Telekom Austria : Report PDF (0.38 MB)

Results for the Fourth Quarter and the Full Year 2020

Vienna, February 9, 2021 - Today, A1 Telekom Austria Group (VSE: TKA, OTC US: TKAGY) announces its results for the fourth quarter and the full year 2020, ending December 31, 2020.

Key performance indicators
in EUR million	Q4 2020	Q4 2019	% change	2020	2019	% change
Total revenues	1,185.6	1,200.4	-1.2	4,549.4	4,565.2	-0.3
Service revenues	961.4	962.7	-0.1	3,804.5	3,805.5	0.0
thereof mobile service revenues	516.8	520.4	-0.7	2,071.1	2,075.3	-0.2
thereof fixed-line service revenues	444.6	442.4	0.5	1,733.5	1,730.2	0.2
Equipment revenues	195.7	212.9	-8.1	659.4	663.9	-0.7
Other operating income	28.5	24.8	15.1	85.5	95.8	-10.8
EBITDA	364.5	355.5	2.5	1,576.8	1,560.6	1.0
% of total revenues	30.7%	29.6%		34.7%	34.2%
EBITDA before restructuring	387.0	376.5	2.8	1,661.3	1,644.7	1.0
% of total revenues	32.6%	31.4%		36.5%	36.0%
EBIT	129.3	118.0	9.6	638.9	614.8	3.9
% of total revenues	10.9%	9.8%		14.0%	13.5%
Net result	43.2	35.3	22.4	388.8	327.4	18.7
% of total revenues	3.6%	2.9%		8.5%	7.2%
Wireless indicators	Q4 2020	Q4 2019	% change	2020	2019	% change
Wireless subscribers (thousands)	21,864.2	21,288.1	2.7	21,864.2	21,288.1	2.7
Postpaid	17,822.4	16,954.6	5.1	17,822.4	16,954.6	5.1
Prepaid	4,041.9	4,333.6	-6.7	4,041.9	4,333.6	-6.7
MoU (per Ø subscriber)	450.5	369.9	21.8	424.4	361.9	17.3
ARPU (in EUR)	7.9	8.1	-2.3	8.1	8.2	-1.3
Mobile churn (%)	1.3%	2.0%		1.4%	1.7%
Wireline indicators	Q4 2020	Q4 2019	% change	2020	2019	% change
RGUs (thousands)	6,050.3	6,147.7	-1.6	6,050.3	6,147.7	-1.6

2	Results for the Fourth Quarter and the Full Year 2020

Table of Contents

Q4 2020 Analysis1	3
Year-to-date Highlights	11
Outlook	14
Detailed Figures	16
Additional Information	25

1 Alternative performance measures are included in this report. For details, please refer to the tables on page 16 onwards.

A1 Telekom Austria Group

3

Q4 2020 Analysis

Group Summary

While the pandemic situation seemed to be relatively stable at the beginning of the fourth quarter, a growing number of new COVID-19 infections in October and November prompted all governments in the footprint of the A1 Telekom Austria Group to reimpose certain measures. In order to protect public health systems, most governments announced national lockdowns in the course of Q4 2020, temporarily closing or restricting opening hours for hospitality facilities, cancelling public events and limiting travel. Telecommunication shops remained open in almost all of the Group's markets.

Operations were well prepared and adjusted again to this environment, while continued focus on operational efficiency strengthened business resilience further and allowed to offset negative external effects from lower roaming revenues and equipment sales.

