OTE GROUP REPORTS 2021 THIRD QUARTER RESULTS

Highlights:

  • Group revenues up 1.8% on further growth in Greece; Adj. EBITDA (AL) up 3.2%
  • Positive momentum of Greek operations continues; Revenues up 3.5%
    1. Fixed retail up 1.8%, driven by strong broadband growth, favorable TV trends
    1. Mobile service revenues jump 8.2%, boosted by recovery in roaming
    1. Another quarter of strong Adj. EBITDA (AL) growth, up 5.0%
    1. Ongoing strength in KPIs and operational trends; increasing demand for faster broadband speeds - Fiber subscribers up +24%
    1. FTTH rollout ongoing, 479k homes passed
  • Romania Mobile impacted by one-off comparable adjustments; improved underlying profitability
  • Successful completion of Telekom Romania (Fixed) disposal; €174mn extraordinary distribution to shareholders
    1. €113mn extraordinary Dividend or ca. €0.25/share; €61mn share buy-back program

(€ mn)

Q3'21

Q3'20

Change

9M '21

9M '20

Change

Revenues

861.4

846.4

+1.8%

2,476.8

2,409.8

+2.8%

Adjusted EBITDA After Lease (AL)

352.5

341.6

+3.2%

964.1

928.5

+3.8%

Margin %

40.9%

40.4%

+0.5pp

38.9%

38.5%

+0.4pp

Operating profit before financial and

342.1

15.0

-

660.9

271.7

+143.2%

investing activities

Profit to owners of the parent

209.7

88.6

+136.7%

386.5

244.1

+58.3%

Adj. Profit to owners of the parent

160.2

129.7

+23.5%

368.1

325.6

+13.1%

Basic EPS (€)

0.4628

0.1909

+142.4%

0.8476

0.5224

+62.3%

Adjusted Capex

161.4

99.3

+62.5%

398.5

381.9

+4.3%

Adjusted Free Cash Flow After Lease (AL)

115.8

114.3

+1.3%

441.4

400.8

+10.1%

Free Cash Flow After Lease (AL)

108.0

91.6

+17.9%

381.9

325.6

+17.3%

Free Cash Flow of Discontinued

(2.9)

12.8

-122.7%

23.5

34.2

-31.3%

operations After Lease (AL)

Cash & Other financial assets

904.2

699.5

+29.3%

904.2

699.5

+29.3%

Adjusted Net Debt (excluding leases)

421.8

648.5

-35.0%

421.8

648.5

-35.0%

Adjusted Net Debt

763.9

1,031.7

-26.0%

763.9

1,031.7

-26.0%

Note: The purpose and calculations of all 'Adjusted' data are detailed in the Alternative Performance Measures Section.

Note: All figures (apart from Balance Sheet) adjusted to reflect only continuing operations; Telekom Romania (TKR) operations along with certain significant commercial transactions (MVNO agreement and handset sales) between TKR and Telekom Romania Mobile (TKRM) have been treated as discontinued operations.

ATHENS, Greece -November 12, 2021 - Hellenic Telecommunications Organization SA

(ASE: HTO; OTC MARKET: HLTOY), the Greek full-service telecommunications provider, today announced consolidated results (prepared under IFRS) for the quarter ended September 30, 2021.

Message from the Chairman & CEO, Michael Tsamaz:

"Thanks to another strong performance in Greece, we are posting a solid third quarter. Group revenues, EBITDA and margin are all higher than last year. Our Greek top line benefited from growing demand for higher data speeds and volume in both mobile and fixed, and from the recovery in tourism driving a sharp rebound in visitor roaming. In Romania, we completed the sale of our fixed line operations and gained full ownership of mobile, where underlying trends are moving in the right direction."

Page 1 of 20

"Our cash flow generation has been robust since the beginning of the year, supporting shareholder returns as well as our investments in state-of-the art infrastructure for our customers and our economy."

Outlook

OTE benefits from its superior network, delivering higher speeds, quality, and reliability to its retail and wholesale customers. Its effective deployment of FTTH and 5G provides the required infrastructure tο offer enhanced services to customers and pursue its expansion. Following the removal of COVID 19-induced lockdown measures and the easing of travel restrictions, OTE is well on track to achieve a material recovery in revenue and profitability in 2021.

The gradual deployment of the EU's €30.5bn Recovery and Resilience Plan in Greece should support economic growth in coming years. OTE intends to leverage its expertise to strengthen the digitalization of the country and provide the technological backbone that will accelerate its future growth. As demand for broader access to high-speed connection accelerates, OTE will continue to invest in fiber-to-the-home in coming years. These investments should support OTE's sustainable growth in the medium and longer term.

For 2021, Adjusted Group CAPEX should slightly exceed €550mn while management continues to expect

Adjusted Free Cash Flow of approximately €575mn. Reported Free Cash Flow should reach €480mn, which

also represents the shareholder remuneration amount for 2021. In addition, the Board of Directors has approved an extraordinary shareholder payout of €174mn, representing distribution of the net proceeds from

the disposal of OTE's stake in Telekom Romania fixed operations.

