The digital journey continues

Digitalisation is progressing rapidly in almost all areas of business

and life. The A1 Telekom Austria Group sees itself as a pioneer and companion on this journey. In the year under review, it therefore continued its transformation into a preferred digitalisation partner. Providing connectivity and bandwidth at the highest level forms a sound basis for this. For this reason, further investments in the rollout of fixed-line and mobile broadband infrastructure and in state-of-

the-art data centres were made in 2017.

Thanks to the quality of its infrastructure, the A1 Telekom Austria Group also paved the way for excelling in its core business and ex- panding its product portfolio. An outstanding customer experience

is the focus of these core aspects of the strategic orientation (see ‘Vision and Strategy’). Attractive offers in the areas of ICT, cloud and IoT (‘Internet of Things’) solutions and innovative content offers play

an increasingly important role in this context. Moreover, with the establishment of A1 Digital as an international subsidiary, the Group

is gaining ground beyond its traditional geographical footprint.

The consistent execution of the Group’s strategy allowed the A1 Telekom Austria Group to improve its operational business even in the face of tough competition and regulatory frameworks. As a result, the A1 Telekom Austria Group recorded revenue growth of 4.1 % and EBIT- DA growth of 3.2 % in the year under review despite substantial losses due to roaming regulation. The Group managed to increase free cash flow by 65.8 % to EUR 384.7 mn. The number of mobile customers amounted to 20.7 million and the Group posted a growth of 3.6 % in its contract base, while fixed-line revenue-generating units (RGUs) increased by 2.3 %. The Telekom Austria share price closed at EUR 7.72 on 31 December 2017, up 37.8 % in a year-on-year comparison and clearly outperforming the sector (Stoxx Telecom: –3.6 %). For the year 2018, the management is expecting modest growth in revenues and CAPEX of about EUR 750 mn.

In pursuing its corporate strategy, the A1 Telekom Austria Group com- mits itself to the targets of the triple bottom line of sustainable develop- ment (‘People, Planet, Profit’). The company is also expressly committed to the UN Global Compact and makes contributions to the Sustainable Development Goals (SDG) of the United Nations. All this is intended to

secure business activity in the long run. Beyond that, the Group’s man- agement actively assumes societal and environmental responsibility. This integrated viewpoint has also led to the first-time publication of a combined annual and sustainability report for the year under review.

An example of optimising core business, but also of utilising synergy effects and best possible group-wide leverage of existing assets (‘One to all’), is the gradual roll-out of the A1 brand across all of the Group’s operations, which was resolved in 2017. In the course of consequently pursuing this one-brand strategy, the Group rebranded its international corporate brand into A1 Telekom Austria Group. Thus, the Group contin- ues to use the strong brand identity of A1 to promote its public percep- tion as a powerful international company (‘One company’).

As with any venture into any new territory, enthusiasm for discoveries, development paths and future prospects leads the way when it comes to digitalisation. The A1 Telekom Austria Group will therefore stay curious and continue to think and act innovatively (see ‘Start-up Initiatives’) as it moves on to the next stages of its digital journey. ▬

Alejandro Plater, CEO & COO

Siegfried Mayrhofer, CFO