Magyar Telekom Telecommunications Plc · BET:MTELEKOM

Magyar Telekom Telecommunications — Magyar Telekom — FY2015 Earnings Presentation

23 slides from Magyar Telekom Telecommunications's earnings presentation, Feb 24, 2016

  1. Slide 1: Magyar Telekom Group Full Year and Q4 2015 Results Presentation

    MAGYAR TELEKOM GROUP FULL YEAR AND Q4 2015 RESULTS PRESENTATION FEBRUARY 24, 2015

  2. Slide 2: Strategic Highlights - Full Year

    STRATEGIC HIGHLIGHTS - FULL YEAR  Increased revenue, EBITDA and Free Cashflow TURNAROUND  HUF 15 dividend per share GROUP  Stable market positions OPERATION  Sustained focus on cost efficiency through process/product simplification and online  Underlying growth in mobile, fixed line BB and TV 

  3. Slide 3: Financial Highlights and 2015 Targets

    FINANCIAL HIGHLIGHTS AND 2015 TARGETS FY 2015 RESULTS 2015 TARGETS roughly stable REVENUE +4.8% vs. 2014  Group wide mobile data growth due to 4G push offset by Hungarian MTR cuts  Revenue growth in fixed line   Increased SI/IT revenues across all segments  Higher energy sales in Hungarian B2B

  4. Slide 4: 2015 Group Results – Revenues and EBITDA by Segments

    2015 GROUP RESULTS – REVENUES AND EBITDA BY SEGMENTS Group segmental revenues Group segmental EBITDA HUF bn +4.8% HUF bn +3.4% +10.4 +0.2 -2.6 660 +14.6 -2.2 +3.4 656.3 192 -1.8 655 190 -1.7 650 -0.2 188 187.3 645 +15.8 640 186 635 184 630 626.4 182 181.2 625 180 0 0 2014 T-Hungary T-Systems Maced.

  5. Slide 5: 2015 Group Results – Capex and FCF Breakdown

    2015 GROUP RESULTS – CAPEX AND FCF BREAKDOWN Group CAPEX Group FCF HUF bn HUF bn +40.5 -74.5 +58.7 -20.5 200 45 +18.1 -13.7 184.4 -58.7 180 40 35 160 -2.1 30 26.7 140 -38.9 25 120 +20.5 +2.6 109.8 100 0 80 -5 -10 0 -15 -13.8 2014 HU spectrum HU annual HU fixed Other 2015 licenses frequency fee netwo

  6. Slide 6: Public Guidance

    PUBLIC GUIDANCE 2015 RESULTS 2016 TARGETS 2017 TARGETS REVENUE HUF 656bn HUF 580 - 590bn HUF 585 - 595bn EBITDA HUF 187bn HUF 187 - 191bn HUF 189 - 193bn CAPEX* HUF 110bn ca. 10% yoy decline ca. 10% yoy decline FCF HUF 27bn Surpassing HUF 50bn** DIVIDEND HUF 15 per share Target HUF 25 per share * Ex

  7. Slide 7: Financial Summary

    FINANCIAL SUMMARY FY15 vs. FY14 4Q15 vs. 4Q14 Revenue EBITDA Revenue EBITDA Group +5% +3% +11% +4% T-HU +3% +8% +3% +10% T-Systems +13% +2% +57% +2% Macedonia -4% -11% -3% -15% Montenegro -6% -14% -9% -14% 7

  8. Slide 8: Group Segmental Revenue and EBITDA

    GROUP SEGMENTAL REVENUE AND EBITDA Group segmental revenues Group segmental EBITDA HUF bn HUF bn +4.5% +10.7% +3.0 +0.1 -0.9 190 45.0 +17.0 -0.4 -0.7 -1.4 185 182.9 44.5 -0.4 44.0 0.0 43.7 180 43.5 175 43.0 170 +3.1 42.5 165.3 41.9 165 42.0 0 0.0 4Q 2014 T-HU T-Systems Maced. Monten. Elim. 4Q 2015 4

  9. Slide 9: T-Hungary

    T-HUNGARY T-Hungary revenue* T-Hungary EBITDA HUF bn +2.5% HUF bn +10.0% 125 +0.7 124.8 35 +0.1 +0.4 -1.1 +3.9 +3.8 124 34 -0.1 33.3 123 121.7 -3.9 33 122 121 32 +1.0 120 31 +1.1 -0.4 +1.2 30.2 119 -0.6 30 118 1 0 0 4Q Mobile Mobile Mobile Fixed Fixed TV Fixed SI/IT Energy 4Q 4Q 2014 Gross Special t

  10. Slide 10: T-Hungary – Mobile

    T-HUNGARY – MOBILE Mobile RPC Mobile ARPU (HUF) ‘000 HUF -0.3% 4,964 4,948 4,938 4,935 4,950 5,000 Prepaid 4Q 2014 3,546 Postpaid Blended -4.6% 4Q 2015 4,000 3,383 50.0% 49.6% 49.0% 48.9% 48.5% 3,000 1,295 +66 Prepaid -14.2% 1,111 2,000 50.0% 50.4% 51.0% 51.1% 51.5% 5,824 1,000 Postpaid -5.1% 5,529

  11. Slide 11: T-Hungary – Fixed Broadband and TV

    T-HUNGARY – FIXED BROADBAND AND TV Fixed BB RPC Pay TV RPC ‘000 +6.9% ‘000 +3.8% 961 973 985 950 960 1,000 922 940 1,000 925 934 939 8% 7% 6% <10Mbps Sat 8% 8% 800 10Mbps -30Mbps 800 33% 33% 33% 32% 32% Cable >30Mbps IPTV 600 68% 68% 67% 600 17% 16% 69% 69% 19% 19% 18% +53 400 400 +61 48% 49% 50% 50

