Results for the Second Quarter and First Half 2022

Vienna, July 22, 2022 - Today, A1 Telekom Austria Group (VSE: TKA, OTC US: TKAGY) announces its half year report including the results for the second quarter and the first half of 2022, ending June 30, 2022 as well as the condensed consolidated financial statements.

Key performance indicators

in EUR million

Q2 2022

Q2 2021

% change

1-6 M 2022

1-6 M 2021

% change

Total revenues

1,208.4

1,165.8

3.7

2,374.9

2,301.3

3.2

Service revenues

1,025.7

976.4

5.0

2,013.9

1,932.1

4.2

Equipment revenues

161.6

166.8

- 3.1

316.9

328.9

- 3.6

Other operating income

21.1

22.6

- 6.5

44.1

40.3

9.3

Wireless revenues

716.9

684.0

4.8

1,406.4

1,352.5

4.0

Service revenues

575.0

532.2

8.0

1,122.5

1,051.2

6.8

Equipment revenues

141.9

151.8

- 6.5

284.0

301.4

- 5.8

Wireline revenues

470.4

459.2

2.4

924.4

908.5

1.7

Service revenues

450.7

444.2

1.5

891.4

881.0

1.2

Equipment revenues

19.7

15.0

31.4

32.9

27.5

19.7

EBITDA before restructuring

477.1

448.6

6.3

929.7

868.0

7.1

% of total revenues

39.5%

38.5%

39.1%

37.7%

EBITDA

456.9

427.7

6.8

888.5

826.0

7.6

% of total revenues

37.8%

36.7%

37.4%

35.9%

EBIT

219.0

187.4

16.9

413.2

350.7

17.8

% of total revenues

18.1%

16.1%

17.4%

15.2%

Net result

167.0

125.0

33.6

297.7

233.8

27.3

% of total revenues

13.8%

10.7%

12.5%

10.2%

Wireless indicators

Q2 2022

Q2 2021

% change

1-6 M 2022

1-6 M 2021

% change

Wireless subscribers (thousands)

23,274.6

22,324.6

4.3

23,274.6

22,324.6

4.3

Postpaid

19,352.5

18,368.5

5.4

19,352.5

18,368.5

5.4

Prepaid

3,922.1

3,956.1

- 0.9

3,922.1

3,956.1

- 0.9

ARPU (in EUR)

8.3

8.0

3.6

8.1

8.0

2.4

Mobile churn (%)

1.2%

1.2%

1.3%

1.3%

Wireline indicators

Q2 2022

Q2 2021

% change

1-6 M 2022

1-6 M 2021

% change

RGUs (thousands)

6,134.5

6,071.6

1.0

6,134.5

6,071.6

1.0

All comparisons are given year-on-year. EBITDA is defined as net income excluding financial result, income taxes, depreciation and amortization and impairment charges.

2

Results for the Second Quarter and the First Half of 2022

Table of Contents1

Q2 2022 Analysis

3

Outlook

4

Half-year Analysis

9

Detailed figures

14

Additional information

21

Condensed Consolidated Financial Statements

22

Condensed Consolidated Statements of Comprehensive Income

22

Condensed Consolidated Statements of Financial Position

23

Condensed Consolidated Statements of Cash Flows

24

Capital Expenditures

25

Condensed Consolidated Statements of Changes in Stockholders' Equity

25

Net Debt

26

Condensed Operating Segments

27

Selected Explanatory Notes (unaudited)

28

Statement of all Legal Representatives

34

1Alternative performance measures are included in this report. For details, please refer to the section 'Detailed figures'.

A1 Telekom Austria Group

3

Q2 2022 Analysis

Group Summary

In Q2 2022, positive market trends prevailed and A1 Telekom Austria Group continued on its growth path delivering a solid set of quarterly results. Service revenues increased in all geographies across the footprint and, despite a pressure on the cost side mainly coming from the energy market disruptions, Group EBITDA was again above the previous year's level.

Roaming traffic was comparatively higher and further supported solid development of the mobile core business, while growth momentum continued in the solution and connectivity business. In line with the latter, product-related costs increased while, at the same time, marketing activities in the footprint weighed on higher advertising expenses. Indexation of retail tariffs, triggered earlier in a number of markets as well as the appreciation of the Belarusian ruble versus the euro were both supportive to the results.

