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Telekom Austria Group: Operational Success in a Challenging Environment
VIENNA, August 17, 2011/PRNewswire/ --
- Group-wide growth in mobile communication and data traffic
- Further increase in customer numbers in the Austrian fixed net
business
- Strong earnings performance in Slovenia and the Republics of
Serbia and of Macedonia
- Austrian subsidiary A1 records market success with convergent
offerings
- Acquisition of cable network provider B.net in Croatia
- Decline in Group revenues by 2.9% and in Group EBITDA comparable
by 7.8% mainly attributable to currency translation, competition and
regulation
- Net income still negative in the first half of 2011 due to
restructuring charges totaling EUR 218.6 million
- Revised outlook due to foreign exchange developments
Overview of Key Financials: Telekom Austria Group in the First Half of
2011
Key Financial Figures
in EUR million 1-6 M 2011 1-6 M 2010 +/- in %
Group revenues 2,227.3 2,294.7 -2.9%
EBITDA comparable 777.6 843.4 -7.8%
Net income -59.2 159.9 -
Capital expenditures 277.1 296.5 -6.5%
Employees (as of end of June 2011) 17,032 16,530 3.0%
In the first half of 2011, the Telekom Austria Group reported
considerable operational success despite challenging economic conditions and
a market environment marked by intense competition and strong regulation.
Against this backdrop, the Group succeeded in increasing its mobile customer
base as well as total data traffic. In Austria, following the turnaround in
the fixed net business, there was a further increase in fixed net access
lines. The rebranding of the new domestic subsidiary, A1, in June 2011
following the merger of the Austrian fixed net and mobile communication
operations showed significant market success: in July 2011, the company's
convergent product bundles exceeded the one-million customer mark.
In addition, the Group's convergence strategy has proved successful
beyond Austrian borders: in Bulgaria, the Telekom Austria Group has been the
dynamic provider of innovative converged services since the acquisition of
two fiber optic operators. In Croatia, a total of 120,000 fixed net
customers were acquired in the period under review following the acquisition
of B.net (closing in August 2011, customers not yet reported in the first
half year). The Group's subsidiaries in Slovenia and in the Republics of
Serbia and of Macedonia also recorded significant growth rates, with both
customer numbers and ARPU showing a favorable upward trend. The Belarus
segment also reported customer growth.
"We are proud of our operational success, which we have achieved against
a backdrop of intensive competition and strong economic headwinds. These
results demonstrate once again that our convergence strategy provides a
solid base for our future business," said Hannes Ametsreiter, CEO Telekom
Austria Group.
Telekom Austria Group's Performance in Figures
The Group's operational success could not fully compensate for the
negative impact of the macroeconomic environment and, more specifically, for
the negative effects of intensive competition and persistently intrusive
regulatory measures. Group revenues amounted to EUR 2,227.3 million in the
first half of 2011, a decline of 2.9% or EUR 67.3 million compared to the
same period of the previous year. In the first half of 2011, the negative
impact on revenues of the 54% devaluation of the Belarusian ruble against
the euro as of May 24, 2011 amounted to EUR 43.3 million.
EBITDA comparable fell by 7.8% to EUR 777.6 million in the first half of
2011. This decline of EUR 65.8 million year-on-year is due to regulatory
effects, which account for a drop of EUR 15.6 million, as well as to the
devaluation of the currencies, which accounts for a decline in EBITDA
comparable of EUR 19.0 million. The remaining decrease of EUR 31.3 million
is mainly attributable to a competition-related decline in earnings, which
could only be partly offset by strict cost management.
Personnel expenses to be sustainably disburdened
In the first half of 2011, EBIT declined from EUR 300.5 million to EUR
42.7 million. This drop is mainly attributable to personnel expenses
associated with the restructuring program in Austria of EUR 218.6 million in
the period under review. This cost will ease the burden of personnel costs
over the long term with a positive effect for the consolidated statements of
operations.
Due to the restructuring cost and the negative impact of the devaluation
of the Belarusian ruble, net income turned from EUR 159.9 million in the
first half of 2010 to a net loss of EUR 59.2 million in the first half of
2011.
