Hrvatski Telekom d.d. · ZSE:HT

Hrvatski Telekom d.d — Hrvatski Telekom — H1 2014 Earnings Presentation

19 slides from Hrvatski Telekom d.d's earnings presentation, Jul 30, 2014

  1. Slide 1: Business and Financial Review January – June 2014

    BUSINESS AND FINANCIAL REVIEW JANUARY – JUNE 2014 ANALYST PRESENTATION 30 JULY 2014

  2. Slide 2: Disclaimer

    DISCLAIMER ƒ These materials and the oral presentation do not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company nor should they or any part of them or the fact of their distribution form t

  3. Slide 3: Continued challenging environment due to prolonged recession in Croatia

    CONTINUED CHALLENGING ENVIRONMENT DUE TO PROLONGED RECESSION IN CROATIA Real GDP growth Percent 1.1 -0.2 -0.4 -0.9 09 -2.3 -2.2 ƒ 2014 forecast to be 6th consecutive year with no real GDP growth ƒ Public debt and budget deficit still on rising trend Unemployment ƒ Credit rating of sub-investment Per

  4. Slide 4: Fixed and mobile voice market in Croatia still shrinking

    FIXED AND MOBILE VOICE MARKET IN CROATIA Annual change STILL SHRINKING… SHRINKING Revenue Number of subscribers HRK million Million ƒ 13 active operators in -17% market Fixed -5% ƒ Minutes of use voice i 69 695 578 1.47 1.40 decreased by 14.4% in Q1 2014 Q1 2013 Q1 2014 Q1 2013 Q1 2014 ƒ Minutes of

  5. Slide 5: Partially offset by growth in fixed and mobile broadband and PayTV

    … PARTIALLY OFFSET BY GROWTH IN FIXED AND Annual change MOBILE BROADBAND AND IN PAYTV Revenue Number of subscribers HRK million Million +9% +5% ƒ Fixed Broadband lines at 933k in Q1 Fixed 2014 (+4% ( 4% yoy);) and Fixed BB household Mobile 605 659 1.28 1.35 penetration at 60% Broad- band ƒ HT Smartp

  6. Slide 6: Decrease in HT revenue led by fixed and mobile, partially offset by ICT and IP

    DECREASE IN HT REVENUE LED BY FIXED AND MOBILE PARTIALLY OFFSET BY ICT AND IP MOBILE, Revenue breakdown HRK million 3,469 -5.2% 3,288 ƒ Fixed telephony down due to general usage trends Other1 74 -13.5% 13.5% 195 64 ƒ Mobile M bil revenue under d pressure mostly tl from f EU ICT 250 28.4% roaming reg

  7. Slide 7: HT's financial performance impacted also by transformation projects and net financial result

    HT’S FINANCIAL PERFORMANCE IMPACTED ALSO BY TRANSFORMATION PROJECTS AND NET FINANCIAL RESULT All in HRK million, except where stated differently EBITDA before except. except items1 Net profit -10.0 % -29.5 % As well as by the decline in revenue, net profit impacted also by 1,422 570 redundancy and 1

  8. Slide 8: HT undertook three major transformation initiatives in H1 2014

    TO PROTECT RESULTS AND STABILITY OF OPERATIONS, HT UNDERTOOK THREE MAJOR TRANSFORMATION INITIATIVES IN H1 2014 HT adapting cost base 1) New organisational structure, cut in number off management positions and voluntary redundancy 2) Signed new Collective Agreement valid from 1 July J l 2014 3) Start

  9. Slide 9: Successful value strategy in mobile; more customers choosing advanced services

    SUCCESSFUL VALUE STRATEGY IN MOBILE; MORE CUSTOMERS CHOOSING HT’S MORE ADVANCED SERVICES Market share by subscribers1 Number of subscribers Other operators Thousands Prepaid Postpaid Data T-HT -1.8% 2,350 2,308 +9.6% 53.4% 53.7% 1 326 1,326 1 218 1,218 1,248 1,368 1,023 1,090 46.6% 46.3% End-H1 End-

