Hellenic Telecommunications Organization S.A.

Ladies and gentlemen, thank you for standing by. I am Gailie, your course call operator. Welcome and thank you for joining Viotek conference call and live webcast to present and discuss the second quarter and six months 2026 financial results. All participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mr. Kostas Nebis, CEO, OTEC Group, Mr. Babis Mazarakis, Chief Financial Officer, Mr. Panayiotis Gavrilidis, Chief Marketing Officer, Consumer Segment, OTEC Group, and Mr. Evrikos Sarsentis, Head of IR and M&A. Mr. Nebis, you may proceed.

Thank you very much. And welcome, everyone. Thank you for joining us today for our quarter two results review of this financial year. Our first half performance demonstrates continued progress towards our strategic priorities and brings us closer to our 2026 growth ambition. Adjusting for the zero margin impact of the gradual wind down of the international wholesale business, our revenues continue to grow strongly. Our EBDA increased once again and accelerated slightly, supported by solid execution across core business and the ongoing transformation of our business model. This positive momentum is underpinned by the strength of our financial profile and market position. OTEL's recent upgrade to A- by Standard & Poor's global ratings, making us the only company in Greece rated in the A category. It is a clear recognition of our resilience and further strengths, confidence in our long-term prospects. Let me now turn to the operational drivers behind this performance. Starting with the fixed segment, where despite intense competitive dynamics, we remain in the positive territory, with sustained momentum across our FTTH, fixed wireless access, pay TV, and enhanced data communication services offered to our B2B customers. FTTH's adoption remains strong. We registered another quarter of record high customer additions, both in retail and wholesale. Demonstrating the growing utilization of our infrastructure. At the same time, we are making good progress with the advanced in-home connectivity solutions adoption, optimizing our customers' Wi-Fi experience at home and in the office, while further differentiating our offering against our competitors. We continue to expand our network and lead the market in fiber availability. both in urban areas and in semi-urban and rural regions through our UFPB deployment. This progress reinforces our broader vision of advancing Greece's digital transformation with measurements showing continual improvement in the country's fixed broadband speeds. Next to our FTTH, we are also particularly pleased with the ongoing momentum of our fixed wireless product lineup. Our 5G Wi-Fi Fixed Wireless Access Base has just crossed the 100,000 customers mark, addressing customer needs for higher speeds where FTTH is not yet available, allowing us to defend our broadband base against alternative technologies. In Pay TV, we once again delivered robust revenue growth, while also achieving positive customer additions in the quarter that typically makes a small contribution to the annual performance. Turning now to our mobile business, we sustained a positive trajectory driven by continuing strong customer migration from prepaid to postpaid plans and increasing adoption of higher value data services. As a result, overall base ARPU continues to increase. Once again, postpaid customer growth reached record levels with quarterly net additions at the highest in more than 17 years, while The still relatively high share of prepaid customers compared to the broader European market highlights further potential for future growth. Our long-standing commitment to network excellence continues to differentiate us in the market. Rookless recognition for our mobile network for the 10th consecutive year is a historic achievement and a testament to our sustained investments in network excellence. Importantly, according to Oukla, we are the only operator worldwide to have outperformed the competition for 10 consecutive years, consistently delivering superior experience to our customers. This distinction adds to eight major recognitions received during this year by leading industry benchmarks, including both Oukla and OpenSignal. Let me now say a few words about our ICT and system solution business. We have once again achieved strong double-digit growth in this quarter. As we move into the second half of the year, results will reflect the gradual termination of the RRF deployment cycle and a more demanding comparison base following last year's peak implementation phase. Nevertheless, we remain confident in delivering solid growth for the full year while building up a very solid pipeline for 2027. including both national and international projects where we are expanding our presence in new organizations like NATO, like the UN and the European Food Safety Authority among others allowing us to diversify a big part of our revenues. We are in parallel expanding our presence in high growth areas such as cloud, cyber security and AI having already introduced A new advanced cloud proposition including GPU as a service and implementing the first set of AI agents for procurement, finance, HR processes supporting our B2B customers in their AI transformation journey setting another growth foundation for the future. Data and AI are becoming an increasingly important part of our agenda and a key enabler of our internal transformation driving greater efficiencies. We are doubling down on the software development lifecycle, our network management, our customer service introducing conversational agents, the productivity of our frontliners with a number of AI agents, while progressively shifting our internal processes towards AI augmented solutions, with the ambition to evolve into a digital first and over time an AI native company. While at the same time, we are embedding AI into our commercial offerings, to deliver richer and more personalized customer experiences, strengthening our value proposition to support future growth and further differentiate us in the market. One of these initiatives is around our core network communication services like voice, bringing the AI deep into our core network. With initial trials and deployments of services like AI calling expected in the next few months We are laying the foundations for the reinvention, I would say, of the voice calling experience in an AI world. This broader transformation is also reflected in how we position ourselves in the market and how we bring the full strength of our group to Greece. This year, we are taking our brand transformation one step further, evolving from Cosmote Telecom to Telecom by leveraging the strength of the world's number one telco brand. We are strengthening our market presence and further differentiating ourselves versus the competition. Taken together, these results reflect the strength of our strategic direction and the quality of our execution. Our solid core performance, network excellence, digital and value-added services portfolio, and continued transformation of our operating model to unlock further cost efficiencies are the strengths that will continue to support our growth and our market leadership. Looking ahead, we remain firmly focused on our vision and committed to delivering superior value to our customers and shareholders while achieving our 2026 targets. Our priorities are clear to keep investing in the networks and platforms and digital capabilities that will define the next phase of growth for OTE, for our customers and for Greece's AI-ready economy. I will hand over to Babis now to provide more details on this last quarter.

