Telekom Austria Group Refined Outlook for 2010
Several negative external effects and the impact of weak economies shape the market environment for Telekom Austria Group. These effects include the unabated fixed-to-mobile substitution and the continued price pressure in Telekom Austria Group’s major markets. In addition, regulatory induced lower roaming prices as well as mobile termination rates will continue to impact the group’s results in the second half of 2010. Taxes levied on mobile communication services in Croatia and the Republic of Serbia pose an additional burden.
For the second half of 2010, the management expects the challenging market environment to continue to persist. However, the refined outlook reflects the group’s confidence to be able to successfully address these challenges through clear customer focus, intensified marketing of innovative products and strict cost management. Moreover, the revised outlook now includes the impact of the integration of Fixed Net and Mobile Communication activities in Austria.
For the financial year 2010, revenues are expected to amount to approximately EUR 4.7 billion. Stringent cost control will mitigate the impact from lower revenues and is anticipated to result in an EBITDA of EUR 1.60 – 1.65 billion. In light of investments for the migration to an All-IP based voice network in the Fixed Net segment, capital expenditures of Telekom Austria Group are forecasted to reach EUR 750 to 800 million. This amount does not reflect a material roll-out of glass fiber which is not expected to start in 2010.
Operating Free Cash Flow remains the primary focus of the management and is expected to amount to at least EUR 800 million. Telekom Austria Group reiterates its intention to distribute the higher of 65% of the annual net income or at least 75 Eurocents per share as dividend until 2012.
The Management Board remains committed to its capital allocation policy including returning excess cash to shareholders via share buybacks within the 1.8x-2.0x net debt/EBITDA target balance sheet structure and provided stability in its main foreign currencies and operations. However, in light of the ongoing challenging operating environment share buyback is not expected to start in 2010.
This outlook is given on a constant currency basis.
|
Outlook 10*
as of Aug. 18 |
Outlook 2010**
as of May 12 |
|
|---|---|---|
| Telekom Austria Group | ||
| Revenues | ~ EUR 4.7 bn | ~ EUR 4.7 bn |
| EBITDA | EUR 1.60 - 1.65 bn | ~ EUR 1.6 bn |
| Capital Expenditures | EUR 0.75 - 0.80 bn | ~ EUR 0.8 bn |
| Operating Free Cash Flow | at least 0.8 bn | ~EUR 0.8 bn |
| Dividend | 65% of net income, DPS of 75 cents minimum |
65% of net income, DPS of 75 cents minimum |
* Including the impact of the merger of domestic operations
**Excluding the impact of the merger of domestic operations
Please note that this text contains forward-looking statements. The website contains forward-looking statements that could result in risks and uncertainties. Forward-looking statements usually use expressions such as "believe", "is the aim", "assume", "plan", "expect" and similar wording. Due to a number of factors the actual events can deviate considerably from expected development. Forward-looking statements naturally contain risks and uncertainties. We would like to point out that due to a number of important factors the actual results can deviate considerably from the forward-looking statements.
