telekom austria group results for the first half 2001 · 2020-04-03 · 5 highlights of the 1st...
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Telekom Austria GroupResults for the First Half 2001
August 29, 2001
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Disclaimer
This presentation contains certain forward-looking statements. Actual results may differ materially from those projected or implied in such forward-looking statements. Forward-looking information involves risks and uncertainties that could significantly affect expected results. These risks and uncertainties are discussed inTelekom Austria's SEC filings, including, but not limited to,Telekom Austria's Form 6-K containing the relevant press release and certain sections of the Company's Annual Report on Form 20-F. Figures contained in this presentation are unaudited.
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Agenda
l Group overview
l Operational highlights
l Financial review
l Outlook
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Group Overview
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Highlights of the 1st Half 2001
l Fixed line cost cutting on track, personnel reduction ahead of target
l Introduction of second-based fixed-line tariffs
l Increasing mobile margins in Austria and Croatia, market entry in Slovenia
l Internet market share rises to 39% due to organic growth and acquisitions
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Telekom Austria Group Figures
EBITDA is defined as operating income excluding depreciation, amortization and costs for idle workforce. Costs for idle workforce include expenses for employees who have been released or transferred from the work force as well as all cash settlements for civil servants who have agree to leave with severance packages.Note: All financial figures for first half 2000 are shown on a restated basis.
(EUR million) 2 Q 01 2 Q 00 % change 1 H 01 1 H 00 % change
Total managed operating revenues 967.9 977.1 -0.9% 1,935.3 1,923.0 0.6%
Total managed EBITDA* 330.0 290.2 13.7% 704.6 640.0 10.1%
Total managed EBIT* 31.9 12.9 147.3% 128.6 110.7 16.2%
Consolid. net loss of Telekom Austria, with Mobilkom at-equity -45.8 -36.5 -25.5% -35.5 -22.5 -57.8%
Capex 134.0 274.0 51.1% 297.4 470.0 36.7%
* excluding costs for idle workforce 14.4 0.0 n.m. 18.3 0.0 n.m.
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EBITDA - Margins by Segments
18%
26%
36% 34% 35%
7%
-36%
33% 30% 28%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
TA Group Fixed Line Mobile Data Internet
1 H 00 1 H 01
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Operational Highlights by Business Segment
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Fixed Line - Access Channels
3,043 2,929 2,821
904800 1,006
13,000
39,000
69,0003,8273,8333,843
0
1,000
2,000
3,000
4,000
June 30, 2000 Dec 31, 2000 June 30, 20010
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Channelsin (‘000s)
ADSLLines
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Fixed Line - Market Shares
*including internet dial-up trafficNote: All figures as of end of period
94.4%
63.8% 67
.2%
50.0%
48.0%
59.9% 62
.8%
47.5%
45.9%
93.5%
58.5% 61.
6%
45.5%
93.6%
46.4%
40%
60%
80%
100%
Access
channels
Total m
arket s
hare*
Local*
Long distance
Internatio
nal
FY 00 1 Q 01 1 H 01
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Fixed Line - Tariffs
0.022
0.0760.057
0.120
0.225
0.295
0.0630.055 0.068
0.018
0.2060.242
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
Loca
l
Long
dista
nce
Intern
et-dia
l up
Fixed
to m
obile
Intern
ation
al
Averag
e
June 00 June 01In EUR for one minuteAll figures as per end of period
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l Average fixed line employee numbers fall by 1,152 in the first half of the year, with the following reasons for leaving:
l Re-transfer of staff from Telekom Austria Personal Company (TAP) into operating activities scheduled for 2H 2001
Personnel Reduction on Track
Assigned to other group entities 9 %
Early retirement 16 %
Golden handshakes 34 %
Natural attrition(net of additions) 41%
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Fixed Line Cost Reductions in 1H 2001
* Excluding costs for idle workforce and social plan costs
-6.2% -5.7% -5.9%
-23.1%
-4.0%
-8.8%
-25%
-20%
-15%
-10%
-5%
0%Total expenses*Other expensesInterconnectionDepreciationPersonnel *Material
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Mobile - Subscriber Numbers
