Earnings

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Despite the negative net effects from the above-mentioned one-offs, EBITDA comparable fell by only 0.1% to EUR 1,286.1 mn in the 2014 financial year, largely as a result of the reduction in operating expenses. The segments Austria and Belarus saw growth in EBITDA comparable of 1.4% and 10.6% respectively, thereby nearly offsetting declines of 9.8%, 28.3% and 1.1% in Bulgaria, Croatia and the Additional Markets segment. Excluding the extraordinary effects from the fixed-line business and employee costs in Austria as well as the one-off effect in Liechtenstein, and adjusted for negative foreign exchange effects in the amount of EUR 20.1 mn, EBITDA comparable increased by 3.9% compared with the previous year. All in all, the EBITDA comparable margin improved from 30.8% in the previous year to 32.0% in the year under review.

Restructuring expenses, which relate entirely to the Austrian segment, amounted to EUR 89.6 mn in the year under review after EUR 45.2 mn in the previous year. They include social plans for employees whose employment contracts are being terminated in a socially responsible manner, and future expenses for civil servants who no longer provide services to Telekom Austria Group, but whose employment contracts cannot be terminated due to their civil servant status. The cost savings from the fewer employees accepting social plans were insufficient to offset the negative effects of an interest rate adjustment affecting the valuation of the restructuring provision in the amount of EUR 42.6 mn as well as a provision for payments to civil servants in the amount of EUR 15.0 mn. In addition, a change in the weighted average cost of capital (WACC) of the Bulgarian segment and the revised expectations for the development of Mobiltel led to the above-mentioned impairment charge. In the Republic of Macedonia Telekom Austria Group also booked an impairment of EUR 5.1 mn in the fourth quarter of 2014 as a result of changes in the weighted average cost of capital (WACC) for Vip operator.

Largely as a result of this impairment charge, EBITDA including the effects of restructuring and impairment testing declined by 28.1% to EUR 850.8 mn. Depreciation and amortisation fell slightly year-on-year by 1.2% to EUR 853.8 mn. Operating income declined from EUR 318.2 mn in the previous year to a negative EUR 3.0 mn.

The Telekom Austria Group recorded a financial result of EUR 181.1 mn in the year under review, 6.1% lower than in the previous year. This was primarily attributable to the EUR 11.8 mn reduction in interest expenses due to the recognition of a net loss in connection with the forward starting interest rate swaps. Interest income also declined slightly to around EUR 14.6 mn. FX differences amounted to a negative EUR 1.9 mn after a negative EUR 4.3 mn in 2013 as a result of the higher level of FX gains in the year under review.

Tax expenses fell from EUR 73.1 mn in 2013 to EUR 1.3 mn in the year under review due to the higher capitalised deferred taxes.

Overall, the Telekom Austria Group reported a negative net income of EUR 185.4 mn in 2014 compared with a positive EUR 52.1 mn in the previous year.

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Company key figures

 

2014

2013

Change
in %

Comparative period 2013 was adjusted in accordance with IAS 8 (please refer to Note (1) of the Consolidated Financial Statements).

*

Proposal to the 2014 Annual General Meeting, which will take place on 27 May 2015

Earnings per share (in EUR)

−0.46

0.07

n.m.

Dividend per share (in EUR)

0.05*

0.05

n.m.

Free cash flow per share (in EUR)

0.34

−1.62

n.m.

ROE

−10.1%

4.9%

ROIC

−0.1%

2.4%

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