TKA Roadshow Presentation Q4 2018 Roadshow Presentatio · PDF file Roadshow Presentation...

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Transcript of TKA Roadshow Presentation Q4 2018 Roadshow Presentatio · PDF file Roadshow Presentation...

  • Roadshow Presentation Results for the fourth quarter and full year 2018

  • Results for the fourth quarter and full year 2018 2

    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.

  • Operational and financial highlights for the full year 2018

    Operational and financial highlights for the full year 2018

  • Results for the fourth quarter and full year 2018 4

     Smart network rollout continued:

     Austria: 333k more high-speed ready households as part of NGA rollout in 2018

     Next Generation Data Center in Austria launched in Q4 2018

     Next phase of future-proof mobile networks preparation towards 5G

     A1 brand successfully launched in Bulgaria and Croatia

     Innovative products in the areas of entertainment and smart living as well as security solutions fitting A1 connectivity proposition

     A1 Digital: customer wins confirm growing traction; further investments and intensified sales actions

     Strong performance in Austria and most CEE countries led to growth of 1.8% in revenues (adjusted: 3.1%*) and of 1.6% in EBITDA, excl. restructuring (adjusted: 3.6%*)

     Mobile contract customer base increase of 4.1% y-o-y due to ongoing shift from prepaid to contract and M2M, migrations to higher tariffs and strong demand for WiFi router

     Increase of RGUs by 3.7% y-o-y due to strong BB and TV trends with ARPL growing in most markets

     Steady demand for ICT solutions and complementary connectivity continues to benefit service revenues

    Highlights FY 2018

    * Adjusted basis excluding one-off and FX effects as well as restructuring charges

  • Results for the fourth quarter and full year 2018 5

    FY 2018 – Solid service revenue growth translated into strong operative EBITDA increase

    * Proforma figures include effects of M&A transactions executed between the start of the comparison period and the end of the reporting period. ** Adjusted basis excluding one-off and FX effects as well as restructuring charges:

     Revenue increase of 3.1% on an adjusted** basis with service revenue growth in all markets except for Slovenia.

     EBITDA on an adjusted** basis increased by 3.6% driven by strong growth in Austria and most of the CEE segments; ~EUR 15 mn negative roaming impact on Group EBITDA in FY 2018 more than offset.

     Net income declined due to amortization of brand values (EUR 198 mn in D&A in 2018; EUR 122 mn in 2017) and as the prior-year was positively impacted by a lower effective tax rate (income taxes of EUR 99.7 mn 2018 vs. EUR 3.0 mn 2017).

     CAPEX higher due to investments in Austria (fiber roll-out, datacenter) as well as investments in CEE in late 2018.

    • One-off effects: EUR +5.0 mn (2017: EUR +30.4 mn) in revenues; EUR +9.4 mn (2017: EUR +21.3 mn) in EBITDA • Restructuring charges: EUR 22.1 mn in FY 2018 versus positive EUR 18.2 mn in FY 2017 • FX effects: negative EUR 30.7 mn and EUR 14.9 mn in revenues and EBITDA respectively in FY 2018

    Group (in EUR million) FY 2018 FY 2017 % change

    Total revenues (proforma*) 4,466.4 4,388.5 1.8%

    EBITDA (proforma*) 1,380.6 1,398.9 -1.3% excl. restructuring 1,402.7 1,380.7 1.6%

    Net Income (reported) 242.7 345.5 -29.7%

    CAPEX (proforma*) 771.0 738.0 4.5%

  • 6Results for the fourth quarter and full year 2018

    FY 2018 – EBITDA benefits from service revenue growth in all areas and strong focus on sales execution

    Non-operating effectsService revenues OOI Equipment margin OPEX

    • Restructuring charges: negative EUR 22.1 mn in FY 2018 versus positive EUR 18.2 mn in FY 2017

    EU R m

    n

    EBITDA 2017 excl.

    restructuring (proforma)