1,265 1,287 1,336 1,354 1,377
1,320 1,405 1,468 1,480 1,482
319 430531 604 677
197168
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
June 2000 Sep.00 Dec. 2000 March 2001 June 2001
cust
omer
s ('
00
0s)
Mobilkom contract Mobilkom prepaid Vip-Net Si.Mobil
3,733
3,335
3,1222,904
3,606
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Mobile - ARPU‘s
60.758.0 60.0
10.6 9.6 9.2
35.932.7 33.6
0
10
20
30
40
50
60
70
FY 00 1 Q 01 2 Q 01
Mobilkom contract Mobilkom prepaid Average
(EU
R)
Mobilkom Austria ARPU’s
(EU
R)
International ARPU’s
*
* Si.Mobil was acquired during the 1 Q 01
28.2
21.0 21.7
19.2
12.7
19.7
5
10
15
20
25
30
FY 00 1 Q 01 2 Q 01
VIP-Net average Si.Mobil average
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Mobile - Traffic Development in Austria
1 H 00 2 H 00 1 H 01
Outgoing minutes (millions) * 1,553 1,636 1,776Incoming minutes (millions) * 1,312 1,419 1,540Average number of customers ('000s) 2,423 2,695 2,832
Minutes per customer per month - outgoing 107 101 105 - incoming 90 88 91
* Rated MOUs of Mobilkom customers
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Mobilkom - Mobile DataData revenues in % of
airtime revenuesNo. of SMS per quarter
(in million)
8.4%
9.5%
5%
6%
7%
8%
9%
10%
1 H 00 1 H 01
67.2 68.272.1
89.8
96.2 94.4
50
60
70
80
90
100
110
1 Q 00 2 Q 00 3 Q 00 4 Q 00 1 Q 01 2 Q 01
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l Redesign towards the Group’s solution provider into a higher margin business
l Complex IT data and communications solutions from one source
l Share of solution products rises from 29% in 2001 of revenues to 66% in 2005
l Profiting from a dominant market position in Austria: at present55% market share in Austria
Data Communications
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Internet in Austria
*Including 90,000 subscribers acquired during 2 Q 01
187 209 259 304
457
59
5035
2813
0
100
200
300
400
500
600
June2000
Sep.00 Dec.2000
March2001
June2001*
cust
omer
s ('
00
0s)
Dial-up ADSL
200 237294
354
516 39% *
28%26%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1 H 00 FY 00 1 H 01
* Telekom Austria Group including mobile portal (2% market share)
Internet Subscribers Residental Market ShareOrganic growth and
acquisitions
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Financial Overviewby Business Segment
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Fixed Line - Key Financial Data
(EUR million) 2 Q 01 2 Q 00 % change 1 H 01 1 H 00 % change
Operating revenues 605.6 668.8 -9.4% 1,244.4 1,350.9 -7.9%
EBITDA* 207.9 191.7 8.5% 417.9 403.5 3.6%
EBIT* -1.3 -36.1 -96.4% 8.3 -31.0 n.m.
* excluding costs for idle workforce 14.4 0.0 n.m. 18.3 0.0 n.m.
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Idle Workforce
* Reported EBITDA excludes costs for idle workforce, social plan costs included in EBITDA
* Costs for idle workforce include expenses for employees who have been released or transferred from the work force as well as all cash settlements for civil servants who have agreed to leave with severance packages.
(EUR million) FY 99 1 H 00 FY 00 1 H 01 FY 01E
Costs for idle workforce - - 5.2 18.3 70
Social plan costs 85.5 28.1 253.8 2.1 17
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Mobile - Key Financial Data
(EUR million) 2 Q 01 2 Q 00 % change 1 H 01 1 H 00 % change
Operating revenues 410.6 371.4 10.6% 822.5 710.4 15.8%
EBITDA 130.6 81.8 59.7% 289.6 201.5 43.7%
EBIT 63.2 41.0 54.1% 165.5 122.5 35.1%
Net income* 54.8 26.4 107.6% 17.3 80.3 -78.5%
* Including the one-off tax effect (EUR 134.4million) resulting from the change of legal structure of Mobilkom Austria
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Mobile - Geographic Breakdown
658 713
1498
55
0
200
400
600
800
1,000
1 H 00 1 H 01
Mobilkom Austria VIP-Net Si.Mobil
Revenues
195265
6
32
-7-25
25
75
125
175
225
275
325
1 H 00 1 H 01
Mobilkom Austria VIP-Net Si.Mobil
EBITDAEUR million EUR million
710*
290*
823* 202*
* total consolidated numbers
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Data - Key Financial Data
(EUR million) 2 Q 01 2 Q 00 % change 1 H 01 1 H 00 % change
Operating revenues 77.9 84.0 -7.3% 151.5 150.9 0.4%
EBITDA 3.3 12.6 -73.8% 11.2 27.7 -59.6%
EBIT -4.4 4.1 n.m. -4.4 12.2 n.m.
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Internet - Key Financial Data
(EUR million) 2 Q 01 2 Q 00 % change 1 H 01 1 H 00 % change
Operating revenues 20.7 14.9 38.9% 39.2 27.8 41.0%
EBITDA -11.8 4.1 n.m. -14.1 7.3 n.m.
