Results for

Q2 2024 and H1 2024

A1 Group

Summary Q2 2024

  • Total revenues up +1.3% driven by service revenue growth (+3.9% yoy) in all markets except Belarus and Slovenia; strong decline in equipment revenues.
  • Service revenue growth driven by value-protecting measures, and strong fixed-line performance in international segments.
  • EBITDA up 3.8% yoy, margin improvement from 37.4% to 38.3%; +8.3% adjusted for one-offs, restructuring and FX.
  • Core OPEX (ex one-offs) driven mainly by higher workforce and product related costs, electricity costs decreased
  • Spectrum prolongation in Bulgaria: A1 prolonged and acquired frequencies in the 900 and 1.800 MHz spectrum for EUR 31 mn in June 2024
  • Dividend of 36 Eurocents per share for FY 2023 approved by Annual General Meeting (previous year: 32 Eurocents).
  • FCF in H1 42% higher due to lower CAPEX and better operational result.
  • S&P confirmed its credit rating for Telekom Austria AG with 'A-' in May 2024.
  • Outlook confirmed: 3-4% revenue growth, CAPEX of approx. EUR 800 mn (excl. spectrum and M&A)

Please note that this presentation, besides reported values, also contains values on a pro forma basis, due to the towers spin-off in 2023. Pro forma means, data of the comparison period has been adjusted, as if the towers have already been spun-off in the respective period.

3 Results presentation: Q2 2024

Customer-related information

Mobile subscribers (in thousand)

RGUs (in thousand)

25,949

6,249

6,250

6,271

6,267

6,283

24,486

25,131

25,245

25,441

27%

27%

26%

26%

25%

85%

86%

84%

84%

86%

43%

43%

44%

44%

44%

30%

30%

30%

30%

31%

Q2 2023

Q3 2023

Q4 2023

Q1 2024

Q2 2024

Q2 2023

Q3 2023

Q4 2023

Q1 2024

Q2 2024

Subscribers

Share postpaid

Total fixed voice

Total broadband

TV@home

Q2 '24 Group ARPU and ARPL (in EUR)

26.527.7

11.411.8

Q2 2023

Q2 2024

ARPU op. in CCY

ARPL op. in CCY

Mobile subscribers: +6.0% yoy; stable excl.M2M customers

RGUs: +0.5% yoy; Broadband RGUs: +1.9% yoy, Advanced RGUs: +13.8% yoy

ARPL operative +4.4% yoy in CCY

ARPU operative +4.0% yoy in CCY

4 Results presentation: Q2 2024

Group revenues

otherwise stated, all amounts in EUR mn

Q2 2024

Q2 2023

H1 2024

H1 2023

Service revenues

1,124

1,082

+3.9%

2,195

2,120

+3.5%

Equipment revenues

168

194

-13.4%

344

389

-11.6%

Other operating income

24

23

+3.3%

44

47

-6.5%

Total revenues

1,316

1,299

+1.3%

2,583

2,557

+1.0%

Service revenue growth drivers, YTD

Total revenue growth - Group and International, YTD

+3.5%

+4.6%

+4.3%

2,194.9

2,120.2

in CCY

+2.4%

-0.5%

+8.9%

+5.8%

in CCY

+2.5%

H1 2023 Mobile

Cubes BB + TV Fixed

IC

Sol &

VR / NR Other H1 2024

Core

Voice

Con

Rev.

Austria

International

Bulgaria

Croatia

Belarus

Other*

-7.8%

yoy performance

* Incl. corporate and eliminations

5 Results presentation: Q2 2024

Segment Austria in Q2 2024

Key Points

  • Total revenues decrease: Q2 2023 profited from large ICT deals (visible in lower equipment and solutions & conn. revenues)
  • Service revenue growth in mobile and fixed profiting from value protecting measures; overcompensating losses in IC and voice

Operations

  • Value-protectingmeasures +7.8% (as of Apr. 1st 24)
  • Mobile: lower total subscriber number driven by voice only customers; net adds positive in Q2
  • Fixed: RGU loss due to voice, gains in high-bandwidth BB RGUs not fully compensate for low-bandwidth BB RGU loss

Core OPEX increase: higher workforce costs (collective bargaining agreement but lower FTEs), higher network maintenance and product- related costs but lower electricity costs

One-offs in OPEX: net total of EUR 3 mn related to provisions in Q2 2024

6 Results presentation: Q2 2024

AT Service revenues (EUR mn)

+0.4%

+0.9% w/o IB*

620622

3937

Q2 2023

Q2 2024

AT EBITDA (EUR mn)

+1.1%

270272

Q2 2023

Q2 2024

International Business*

comprising transit and other interconnection, solutions & connectivity) as reported in Austria, shown separately as it is not reflecting Austrian business performance

International segments in Q2 2024

Highlights

Total revenues grew driven by higher service revenues clearly overcompensating the losses in equipment revenues.

