Equity story

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The most important arguments for investing at a glance

 

Turnaround target in Austria


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In its home market in Austria, the Telekom Austria Group is targeting a reversal of trends towards a positive EBITDA comparable development. The priority is value-orientated growth. For this purpose, A1 Telekom Austria AG (A1) is focusing on high-value customer segments and on convergence. The company is ideally equipped to monetise the ongoing growth of data: Thanks to an outstanding frequency spectrum, A1 can distinguish itself from the competition in terms of network quality. In the fixed-line business, the accelerated fibre rollout—an additional EUR 400 mn is to be invested in this from 2015 to 2018—offers growth opportunities through up- and cross-selling. Moreover, strict cost management will also contribute significantly to the expected growth of results in the future. The sustainability of the anticipated turnaround will depend on the impact of expected market entries by new mobile virtual network operators (MVNOs).

 

Medium-term growth opportunities in CEE


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The overriding objective of the Telekom Austria Group as one of the leading providers in CEE is to capitalise on the medium-term economic growth potential that the Group sees in this region. Depending on market maturity, the convergence strategy, which has been proven successful, shall be implemented here too. It has been developed furthest in Bulgaria, Croatia and the Republic of Macedonia where the Group’s number one goal is to stop the current EBITDA comparable decline in the face of fierce competition and macroeconomic challenges. In Belarus, meanwhile, the Telekom Austria Group focuses on data growth and operational strength in order to counteract inflation and currency devaluation. In the Additional Markets segment growth opportunities will also continue to be used in the best way possible.

 

Solid balance sheet structure and dividend growth potential


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The Telekom Austria Group has a solid capital structure, which is defined by the current target rating of Baa2 and BBB of the rating agencies Moody’s and Standard & Poor’s respectively. The successful capital increase in November 2014 further strengthened the Group’s balance sheet structure and gave it additional financial flexibility for investments—for example for the accelerated fibre rollout in Austria and value-accretive M&A activities. As part of its longer-term dividend policy, the Telekom Austria Group intends to distribute a sustainable annual dividend of at least 5 Eurocents per share, which has the potential to grow in the medium-term. This minimum value has already been confirmed for 2014 and 2015.

 

Shareholder structure with long-term orientation


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The shareholder structure with the controlling majority owner América Móvil and the core shareholder Österreichische Industrieholding AG (ÖIAG) offers the Telekom Austria Group a stable basis for the future, even in times of Europe-wide market consolidation. In order to secure an appropriate free float in terms of sufficient liquidity, the core shareholders agreed that América Móvil must ensure a broadly diversified free float of at least 24% again within 24 months of the expiration of the takeover bid in October 2014.

 

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