"The decline in revenues and earnings is in line with expectations. All
in all, we were able to cope quite well with the devaluation of the
Belarusian ruble thanks to the early adoption of effective countermeasures,"
said Hans Tschuden, CFO and Deputy Chairman of the Telekom Austria Group.
Outlook for the Full Year 2011
Against the backdrop of a furthermore challenging economic environment
in all operating markets of the Telekom Austria Group, persisting
competitive pressure and the currency devaluation in Belarus, the Management
Board has adjusted the outlook for the full year 2011. However, this refined
outlook for 2011 reflects the Group's confidence in mitigating the negative
effects mentioned above through clear customer focus, intensified marketing
of innovative products and strict cost management.
For the full year 2011, revenues are expected to amount to approximately
EUR 4.50 billion. EBITDA comparable is anticipated to reach up to EUR 1.55
billion. Operating free cash flow is expected to total up to EUR 800 million
and capital expenditures for the Group as a whole are forecasted to reach
EUR 750 to EUR 800 million. Furthermore, the management confirms a minimum
dividend floor of 76 eurocents per share for the 2011 financial year.
The Telekom Austria Group's Markets in Detail
Austria:
In the period under review, the most outstanding milestone in Austria
was the rebranding of the new domestic operating company A1 Telekom Austria
AG resulting from the merger of mobilkom austria and Telekom Austria the
previous year. Since June 2011, the company's products and services have
been provided from one source under the umbrella brand A1. This rebranding
campaign in connection with the marketing of innovative offerings led to
customer growth and market success: in July 2011, the company's product
bundles exceeded the one-million customer mark. The number of fixed access
lines continued to grow from 2.304 million lines in the first half of 2010
to 2.324 million lines as of June 30, 2011, with fixed net broadband
accounting for 1.216 lines, an increase of 11.6% compared to the same period
of the previous year. The number of A1TV (formerly aonTV) subscribers
increased by 41.1% to more than 174,800. Customer up-take of high-value
broadband offerings counteracted the loss of fixed net voice minutes and
resulted in a slower decline of average revenues per line (ARPL), which
dropped to EUR 32.4 in the period under review compared to EUR 33.1 in the
previous year.
The mobile communication business recorded further customer growth in
the first half of 2011. The mobile customer base increased by 4.2% from
about 5 million subscribers as of June 30, 2010 to about 5.2 million
customers as of June 30, 2011. The number of mobile broadband customers rose
by 19.7% to more than 700,000 subscribers.
Revenues in the Austrian segment declined by 4.5% to 1,469.4 million in
the first six months of 2011 compared to the same period of the previous
year mainly due to regulatory measures, lower mobile tariffs and the
persisting decline in fixed net voice minutes.
In the first half of 2011, EBITDA comparable dropped by 9.8% to EUR
497.8 million mainly due to regulatory measures. Strict cost management
could counteract the pressure on earnings.
Bulgaria:
In the period under review, the Bulgarian segment was marked by opposite
trends. While Mobiltel's customer base increased by 1% to 5.3 million
subscribers and the number of mobile broadband customers more than doubled,
ARPU declined by 10.6% due to intensive competition and lower usage.
Revenues in the Bulgarian segment dropped by 4.8% to EUR 263.9 million.
Mobiltel's revenue figures for the first six months of 2011 also include the
results of two fiber optic operators Megalan AD and Spektrumnet AD, which
were acquired the previous year. Together they account for a total of
101,200 fixed net lines, of which 95,700 are broadband lines.
In the first half 2011, the Bulgarian market was impacted by a laggard
domestic economy and regulatory cuts. In addition, fierce competition
spurred by smaller operators in the market characterized the operational
environment. As a result, EBITDA comparable declined by 9.3% to EUR 135.5
million in the period under review.
Belarus:
In the first half of 2011, the most striking event in Belarus was the
devaluation of the ruble by 54% as of May 24, 2011 as a result of a strong
decline in the level of foreign exchange reserves. Despite this negative
effect, the Belarus subsidiary Velcom was able to increase its mobile
subscriber base by 7.6%, with the number of mobile broadband lines almost
quadrupling. Thanks to the adopted countermeasures - in the form of price
increases and CAPEX reductions - Velcom showed a strong operational
performance in its local currency. Revenues denominated in the local
currency increased by more than 26%, ARPU by 14.3% and EBITDA comparable by
21.3%.