  10. Slide 10: Number of fixed lines and ARPA decline; HT stabilises overall telekom market

    NUMBER OF FIXED LINES AND ARPA DECLINE; HT STABILISES OVERALL TELEKOM MARKET Number of mainlines1 Thousands -5.9% 5 9% Wh l l Wholesale 1,282 1,206 Retail 108 120 1,174 1,086 ƒ Substitution of fixed traffic with mobile and IP traffic; total traffic down 22.2% to 819 million End-H1 2013 End-H1 2014 m

  11. Slide 11: Number of BB and TV customers continues to grow

    NUMBER OF BB AND TV CUSTOMERS CONTINUES TO GROW; HT LEADS IN CONVERGENT OFFERS AND CONTENT No. of broadband access lines Broadband retail ARPA Thousands +2.3% Wholesale1 HRK 665 680 Retail2 -1.4% 33 60 631 621 127 126 End H1 2013 End-H1 End H1 2014 End-H1 H1 2013 H1 2014 Number of TV customers Th Th

  12. Slide 12: Residential segment revenue breakdown

    IN RESIDENTIAL SEGMENT, DECREASE IN Miscellaneous Terminal equipment VOICE PARTIALLY OFFSET BY INCREASE IN Other service Non voice revenue NON-VOICE AND TERMINAL EQUIPMENT Voice revenue Revenue breakdown1,2 ƒ Revenue down mainly as a result of HRK millions 13.7% lower voice revenue, in both 1 983 1,

  13. Slide 13: Business segment: strong growth in ICT softens decrease in voice revenue

    IN BUSINESS SEGMENT, STRONG GROWTH Miscellaneous Terminal equipment IN ICT SOFTENS IMPACT OF DECREASE IN Other service Non voice revenue VOICE REVENUE Voice revenue Revenue breakdown1,2 HRK millions 1 486 1,486 -8.8% 8.8% 31 71 1,355 62 -12.2% 222 38 ƒ 27.3% lower voice revenue, in fixed 21.8% 278 a

  14. Slide 14: 2014 outlook unchanged

    2014 OUTLOOK UNCHANGED ƒ Outlook for 2014 maintained — Slow declining trend in revenue — EBITDA margin before exceptional items between 39% and 41% — Investments: in order to reverse the negative business trend, HT intends to invest over HRK 1 billion capex in 2014, specifically targeting ▫ Infrastr

  15. Slide 15: Appendix

    APPENDIX c | : Hrvatski aie fe a LIFE IS FOR SHARING. Telekom

  16. Slide 16: Consolidated income statement

    CONSOLIDATED INCOME STATEMENT HRK millions illi in HRK million Q2 2013 Q2 2014 change Jan-Jun 2013 Jan-Jun 2014 change Mobile 1) 722 688 -4.8% 1,403 1,325 -5.5% Fixed Telephony 366 309 -15.4% 744 625 -16.1% Wholesale 142 118 -17.0% 277 233 -15.7% IP Revenue 389 397 2.1% 776 791 1.9% Data 26 20 -20.7

  17. Slide 17: Consolidated balance sheet

    CONSOLIDATED BALANCE SHEET HRK millions illi At 31 Dec At 30 Jun in HRK million (IFRS) Change 2013 2014 Intangible assets 1,358 1,358 0.0% Property, plant and equipment 5,570 5,402 -3.0% Non-current financial assets 594 650 9.3% Receivables 126 143 13.7% Deferred tax asset 60 60 0.2% Total non-curre

  18. Slide 18: Consolidated cash flow statement

    CONSOLIDATED CASH FLOW STATEMENT HRK millions illi in HRK million (IFRS) Jan-Jun 2013 Jan-Jun 2014 change Profit before tax 716 501 -30.1% Depreciation and amortization 637 660 3.6% Increase / (decrease) of current liabilities 179 -216 -220.3% (Increase) / decrease of current receivables -120 120 83

  19. Slide 19: Investor relations contact

    INVESTOR RELATIONS CONTACT „ Elvis Knežević Tel: + 385 1 4911 114 „ Anita Marić Šimek Tel: +385 1 4911 884 „ e-mail: [email protected] „ www.t.ht.hr/eng/investors/ London Stock Exchange GDR trading symbol: THTC Zagreb Stock Exchange Share trading symbol: HT-R-A R t THTC.L, Reuters: THTC L HT HT.ZA ZA Bloom

Hrvatski Telekom — H1 2014 Earnings Presentation on 6ix