  • Total revenues increased by 3.7%, as service revenue growth achieved in all the markets more than compensated for slightly lower equipment revenues.
  • Equipment revenues declined, driven by the Bulgarian segment where the comparison period was positively impacted by a public customer deal and to a lesser extent by the Belarusian seg- ment following a lack of high-value handsets.
  • Mobile service revenues increased by 8.0% due to the solid performance of the mobile core busi- ness, improved roaming results as well as earlier implemented inflation-linked price adjustments.
  • Fixed-lineservice revenues rose by 1.5% on the back of solid solution and connectivity business which more than compensated for lower interconnection revenues.
  • The number of mobile subscribers rose by 4.3%, driven by the higher number of M2M subscrib- ers as well as the higher number of mobile WiFi routers.
  • The Internet@home customer base grew by 4.9%, mainly driven by mobile WiFi routers but also high-bandwidth broadband RGUs.
  • Group total RGUs increased by 1.0% as growth in broadband subscribers outweighed the de- cline of voice RGUs.
  • Roaming benefited results in Q2 2022 (positive impact yoy: ~ 1% of revenues; ~ 2.5% of EBITDA) amidst increased travel activities in the footprint, especially in Austria and Croatia.
  • Group EBITDA before restructuring charges grew by 6.3% (reported: 6.8%) as higher service rev- enue more than compensated for increased core OPEX. Excluding FX and one-off effects, Group EBITDA before restructuring charges grew by 5.5%.
    • In Austria, EBITDA before restructuring charges increased by 3.1% (reported: 3.7%) owing to the successful translation of service revenues as total costs and expenses remained flat.
    • EBITDA in international operations rose by 10.3% with growing numbers in almost all seg- ments and in particular strong contribution from Bulgaria and Belarus. Excluding FX and one- off effects, EBITDA in international operations grew by 8.3%.
  • Net result improved by 33.6% year-on-year in the second quarter of 2022, as better operational result and better financial result more than compensated for higher income tax expense.
  • A EUR 750 mn bond was repaid from existing cash and proceeds from bank loans on April 4, 2022.

The presentation for the conference call and key figures of A1 Telekom Austria Group in Excel format ('Fact Sheet Q2 2022') are available on the website at www.a1.group.

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

  • Positive FX effects amounted to EUR 8.9 mn in total revenues and EUR 4.4 mn in EBITDA, almost entirely coming from the Belarusian segment.

4

Results for the Second Quarter and the First Half of 2022

Outlook confirmed

Internet@home: +4.9% year- on-year in Q2 2022

  • There were no one-off effects in the reporting period, while there was a minor positive one-off effect in the comparison period in EBITDA (+0.6 mn in Serbia).
  • Restructuring charges in Austria amounted to EUR 20.1 mn in Q2 2022 (Q2 2021: EUR 20.9 mn).

Outlook

The Management of A1 Telekom Austria Group confirms the outlook for the financial year 2022 with total revenue growth of close to 3%. The initial outlook for 2022 included an assumption of depreciation of the Belarusian ruble versus the euro of 5-10% in 2022 (period average). After a sharp drop of the BYN in February and March, the currency appreciated again in April and May and closed slightly higher in June.

Going forward, and given the volatile nature of the Belarusian ruble, a potential adverse BYN development equivalent to a 2022 period-end depreciation of approx. 18 % versus the rate as of YE 2021 (or approx. 27 % period-end depreciation versus the rate as of June 30, 2022) would result in a zero 2022 period- average BYN depreciation and thus neutral currency effects on total revenues in 2022. However, it shall be noted that the probability of the above-mentioned or any other BYN outcome is very hard to predict, especially under the current circumstances.

Furthermore, equipment revenues might be stressed by supply chain challenges. Overall, the EBITDA margin is still expected to slightly increase. Capital expenditures, before spectrum investments and acquisitions are expected to increase by approximately 15% in 2022. The increase versus last year's CAPEX results mainly from higher investments in Austria dedicated to more fiber build, and to a small extent to more IT CAPEX and the 5G roll-out.

Mobile Subscribers and Fixed-line RGUs

In mobile communications, the number of subscribers of the A1 Telekom Austria Group rose by 4.3% to a total of 23.3 million in the second quarter of 2022. Growth was mainly driven by a strong increase in M2M subscribers. Also, the growth in contract customers (ex M2M) was driven by the mobile core business and the continued shift from prepaid to contract offers as well as continued solid demand for mobile WiFi routers. The number of A1 Digital M2M customers continued to increase in Q2 2022.