However, due to the devaluation of the Belarusian ruble, this
outstanding performance could not be translated into euro. As a result of
negative currency translation effects, revenues showed an increase of 1.8%
to EUR 162.8 million and EBITDA comparable declined slightly by 2% to EUR
75.4 million in the year under review.
Croatia:
Severe economic headwinds, regulatory and fiscal burdens as well as
fierce competition were the key challenges on the Croatian market in the
period under review. Due to the negative factors mentioned above, ARPU
(average revenue per customer) dropped by 11.5% to EUR 12.8. Against this
backdrop, the Croatian subsidiary, Vipnet, was able to increase its mobile
customer base by 1% to almost 2.1 million subscribers. The number of mobile
broadband customers rose by 17.3 % to over 165,000 subscribers.
Vipnet's revenues decreased by 9.5% to EUR 190.8 million in the first
half of 2011. EBITDA comparable fell by 19.8% to EUR 52.0 million. This
disproportionate decline is mainly attributable to one-off personnel
expenses in connection with a headcount reduction by approximately 10% in
the second quarter 2011.
To address the increasing demand for convergent products in Croatia,
Vipnet acquired the Croatian cable operator B.net in August 2011 for a total
consideration of EUR 93 million. B.net currently provides broadband fixed
net offerings and cable TV services to roughly 120,000 households in
Croatia.
Slovenia:
Slovenia showed a favorable development in the period under review:
customer numbers grew by 6.9% to more than 630,000 and the mobile broadband
customer base rose by 19.4%. Si.mobil's market share slightly increased to
29.9%. ARPU remained almost unchanged at EUR 19.8 compared to the same
period of the previous year. Revenues in the Slovenian segment rose by 10.1%
to EUR 90.0 million in the period under review, with EBITDA comparable
dropping by 0.9% to EUR 22.9 million.
Republic of Serbia:
Vip mobile, the Group's subsidiary in the Republic of Serbia, showed a
favorable performance and positive results in the first half of 2011.
Customer numbers increased by 19.1% to roughly 1.5 million and ARPU rose by
17.4% to EUR 6.9. Revenues grew by 33.6% to EUR 65.6 million driven by
customer growth and higher usage. Furthermore, Vip mobile, for the first
time, was able to make a significant positive contribution of EUR 11.9
million to Group EBITDA.
Republic of Macedonia:
In the Republic of Macedonia, Vip operator, the most recent greenfield
operation of the Group, was able to report strong growth rates. The mobile
customer base rose by 42.9% to over 500,000 subscribers and market share
increased to 22.7% as of June 30, 2011. ARPU improved by 12.7% to EUR 7.1.
Revenues showed a similar favorable development, growing by 58.2% to EUR
24.3 million and EBITDA comparable was break-even.
The current quarterly report is available at
http://www.telekomaustria.com/ir/interim-results.php
About Telekom Austria Group
The Telekom Austria Group, listed on the Vienna Stock Exchange since
November 2000, is the leading telecommunications provider in Central and
Eastern Europe with approx. 22 million customers across its markets of
operations. The Group is currently operating in eight countries: in Austria
(A1), Slovenia (Si.mobil), Croatia (Vipnet), the Republics of Serbia (Vip
mobile) and Macedonia (Vip operator), Bulgaria (Mobiltel), Belarus (Velcom)
and Liechtenstein (mobilkom liechtenstein). The total market of the eight
countries covers about 41 million inhabitants. The Group has more than
17,000 employees, revenues were EUR 4.7 billion as of year-end 2010. Telekom
Austria Group's portfolio encompasses products and services of voice
telephony, broadband Internet, multimedia services, data and IT solutions,
wholesale as well as m-payment solutions. More detailed information is
available at http://www.telekomaustria.com
Contact:
Elisabeth Mattes, Director Corporate Communications and Spokeswoman,
Telekom Austria Group mobile: +43-664-6639187, email:
elisabeth.mattes@telekomaustria.com
Source: Telekom Austria Group
.
