Roadshow Presentation Results for the first nine months and third - PowerPoint PPT Presentation

Roadshow Presentation Results for the first nine months and third quarter 2018

Cautionary statement 'This presentation contains forward-looking statements. These forward-looking statements are usually accompanied by words such as 'believe', 'intend', 'anticipate', 'plan', 'expect' and similar expressions. Actual events may differ materially from those anticipated in these forward-looking statements as a result of a number of factors. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statement. Neither A1 Telekom Austria Group nor any other person accepts any liability for any such forward- looking statements. A1 Telekom Austria Group will not update these forward-looking statements, whether due to changed factual circumstances, changes in assumptions or expectations. This presentation does not constitute a recommendation or invitation to purchase or sell securities of A1 Telekom Austria Group.‘ All figures are stated according to IAS 18 if not stated otherwise. To reflect the performance on an operational basis, the proforma figures present comparison figures for previous periods as if M&A transactions executed between the start of the comparison period and the end of the reporting period had already been fully consolidated in the relevant months of the comparison period. Alternative performance measures are used to describe the operational performance. Please therefore also refer to the financial information presented in the Consolidated Financial Statements, which do not contain proforma figures, as well as the reconciliation tables provided in the Earnings Release. Results for the first nine months and third quarter 2018 2

Telekom Austria share price performance Performance since 2016*: 180 TKA: +32.3 % 160 ATX: +39.5% 140 Telco: -30.7% 120 Performance 1-9M 2018*: 100 TKA: -13.7% 80 ATX: -2.2% 60 Telco: -14.6% Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 TKA ATX Telco Stoxx Dividend for the financial (indexed from 1 January 2016) year 2018**: EURc 20 * as of 30 September 2018 ** Intended proposal to the Annual General Meeting 2019 Results for the first nine months and third quarter 2018 3

A1 Telekom Austria Group key facts Revenues by segment (a) Bulgaria 9.7% 59.1% Austria 9.8% Croatia 8.8% Belarus Slovenia 4.9% 5.2% 2.6% Serbia Macedonia EBITDA by segment (a) Bulgaria 9.0% 63.4% Austria Croatia 7.5% 12.6% Belarus Slovenia 2.8% 2.1% 2.7% Serbia Macedonia Notes: (a) For Full Year 2017. Breakdown does not show corporate, others and eliminations. Results for the first nine months and third quarter 2018 4

The leading regional communications player providing convergent telecommunication services as of 30 September 2018 (in ‘000) Austria Bulgaria Croatia Mobile market position #1 Mobile market position #2 Mobile market position: #1 Mobile subscriber: Mobile subscriber: Mobile subscriber: 5,304 (Q3 2017: 5,357) 1,878 ( Q3 2017: 1,837)  4,024 ( Q3 2017: 4,056)   Fixed access lines: Fixed access lines: Fixed access lines: 2,063 (Q3 2017: 2,129) 295 (Q3 2017: 300)  531 ( Q3 2017: 528)   Republic of Macedonia Belarus Slovenia Republic of Serbia Mobile market position #1 Mobile market position #2 Mobile market position #2 Mobile market position #3 Mobile subscriber: Mobile subscriber: Mobile subscriber: Mobile subscriber: 1,090 (Q3 2017: 1,112) 2,205 (Q3 2017: 2,194)  4,903 (Q3 2017: 4,863) 695 (Q3 2017: 710)    Fixed access lines: Fixed access lines: Fixed access lines:  158 (Q3 2017: 145) 417 ( Q3 2017: 310) 72 (Q3 2017: 70)   Results for the first nine months and third quarter 2018 5

A1 Telekom Austria Group Strategy and Equity Story Group Strategy Equity Story • Solid market position in Austria: exploiting rising demand for bandwidth and new technologies • Growth in CEE: benefiting from growing data consumption and macroeconomic recovery • Medium- to long-term growth with new business areas thanks to digitalisation • Strong balance sheet structure • Sustainable dividend policy Appropriate level of Growth and improved dividend and total efficiency shareholder return Results for the first nine months and third quarter 2018 6

Digitalisation is core to A1 Telekom Austria Group‘s strategy Empowering Digital Life Digitalising B2B. Digitalising B2C. Consumer Trends ROBOTISATION MARKETING & PROCESSES AUTOMATION Enabling companies to translate digital potential into business results CUSTOMER From traditional legacy platforms to cloud DIGITAL SERVICE services PRODUCTS DIGITALISATION Results for the first nine months and third quarter 2018 7

