Outlook 2020

In 2019, A1 Telekom Austria Group achieved substantial growth in its revenues and its EBITDA adjusted for one-off and FX effects as well as restructuring charges, with the CEE segments making a particularly strong contribution to this growth. In the mobile communications business, this was achieved by means of a clear focus on high-value customers and continuing growth in mobile broadband solutions. The fixed-line business profited from the increasing significance of TV content, demand for higher bandwidths, and fast-growing solutions and connectivity business.

For the full year 2020, most of the market dynamics described above are expected to continue. The development in Austria will still be dominated by convergent offers and intense competition in the mobile market. In the mobile markets in the CEE countries, the competitive environment is expected to remain largely similar to 2019 and demand for fixed-line services is also expected to remain a positive driver across all markets. As in the financial year 2019, TV content will be an important element here, as will solutions and connectivity.

In this business environment, the Management of A1 Telekom Austria Group remains committed to its growth strategy. The focus here is on growth in the core business, lifting earnings and efficiency potential from platform solutions, and selective non-organic growth by way of acquisitions. As in previous years, results are expected to receive support from ongoing measures to continuously increase operating efficiency.

For 2020, the Management of A1 Telekom Austria Group expects to achieve growth in total revenues of approximately 1-2% and another increase in the EBITDA margin.

The development in Belarus could be negatively affected by the devaluation of the Belarusian Ruble in 2020. The Management of A1 Telekom Austria Group expects the currency to depreciate by around 5% (period average) against the Euro in 2020, although it should be noted that the predictability of the Belarusian Ruble is generally limited.

The harmonization of the local brands under the “A1” brand will be completed in 2020 with the market launch in Serbia, thus allowing for a uniform market presence of A1 Telekom Austria Group in its footprint.

A1 Telekom Austria Group will remain committed to the fiber rollout in Austria and the further development of its mobile infrastructure, especially with regards to the preparation and rollout of 5G, in 2020. In January 2020, A1 Austria started operating its 5G network and it will keep pressing ahead with the rollout in 2020 and the following years. Capital expenditures before spectrum investments and acquisitions are expected to total approximately EUR 770 mn in 2020.

In Austria, a frequency allocation for the 700-MHz, 1500-MHz and 2100-MHz bands is coming up in a multi-band auction. The bidding documents were published in December 2019, while the auction itself is expected to begin in April 2020.

Based on the improved operational and financial performance of the Group, a new expected dividend level was agreed upon by América Móvil and Österreichische Beteiligungs AG (ÖBAG) in 2016. Starting with the financial year 2016, this dividend expectation entails the payment of EUR 0.20 per share to be maintained or increased on a sustainable basis in line with the operational and financial developments of the Group.

In this context, the Management Board plans to propose a dividend of EUR 0.23 per share to the Annual General Meeting 2020 for the financial year 2019.

In order to ensure its financial flexibility, A1 Telekom Austria Group remains committed to maintaining a solid investment grade rating of Baa2 from Moody’s and BBB from Standard & Poor’s (currently Baa1 from Moody’s and BBB+ from Standard & Poor’s).

[1] Please note that this a list of potential spectrum awards procedures. The Group is not permitted to comment on whether A1 Telekom Austria Group is planning and sees a need to participate and acquire spectrum in the abovementioned procedures. 

 

Disclaimer for forward-looking statements:

This document contains forward-looking statements. These forward-looking statements are usually accompanied by words such as “believe”, “intend”, “anticipate”, “plan”, “expect” and similar expressions. Actual events may differ materially from those anticipated in these forward-looking statements as a result of a number of factors. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statement. Neither Telekom Austria nor any other person accepts any liability for any such forward-looking statements. Telekom Austria will not update these forward-looking statements, whether due to changed factual circumstances, changes in assumptions or expectations. This report does not constitute a recommendation or invitation to purchase or sell securities of Telekom Austria.

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