Outlook 2010: 75 Cents DPS Floor Reiterated until 2012
Telekom Austria Group expects the challenging environment to persist in 2010. This environment is characterized by the concurrence of several negative external effects with the impact of weak economies. The negative external effects mainly encompass ongoing fixed-to-mobile substitution in Austria, continued price pressure in Telekom Austria Group’s major markets and the effect from regulatory-induced lower roaming prices as well as reduced mobile termination rates in Austria, Bulgaria, Croatia and Slovenia. Furthermore, the introduction of taxes levied on selected mobile communication services in Croatia and the Republic of Serbia poses an additional burden.
For the financial year 2010, revenues are expected to amount to roughly EUR 4.7 billion. The com-pany has already initiated significant cost reduction programs in both segments addressing both staff and non-staff related expenses to mitigate the impact from lower revenues. Including the expected cost savings, EBITDA should reach about EUR 1.6 billion. Depending on investments for the migration to an All-IP based voice network in the Fixed Net segment, capital expenditures of the Telekom Austria Group are forecasted to reach approximately EUR 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 come out at about EUR 800 million. The Telekom Austria Group reiterates its intention to distribute the higher of 65% of the annual net income or at least 75 cents per share as dividend until 2012. The management board remains committed to its capital allocation policy including returning excess cash to shareholders via share buy-backs within the 1.8x-2.0x net debt/EBITDA target balance sheet structure and provided stability in its main foreign currencies and operations. Hence, in light of the ongoing challenging operating environment share buyback is not expected to start in 2010.
This outlook is based on constant currencies and does not yet include the impact of the announced integration of Fixed Net and Mobile Communication activities in Austria.
|
Outlook 2010
as of Feb 24, 2010* |
|
|---|---|
| Telekom Austria Group | Actual currency basis |
| Revenues | ~ EUR 4.7 bn |
| EBITDA | ~ EUR 1.6 bn |
| Capital Expenditures | upt ot EUR 800 mn |
| Operating Free Cash Flow | ~EUR 800 mn |
| Dividend |
65% of net income, DPS of 75 cent minimum |
* 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.
