16 impacts 2020 income 21

Magyar Telekom — Q4 2020 Earnings Presentation on 6ix