Magyar Telekom Telecommunications Plc · BET:MTELEKOM
Magyar Telekom Telecommunications — Magyar Telekom — Q3 2007 Earnings Presentation
17 slides from Magyar Telekom Telecommunications's earnings presentation, November 2007
Slide 1: 2007 first nine months results
Presentation 2007 first nine months results On track to meet full year targets
Slide 2: Agenda
Agenda Overview First nine months 2007 summary and segment analysis Regulatory snapshot Integration and organizational changes 2007 public targets and 2008 outlook Key strategic priorities Dividend policy Abbreviations: IC: interconnection, NRA: National Regulatory Authority, CPI: consumer price ind
Slide 3: Magyar Telekom Group at a glance
Magyar Telekom Group at a glance Market leader in all core businesses Stock information Integrated operations in Hungary, EUR 3.8bn market capitalization Macedonia and Montenegro alternative/wholesale operations in Romania, Stock exchange listing Bulgaria and Ukraine listed on NYSE and Budapest
Slide 4: First nine months 2007 summary
First nine months 2007 summary Revenues EBITDA EBITDA margin Group HUF 503,644m +2.7% HUF 202,985m +2.1% 40.3% T-Com HUF 230,728m -2.5% HUF 93,268m -3.9% 40.4% T-Mobile HUF 257,774m +1.6% HUF 114,691m +9.5% 44.5% Segments* T-Systems HUF 56,736m +31.3% HUF 11,561m +1.7% 20.4% HQ & shared services HUF
Slide 5: T-Com: Hungarian operations
T-Com: Hungarian operations Focus on customer retention Voice revenues under threat from HUF million Revenue breakdown competition 200,000 -2.7% strong mobile substitution as mobility premium diminishes 150,000 cable operators offering VoCaTV & 3Play 100,000 alternative operators taking advant
Slide 6: T-Com: Hungarian operations
T-Com: Hungarian operations Continued focus on broadband Cable services Incentives to increase customer base Triple play offers low-end offer from HUF 2,990 (~EUR 12) stable cable customer base (412,300) naked DSL introduced in March cable ARPU around HUF 3,300 (~EUR 13) bundled 2Play and
Slide 7: T-Mobile: Hungarian operations
T-Mobile: Hungarian operations Competitive environment Increasing focus on retention clear market leadership position maintained Breakdown of T-Mobile customer base continued growth in RPC base (up 7.5%), mainly Subscribers driven by data card sales 5,000,000 4,000,000 37% acquisition cost/new
Slide 8: T-Mobile: Hungarian operations & TETRA
T-Mobile: Hungarian operations & TETRA Solid operational performance Usage increase supports ARPU Usage and ARPU trends MOU increased by 6% y-o-y to 147 ARPU (HUF) MOU average tariff level decreased by 13% 6,000 160 ARPU down by 5% to HUF 4,565 (~EUR 18) 5,500 150 5,000 140 growing importanc
Slide 9: T-Systems
T-Systems Declining traditional revenues Growing importance of SI/IT services intense competition from alternative service full scale of IT service portfolio offered, increasing providers presence in the Hungarian SI / IT market strong mobile substitution driven by negative integrated outsou
Slide 10: T-Com: international operations
T-Com: international operations Macedonia Montenegro Limited top line opportunities Saturated fixed line market strong mobile substitution increasing role of mobile substitution competition from altnets and cables fixed line penetration at 30.5% (down 1.2ppt) fixed penetration was 22.8% (d
Slide 11: T-Mobile: international operations
T-Mobile: international operations Macedonia Montenegro Subscribers (th) Subscribers (th) 81% Penetration 135% 141% 185% Penetration 1,800 51% 59% 62% 66% 70% 1 200 90% 109% 130% 1,600 4% 16% 1,400 1 000 1,200 33% 34% 33% 800 1,000 31% 32% 59% 60% 50% 26% 59% 800 600 60% 600 59% 400 69% 68% 67% 66%
Slide 12: Regulatory snapshot
Regulatory snapshot Fixed-line Mobile geographic number portability since January 2004 mobile number portability since May 2004 WS naked ADSL offered to ISPs since end-March 2007 EU roaming regulation adopted IC fees close to EU average approx 14% cut in average traffic fees announced in
Slide 13: Integration steps within the Magyar Telekom Group
Integration steps within the Magyar Telekom Group Integration of T-Mobile Hungary Integration of T-Online and Emitel Decision made in December 2005, integration since Decision made in June 2007, integration since October March 2006 2007 Benefits to come from unified shop network, integrated call-c
Slide 14: Changes in organization, headcount reduction
Changes in organization, headcount reduction New organizational structure Headcount rationalization Structural changes in the telecom industry: Agreement with trade unions reached on technological development and innovation October 1, 2007 convergence throughout the industry changes in custome
Slide 15: 2007 public targets and 2008 outlook
2007 public targets and 2008 outlook 2007 revenue stable compared to 2006 2007 EBITDA stable compared to 2006 4.5% compound average growth rate over 2005 HUF 2bn growth over 2005 level Flat over 2006 due to: Flat over 2006 due to: c. HUF 11bn lower TETRA revenues than in 2006 c. HUF 3bn lower TE
Slide 16: Key strategic priorities
Key strategic priorities Current direction maintained, strengthened focus on 3 key areas Excellence Expansion stronger customer focus seeking value-accretive acquisitions both in Hungary improved service quality and the region integrated sales and call-center services integrated operations
Slide 17: Dividend policy
Dividend policy Net debt ratio and dividend yield Net debt ratio** Dividend yield*** 50% 7.3% 7.3% 7.6% 7.3% 8% 46.6% 40% 38.8% 32.9% 33.1% Targeted net 6% 31.6% 31.7% 32.2% debt ratio range 30% 4% 20% 1.9% 2% 10% 1.1% 0% 0% 2001 2002 2003 2004 2005 Q1 2007* Q3 2007 2007 2008 * dividends for 2005 fi