The number of revenue-generating units (RGUs) in the Group's fixed-line business increased (+1.0%) year-on-year. In Austria, the number of RGUs declined, driven by fewer voice-only and low-bandwidth broadband RGUs, which could not be offset by the continued solid demand for high-bandwidth products in Q2 2022. In the international markets, the number of RGUs rose mainly due to increasing high-bandwidth broadband RGUs while TV RGUs also grew in all the markets.

The Internet@home customer base increased by 4.9% in the Group, driven by the increase in mobile WiFi router numbers and higher number of high-bandwidth RGUs.

A1 Telekom Austria Group

5

Comments on Operating Segments for Q2 2022 - Revenues and EBITDA

Austria

Key performance indicators

Financials

in EUR million

Q2 2022

Q2 2021

% change 1-6 M 2022 1-6 M 2021

% change

Total revenues

676.1

666.2

1.5

1,339.8

1,323.6

1.2

Service revenues

602.7

590.6

2.1

1,191.2

1,171.7

1.7

Equipment revenues

61.5

61.2

0.6

121.7

126.3

- 3.7

Other operating income

11.9

14.4

- 17.8

26.9

25.6

5.3

Wireless revenues

302.0

291.2

3.7

603.7

585.1

3.2

Service revenues

255.2

240.3

6.2

504.3

476.9

5.8

Equipment revenues

46.8

50.9

- 8.0

99.4

108.3

- 8.2

Wireline revenues

362.2

360.5

0.5

709.1

712.9

- 0.5

Service revenues

347.5

350.3

- 0.8

686.9

694.8

- 1.1

Equipment revenues

14.7

10.3

43.0

22.3

18.1

23.3

EBITDA before restructuring

278.6

270.1

3.1

544.2

520.0

4.7

% of total revenues

41.2%

40.5%

40.6%

39.3%

EBITDA

258.5

249.2

3.7

503.0

478.1

5.2

% of total revenues

38.2%

37.4%

37.5%

36.1%

EBIT

122.8

109.0

12.6

229.4

203.2

12.9

% of total revenues

18.2%

16.4%

17.1%

15.3%

Wireless indicators

Q2 2022

Q2 2021

% change 1-6 M 2022 1-6 M 2021

% change

Wireless subscribers (thousands)

5,112.5

5,023.1

1.8

5,112.5

5,023.1

1.8

ARPU (in EUR)

16.5

15.8

4.6

Mobile churn (%)

1.0%

1.8%

1.0%

1.5%

Wireline indicators

Q2 2022

Q2 2021

% change 1-6 M 2022 1-6 M 2021

% change

RGUs (thousands)

2,994.5

3,096.1

- 3.3

2,994.5

3,096.1

- 3.3

In Q2 2022, market dynamics in Austria remained broadly unchanged compared to the first quarter of 2022. Mobile network operators launched Easter promotional campaigns in April that were mainly focused on convergent but also on mobile-only offers. While the availability of high value handsets posed a certain challenge, A1's mobile core business showed decent performance and was additionally supported by solid development in the SIM-only and the prepaid segments. A1's 5G tariffs continued to be sold with the premium over LTE tariffs, while the mobile low-value segment remained highly competitive. The Internet@home market was characterized by continued speed upgrades, mainly on the side of mobile WiFi routers, with somewhat abating dynamics compared to the same period last year. Fixed RGU losses, similar to the previous reporting periods, continued to be driven by voice-only and low-bandwidth customers. Solution and connectivity business, on the other hand, continued to grow in the reporting period, supported by additional projects in connectivity and security areas.

Total revenues in the Austrian segment increased by 1.5% year-on-year, mainly driven by higher service revenues. Equipment revenues increased only slightly as higher ICT equipment sales compensated for lower sales of mobile handsets, while other operating income came in lower. The latter is attributable to the parameter changes in the comparison period, which positively impacted the valuation of asset retirement obligations.

Mobile service revenues were higher compared to the same period last year, driven by improved roaming result in the reporting period, continued demand for mobile WiFi routers as well as solid performance of

Mobile WiFi routers continue to drive Internet@home market

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Telekom Austria AG published this content on 22 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 July 2022 07:53:09 UTC.