MAGYAR TELEKOM GROUP Q RESULTS PRESENTATION AUGUST 8, 2018

Transcription

1 MAGYAR TELEKOM GROUP Q2 218 RESULTS PRESENTATION AUGUST 8, 218

2 Q2 218 GROUP SEGMENTAL REVENUE AND EBITDA Group segmental revenues* Group segmental EBITDA* % % Q 217 Mobile Fixed line SI/IT Energy Mobile Fixed line SI/IT 2Q 218 2Q 217 Gross profit Indirect costs Gross profit Indirect costs Measurement diff. 2Q 218 Hungary Macedonia Hungary Macedonia Change Y-o-Y +9.9% +2.3% Change Y-o-Y +5.4% +17.% *Excluding Crnogorski Telekom financials and IFRS 9 and 15 impacts 2

3 H1 218 RESULTS AND 218 FINANCIAL TARGETS H1 218 RESULTS (change y-o-y) 218 TARGETS REVENUE Strong growth in SI/IT revenue and equipment sales Improving service revenue trends HUF bn (+8.2%) around HUF 63 bn* EBITDA Higher gross profit driven by increased sales volumes Strong focus on efficiency reflected in indirect cost decline HUF 92.8 bn (+7.6%) around HUF 19 bn CAPEX Different timing of investments vs H1 217 Lower spending on 4G rollout and IT HUF 3.8 bn (-18.2%) around HUF 9 bn FCF Improvement thanks to higher EBITDA and lower investments Higher supplier outpayments vs H1 217 HUF 11.6 bn (+8.2%) around HUF 6 bn * Changed from around HUF 6 bn 3

4 Q2 218 STRATEGIC HIGHLIGHTS LAND GRABBING Accelerated fibre rollout to increase competitiveness; Continuous growth in fixed-mobile convergent households Leading position in the IT market strengthened GROWTH Service revenue increase thanks to positive customer developments Growth in equipment sales driven by regulatory change and rising demand for high-value products SI/IT revenues fueled primarily by public sector projects EFFICIENCY Wide-ranging cost optimization project ongoing Digitalization to enhance operating efficiency and customer experience Portfolio simplification to improve customer servicing MACEDONIA Subscriber growth in post-paid, TV and fixed BB continues Positive trend in service revenues Indirect cost savings leading to profitability improvements 4

5 HUNGARY Revenue* EBITDA* % % Q 217 Mobile Mobile Fixed Fixed service equipment service equipment SI/IT Energy 2Q 218 2Q 217 Gross profit Employee related expenses operating expenses (net) 2Q 218 Mobile service revenue growth primarily driven by increases in mobile data usage and postpaid customer base Fixed service revenue up thanks to higher TV and broadband subscriber bases Increase in SI/IT revenue driven by strong demand for HW&SW delivery projects Decline in other revenues due to reclassification of handset insurance revenues as mobile content from 218 Gross profit increase driven by strong revenue growth Employee related expenses reflect lower headcount Savings achieved in marketing, maintenance and HRrelated expenses *Excluding IFRS 9 &15 effects 5

6 HUNGARY MOBILE Mobile SIMs Mobile ARPU* HUF +.9% -1.6% 6, 5,344 5,39 5,36 5, Prepaid Blended 41.8% 38.3% 34.4% Postpaid 4, 3, Prepaid 1,17 1,95-1.1% 3,365 3, % 2Q 217 2Q 218 2, 1, 58.2% 61.7% 65.6% Postpaid 4,815 4, % Jun 216 Jun 217 Jun 218 Total mobile data subscriber development Mobile broadband usage developments 3, 2,5 2, 1,5 1, 5 2,423 56% 44% 2,76 41% 59% 2,915 27% 73% Non-4G 4G GB/month 86.6% 5,946,468 6,, 11% 1% 5,, 26.5% 4,, 3,186,2 3,, 2,518,33 19% 1% 88% 2,, 31% 2% 8% 1,, 67% Average data usage in 2Q 218 GB/month Jun 216 Jun 217 Jun 218 2Q 216 2Q 217 2Q 218 2G 3G 4G *Excluding IFRS15 effects 6

7 HUNGARY FIXED VOICE, BROADBAND AND TV Fixed line customer base Fixed line multiplay residential subscribers 1,5 1, 5 1,441 1, ,425 1,5 1,6 1,391 1,14 1,45 Voice Broadbad PayTV 1,4 1,2 1, ,395 34% 3% 36% 1,368 3% 28% 42% 1,374 27% 29% 45% 1Play 2Play 3Play Jun 216 Jun 217 Jun 218 June 216 June 217 June 218 Fixed Voice, BB and TV ARPU* Fixed line multiplay residential ARPU* HUF Fixed voice Fixed BB 2,45 2, % 3,548 3, % 2Q 217 2Q 218 HUF Blended 1Play 2Play 3,188 3,146 6,33 6,18-1.3% 5,87 5, % -1.9% Annual churn 11% 15% 1% Pay TV 3,493 3, % 3Play 8,265 8,23 -.8% 9% *Excluding IFRS15 effects 2Q 217 2Q 218 7