Finance strategy ensures flexibility to invest into growth opportunities Accelerated fibre roll-out in Austria • Accelerated fibre roll-out in Austria • Value-accretive M&A to Value-accretive M&A to • • Exploit growth unlock potential from digital transformation and • unlock potential from digital transformation and • opportunities strengthen footprint in core business (with priorities I. in- • strengthen footprint in core business (with priorities I. in- • Strong balance sheet market consolidation II. convergence III. entry into new market consolidation II. convergence III. entry into new structure markets) markets) Sustainable Dividend level of EURc 20 with growth potential in line with • operational and financial performance dividend policy Conservative financial profile with rating target of solid investment grade rating (BBB) Results for the first nine months and third quarter 2018 8

Shareholder structure as of 31 December 2017 Two strong core shareholders Freefloat by nationality Rest of Europe Switzerland United Kingdom 2.7% 2.2% 1.2% Unidentified Free Float 3.5% 20.58% France United States 4.1% 34.9% Rest of World 4.3% Nordics 5.1% América Movil 51.00% Germany 20.6% ÖBIB Austria 28.42% 21.4% Results for the first nine months and third quarter 2018 9

Key financial developments for the first nine months and third quarter 2018

Highlights Q3 2018 1.4% increase in Group revenues and stable EBITDA excl. restructuring (+0.3%)  Service revenue growth both in mobile and fixed-line business  3.9% EBITDA growth (excl. restructuring) in Austria  FY 2018 Outlook unchanged: Revenue growth of 1-2%, CAPEX at EUR 750 mn and  EURc 20 dividend Mobile customer base increased by 1.3%; postpaid growth of 4.9%  RGUs increased by 2.8% y-o-y, driven by CEE markets   Cash & Carry hybrid broadband solution  A1 Xplore Music launched  Tender documents for 3.4-3.8 Ghz spectrum were published by RTR As of 1 October 2018, vipnet was successfully rebranded into A1 Croatia • Results for the first nine months and third quarter 2018 11

Q3 2018: Group results benefit from continuous strong service revenue development in most segments Reported Proforma Group (in EUR million) Q3 2018 Q3 2017 % change Total revenues 1,126.2 1,111.1 1.4% EBITDA 389.8 410.0 -4.9% excl. restructuring 397.8 396.7 0.3% CAPEX 193.8 147.2 31.7% Service revenue growth in Austria, Bulgaria, Serbia and Macedonia. Croatia was only down due to lower visitor  roaming versus last year and Belarus due to FX effects. EBITDA excl. restructuring was stable (+0.3%) as service revenue trends more than outweighed the increase in  OPEX, driven by higher content and advertising costs as well as investments into A1 Digital. CAPEX increased in Q3 2018 in a year-on-year comparison driven by higher investments in Austria; Group total  CAPEX is almost stable in 1-9M 2018 versus last year. * Restructuring charges: EUR 8.1 mn in Q3 2018 (positive effect of EUR 13.3 mn in Q3 2017) The combined effects from the one-offs and FX caused the levelling out on Group level; for details please refer to page 7 Results for the first nine months and third quarter 2018 12

Austria: Strong operational performance driven by sound service revenue growth and better equipment margin Operational data ARPU ARPL (in EUR) (in EUR) Postpaid subscriber base grew by 2.4% driven by ongoing high  Δ: +2.5% Δ: +4.7% demand for mobile WiFi routers and high-value tariffs 30.8 29.5 ARPU also rose due to mobile WiFi routers and increased high-value  16.3 15.9 customer share Higher ARPL due to strong demand for higher bandwidth and TV  options as well as the fixed-line price increases and indexation Q3 18 Q3 17 Q3 18 Q3 17 1.8% RGU decrease mainly driven by voice; broadband RGUs  declined slightly year-on-year Total revenues EBITDA (in EUR mn) (in EUR mn) Financial performance Δ: -4.7% Total revenues entirely driven by service revenue growth (+1.1%)  Δ: +0.3% excl. restructuring*: OPEX excl. restructuring decreased as higher content, advertising and  +3.9% 657.3 655.3 network costs were more than offset lower equipment costs Total subsidies decreased due to lower quantities compared to last  242.1 254.1 year as well as higher promotional deals; subsidies per handset remained on previous levels; EBITDA adjusted for restructuring increased by 3.9%  Q3 18 Q3 17 Q3 18 Q3 17 * Excluding restructuring charges of EUR 8.1 mn in Q3 2018 and positive EUR 13.3 mn in Results for the first nine months and third quarter 2018 13 Q3 2017.