Telekom Austria Group: Operational Success in a Challenging Environment
VIENNA, August 17, 2011/PRNewswire/ --
- Group-wide growth in mobile communication and data traffic
- Further increase in customer numbers in the Austrian fixed net
business
- Strong earnings performance in Slovenia and the Republics of
Serbia and of Macedonia
- Austrian subsidiary A1 records market success with convergent
offerings
- Acquisition of cable network provider B.net in Croatia
- Decline in Group revenues by 2.9% and in Group EBITDA comparable
by 7.8% mainly attributable to currency translation, competition and
regulation
- Net income still negative in the first half of 2011 due to
restructuring charges totaling EUR 218.6 million
- Revised outlook due to foreign exchange developments
Overview of Key Financials: Telekom Austria Group in the First Half of
2011
Key Financial Figures
in EUR million 1-6 M 2011 1-6 M 2010 +/- in %
Group revenues 2,227.3 2,294.7 -2.9%
EBITDA comparable 777.6 843.4 -7.8%
Net income -59.2 159.9 -
Capital expenditures 277.1 296.5 -6.5%
Employees (as of end of June 2011) 17,032 16,530 3.0%
In the first half of 2011, the Telekom Austria Group reported
considerable operational success despite challenging economic conditions and
a market environment marked by intense competition and strong regulation.
Against this backdrop, the Group succeeded in increasing its mobile customer
base as well as total data traffic. In Austria, following the turnaround in
the fixed net business, there was a further increase in fixed net access
lines. The rebranding of the new domestic subsidiary, A1, in June 2011
following the merger of the Austrian fixed net and mobile communication
operations showed significant market success: in July 2011, the company's
convergent product bundles exceeded the one-million customer mark.
In addition, the Group's convergence strategy has proved successful
beyond Austrian borders: in Bulgaria, the Telekom Austria Group has been the
dynamic provider of innovative converged services since the acquisition of
two fiber optic operators. In Croatia, a total of 120,000 fixed net
customers were acquired in the period under review following the acquisition
of B.net (closing in August 2011, customers not yet reported in the first
half year). The Group's subsidiaries in Slovenia and in the Republics of
Serbia and of Macedonia also recorded significant growth rates, with both
customer numbers and ARPU showing a favorable upward trend. The Belarus
segment also reported customer growth.
"We are proud of our operational success, which we have achieved against
a backdrop of intensive competition and strong economic headwinds. These
results demonstrate once again that our convergence strategy provides a
solid base for our future business," said Hannes Ametsreiter, CEO Telekom
Austria Group.
Telekom Austria Group's Performance in Figures
The Group's operational success could not fully compensate for the
negative impact of the macroeconomic environment and, more specifically, for
the negative effects of intensive competition and persistently intrusive
regulatory measures. Group revenues amounted to EUR 2,227.3 million in the
first half of 2011, a decline of 2.9% or EUR 67.3 million compared to the
same period of the previous year. In the first half of 2011, the negative
impact on revenues of the 54% devaluation of the Belarusian ruble against
the euro as of May 24, 2011 amounted to EUR 43.3 million.
EBITDA comparable fell by 7.8% to EUR 777.6 million in the first half of
2011. This decline of EUR 65.8 million year-on-year is due to regulatory
effects, which account for a drop of EUR 15.6 million, as well as to the
devaluation of the currencies, which accounts for a decline in EBITDA
comparable of EUR 19.0 million. The remaining decrease of EUR 31.3 million
is mainly attributable to a competition-related decline in earnings, which
could only be partly offset by strict cost management.
Personnel expenses to be sustainably disburdened
In the first half of 2011, EBIT declined from EUR 300.5 million to EUR
42.7 million. This drop is mainly attributable to personnel expenses
associated with the restructuring program in Austria of EUR 218.6 million in
the period under review. This cost will ease the burden of personnel costs
over the long term with a positive effect for the consolidated statements of
operations.
Due to the restructuring cost and the negative impact of the devaluation
of the Belarusian ruble, net income turned from EUR 159.9 million in the
first half of 2010 to a net loss of EUR 59.2 million in the first half of
2011.