  • Bulgaria: Strong growth in fixed, mobile and ICT: upselling, value- protecting measures, TV and broadband RGU increase
  • Croatia: Value-protecting measures in June 2024, mobile subs and TV RGU growth; focus on monetizing higher network investments of PY
  • Belarus: Dividend restrictions as of Q2 2024; higher service revenues in LCY, solid traction in fixed-line service revenues, EBITDA suffers from negative one-off
  • Serbia: Service revenue growth supported by pricing measures in March. Postpaid share increased further
  • Slovenia: Fierce competition, decline in fixed and mobile service revenues. Core OPEX improved, driven by advertising and electricity
  • N.Macedonia: Strong service revenue increase both in retail mobile & retail fixed translated in double-digit EBITDA growth

Revenues and EBITDA (EUR mn)

+4.3%

+5.4%

191

+10.6%

(BYN)

+10.7%

139

-2.9%

+1.0%

+32.2%

106

88

clean*

59

-50.8%

24

Bulgaria

Croatia

Belarus

+5.3%

97 +21.5%

-4.6%

+5.0%

38

57 -1.8%

38

+16.1%

13

14

Serbia

Slovenia

North

Macedonia

* excl. negative FX effects and

EUR 24 mn negative one-off effect in Q2 2024 in Belarus

7 Results presentation: Q2 2024

P&L

Unless otherwise stated, all amounts in EUR mn

Q2 2024

Q2 2023

H1 2024

H1 2023

Revenues

1,316

1,299

+1.3%

2,583

2,557

+1.0%

OPEX

(812)

(813)

-0.2%

(1,624)

(1,635)

-0.6%

Restructuring

(18)

(17)

+6.9%

(39)

(38)

2.6%

EBITDA

504

486

+3.8%

959

922

+4.0%

EBITDA margin

38.3%

37.4%

+0.9pp

37.1%

36.1%

+1.0pp

before restructuring

522

503

+3.9%

998

960

+3.9%

Margin

39.7%

38.7%

+1.0pp

38.6%

37.5%

+1.1pp

FX effects

1

-

n.m.

9

-

n.m.

one-off effects

21

-

n.m.

21

-

n.m.

EBITDA underlying

544

503

8.3%

1,028

960

7.1%

Margin

41.1%

38.7%

+2.4pp

39.4%

37.5%

+1.8pp

after leases

400

436

-8.3%

753

825

-8.7%

Margin

30.4%

33.6%

-3.2pp

29.1%

32.3%

-3.1pp

EBIT

218

241

-9.3%

396

436

-9.1%

EBIT margin

16.6%

18.5%

-1.9pp

15.3%

17.0%

-1.7pp

Financial result

(23)

(27)

-12.9%

(49)

(48)

2.9%

Income taxes

(49)

(48)

1.8%

(83)

(86)

-4.0%

Net result

146

166

-11.9%

263

301

-12.5%

Net margin

11.1%

12.8%

-1.7pp

10.2%

11.8%

-1.6pp

Q2 2024 - below EBITDA

EBIT declined due to D&A:

  • EUR 43.8 mn higher D&A, mainly due to rights of use assets after tower spin- off
  • D&A on a proforma basis increased by EUR 17 mn

Financial result: lower interest on financial liabilities offset higher interest expenses for the tower leases

Net result lower, on pro forma* basis above previous year Q2 and H1 by 8.0% and 9.1% respectively

Pro-forma= as if tower business has already been spun-off in comparison period

8 Results presentation: Q2 2024

Free cash flow

Unless otherwise stated, all amounts in EUR mn

Q2 2024

Q2 2023

EBITDA

504

486

3.8%

Restructuring charges, cost of labor

19

18

5.2%

obligations

Lease paid (principal, interest,

(96)

(42)

127.6%

prepayments)

Income taxes paid

(31)

(31)

-0.2%

Net interest paid

4

(7)

n.m.

Change working capital and other changes

(11)

(15)

-25.4%

CAPEX

(247)

(359)

-31.2%

FCF before soc. plans

142

50

183.0%

Social plans new funded

(19)

(20)

-4.3%

Free cash flow

123

30

309.4%

FCF/revenues

9.3%

2.3%

+7.0pp

H1 2024

H1 2023

959

922

4.0%

41

41

1.4%

(193)

(108)

78.9%

(54)

(48)

11.6%

7

(9)

n.m.

(63)

(26)

143.8%

(480)

(606)

-20.8%

217

166

30.5%

(42)

(43)

-2.4%

175

123

42.1%

6.8%

4.8%

+2.0pp

Free Cash Flow in H1 2024 higher

due to

  • substantially lower CAPEX due to savings and lower spectrum payments:
    EUR 38.7 mn in H1 2024 vs EUR 110 mn in H1 2023
  • better operational result
  • higher lease paid
  • unfavorable changes in working capital

Working capital changes:

  • Negative impact from accounts payable (broadband subsidy received in 2023) but
  • lower inventories and accounts receivables

9 Results presentation: Q2 2024

Focus points

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Telekom Austria AG published this content on 16 July 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 July 2024 17:07:04 UTC.