EBIT -13.5 4.1 n.m. -19.0 7.2 n.m.
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Ongoing Capex Reductions
l On course to achieve targeted capex reduction
l Fixed line focus on broadband access (over 44%)
l UMTS vendors selected (Ericsson/Nortel)
l Capex/revenue ratio: 15%
(EUR million)
323 360
475
312
135158
162
594
0
200
400
600
800
1.000
2000 2001E 1H 2000 1H 2001
Mobilkom Austria Telekom Austria
917
470
297
835
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Net Debt - Telekom Austria Group(in EUR million) Dec. 31, 00 Mar. 31, 01 Jun. 30, 01
Long-term debt 2,353.9 2,274.5 2,245.6Short-term debt 946.0 1,166.4 1,105.5- Cross border lease, included in s/t debt -81.2 -84.5 -88.0+ Capital lease obligations 6.2 6.0 6.7- Intercompany loans for Mobilkom Austria -199.7 -378.9 -472.9Cash and cash equivalents and short-term investments -23.7 -14.9 -22.3Financial instruments, included in other assets -47.6 -45.5 -50.6Net debt Telekom Austria 2,953.9 2,923.0 2,723.9
Long-term debt 430.8 473.7 472.2Short-term debt 91.2 269.4 321.2- Cross border lease, included in s/t debt -18.6 -19.6 -20.5Cash and cash equivalents and short-term investments -38.8 -65.3 -28.7Net debt Mobilkom Austria 464.6 658.2 744.2
Net debt of Telekom Austra Group 3,418.4 3,581.3 3,468.1
Shareholders' equity 2,603.6 2,604.6 2,558.7
Net debt/equity 131.3% 137.5% 135.5%
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Outlook
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Outlook for 2001
The further development of traffic revenues will be decisive for the achievement of the budgeted full-year revenues, the first results of the new tariff schemes give encouraging signals. Cost cutting is on track.
Mobile Lower subscriber acquisition costs and the focus on quality customers in Austria as well as a growing contribution from Croatia should enable a stable margin development in spite of the additional costs expected for relaunching the Slovenian business.
Data Stronger revenue growth in the second half of the year should allow the achievement of the full year target; margins will fall due to higher intercompany prices for fixed line services.
Internet Focus in the second half of the year will be the enlargement of the broadband product portfolio and b-2-b activities for small and medium enterprises. Investments into the new internet portal as well as enhanced marketing initiatives lead to a higher costs base.
Fixed line
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Execution Steps of Three-Part Strategy
Change corporate cultureaProfit accountabilityaAlign management and shareholders objectives
Improve profitablity significantlyaReduce fixed line headcountaReduce/refocus capexaReduce operating expenditures
Enhance customer focusè Focus on customer needs through split into retail
and wholesale business units
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Competitive Advantages of a Focused Strategy
l Retail– Focus through customer
relationship– Service innovation based on
wholesale services– Total telecom solutions:
bundling the full range of telecom solutions
l Wholesale- Broadband: using the competitive
advantages of Telekom Austria- Interconnection: protect the regulated
prices– Full geographical coverage as a key
differentiator– Network utilization and economies of
scale: basic services at lowest costs
¬ Continue the transformation of the fixed line business
Appendix
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Restatements to 1H 2000 figures(EUR million)
as per prospectus restated Change Comment Amount
Telekom Austria GroupRevenues 1,915.9 1,923.0 7.1 7.1EBITDA 608.4 640.4 32.0 32.0
Telekom Austria, consolidatedRevenues 1,416.7 1,420.9 4.2 Reclassification from non-operating income to
operating income 4.2EBITDA 403.6 438.6 35.0 Changed definition of EBITDA 21.3
Reclassification from non-operating to operating income/expense 13.7