  12. Slide 12: T-Hungary – Fixed Voice, Multiplay and Energy

    T-HUNGARY – FIXED VOICE, MULTIPLAY AND ENERGY Fixed voice RPC Multiplay development among residential customers ‘000 ‘000 1Play -1.4% 2Play 1,500 1,418 1,408 1,408 1,404 1,398 2,000 -1.3% 3Play PSTN 26% 1,538 1,546 1,529 1,521 1,518 Annual churn rate 36% 31% IP based* 48% 44% 1,500 1,000 38% 38% 37%

  13. Slide 13: T-Systems

    T-SYSTEMS Financials SI/IT revenue and margin Revenues (HUF bn) EBITDA (HUF bn) HUF bn +33.1% +57.1% +2.2% 50 +18.0 46.9 4.5 +100.6% +1.2 -1.2 45 40 35.9 4.0 Revenue 40 3.5 30 Gross margin 35 29.8 -0.2 -0.8 3.0 3.1 17.9 30 3.0 20 25 8.2 10 6.2 0 0.0 0 4Q Mobile Fixed SI/IT 4Q 4Q Gross Other 4Q 4Q 20

  14. Slide 14: Macedonia

    MACEDONIA Financials Mobile KPIs Revenues (HUF bn) EBITDA (HUF bn) Subscribers -3.0% -14.7% -2.1% 2,500,000 One (T. Slovenia)* 14.2 -0.2 14.2 6.0 5.8 -0.7 2,000,000 24.0% 25.5% 24.7% VIP (T. Austria) 14.0 -0.3 1,500,000 T-Mobile 5.5 28.5% 27.8% 28.0% 13.8 +0.1 13.8 -0.1 1,000,000 -17,954 5.0 5.0 500

  15. Slide 15: Montenegro

    MONTENEGRO Financials Mobile KPIs Revenues (HUF bn) EBITDA (HUF bn) Subscribers -14.5% 1,200,000 +0.7% -8.7% Telenor 8.0 2.8 2.7 -0.5 1,000,000 7.8 -0.4 m:tel (T. Serbia) 2.6 800,000 38.2% 37.7% 38.8% T-Mobile 7.5 -0.3 600,000 2.4 +0.1 2.3 26.3% 28.1% 28.5% 0.0 400,000 -16,019 7.1 2.2 200,000 35.5%

  16. Slide 16: Appendix

    APPENDIX

  17. Slide 17: Market Position in Hungary

    MARKET POSITION IN HUNGARY Total mobile market* Fixed voice market** Subscribers Vodafone Subscribers Other 12,000,000 3,500,000 -0.1% Telenor Invitel 10,000,000 22.8% 22.7% MT 3,000,000 5.8% 5.8% 3.2% DIGI 12.7% 12.6% 12.8% 2,500,000 UPC 8,000,000 9.5% 10.0% 11.0% 30.9% 30.5% MT 2,000,000 14.3% 15.

  18. Slide 18: 2015 Group Results – Revenues by Product Lines

    2015 GROUP RESULTS – REVENUES BY PRODUCT LINES Group revenues HUF bn 690 +4.8% +7.0 -11.8 +21.8 660 656.3 +6.4 +3.4 +3.4 630 626.4 -1.6 -4.7 +6.0 0 2014 Mobile Fixed Mobile data Fixed BB and TV Equipment SI/IT Energy Wholesale 2015 voice retail voice retail (incl. SMS) data retail and other  Retail

  19. Slide 19: 2015 Group Results – EBITDA

    2015 GROUP RESULTS – EBITDA Group EBITDA HUF bn 190 +3.4% +6.9 -0.4 -1.0 +0.6 187.3 185 181.2 0 2014 Direct margin Employee- Net other Opex Taxes* 2015 related expenses  Significant improvement in direct margin driven by higher revenues (incl. GTS acquisition), lower interconnect costs (due to MTR

  20. Slide 20: Magyar Telekom – Consolidated Income Statement

    MAGYAR TELEKOM – CONSOLIDATED INCOME STATEMENT HUF million Q4 2014 Q4 2015 Change HUF million Q4 2014 Q4 2015 Change Mobile revenues 84 622 81 117 -4.1% Fixed lineMobile revenues revenues 51622 84 846 56 036 81 117 -4.1% 8.1% System Integration/Information Fixed line revenues Technology revenues 168

  21. Slide 21: Magyar Telekom – Consolidated Balance Sheet

    MAGYAR TELEKOM – CONSOLIDATED BALANCE SHEET HUF million Dec 31, 2014 Dec 31, 2015 Change Current assets 197 897 210 178 6.2% Cash and cash equivalents 14 625 17 558 20.1% Other current financial assets 23 690 11 052 -53.3% Non current assets 992 879 996 846 0.4% Property, plant and equipment - net 4

  22. Slide 22: Magyar Telekom – Consolidated Cash Flow Statement

    MAGYAR TELEKOM – CONSOLIDATED CASH FLOW STATEMENT HUF million Dec 31, 2014 Dec 31, 2015 Change Net cash generated from operating activities 145 495 156 298 7.4% Investments in tangible and intangible assets (184 364) (109 847) 40.4% Adjustments to cash purchases 42 211 12 992 -69.2% Purchase of subs

  23. Slide 23: For further questions please contact the IR department

    For further questions please contact the IR department: Investor Relations Phone: +36 1 458-0424 Fax : +36 1 458-0443 e-mail: investor.relations@telekom.hu DISCLAIMER This investor presentation contains forward-looking statements. Statements that are not historical facts, including statements about

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