Telekom Austria Ag

Good morning, everybody, and thank you, operator. Thanks for joining our call on the Q4 and full year results 2024. I'm here with our management. I'm here with our CEO, Alejandro Platzer, our deputy CEO, Thomas Arnoldner, and our CFO, Sonja Weimer. And as usual, they will lead you through the presentation now, and we are happy to take your questions afterwards in the Q&A sessions. Thank you.

Thank you very much. Good morning to everyone. Let us drive you through some of our Q4 and fall year results, as you can see in the slide. We had a strong end of the year, showing 4% service revenue growth, driven primarily by our international OCEE operations. Also, you have seen strong total revenues. As we were anticipating in different calls, we were working in several big ICT business. Some of them we managed to close in 24. Some we hoped that we would close in 25. EBITDA also show a strong performance with a growth of 7.1%, as well as free cash flow coming up to 575 million euros for the full year, plus 62% versus 2023. Despite the increase of leases, as you know, we had a spin-off of our towers in 2023, which reflects an increase of leases in the year, of course, But nevertheless, we managed to grow free cash flow by 62%. On the market, we see a very strong equipment sales in Bulgaria, Belarus, and Austria. That's something that we were working on, especially in Austria. We were very active in the Christmas campaigns with more hardware offers. We adjusted our subsidies in several parts of the portfolio since we saw an opportunity to push hardware sales and also to have a better platform on the subscriber base, as you will see later, and also Bulgaria primarily driven by large ICT deals that were reported in the quarter. We managed also to revert the penalty that we got in Belarus in Q2, if I remember correctly, So we had this negative one-off in Q2 due to this administrative penalty in Belarus that we managed to negotiate out and revert the provision in Q4. And this is basically the penalty was removed and we have committed to do certain investments as a way of compensating. We have been working in 24 to make the last of our markets fully convergent. So now we're ready in Serbia to launch fixed services in a combination of wholesale or MTS network as building our own private network. And so we expect very much to see that, especially after today's news that looks like SBB is finally being sold to PPS. So we will have two strong convergent competitors in Serbia So it's even more important that we also build a strong convergent proposition in the market. And yeah, still very high rated in EST, as you know, it's a very important and focus areas that we follow. So still very highly rated. It's very important for us, not only what we do, but how we do it. So this is critical for us. For the outlook, we see a guidance of total revenues between 2% to 3%. Lower inflation, of course, we see all over the place. So I think that is going to be reflected in a lower indexation and therefore slightly lower revenue growth that we were anticipating before. And also we are adjusting CAPEX to 850 million, basically following the same logic. lower inflation has lower indexation, which is slightly lower revenue guidance, but also we see the same impact on CapEx with less indexation in CapEx costs. We see clearly in CPEs that two years ago, CPE prices went crazy, especially with all the issues that probably you remember with the lack of chipsets, and it was crazy. Now we see exactly the opposite, very competitive in CPE markets, prices going down dramatically. And CPEC investment is a very significant part of our capex. So to give you an example, but also in other capex positions, we see that the price pressure is coming down and we are managing to negotiate much better conditions than we were planning to due to lower inflation. And now with dividend proposal from the management board to the board and then the board probably to ACM, is to increase dividends from 36 cents to 40 cents, as we have been doing the last couple of years. Moving to customer development, we are pretty satisfied with the development. I'm very satisfied with what the Austrian team is doing, especially at the end of the year, seeing opportunities to tactically invest in in subsidies in certain segments where we think that we can be very competitive and so i'm very proud of what the ocean team has managed to do especially the last quarter was very very well executed especially you know there is a little bit of pressure on the low value segment so differentiating ourselves in the high value is very important for us and we have seen very good customer development especially in residential postage which was focus area that the team had in Q4. Overall, you saw our mobile subscriber base going up 4.7%, 7.4%. And also you can see our broadband base also increasing with a special focus in what we call advanced broadband, which is higher speeds. That's what is driven basically RPL and revenues, especially in Austria. When you look at the results in Austria, this Still, it's a strategy that, even though we have been doing this for many, many years, we still manage to monetize pretty well upselling the base. Not only now on speed, we are managing to upsell the base, as you will see a little bit later, with other products. We were focusing in speed first, then we started to focus on OTT content, and now we are focusing more and more in other things like cybersecurity for the residential segment or insurance. You will see more links. Moving to the next one, you see the full year numbers here. Your total service revenues going up 3.5% on an annual basis. Equipment revenue slump year over year. And despite this big push that we did in Q4, as you can see, with close to 24% increase in equipment revenues driven by both phones, but also ICT. As you know, ICT is becoming more and more important business. And we're focusing more and more on that because we see a great potential moving forward on ICT business. And so total revenues were 7.8 in the quarter and 3.1% in the reported view. Of course, in performance, a little bit higher, but it's neglected about the difference. The components you see, all segments are growing. Mobile cores is growing. Qs or FMAs is growing. Broadband and TV is growing. We have only two areas that are not growing. One is fixed voice driven primarily by Austria, where we have most of the revenues as well. And interconnection that is mostly regulated tariffs coming from the EU. That was a big cut, if I remember correctly, close to 50% this year versus 2023. And when you look on the segments geographical segments, you see still a very strong growth in our international or CEE business with a growth of 7% in cost and currency and flattish in Austria. But nevertheless, I think that due to the situation of the economy in Austria, I think the team did a very good job in 2024 where we focused more in having a growing and stable customer base, especially in the mobile segment. With that, I will deep dive slightly more in Austria. As I said before, you see 10,000 NetApps in mobile, very important for us. We see a little bit decline in B2B, so basically some companies are struggling, but a very good performance in residential postpaid. Also, the strategy that we are pursuing on fixed is working pretty well. We lose a little bit of RGUs. But we fully compensate those RGUs on revenues by upselling the base, as I said before, in speed, but not only, more and more focusing on cyber solutions for the residential segment as well as some financial services. If we go to the next one and focus on CEE, you see the international segment, strong growth in all markets. You see Bulgaria with... Revenues up 20%, driven again by ICT. Evita also very strong. You see Croatia, very good results. We were focusing a lot in 24 in stabilizing the fixed platform where we did a lot of fiber investments and we were not very happy with the uptake, but at the end of the year, we saw a much better performance there. Belarus, of course, we look at constant currency numbers, very solid. Q4 is a bit affected by the reversal of the penalty. That's why you see 67%. You need to actually remove the reversal of the penalty to see the true operational performance, which is very solid nevertheless. Serbia, also very good performance in the markets, as you see. And the challenging market is Slovenia. You see revenues decline in Q4. And Evita, you see a 24%, but that is affected by a one-off of 2023. North Macedonia, our smallest market, but nevertheless, very solid performance in the quarter and throughout the year. We are the leaders in mobile and doing a very good job in CRIF. Having said this, I will hand over to Sonia, who will drive us a little bit more details on the P&L.

