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Information about prez0301

Published on February 24, 2008

Author: Mikhail


Slide1:  Successful start to the year First quarter 2003 results Slide2:  Segment analysis This presentation contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors are described in, among other things, our Annual Report on Form 20-F for the year ended December 31, 2002 filed with the U.S. Securities and Exchange Commission. Agenda Overview, first quarter 2003 highlights Outlook Slide3:  Market leader in all core businesses Revenue up by 2.8% to HUF 144.9 bn, EBITDA margin reached 46% in Q1 2003 100% stake in the leading Hungarian mobile operator Full scale telecommunications services in Macedonia EUR 3 bn market capitalisation Listed on NYSE and Budapest Stock Exchange, traded in London (SEAQ) Matáv at a glance Ownership structure - approx. (%) Slide4:  Stable results, new packages, momentum in the ADSL market EBITDA margin (46%) Revenues HUF 144,931 mn First quarter 2003 highlights Fixed line Mobile International 0% 40.3% 8.4% 43.0% 3.2% 55.9% Revenues up by 2.8% EBITDA HUF 66.683 mn 0.9% 31.0% 35.0% Top line hit but profitability preserved Strong financial performance despite intense competition Slide5:  Infrastructure based competition RIO based interconnection fees are paid only if there are at least 3 points of interconnection in 3 out of the 10 secondary switches No third-party billing in voice telephony Price cap regime Overall price cap: 4% in 2002, 2% in 2003 and CPI minus 3% in 2004 Specific price caps for subscription fees and local tariffs New fixed line retail tariffs since February 2003 LRIC based reference offers including leased line IC approved in May 2003 Origination and termination fees reduced retrospectively IC fees will likely continue to move toward EU benchmarks Regulatory snapshot So far limited traffic fall out and loss of customers Slide6:  Fixed line: stable results, successful new packages 2,860 2,672 2,900 2,966 2,936 38.1 35.4 38.6 39.5 39.1 38.4 2,882 Fixed line penetration and number of lines marginally declined Shift to ISDN (up 7.9% y/y), which now represents 18% of total lines Growing popularity of customised tariff packages (37% of total number of lines) Slide7:  Fixed line: further efficiency boost Limited growth in the voice business mobile cannibalisation competitive pressure (mainly DLD, ILD) new packages Further cost cutting is crucial, primarily headcount reduction (1,100 in 2003 and 250 in 2004) Re-negotiation of contracts to trim expenses First quartile of WE companies Slide8:  Data business: momentum in the ADSL market ADSL proved to be a successful broadband product Large portion of revenue still comes from managed leased lines Axelero had almost 157,000 subscribers - market leader among ISPs with around 43% share in the dial-up market New tax incentives to boost broadband penetration 35-50% of broadband investments tax deductible Personal income tax incentives supporting PC purchases Tax free PC / Internet benefit in kind Slide9:  Mobile: market leadership in a slowing market Subscribers in '000 842 547 1,599 GSM Penetration Penetration 2,493 Westel Customer Growth and GSM Penetration in Hungary 3,403 Penetration in Hungary nearly 70% at the end of March 2003 Pre-paid represented 75% of total customer base Westel: HUF 5,059 ARPU (ca. EUR 21) and 103 MOU 3,402 Slide10:  Mobile: financial excellence, new services Impressive financial results Slight decline in market share Enhanced services showed strong development (nearly 11% of ARPU) Continuously falling customer acquisition costs (down by 22% to HUF 11,854 in Q1 2003) Profitability and market share entry barrier: lowest price of the pre-paid handsets Slide11:  Mobile: intense competition Focus shifted from entry barrier towards tariff competition - churn reacted immediately Westel response: new post-paid “halving” offer from April, new pre-paid structures from May Leading market position and healthy advantages preserved over rivals Increasing importance of customer retention program Slide12:  MakTel: top line hit but profits preserved Limitation on revenue growth Disconnections, lower equipment sales, lower mobile and domestic usage Decrease in international revenues as both prices and usage reduced Strong focus on expenses Maintenance costs, marketing, consultancy fees reduced Decrease in volume related costs EBITDA margin reached 55.9% Drivers of Q1 2003 results Focus on cost control (3.2%) (22.8%) Slide13:  MakTel: growth in customer base and market penetration Number of Customers Low market penetration (2%) substantial growth potential despite competition Impressive growth, prepared for competition, penetration 19% Successful take-up of ISDN channels, penetration 29% Penetration fixed line Slide14:  MakTel: outlook Macroeconomic environment Stagnating GDP High unemployment rate Falling disposable income Limited economic growth in the next twelve months Further fixed line tariff rebalancing (7.5% price increase in 2003) Emergence of mobile competition Outsourcing opportunities Continued strict cost control in all business areas Slide15:  Matáv Group: reducing indebtedness *MakTel and Westel acquisition were financed from debt Controlled leverage post acquisitions Strong operational cash flow provides balance sheet flexibility Uncovered FX exposure was around 13% of the total debt Rating: S&P: BBB+ stable outlook, confirmed Moody’s: Baa1 stable outlook, confirmed Slide16:  Matáv Group: new dividend policy HUF 18 per share dividend approved for 2002, representing 64% increase y-o-y Strategic priority remains to seek further value-enhancing acquisitions Targeted net debt ratio between 30-40% Aim to further increase the dividend in forint terms, while keeping within net debt ratio range *Dividend yield calculated with HUF 815 share price (end of 2002) Targeted net debt ratio range Aim to further increase the dividend Slide17:  Gross additions to tangible and intangible assets 2002 capex/sales ratio was 16.6%, aim to further improve Growth areas not affected by capex reductions Public target for 2003: around HUF 90 bn including MakTel but without UMTS and acquisitions Slide18:  Outlook and targets for 2003 Outlook Challenges from intensifying competitive pressures in all businesses Slowing growth in domestic mobile penetration Strong growth in ADSL business Financial targets set for 2003 Revenue growth low single-digit EBITDA margin in the region of 40% Gross additions to tangible and intangible assets around HUF 90 billion

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