"The decline in revenues and earnings is in line with expectations. All
in all, we were able to cope quite well with the devaluation of the
Belarusian ruble thanks to the early adoption of effective countermeasures,"
said Hans Tschuden, CFO and Deputy Chairman of the Telekom Austria Group.
Outlook for the Full Year 2011
Against the backdrop of a furthermore challenging economic environment
in all operating markets of the Telekom Austria Group, persisting
competitive pressure and the currency devaluation in Belarus, the Management
Board has adjusted the outlook for the full year 2011. However, this refined
outlook for 2011 reflects the Group's confidence in mitigating the negative
effects mentioned above through clear customer focus, intensified marketing
of innovative products and strict cost management.
For the full year 2011, revenues are expected to amount to approximately
EUR 4.50 billion. EBITDA comparable is anticipated to reach up to EUR 1.55
billion. Operating free cash flow is expected to total up to EUR 800 million
and capital expenditures for the Group as a whole are forecasted to reach
EUR 750 to EUR 800 million. Furthermore, the management confirms a minimum
dividend floor of 76 eurocents per share for the 2011 financial year.
The Telekom Austria Group's Markets in Detail
Austria:
In the period under review, the most outstanding milestone in Austria
was the rebranding of the new domestic operating company A1 Telekom Austria
AG resulting from the merger of mobilkom austria and Telekom Austria the
previous year. Since June 2011, the company's products and services have
been provided from one source under the umbrella brand A1. This rebranding
campaign in connection with the marketing of innovative offerings led to
customer growth and market success: in July 2011, the company's product
bundles exceeded the one-million customer mark. The number of fixed access
lines continued to grow from 2.304 million lines in the first half of 2010
to 2.324 million lines as of June 30, 2011, with fixed net broadband
accounting for 1.216 lines, an increase of 11.6% compared to the same period
of the previous year. The number of A1TV (formerly aonTV) subscribers
increased by 41.1% to more than 174,800. Customer up-take of high-value
broadband offerings counteracted the loss of fixed net voice minutes and
resulted in a slower decline of average revenues per line (ARPL), which
dropped to EUR 32.4 in the period under review compared to EUR 33.1 in the
previous year.
The mobile communication business recorded further customer growth in
the first half of 2011. The mobile customer base increased by 4.2% from
about 5 million subscribers as of June 30, 2010 to about 5.2 million
customers as of June 30, 2011. The number of mobile broadband customers rose
by 19.7% to more than 700,000 subscribers.
Revenues in the Austrian segment declined by 4.5% to 1,469.4 million in
the first six months of 2011 compared to the same period of the previous
year mainly due to regulatory measures, lower mobile tariffs and the
persisting decline in fixed net voice minutes.
In the first half of 2011, EBITDA comparable dropped by 9.8% to EUR
497.8 million mainly due to regulatory measures. Strict cost management
could counteract the pressure on earnings.
Bulgaria:
In the period under review, the Bulgarian segment was marked by opposite
trends. While Mobiltel's customer base increased by 1% to 5.3 million
subscribers and the number of mobile broadband customers more than doubled,
ARPU declined by 10.6% due to intensive competition and lower usage.
Revenues in the Bulgarian segment dropped by 4.8% to EUR 263.9 million.
Mobiltel's revenue figures for the first six months of 2011 also include the
results of two fiber optic operators Megalan AD and Spektrumnet AD, which
were acquired the previous year. Together they account for a total of
101,200 fixed net lines, of which 95,700 are broadband lines.
In the first half 2011, the Bulgarian market was impacted by a laggard
domestic economy and regulatory cuts. In addition, fierce competition
spurred by smaller operators in the market characterized the operational
environment. As a result, EBITDA comparable declined by 9.3% to EUR 135.5
million in the period under review.
Belarus:
In the first half of 2011, the most striking event in Belarus was the
devaluation of the ruble by 54% as of May 24, 2011 as a result of a strong
decline in the level of foreign exchange reserves. Despite this negative
effect, the Belarus subsidiary Velcom was able to increase its mobile
subscriber base by 7.6%, with the number of mobile broadband lines almost
quadrupling. Thanks to the adopted countermeasures - in the form of price
increases and CAPEX reductions - Velcom showed a strong operational
performance in its local currency. Revenues denominated in the local
currency increased by more than 26%, ARPU by 14.3% and EBITDA comparable by
21.3%.