Thank you, Kostas, and welcome to everyone, for me as well. Let me now take you through our financial performance of the quarter. Total revenues, adjusting for the anticipated phase-out of the international for-sale business, however, with zero margin effect, increased by 8% year-on-year, driven by strong system solutions, solid growth in mobile and resilient fixed retail business. Fixed retail service revenues, including data communications, increased by 1.4% year on year, driven by continued customer migration to FTTH alongside the solid performance of our TV and fixed wireless access businesses. Data communications continue to support the segment, benefiting from the growing adoption of next-generation connectivity solutions. In FTTH, Net additions reached a new high record of 62,000, bringing our customer base to 687,000. This now represents 29% of our broadband base, while continued customer migration and solid wholesale demand further increased the utilization of our network to 42%. We remain on track with our rollout, reaching now 2.2 million homes passed and targeting around 2.4 million by ERM. And these numbers are based on the view of home past with an active line and include the continued expansion of our UFV network, reaching now a footprint of a bit over 150,000 homes past and around 50,000 commercially available that should support FTTH adoption, particularly in rural and semi-rural areas. Fixed wireless access maintains its stock momentum with 19,000 net additions in the portal, bringing the total subscriber base to almost 120,000. As Kostas mentioned, the key element here is our advanced 5G Wi-Fi proposition that is based on our expanded 5G Plus network Exceeding, as we speak, 100,000 customers. Covering underserved areas, FWA continues to strengthen our broadband proposition, supporting growth and customer retention. Our pay-to-be businesses continued its solid momentum, delivering another quarter of strong revenue growth in the high single-digit range. Customer performance also remained encouraging With net additions, once again positive, plus 1,000, despite the seasonally softer quarter, as key sporting events concluded during the period. Stricter anti-piracy measures, the removal of the paid EV tax and high-quality content continue to drive growth in this segment. Turning now to our mobile business, service revenues continue to grow, increasing by 2.3% on the back of strong post-paid momentum and the going adoption of higher value propositions. As expected, the year-on-year growth rate reflects the normalization of last year's minimum prepaid recharge adjustment. Postpaid performance remained solid, delivering record net additions of 62,000 and a record 8% year-on-year subscriber growth. Continuing prepaid to postpaid migration, Together with the improving customer mix led to 3% increase in blended output. Mobile average data usage remained strong, reaching 21 GB per user per month, up 20% year-on-year. At the same time, 5G device penetration increased by 10% points, now to 50% of our active customer base, providing a solid foundation for the demand for higher value data services. A critical neighbor of our mobile growth continues to be our network leadership, which remains a key differentiator factor. Our 5G coverage now exceeds 99% and 5G plus coverage has reached approximately 84%. As Konstant pointed out, two days ago we achieved a historical acquisition for 10 years in a row for our network excellence. Other revenues, excluding data comps, increased by 31.2%, driven by another strong quarter in system solutions, increasing by 52.1% year-on-year, as demand remained robust across both public and private sectors. I believe Kostas provided a comprehensive view of this business performance and gave us strong confidence in the ability to deliver solid growth for the full year while building a robust pipeline for 2027 across both national and international projects. Turning now to wholesale. The revenue decline primarily reflects the planned and announced phase-out of zero-margin international transit activities, as already communicated also in our previous calls. The impact in the quarter was €60 million and will continue to weigh on revenues through 2026 and beginning of 2027. On the national side, Thank you very much. Adjusted TPTA after leases increased by 3% in the quarter, with margin improving above 40%, namely at 40.1%. This reflects continued service revenue growth, higher other operating income, mainly reflecting approximately 3 million from corporate sales, and ongoing cost efficiencies. Personal expenses continue to decline, mainly supported by voluntary exit schemes programs. Mining expenses were also down in the quarter by over 7%, normalizing as expected the seasonal increase we saw in the previous quarters. Our transformation program continues to deliver structural improvements as reflected in the declining ratio of indirect costs to service revenues down to 28% from 31% a year ago. At the same time, we continue to expand the use of our digital channels with e-sales, digital payments, and top-ups reaching 36%, 43%, and 53%, respectively. As a result, we remain firmly on track to deliver the 3% EBITDA growth of what we have guided so far for this year. Finally, let me touch on CapEx and Fricas Flow. CapEx spending amounts about 157 million euros, down 7.7% yearly, mainly deflecting lower TV content outflows in the quarter. We continue to expect full-year capital expenditure of approximately 600 million euros as we invest in our key strategic priorities, notably the expansion of our FTPH footprint and the rollout of our 5G standalone network. These investments will support both RFQPAs and FWA propositions. Pre-cash flow after leases amounted to 150 million in the quarter compared to 161 million a year ago. This year-on-year difference primarily reflects certain timing difference of income tax payments of the previous two quarters. The prior year quarter benefited from a one-off tax refund following the absorption of Cosmote in Tote, which was subsequently offset through high-end tax payments in the following period. We reiterate our fricasse flow guidance as we expect trends to unwind during the second half of the year. The important fricasse flow, as denied from our financial statements, is expected to be around 750 million euros and adjusting for one of items at between 570 to 580 million euros. At this point, operator, we are now available to take any further clarification questions. Thank you.