• Group total revenues decrease of 1.2% driven by equipment revenues while service revenues re- mained flat despite heavy roaming losses (~2% on Group revenues) and negative FX effects.
• • Mobile service revenues declined only slightly by 0.7% on a Group level as growth in Austria, Bulgaria and Serbia almost compensated for the decline in Belarus and Slovenia.
  • Fixed-lineservice revenues rose by 0.5% as growth in Bulgaria and Slovenia outweighed de- clines in other CEE markets, while they remained flat in Austria.
  • Equipment revenues declined by 8.1%, due to a considerably lower number of sold devices fol- lowing the year-end lockdown measures.
• Mobile contract subscriber numbers rose by 5.1%, with growth in almost all markets.
• Fixed-lineRGUs decreased by 1.6%, as the group-wide growth in high-bandwidth broadband RGUs could not compensate for the decline in low-bandwidth broadband and fixed-line voice RGUs.
• Group EBITDA before restructuring increased by 2.8% on the back of operational efficiencies
• • Excluding FX and one-off effects as well as restructuring charges EBITDA rose by 5.0%.
  • In Austria, successful cost saving measures together with higher service revenues translated into EBITDA before restructuring growth of 4.2%.
  • In the CEE markets, EBITDA excluding FX and one-off effects grew by 3.7% (reported: -1.2%) due to growth in Bulgaria, Serbia and North Macedonia.
• Total CAPEX in the full year 2020 declined by 26.0% on Group-level. CAPEX in Austria was 13.4% lower. The CAPEX reduction was a decision taken early in 2020 to ensure flexibility in unstable times due to COVID-19.
• In FY 2020, free cash flow increased by EUR 159.9 mn due to announced CAPEX cuts (EUR 131.3 mn less CAPEX paid) and better operational performance.
• A1 Telekom Austria Group is currently working on developing alternatives to reap more benefits from its tower assets through a targeted management focus on internal efficiencies and higher tenancy ratios.
• Outlook 2021: approximately 1% Group total revenue growth, approx. EUR 800 mn CAPEX exclud- ing spectrum investments and acquisitions.

The presentation for the conference call and key figures of A1 Telekom Austria Group in Excel format ('Fact Sheet Q4 2020') are available on the website at www.a1.group.

4	Results for the Fourth Quarter and the Full Year 2020

The following factors should be considered in the analysis of A1 Telekom Austria Group's quarterly operating results:

 Negative roaming impact on Group EBITDA of around 5% (Q3 2020: ~-5%) stemming from the decline in roaming traffic following reduced mobility and increased travel restrictions.

 Negative FX effects amounted to EUR 34.9 mn in total revenues, EUR 25.0 mn in service revenues, and EUR 14.0 mn in EBITDA in Q4 2020, the vast majority stemming from Belarus and, to a small extent, from Croatia.

 Total one-off effects of positive EUR 6.9 mn in revenues and positive EUR 5.9 mn in EBITDA in Q4

2020 with the following main effects (none in the comparison period):

 In Croatia, there was a positive one-off effect of EUR 4.2 mn in total revenues and EUR 5.8 mn in EBITDA in Q4 2020 stemming from income in relation to an agreement on network infrastructure rental.

 In Slovenia, there were negative one-off effects of EUR 2.2 mn in EBITDA, with the main effect stemming from a pending proceeding of the national regulation authority.

	 In Serbia, there were positive one-off effects of EUR 2.4mn, in both total revenues and EBITDA,
	stemming from the settlement related to a contractual obligation and revised future costs for
	asset retirement obligations.
	 Restructuring charges in Austria amounted to EUR 22.6 mn in Q4 2020 (Q4 2019: EUR 21.0 mn).
	Mobile Subscribers and Fixed-line RGUs
Number of postpaid	In mobile communications, the number of subscribers of the A1 Telekom Austria Group rose by 2.7% to
subscribers grew by 5.1% in	21.8 million in the quarter under review.
Q4 2020, RGUs decreased
by 1.6%	In a year-on-year comparison, the number of contract customers rose in almost all markets driven by ongo-
	ing strong demand for mobile WiFi routers. The number of A1 Digital M2M customers increased in Q4 2020
	while prepaid customer numbers declined in almost all markets. In Austria, prepaid churn has stabilized as
	the SIM card registration for existing customers annualized as of September 1, 2020.
	The number of revenue-generating units (RGUs) in the Group's fixed-line business declined by 1.6% year-
	on-year. The decline in RGUs in Austria was driven by voice and low-bandwidth broadband RGUs. In the
	CEE markets, the number of RGUs rose due to broadband and TV RGUs.