However, due to the devaluation of the Belarusian ruble, this
outstanding performance could not be translated into euro. As a result of
negative currency translation effects, revenues showed an increase of 1.8%
to EUR 162.8 million and EBITDA comparable declined slightly by 2% to EUR
75.4 million in the year under review.
Croatia:
Severe economic headwinds, regulatory and fiscal burdens as well as
fierce competition were the key challenges on the Croatian market in the
period under review. Due to the negative factors mentioned above, ARPU
(average revenue per customer) dropped by 11.5% to EUR 12.8. Against this
backdrop, the Croatian subsidiary, Vipnet, was able to increase its mobile
customer base by 1% to almost 2.1 million subscribers. The number of mobile
broadband customers rose by 17.3 % to over 165,000 subscribers.
Vipnet's revenues decreased by 9.5% to EUR 190.8 million in the first
half of 2011. EBITDA comparable fell by 19.8% to EUR 52.0 million. This
disproportionate decline is mainly attributable to one-off personnel
expenses in connection with a headcount reduction by approximately 10% in
the second quarter 2011.
To address the increasing demand for convergent products in Croatia,
Vipnet acquired the Croatian cable operator B.net in August 2011 for a total
consideration of EUR 93 million. B.net currently provides broadband fixed
net offerings and cable TV services to roughly 120,000 households in
Croatia.
Slovenia:
Slovenia showed a favorable development in the period under review:
customer numbers grew by 6.9% to more than 630,000 and the mobile broadband
customer base rose by 19.4%. Si.mobil's market share slightly increased to
29.9%. ARPU remained almost unchanged at EUR 19.8 compared to the same
period of the previous year. Revenues in the Slovenian segment rose by 10.1%
to EUR 90.0 million in the period under review, with EBITDA comparable
dropping by 0.9% to EUR 22.9 million.
Republic of Serbia:
Vip mobile, the Group's subsidiary in the Republic of Serbia, showed a
favorable performance and positive results in the first half of 2011.
Customer numbers increased by 19.1% to roughly 1.5 million and ARPU rose by
17.4% to EUR 6.9. Revenues grew by 33.6% to EUR 65.6 million driven by
customer growth and higher usage. Furthermore, Vip mobile, for the first
time, was able to make a significant positive contribution of EUR 11.9
million to Group EBITDA.
Republic of Macedonia:
In the Republic of Macedonia, Vip operator, the most recent greenfield
operation of the Group, was able to report strong growth rates. The mobile
customer base rose by 42.9% to over 500,000 subscribers and market share
increased to 22.7% as of June 30, 2011. ARPU improved by 12.7% to EUR 7.1.
Revenues showed a similar favorable development, growing by 58.2% to EUR
24.3 million and EBITDA comparable was break-even.
The current quarterly report is available at
http://www.telekomaustria.com/ir/interim-results.php
About Telekom Austria Group
The Telekom Austria Group, listed on the Vienna Stock Exchange since
November 2000, is the leading telecommunications provider in Central and
Eastern Europe with approx. 22 million customers across its markets of
operations. The Group is currently operating in eight countries: in Austria
(A1), Slovenia (Si.mobil), Croatia (Vipnet), the Republics of Serbia (Vip
mobile) and Macedonia (Vip operator), Bulgaria (Mobiltel), Belarus (Velcom)
and Liechtenstein (mobilkom liechtenstein). The total market of the eight
countries covers about 41 million inhabitants. The Group has more than
17,000 employees, revenues were EUR 4.7 billion as of year-end 2010. Telekom
Austria Group's portfolio encompasses products and services of voice
telephony, broadband Internet, multimedia services, data and IT solutions,
wholesale as well as m-payment solutions. More detailed information is
available at http://www.telekomaustria.com
Contact:
Elisabeth Mattes, Director Corporate Communications and Spokeswoman,
Telekom Austria Group mobile: +43-664-6639187, email:
elisabeth.mattes@telekomaustria.com
Source: Telekom Austria Group
.