OTE GROUP HIGHLIGHTS

OTE Group successfully completed the disposal of its fixed operations in Romania. This marks a major step in OTE's strategic refocusing on its most sustainable income-generating activities. OTE remains in the Romanian market with 100% ownership of Telekom Romania Mobile, following the acquisition of the 30% stake in this entity previously held by Telekom Romania.

OTE Group consolidated Revenues increased by 1.8% in Q3'21 to €861.4mn. In Greece, Revenues were up 3.5% to €789.9mn, supported by recovery in tourism and steady demand for higher speeds in fixed and data demand in mobile. In Romania, revenues totaled €80.8mn in the quarter, down 10.8%, reflecting certain positive one-off base effects recorded in Q3'20. Excluding these adjustments, Romania revenues would be down about 4%.

Total Operating Expenses, excluding depreciation, amortization, impairment, and charges related to restructuring costs (primarily voluntary leave schemes) and non-recurring litigation, amounted to €488.1mn in Q3'21, up 0.9% compared to Q3'20, as significant savings in personnel costs resulting from the strategic transformation initiatives implemented in 2020 nearly offset the increase in energy costs.

Group Adjusted EBITDA (AL) rose 3.2% to €352.5mn, resulting in a strong margin of 40.9%, on positive performance in Greece. In Greece, Adjusted EBITDA (AL) rose sharply (+5.0%) to €342.0mn, and the EBITDA margin was 43.3%, up 60 basis points. Romania Mobile operations recorded an Adjusted EBITDA (AL) of €10.5mn, down 33.5% from a high comparison base.

Group profit before tax amounted to €281.5mn, up €271mn from Q3'20, mainly reflecting an impairment of €160mn in Romania Mobile operations in Q3'20, as well as a €132mn reversal of provision in the current quarter, related to OTE's pension fund for voluntary leave schemes of past years.

The Group recorded an Income Tax charge of €71.1mn in Q3'21, compared to an income tax credit of €56.6mn in Q3'20, mainly reflecting positive deferred taxation related to the Telekom Romania disposal booked in Q3'20 following the announcement of the transaction last year.

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Adjusted Capital Expenditures amounted to €161.4mn, an increase of 62.5% from Q3'20, partly reflecting higher payments for TV content. Investments in Greece and Romania mobile stood at €147.2mn and €14.2mn, respectively. In the first nine months of the year, adjusted Capital Expenditures totaled €398.5mn, up 4.3% relative to the prior-year period.

Group Adjusted Free Cash Flow after leases reached €115.8mn, up 1.3% year-on-year despite higher Capex spending in the quarter. Free Cash Flow stood at €108.0mn, up €16.4mn year-on-year on lower income tax, interest expenses and payments related to voluntary exit schemes.

The Group's Adjusted Net Debt stood at €763.9mn as of September 30, 2021, down 26.0% compared to September 30, 2020. The Group ratio of Adjusted Net Debt to 12-month Adjusted EBITDA (AL) stood at 0.6x.

Revenues (€mn)

Q3 '21

Q3 '20

Change

9M '21

9M '20

Change

Greece

789.9

763.0

+3.5%

2,265.6

2,162.1

+4.8%

Romania mobile

80.8

90.6

-10.8%

232.7

266.1

-12.6%

Eliminations

(9.3)

(7.2)

+29.2%

(21.5)

(18.4)

+16.8%

OTE GROUP

861.4

846.4

+1.8%

2,476.8

2,409.8

+2.8%

Adjusted EBITDA After

Lease (AL) (€mn)

Q3 '21

Q3 '20

Change

9M '21

9M '20

Change

Greece

342.0

325.8

+5.0%

944.0

899.2

+5.0%

Margin (%)

43.3%

42.7%

+0.6pp

41.7%

41.6%

+0.1pp

Romania mobile

10.5

15.8

-33.5%

20.1

29.3

-31.4%

Margin (%)

13.0%

17.4%

-4.4pp

8.6%

11.0%

-2.4pp

OTE GROUP

352.5

341.6

+3.2%

964.1

928.5

+3.8%

Margin (%)

40.9%

40.4%

+0.5pp

38.9%

38.5%

+0.4pp

Note: Adjusted EBITDA (AL) is defined as Adjusted EBITDA deducting the Depreciation for the right-of-use assets and Interest expense on leases.

Page 3 of 20

GREECE

Operational highlights:

y-o-y

y-o-y

Q3'21

net

Q3'21

Q3'20

change

diff

adds

Fixed lines access

2,698,927

2,663,920

+1.3%

35,007

(530)

Broadband subscribers

2,221,725

2,104,151

+5.6%

117,574

17,916

of which Fiber service

1,099,784

886,178

+24.1%

213,606

43,574

TV subscribers

600,167

563,051

+6.6%

37,116

21,316

Mobile Subscribers

7,040,252

7,112,324

-1.0%

(72,072)

52,311

Postpaid

2,790,102

2,722,570

+2.5%

67,532

34,431

Prepaid

4,250,150

4,389,754

-3.2%

(139,604)

17,880

Fixed Segment:

OTE further expanded its fiber subscriber base in the quarter, with 44k net additions, raising the total number of fiber subscribers to 1,100k. As OTE continually upgrades the quality and speed of its service, penetration of fiber broadband increased by more than 7 percentage points year-on-year and half of all fixed broadband subscribers have upgraded to fiber. Customers continue to migrate to higher-speed FTTC/FTTH offerings, and the share of subscribers using broadband speeds of 100Μbps or higher has now reached 23% of all fiber connections, nearly twice the ratio one year earlier. With over one million customers still relying on standard speeds, increasing fiber availability should support the Group's long-term growth.

