Telekom Austria Ag

Good morning, everyone. Thank you for joining us for our Q2 2025 results call. We are pleased to have with us our CEO, Alejandro Plata, our Deputy CEO, Thomas Arnoldner, and our CFO, Sonja Wallner. They will walk you through the key highlights of the second quarter and the first half and provide an outlook for the remainder of the year. As always, we'll be happy to take your questions after the presentation. Thank you. With that, let me hand over to Alejandro.

Thank you, Sanne, and good morning, everyone. Thank you for joining us this morning. As you have seen, yesterday we presented Q2 results with mixed feelings, to be totally honest. So total revenues went up 4.1%, which is pretty solid and above our four-year guidance. So we are confident on the total revenue growth. development mostly coming from Eastern European operations that are performing all in all pretty well. And service revenue went up close to 2%. Also, the CEE fully compensated the decline in Austria. You will see more details on Austria later where the market conditions are pretty tough. But I'm very happy with the development of the team instead of customer acquisition, and that we're doing. I will share a little bit more later. Evita, the Evita that really mattered was declining close to 1%. You have to remember that last year we had a special negative one-off due to the penalty in Belarus, and that's why we are reporting plus 3.4%. Remember that that penalty at the end of that provision of that penalty was reverted at the end of last year. So in the year 2024 had actually no impact. But when you compare quarter by quarter through the year, it will have. So a positive impact this quarter, a negative impact in Q4. And what we are very proud is that we are generating very solid cash flow with 333 million euros, which is close to, 100% more than what we did last year. So very solid cash flow generation driven by three things. Slightly lower CapEx execution, better data cash, and a lot of activities around how to optimize utilization of working capital that is providing some boost on free cash flow. On the market environment, We see a very difficult situation in Austria with a lot of competition in a very weak economy. Thomas will give you a bit more color on that situation. And we took the decision last year, at the end of last year, to increase our investments in the market. We see an opportunity to grow customer base faster since the market is so weak and we have so much Financial flexibility to invest, we decided to invest. Part of that investment, you see it as a negative EBITDA development in Q2. We increased advertisement, we increased commissions, we increased subsidies. You will see more details moving forward. So it was a conscious decision that we did. And I think I'm at least very happy on the results that we have seen. Finally, the regulator published the rules for the option. Let's see if it happens this year or not. We are not totally sure yet, but it's good because we desperately need more spectrum in service, so we are happy that it's moving forward. And as we have presented to you many times, we are very much focused on our ICT business, and we're happy to report that in the second quarter grew 11% a week in Austria due to the economical situation, but very strong in CE with a growth of close to 30%. We confirm our guidance Our run rate in the first half of the year is roughly four. And also a spectrum, CapEx excluded a spectrum of close to 800 million euro. If I move to the next slide, you see customer development that has been performing very well. And on the right side, you see mobile postage. We added excluded end-to-end. We added 330,000 new postage. customers, which is a very strong growth. 30,000 in Austria, where we have been focusing a lot to grow our post-paid base. We are the market leader, but I still think that we can grow smartly in this segment. And now we show it with 30,000 positive stats in Austria. And CE, the growth was 300,000, which is also very impressive. in post-paid, I mean, I'm not talking about prepaid here, post-paid customers. And on top of that, we grew more than 2 million new subscribers in IoT. IoT business is growing also very nicely across the group. On the internet, or internet at home, as we call it, where you see broadband, where we have a network, and queues where we don't have a network, basically, You see that even though we had a decline of 35, 37,000 broadband customers in Austria, we managed to grow cubes by 27. And you will see throughout the year that we will push even more migrations from low broadband speed customers in Austria to cubes. So we are actively migrating that base. Unfortunately, Thomas will share more with us later, but we don't see that the environment is set up in Austria to invest a lot more in fiber. So we think that migrating these customers to queues is a much better strategy for us. You know, we have been always reluctant of accelerating fiber in the past because of this. Now you see the evidence. It's too expensive to build fiber in Austria. The uptake is very low, and the outputs are relatively low when we have so much competition And on the east, you see a very good performance in both, so almost 160,000 customers added versus previous quarter last year, driven by BBI, but also in cubes with 53,000. So we are very pleased with the commercial performance, not only in Ostia, but in the rest of the market. Having said that, I will hand over to Sonia, who is going to drive us through more details on our financial numbers.

Thank you for your introduction. Digging a little bit deeper into the financial results of Q2, you see that you had already that our total revenues grew by 4.1% to 1.37 billion in the second quarter. This was mainly driven by equipment revenues and coming also from our international operations. Going to the service revenues that we grew by 1.8% in the last quarter to 1.145 billion in quarter two, you see the strong growth of international operations, especially pointing out Belarus with an excellent performance and Croatia and Bulgaria with a strong growth in this quarter. Austria has already seen a little bit of headwinds also in the service revenues due to commercial and macroeconomic situation as Alejandro pointed out before. Coming to the GDPR. already said that last year Q2 was affected by the one-off provision of sanity. You see that we grow by 3.4, reflecting that only with decreased EBITDA growth by 0.8%. Also here, you see strong operation growth in the international operations and weaker of megabit growth in the Austrian operations. Going to the next page with the sales revenue growth, you see that we were able to grow nearly all segments that we show from mobile core cubes, broadband and TV, and solution and connectivity, whereas the operations that said Bulgaria, Belarus, and Croatia brought a higher growth there, and you see that we have headwinds in fixed-voice higher and lower interconnection as the regulation was figured out last time. That means that we were able to grow by 58 million with 2.6% from quarter-on-quarter view this year. Going to the next page, we see the impacts of the EBITDA growth, and it says revenue contribution shows a good part of the growth. And as already said, we decided last year to start investing into the market. This is represented on one hand side in the equipment margin and on the second side where we still show a decline of OPEX, but doing restructuring measures and efficiency gains activities that could more than compensate all the investments that we did in the market investment. All this resulted in an increase of 3% to 3% by 34 million from 959 to 999 million in the first half of the year. Going to the next page with the free cash flow, that showed a very strong development, and as I pointed out, that comes from one hand side, the better operational performance, and the second side, lower capex operationally, but also coming from the frequency, and the good performance and lower need for working capital that were able to offset the needs for leases paid. This is great. What has been done in the working capital, we see a good development on both sides, receivables and payables. And as said already before, we were investing into the markets. That's also shown in the use of working capital for installment sales that were able to be compensated by a better performance in the past. Having said that, I would like to hand over to Thomas for the next bit of time.