    Mobile Fixed Solutions Connectivity

    OOI Subsidies Handset valulation

    Opex savings

    Opex increase

    One-offs FX Roaming EBITDA 2018 excl.

    restructuring

    1.380.7 1.402.7

  • 7Results for the fourth quarter and full year 2018

    2,029.3 2,054.4

    2017 (in EUR mn)

    Workforce related

    Infra- structure

    Content A1 Digital

    Advertising Rebranding

    Other Opex savings

    FX effect

    2018 (in EUR mn)

    Ongoing cost efficiencies more than offset indirect cost increases*

     Ongoing program ‘Sourcing 4 Success’ will target especially the following areas:  Maintenance  Customer Service  Energy

     Focus on process efficiency and process automation

     Investments in IT-system simplifications

     Savings from lower frequency fees in Croatia

     Drive digital transformation forward:  Customer provisioning  Customer post-sales processes

     OPEX savings in 2019 are expected to be at a similar level like in 2018

    Savings initiatives 2019OPEX** development 2018

    * indirect costs: costs which are not directly product- or sales-related, overhead costs ** excl. interconnection, roaming, equipment and restructuring costs; proforma figures

  • Key financial developments for the fourth quarter 2018

    Key financial developments for the fourth quarter 2018

  • Results for the fourth quarter and full year 2018 9

     Service revenue growth in all markets except for Slovenia (increase in Belarus excl. FX effects) with growth both in the fixed-line and the mobile business; solutions & connectivity revenues particularly high in Austria.

     EBITDA excl. restructuring* showed a strong increase, especially driven by Austria and Bulgaria.  CAPEX increase in Q4 2018 driven by higher investments in CEE, stemming mainly from satellite IRU in Bulgaria

    and VULA agreement in Slovenia.

    Q4 2018 in line with FY trends: Strong service revenues translated into EBITDA growth

    * Restructuring charges: EUR 13.9 mn in Q4 2018 (positive effect of EUR 5.0 mn in Q4 2017) The combined effects from the one-offs and FX caused the levelling out on Group level

    Reported Reported Group (in EUR million) Q4 2018 Q4 2017 % change

    Total revenues 1,165.1 1,130.0 3.1%

    EBITDA 293.0 288.3 1.6% excl. restructuring 306.8 283.3 8.3%

    CAPEX 263.7 238.5 10.6%

  • Results for the fourth quarter and full year 2018 10

    694.9 676.2

    214.1 197.1

    Q4 18 Q4 17 Q4 18 Q4 17

    16.1 15.5

    31.1 30.5

    Q4 18 Q4 17 Q4 18 Q4 17

     High demand for mobile WiFi routers and sound development in high- value tariffs both benefit postpaid subscriber base (+1.2%) and ARPU development

     Higher ARPL due to strong demand for higher bandwidth and TV options as well as price indexation

     1.9% RGU decrease mainly driven by voice; broadband RGUs declined slightly year-on-year

     Strong service revenue growth (+3.8%), driven by mobile & completion of large ICT corporate projects in Q4 2018

     OPEX excl. restructuring remained stable. Lower interconnection, roaming costs and cost efficiencies (i.e. network engineering, maintenance) outweighed higher costs for leased lines and content

     Subsidy per handset increased due to higher-value handsets but overall lower quantities

     Restructuring charges increased due to accelerated program

    Austria: Strong operational performance driven by sound service revenue growth and a better equipment margin

    Financial performance

    Operational dataARPU(in EUR)

    Total revenues (in EUR mn)

    EBITDA* (in EUR mn)

    ARPL (in EUR)

    Δ: +3.7%

    Δ: +2.1%

    Δ: +2.8% Δ: +8.6%

    rep.: -0.9%

    * excl. restructuring charges of EUR 13.9 mn in Q4 2018 and positive EUR 5.0 mn in Q4 2017

  • Results for the fourth quarter and full year 2018 11

    Slovenia Republic of Serbia Republic of Macedonia

    Bulgaria Croatia Belarus