OTE continues to expand its FTTH footprint to meet the constant increase in demand for high-speed services. OTE reached 479k homes passed by the end of September and is on track to pass the 560k mark this year. FTTH is gaining traction, as OTE provides fiber access to ever growing portions of the population. As demand grows, OTE is deploying its fiber network, modernizing the country's infrastructure and ensuring its customers continue to enjoy state-of-the-art networks, while supporting its sustainable long-term growth.

As of September 30, 2021, the total number of TV subscribers reached 600k, a year-on-year increase of 6.6%. Cosmote TV captured 21k additions in the quarter, reflecting its ongoing investment in superior sport content, notably securing broadcasting agreements with eight out of fourteen Greek Superleague football teams. The Company also enriched its sports bouquet with the Greek broadcasting rights for the Italian Lega Serie A football league.

Mobile Segment:

As of September 30, Cosmote's mobile customer base stood at 7.0mn customers, a 1.0% decrease compared to the end of Q3'20, reflecting a drop in prepaid, while the postpaid base continued to grow, in line with Company targets. Consistent with its strategy, the Company recently launched "Cosmote Neo", the first fully digital mobile offering in Greece aiming to promote further upselling, mainly targeting younger tech-savvy population segments.

OTE is rapidly expanding its 5G service and expects to reach 60% population coverage by the end of this year and full coverage of the nationwide highway system by 2023, while continuing to promote data usage over its superior 4G/4G+ network. Population coverage in the country's two biggest cities, Athens and Thessaloniki, now exceeds 97% and 90%, respectively. In addition, the company has reached 5G roaming agreement with 34 countries.

For the fifth consecutive year, Cosmote's mobile network was recognized as Greece's "Fastest Mobile Network" by the recent OOKLA Speedtest AwardsTM . Download speeds increased by 90% compared to the same period in the prior year, largely driven by the performance of 5G networks included for the first time in the measurements.

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Financial highlights:

(€ mn)

Q3 '21

Q3 '20

Change

9M '21

9M '20

Change

Revenues

789.9

763.0

+3.5%

2,265.6

2,162.1

+4.8%

Retail Fixed Services

241.2

236.9

+1.8%

710.3

702.6

+1.1%

Mobile Service Revenues

263.7

243.7

+8.2%

719.2

683.8

+5.2%

Wholesale Services

144.7

156.0

-7.2%

427.2

432.2

-1.2%

Other Revenues

140.3

126.4

+11.0%

408.9

343.5

+19.0%

Adjusted EBITDA (AL)

342.0

325.8

+5.0%

944.0

899.2

+5.0%

margin (%)

43.3%

42.7%

+0.6pp

41.7%

41.6%

+0.1pp

In Greece, revenues rose 3.5% to €789.9mn on strong broadband and mobile growth.

Retail fixed service revenues were up 1.8% in the quarter, supported by continuing momentum in broadband revenues as a result of increasing demand for higher speeds, as well as an increase in TV revenues.

In mobile, service revenues posted a solid performance in the quarter, up 8.2%, on positive momentum across the board. Revenues from visitor roaming were up sharply, reaching 90% of the Q3'19 pre-COVID level, benefiting from tourism recovery during the summer period. Postpaid and prepaid revenues were also up in the quarter, reflecting seasonal offerings to boost data usage and promote Cosmote's more-for-more strategy.

Wholesale revenues were down 7.2% in the quarter, mainly due to the timing of international transit traffic revenues, expected to normalize in Q4.

Other revenues were up 11% in the quarter reflecting positive ICT momentum and growth in handset sales, positively impacted by the government subsidy program for students. ICT revenues were up 7% compared to Q3'20 as OTE remains the partner of choice for the digitalization projects of private and public organizations. Recent projects include solutions developed for the e-health sector, notably the "myHealth" application providing citizens digital access to e-prescription and to their health profile.

Total Adjusted EBITDA (AL) in Greece was up 5.0% in the quarter at €342.0mn, yielding a strong margin of 43.3%, compared to 42.7% in Q3'20, as high-margin roaming revenues and personnel savings more than offset higher energy costs and expenses related to Romanian operational separation. Energy costs represent approximately 4% of the total Greece cost base, and OTE expects 2021 additional costs of around €10mn as a result of current global price increases.

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OTE - Hellenic Telecommunications Organization SA published this content on 12 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 November 2021 08:16:08 UTC.