8 HUNGARY SI/IT SI/IT revenue developments SI/IT revenue breakdown by vertical segments* % 28% 22% % 35% 27% % 3% 26% 217 Hardware & Software w/o mobile devices IT Infrastructure services System Integration / IT Application services 217, Finance Manufacturing Retail&WS Prof. Services Telco+Media Utilities Transport Government Education Healthcare Market Share* 11% 7% 7% 11% 6% 18% 23% 23% 3% 4% SI/IT revenue and gross profit of MT-Hungary Highlights 5, 4, 3, 2, 1, 24, % +36.2% 32,885 6,351 7,798 Revenue Gross profit Positive trajectory of SI/IT revenues maintained EU funded projects are hardware and software focused and relatively low margin Infrastructure delivery projects instrumental in developing long term customer relationships and securing IT service contracts Q2 218 revenue also supported by major PC delivery to the education sector 2Q 217 2Q 218 Gross margin 26% 24% *Based on IDC Research 218, market shares based on 217 revenues 8

9 MACEDONIA Financials* Mobile market Revenues (MKD mn) 2,6 2,55 2, ,5 -.5% ,531 EBITDA (MKD mn) +11.1% 1,1 1,5 1, ,64 Subscribers 2,5, 2,, 1,5, 1,, 5, 51.5% 48.5% +2.4% 2.5% 48.9% 48.6% -3.2% 2.4% 49.2% 48.4% Lycamobile One.Vip Telekom 2Q 217 Mobile Fixed SI/IT 2Q 218 2Q 217 Gross profit expenses (net) 2Q 218 Jun 216 Jun 217 Jun 218 KPIs (mobile/fixed voice/fixed BB/TV)* Highlights customer number QoQ change -3% -1% +3% ARPU (MKD) % -5.7% % 2Q 217 2Q 218 Market dominated by 3 Play Convergent offers gaining popularity Strong focus on efficiency enhancement to mitigate top line pressure EBITDA improvement attributable to savings in marketing and maintenance costs 2.9% weakening in HUF/MKD +8% % *Excluding IFRS 9 and 15 impacts 9

10 For further questions please contact the IR department: Péter Bauer Head of Investor Relations Phone: bauer.peter@telekom.hu Rita Walfisch Investor Relations Manager Phone: walfisch.rita@telekom.hu 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 not have undue reliance placed upon them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors are described in, among other things, our Annual Reports for the year ended December 31, 217 available on our website at Abbreviations: 3G: third generation, 4G: fourth generation, ARPU: average revenue per user, BB: broadband, IP: internet protocol, IT: information technology, LTE: long term evolution, MOU: minutes of use, MTR: mobile termination rate, NRA: National Regulatory Authority, POD: points of delivery, R/E: real estate, RPC: revenue producing customer, SAC: subscriber acquisition cost, SRC: subscriber retention cost, SI: system integration, SIM: subscriber identity module, SMB: small and medium businesses, TWM: Total Workforce Management, VAS: value added services, WS: wholesale In addition to figures prepared in accordance with IFRS, Magyar Telekom also presents non-gaap financial performance measures, including, among others, EBITDA, EBITDA margin, and net debt. These non-gaap measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with IFRS. Non-GAAP financial performance measures are not subject to IFRS or any other generally accepted accounting principles. companies may define these terms in different ways. For further information relevant to the interpretation of these terms, please refer to the chapter Reconciliation of pro forma figures, which is posted on Magyar Telekom s Investor Relations webpage at

11 MARKET POSITIONS IN THE HUNGARIAN TELCO MARKET Total mobile market* Fixed voice market** Subscribers 12,, 9,, 6,, 24.7% 28.1% -.1% 24.9% 27.5% 25.5% 27.6% Vodafone Telenor MT Subscribers 3,5, 3,, 2,5, 2,, 1,5, 13.2% 11.4% 17.4% 3.1% -1.8% 12.4% 12.2% 18.4% 3.3% 3.6% 23.8% 2.6% INVITEL DIGI UPC MT 3,, 47.2% 47.5% 46.9% 1,, 5, 54.9% 53.7% 52.% Jun 216 Jun 217 Jun 218 Jun 216 Jun 217 May 218 Fixed broadband market** TV market** Subscribers 3,, 2,5, 15.% 9.6% 2,, 15.4% 1,5, 21.9% 1,, 5, 38.2% Jun % 15.2% 9.% 15.9% 22.1% 37.9% Jun % 24.7% 22.1% 37.8% May 218 INVITEL DIGI UPC MT Subscribers 4,, 3,, 2,, 1,, +.5% 16.1% 14.5% 4.7% 4.8% 25.% 25.2% 26.8% 26.8% 27.5% 28.6% Jun 216 Jun % 3.5% 26.% 29.2% May 218 INVITEL DIGI UPC MT *Based on internal calculations from Vodafone Group and Telenor Group reports **Based on the total fixed voice channels/bb access/pay TV access market estimated by the National Media and Infocommunicat ions Authority (NMIA) 11