Hello, also from my side to our conference call. I'll focus on the Q4. Alejandro already mentioned Q4 was a very strong quarter in regards of revenue delivery. Coming to the OPEX, you see a strong increase, but also mentioned already by Alejandro, we had one-offs. And the equipment sales that we did, or the ICT sales that we did, are reported in the OPEX, and this OPEX increased by 63 million. Coming now to the EBITDA, I think I mentioned also that we had a couple of one-offs in 23 and 24. You see a strong EBITDA, including one-off performance of nearly 10%, 9.6% increase in the last quarter. Also, EBITS reported a strong growth despite the depreciation amortization, the increase that we were facing, and all these increases shows a 5% increase in the EBITS, and also net results in the Q4 was very strong with an increase of 27.5%. Coming for the full year, that I would like to mention, especially below the EBIT, there are effects. You see the development of the EBIT that's heavily driven by increase due to the dollar spin-off, the depreciation monetization of the dollar spin-off. And the same is true also for the net results where we added the pro forma version. That means that we show the net result of 23 as if the dollar spun off. had already happened before 2023. And here we show also a very strong net result of 12.5% increase year over year for the entire year. Let's switch to the free cash flow performance. I will focus here especially on the full year, where you see a development or a free cash flow of 575 million for the full year. That's a strong increase in regards to 2023. And the most important drivers were, on one hand side, a challenging working capital development, but heavily driven by the good revenue performance of the last quarter. As mentioned, goods and big customer projects that were able to close within December and therefore high receivables. And one development that comes out of 2023, whereas in Austria the subsidy for the broadband fallout was accounted for and therefore this negative impact because of that. Positive impacts that we were able to manage is that despite to the lease payments due to this power spin-off in Q3 2023, we had a better version of results that we were able to transform into the free cash flow, had lower topics, especially for frequencies, and were able to pay lower interest in income tax in comparison to 2023. And then, with that, I'm handing over for the focus topics to Thomas.