Telekom Austria Ag

Thank you very much. Good morning, everybody. Thanks for joining our Q1 results call. I'm here on the line with our management board. I'm here with our CEO, Alejandro Plata, our Deputy CEO, Thomas Arnoldner, and our CFO, Sonja Weiler. And as usual, they will lead you through the presentation now, and we are happy to take your questions afterwards. Thank you.

Thank you very much, everyone, to join our call. I would like to start giving you the highlights for the Q1 2024. As you can see in the slides, our total revenues grew 0.7%, driven primarily by service revenue, which grew 3.1%. And we also saw a decline of equipment revenues of close to 10% in all markets. When you see the quality of the service revenue growth was basically driven by mobile revenues and solution and connectivities, and as always, negatively impacted by two business that we have been seeing a decline. One is the fixed voice, where we lose revenues every quarter, primarily in Austria, and also by the interconnections revenue, which also is declining business every quarter. In euros, our EBITDA went up 4.2% versus last quarter, 2023. In constant currency, EBITDA grew 5.7%. EBITDA is driven primarily by service revenue growth and compensated negatively by OPEX increases. When you look at our OPEX increases are primarily a consequence of total workforce cost increases due to Salary increases, usually we have a timing issue between when the salaries are increased and when we index our base. Usually we index our base one quarter later than when we start increasing salaries on our employees. In Q1, we acquired Spectrum in Austria. the 26 gigahertz spectrum and some remaining parts of the 3.5 gigahertz spectrum. We would like to confirm our outlook of 3% to 4% revenue growth with an approximate capex of 800 million euro, excluding M&A and spectrum acquisitions. So that's the highlights for the Q1 of this year. If I move to the next slide, you can see Our customer-related information, where we see increases in both, fixed RGUs, especially broadband RGUs, growing 1.8%, out of which advanced RGUs, which we call any customer connected with more than 75 megabits, grew by 15.7%, as we have been sharing in the calls. We continue with our strategy to upsell our base with more speeds, and that has been working quite successfully. Also, our mobile subscriber base grew, this time 5.5%. Bear in mind that without machine-to-machine, our customer base decreased slightly. Both RPL and ARPU grew in cost and currency. close 2% the fixed business and close to 3% the mobile business. If I move to the next slide, you can see our group revenues. As I said before, service revenues up 3%, 3.1 equipment revenues close to 10% down in all markets. You can see it basically a similar trend where customers are choosing more SIM-only tariffs instead of hardware tariffs. We see that across the whole footprint and also negative development in other operating income. In the chart below on your left, you can see that all business lines, as I mentioned before, are growing. Mobile, our Qs or fixed wireless substitution business is growing. Broadband and TV, all our B2B businesses are also growing. And you have two reds that I mentioned in the highlights. One is the fixed voice where we see the decline in Austria. both in customers and in minutes of use and also interconnection which had a big impact in this quarter. This is regulated and unregulated transit business. If I move to the next slide, you can see a little bit more color on the segment Austria. Service revenues grew 1.7% in Austria, 2.6% if we remove this transit business that is reported in Austria. Service revenue growth would have been 2.6%. They are part of a transit business that is not related actually to the Austrian business that is reported in Austria. We will give you more transparency moving forward on that so you can see how much of these revenues are not related to Austria, but reported in Austria. Like we do transit minutes between, I don't know, Germany and Turkey, for example. So we will give you more transparency so you can see how much the actual Austrian business is growing. We have acquired in the quarter another IT, ICT company called NTT Austria. We see a great opportunity to cross an upsell that customer base. This acquisition was announced a couple of weeks ago. We are planning and we are in the middle of the execution of our indexation policy for Austria, what we call this value protecting measurements. So we're planning to increase our prices by 7.8% as actually at the beginning of this month. So all customers affected has been informed already, and we are in the process of sending the first invoices with the new prices. with a 7.8% increase. This is not affecting the whole base, just a part of the customer base. We are working in trying to optimize certain market segments where we are not yet happy with our performance. These are more sub-segments of the market. For example, I think we have a good opportunity to increase the penetration in our fixed network when we have more than 300 megabits available in the network. I mean, we still have a low utilization of that network. So we are putting a lot of focus to increase the penetration on that segment. And of course, a lot of focus on efficiencies and OPEX due to primarily a higher workforce. We need to keep on optimizing our workforce. EBITDA in Austria in the quarter grew close to 2%, 1.8%. Keep in mind, as I said on the highlights, that we have usually salary increases start at the beginning of the year, where indexation starts in April. So we have one quarter where we have higher costs with lower revenues. If I move to the next slide, in our international segment, the performance remains very solid in all markets. You see very good performance in Croatia, for example, with 7% revenue growth and 22% EBITDA growth. We will index again the base this year. So we are quite happy with the performance in primarily all the CEE markets. Challenging market is Slovenia, where it is the most competitive market where we operate. You can see that our revenues and EBITDA has been declining in Q1, driven primarily by competition, where we have to keep aggressive pricing in the market in order to keep our base stable. Having said that, I would like to hand over now to Sonia, who is going to drive us a little bit more in details and give us more color on the performance on Q1. Thank you, Sonia.

Thank you, Alejandro. As Alejandro elaborated a little bit more on the GP and DL, above the ABT, I will focus on the P&L below EBITDA, where we see the major effects on tower spin-off compared to last year. One of the biggest effects that we see is the increase of depreciation and amortization that's affected by the rights of use of assets increased due to the spin-off last year in September. Therefore, the EBITDA, the EBIT is lower compared to the previous year. by 17 million, resulting in 178 million for the first quarter. On a pro forma basis, that's important, we increased the depreciation and amortization by 8 million, mainly driven by the effects in Bulgaria in the depreciation and amortization. Coming to the financial results, we show a negative effect of 26 million this quarter compared to 21 million last year's quarter. That affects two major effects we show here. One is the higher interest expense due to the leases also related to the Star spin-off. And secondly, a positive effect due to our lower financial debt, we show lower interest rate expenses, interest expenses. Another effect that's positively impacting the net income is the lower taxes due to a lower taxable income that we show on the first quarter. Therefore, we show on a reported basis a reduction of the net income, the net result of 117 million, whereas on a performer basis, we would show a higher net result due to the effects of the tower that increases by nearly 11% on the quarter-on-quarter comparison. Going to the next page on the cash flow, We show for the first quarter a lower Q1 cash flow at the amount of €52 million. There are primarily two major effects. One effect is directly related to a higher payment of leases due to the tower spin-off. And the second effect, coming from the working capital, there are two major effects. one resulting from an unfavorable time shift in the accounts receivable, as the Good Friday is a banking holiday and therefore an increase in receivables. And last year we received Fiverr subsidies in Q1, that we did not receive this year, but we are building the fiber rollout and therefore showing a negative impact on the free cash flow that is at a level of 52 million in comparison to last year quarter in 93 million euro. And therefore, thank you, and I will hand over to Thomas for the focus points.