Investor Relations

Main focus of Investor Relations’ transparent and timely communication in the reporting year was systematic implementation of the Group strategy ensuring solid results despite regulatory intervention, strong share price performance and a successful increase of the ninth benchmark bond.

Share price performance and sector comparison

The Telekom Austria shares traded sideways at the start of the reporting year and reached their low for the year of EUR 5.50 on 13 January 2017. The price of Telekom Austria shares then increased steadily, and exhibited a particularly strong performance after their inclusion in the MSCI Global Small Cap Index in May. Following the publication of the results for the first half of the year 2017, the shares rose further before losing ground after profit-taking at the end of Sep- tember 2017. The shares then recovered and reached their high for the year of EUR 8.28 on 27 October 2017, their highest level in five reporting years. After further profit-taking, the share price then took a downturn, closing the year at EUR 7.72 as at 31 December 2017, up 37.8 % on the start of the year.

While the ATX, the benchmark index of the Vienna Stock Exchange, was trading sideways at the start of the year, the Stoxx Telecom industry index posted minor gains before falling away heavily at the end of January 2017. Both indices rose again by the middle of April 2017, but then began to decline as geopolitical ten- sions mounted. Following some increases in May 2017, this development contin- ued for the sector and the ATX in June, owing in part to the weak oil price. The sector lost some ground again after a recovery in July and August 2017, and moved sideways until the end of the year. By contrast, the ATX rose again by the end of the year, closing 30.6 % higher year-on-year, while the Stoxx Telecom in- dustry index fell by 3.6 % in 2017.


Dividend

Based on the improved operational and financial performance of the Group, a new expected dividend level was agreed upon by América Móvil and Österreichis- che Bundes- und Industriebeteiligungen GmbH (ÖBIB) in 2016. Starting with the financial year 2016, this dividend expectation entails the payment of EUR 0.20 per share to be maintained or increased on a sustainable basis in line with the operational and financial developments of the Group. For the financial year 2017, the Management of Telekom Austria AG again intends to propose a dividend of EUR 0.20 per share to the Annual General Meeting in 2018.


Financial debt and ratings

Telekom Austria AG actively uses the local and international debt capital markets in order to ensure that its financing is broadly diversified, both geographically and in terms of its investor base.

Since its first bond transaction in 2003, Telekom Austria AG has issued a total of nine benchmark bonds. In 2013, it placed the first hybrid bond in the European telecommunications sector.

A bond of EUR 500 mn that matured in January 2017 was repaid as scheduled from the issuing proceeds of a ten-year bond, with a coupon of 1.5 %, placed on 30 November 2016. On 10 July 2017, guaranteed by Telekom Austria AG, Telekom Finanzmanagement GmbH successfully increased this bond by a volume of EUR 250 mn. Telekom Austria AG announced on 3 January 2018 that it will repay the hybrid bond of EUR 600 mn issued in 2013 as at 1 February 2018 (first call date).


Credit ratings

Telekom Austria AG is regularly rated by Moody’s Investors Service and Standard & Poor’s Ratings Services. Standard & Poor’s confirmed its BBB rating for Telekom Austria AG on 23 May 2017 and raised its outlook to positive. Similarly, Moody’s upgraded its outlook to positive while keeping its rating unchanged at Baa2, which was last confirmed on 5 July 2017.


Spread development

The liquidity of corporate bonds generally declines significantly within a certain period following their issuance. As credit default swaps (CDS) are not affected by this liquidity reduction, it is standard international practice to use five-year CDS when analysing spread development.

Telekom Austria AG’s five-year CDS spread moved sideways above the 50 bp line in the opening months of 2017, reaching its high for the year at around 55 bp on 28 March. The Markit iTraxx Europe Index also moved sideways during these months, hitting its highest point for the year at around 77 bp on 18 April. Devel- opments until then were mainly influenced by the presidential election in France, Brexit negotiations and the uncertainty over the European Central Bank’s mone- tary policy. Both the company’s spread and that of the index continued to decline as the year progressed. The Telekom Austria CDS spread and the Markit iTraxx Europe Index then fell to their lows for the year of around 28 bp and 44 bp respectively towards the end of the year.

Shareholder structure

as of 31 December 2017

Ordinary shares

338,895,000

188,876,602

136,728,398


664,500,000

Shareholders1)

América Móvil

ÖBIB (Republic of Austria)

Free float incl. employee

stocks and treasury shares

Total number of shares


1) As filed for the Extraordinary General Meeting held on

20 September 2017.

There were no holding notifications in the financial year 2017.

Holdings in %

51.00

28.42

20.58


100.00

Development of Telekom Austria share price

indexed from 1 January 2017


Telekom Austria share

Austrian Traded index

Stoxx Europe 600 index

Stoxx Europe telecommunications index

Telekom Austria share monthly turnover (in EUR mn; right-hand scale)


2016

4.66

5.73

5.61

3.7

2.6

664,500,000

664,084,841

1.9

Share price low (in EUR)

Share price high (in EUR)

Share price as of 31 December (in EUR)

Market capitalisation as of 31 December (in EUR bn)

Average daily stock market turnover (in EUR mn)

Number of shares of common stock as of 31 December

Number of shares outstanding as of 31 December

ATX weighting as of 31 December (in %)

2017

5.50

8.28

7.72

5.1

2.7

664,500,000

664,084,841

1.9

Key figures about the

Telekom Austria share

AT0000720008

TKA

TELA.VI

TKA AV

Vienna Stock Exchange

ATX Prime Market

1 ADR = 2

ordinary shares

Basic information about the

Telekom Austria share

ISIN

Symbol

Reuters

Bloomberg

Listing


American Depositary Receipts (ADR)


Volume (in EUR mn)

750

600

300

750

750

Maturity

04.04.2022

perpetual1)

04.07.2023

03.12.2021

07.12.2026

Telekom Austria AG outstanding bonds

as of 31 December 2017 (Issuer: Telekom Finanzmanagement GmbH. Hybrid bond issued by Telekom Austria AG)

Coupon

4.000%

5.625 %

3.500 %

3.125 %

1.500 %


1) Subordinated hybrid bond, called and redeemed at nominal volume plus interest on

1 February 2018 (first call date).

2) Issuance of EUR 500 mn on 30 November 2016; tap issuance of EUR 250 mn on 10

July 2017

Issue Date

26.03.2012

25.01.2013

27.06.2013

26.11.2013

30.11.20162)

ISIN

XS0767278301

XS0877720986

XS0950055359

XS0999667263

XS1405762805

Rating

Baa2

BBB

External ratings and outlook


Company outlook

Positive

Positive


Moody’s

S&P

24 April 2018

20 May 2018

30 May 2018

6 June 2018

7 June 2018

8 June 2018

Week of 16 July 2018

Week of 22 October 2018

Financial calendar

Results for the First Quarter 2018

Record Date

Annual General Meeting

Dividend Ex Date

Dividend Record Date

Dividend Payment Date

Results for the First Half 2018

Results for the First

Nine Months 2018