Mobilkom Austria, consolidatedRevenues 707.5 710.4 2.9 Reclassification from non-operating income to
operating income 2.9EBITDA 204.8 201.5 -3.3 Changed definition of EBITDA -10.3
Reclassification from non-operating to operating income/expense 7.0
1H 2000
35
Cash Flows - Telekom Austria Group
(EUR million) 1H 01 1H 00 % 1H 01 1H 00 %
Cash flow from operating activities 390.9 714.9 -45.3% 258.0 174.2 48.2%
Cash used in investing activities -162.3 -503.5 -67.8% -318.3 -175.5 81.4%
Cash from (used in) financing activities -230.2 -415.6 -44.6% 53.2 -58.1 -191.6%
Effect of exchange rate changes 0.0 0.0 n.m. -3.3 -0.5 507.0%
Net increase (decrease) in cash and cash equivalents -1.6 -204.2 -99.2% -10.3 -60.0 -82.8%
Telekom Austria AG Mobilkom Austria AG
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Fixed Line - Revenue Breakdown
(EUR million) 1 H 01 1 H 00 % changeTraffic revenues 316.3 457.2 -30.8%Monthly rental 317.5 327.5 -3.1%Interconnection 318.1 308.0 3.3%Leased lines 128.2 112.8 13.7%Equipment 46.9 55.7 -15.8%Other 117.4 89.6 31.0%Total fixed line operating revenues 1,244.4 1,350.8 -7.9%
37
Fixed Line - Expense Breakdown
(EUR million) 1 H 01 1 H 00 % changeMaterial expense 43.7 46.6 -6.2%Employee costs 297.0 316.2 -6.1%Depreciation and amortization 409.6 434.4 -5.7%Interconnection 299.0 317.7 -5.9%Repairs 49.0 50.4 -2.8%Services received 8.8 15.7 -43.9%Other 147.3 200.7 -26.6%Total fixed line operating expenses 1,254.4 1,381.7 -9.2%
38
Mobile - Revenue Breakdown
(EUR million) 1 H 01 1 H 00 % changeTraffic revenues 413.7 338.0 22.4%Monthly rental 123.7 121.8 1.6%Equipment 75.9 80.2 -5.4%Roaming 76.2 53.8 41.6%Interconnection 132.5 104.8 26.4%Other 11.8 16.1 -26.7%Discounts -11.3 -4.3 162.8%Total mobile communications 822.5 710.4 15.8%
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Mobile - Expense Breakdown
(EUR million) 1 H 01 1 H 00 % changeMaterial expense 109.3 150.5 -27.4%Employee costs 61.0 46.0 32.6%Depreciation and amortization 124.0 79.0 57.0%Interconnection 69.9 73.8 -5.3%Repairs 16.6 12.3 35.0%Services received 107.8 82.7 30.4%Other 168.4 143.6 17.3%Total mobile communications 657.0 587.9 11.8%operating expenses
40
Operating Revenues by Segment
(EUR million) 2 Q 01 2 Q 00 % change 1 H 01 1 H 00 % change
Fixed line services 605.6 668.8 -9.4% 1,244.4 1,350.9 -7.9%Data communications services 77.9 84.0 -7.3% 151.5 150.9 0.4%Internet 20.7 14.9 38.9% 39.2 27.8 41.0%Intersegmental eliminations -41.4 -61.7 32.9% -105.5 -108.7 2.9%
Consolidated operating revenues 662.8 706.0 -6.1% 1,329.6 1,420.9 -6.4%
Mobile communications services 410.6 371.4 10.6% 822.5 710.4 15.8%Intersegmental eliminations -105.5 -100.3 -5.2% -216.8 -208.3 -4.1%
Total managed operating revenues 967.9 977.1 -0.9% 1,935.3 1,923.0 0.6%
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EBITDA by Segment
(EUR million) 2 Q 01 2 Q 00 % change 1 H 01 1 H 00 % change
Fixed line services 207.9 191.7 8.5% 417.9 403.5 3.6%Data communications services 3.3 12.6 -73.8% 11.2 27.7 -59.6%Internet -11.8 4.1 n.m. -14.1 7.3 n.m.Intersegmental eliminations 0.0 0.0 - 0.0 0.0 -
Consolidated EBITDA 199.4 208.4 -4.3% 415.0 438.5 -5.4%
Mobile communications services 130.6 81.8 59.7% 289.6 201.5 43.7%Intersegmental eliminations 0.0 0.0 - 0.0 0.0 -
Total managed EBITDA 330.0 290.2 13.7% 704.6 640.0 10.1%
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EBIT by Segment
(EUR million) 2 Q 01 2 Q 00 % change 1 H 01 1 H 00 % change
Fixed line services -1.3 -36.1 -96.4% 8.3 -31.0 n.m.Data communications services -4.4 4.1 n.m. -4.4 12.2 n.m.Internet -13.5 4.1 n.m. -19.0 7.2 n.m.Intersegmental eliminations -12.1 -0.2 n.m. -21.8 -0.2 n.m.
Consolidated EBIT -31.3 -28.1 11.4% -36.9 -11.8 212.7%
Mobile communications services 63.2 41.0 54.1% 165.5 122.5 35.1%Intersegmental eliminations 0.0 0.0 n.m. 0.0 0.0 n.m.
Total managed EBIT 31.9 12.9 147.3% 128.6 110.7 16.2%