A1 Telekom Austria Group

Outlook for the full year 2021

The operational and financial development of the A1 Telekom Austria Group was largely impacted by the COVID-19 pandemic in the fiscal year 2020. Under these circumstances, the financial figures for the reporting year reflect the resilience of the business model and the positive effects of the countermeasures taken by the management.

The Group’s revenues remained virtually stable (- 0.3%) and it achieved a slight increase in EBITDA of 1.0%. Despite the substantial loss of roaming revenues and negative FX effects, there was a stable trend in service revenues both in the mobile and the fixed-line segment.

There are signs that the overall economic situation will recover in fiscal 2021, which should exert a positive effect on results. After severe slumps in GDP growth rates in 2020, a recovery is forecast in 2021. The rising availability of vaccinations from the start of the year should ease the situation. Nonetheless, it should be noted that the recovery could be delayed, partly on account of mutations of the COVID-19 virus that emerged at the end of 2020.

Despite the lockdown measures still in place on all markets at the start of the fiscal year, the Group is projecting a partial recovery in roaming revenues for 2021, though it is assumed that travel activity will still be limited.

The market developments in 2020 are likely to largely resume in fiscal 2021. Developments in Austria will continue to be dominated by convergent offers and intense competition on the mobile market. Following the 5G auction in fall 2020 and the advancing expansion of the new mobile generation, attention in the high-value customer segment is shifting to the 5G product portfolio. In the CEE countries as well, like last year, the focus is on the high-value customer segment, and management again expects strong demand for mobile broadband solutions. In 2021, the Group’s fixed-line business should again benefit from demand for higher bandwidths, the rising significance of TV content and fast-growing solutions and connectivity business.

In this business environment, the management of A1 Telekom Austria Group is committed to its growth strategy. The focus here is on growth in the core business, leveraging earnings and efficiency potential from platform solutions and selective growth through acquisitions. As in previous years, results are expected to be supported by ongoing measures to continuously enhance operating efficiency.

A1 Telekom Austria Group announced with the publication of its Q3 2020 quarterly report that it is currently working on the development of alternatives that would allow to reap more benefits from its tower assets through a targeted management focus on internal efficiencies and higher tenancy ratios.

For the financial year 2021, the management of A1 Telekom Austria Group expects to achieve growth in total revenues of around 1% and for its EBITDA margin to grow once again.

The development in Belarus could be negatively affected by the depreciation of the Belarusian ruble in 2021. The management of A1 Telekom Austria Group expects the currency to depreciate by around 15% (period average) against the euro in 2021, though it should be noted that the predictability of the Belarusian ruble is limited.

A1 Telekom Austria Group is also committed to the fiber rollout in Austria and to the ongoing development of its mobile infrastructure in 2021, especially in terms of the roll-out of 5G. This will gather momentum in 2021 following the launch of the 5G network in January 2020.

Capital expenditures before spectrum investments and acquisitions are expected to come in at around EUR 800 mn in 2021.

With regards to frequencies, some tenders are envisaged by regulators in Bulgaria (2.6 GHz, 3.6 GHz), Croatia (700 MHz, 3.6 GHz, 26 GHz), Slovenia (700 MHz, 1.4 GHz, 2.1 GHz, 2.3 GHz, 3.6 GHz, 26 GHz) and Serbia (3.6 GHz). Whether these tenders will take place in 2021 remains to be seen given the current COVID-19 pandemic. Please note that this is a list of spectrum award procedures. Whether A1 Telekom Austria Group is planning to participate and sees a need to acquire spectrum the company does not comment on.

The Management Board intends to propose a dividend of EUR 0.25 per share for the financial year 2020 to the 2021 Annual General Meeting. The Management Board and the Supervisory Board will continuously evaluate the further development of the COVID-19 pandemic in terms of its financial and general business impacts. If the business operations of Telekom Austria AG have noticeable positive or unforeseen negative effects until the invitation to the Annual General Meeting, the Management Board and the Supervisory Board do not rule out a subsequent adjustment of the proposal for the appropriation of profits 2020 in any direction.

To ensure its financial flexibility, A1 Telekom Austria Group is still striving to maintain 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).
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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Susanne Aglas-Reindl

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A1 Telekom Austria Group

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