Main focus of Investor Relations’ transparent and timelycommunication in the reporting year was systematicimplementation of the Group strategy ensuring solid resultsdespite regulatory intervention, strong share price performanceand 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 andreached their low for the year of EUR 5.50 on 13 January 2017. The price ofTelekom Austria shares then increased steadily, and exhibited a particularlystrong performance after their inclusion in the MSCI Global Small Cap Index inMay. Following the publication of the results for the first half of the year 2017, theshares 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 ofEUR 8.28 on 27 October 2017, their highest level in five reporting years. Afterfurther profit-taking, the share price then took a downturn, closing the year atEUR 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 tradingsideways at the start of the year, the Stoxx Telecom industry index posted minorgains before falling away heavily at the end of January 2017. Both indices roseagain 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. Thesector lost some ground again after a recovery in July and August 2017, andmoved sideways until the end of the year. By contrast, the ATX rose again by theend of the year, closing 30.6 % higher year-on-year, while the Stoxx Telecom in-dustry index fell by 3.6 % in 2017.
Based on the improved operational and financial performance of the Group, anew expected dividend level was agreed upon by América Móvil and Österreichis-che Bundes- und Industriebeteiligungen GmbH (ÖBIB) in 2016. Starting with thefinancial year 2016, this dividend expectation entails the payment of EUR 0.20per share to be maintained or increased on a sustainable basis in line with theoperational and financial developments of the Group. For the financial year2017, the Management of Telekom Austria AG again intends to propose adividend 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 marketsin order to ensure that its financing is broadly diversified, both geographicallyand in terms of its investor base.
Since its first bond transaction in 2003, Telekom Austria AG has issued a total ofnine benchmark bonds. In 2013, it placed the first hybrid bond in the Europeantelecommunications sector.
A bond of EUR 500 mn that matured in January 2017 was repaid as scheduledfrom the issuing proceeds of a ten-year bond, with a coupon of 1.5 %, placed on30 November 2016. On 10 July 2017, guaranteed by Telekom Austria AG, TelekomFinanzmanagement GmbH successfully increased this bond by a volume of EUR250 mn. Telekom Austria AG announced on 3 January 2018 that it will repay thehybrid bond of EUR 600 mn issued in 2013 as at 1 February 2018 (first call date).
Telekom Austria AG is regularly rated by Moody’s Investors Service and Standard& Poor’s Ratings Services. Standard & Poor’s confirmed its BBB rating forTelekom 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 atBaa2, which was last confirmed on 5 July 2017.
The liquidity of corporate bonds generally declines significantly within a certainperiod following their issuance. As credit default swaps (CDS) are not affected bythis liquidity reduction, it is standard international practice to use five-year CDSwhen analysing spread development.
Telekom Austria AG’s five-year CDS spread moved sideways above the 50 bp linein the opening months of 2017, reaching its high for the year at around 55 bp on28 March. The Markit iTraxx Europe Index also moved sideways during thesemonths, 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 declineas the year progressed. The Telekom Austria CDS spread and the Markit iTraxxEurope Index then fell to their lows for the year of around 28 bp and 44 bprespectively towards the end of the year. ▬
as of 31 December 2017
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.
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)
Share price low (in EUR)
Share price high (in EUR)
Share price as of 31December (in EUR)
Market capitalisation as of31 December (in EUR bn)
Average daily stock marketturnover (in EUR mn)
Number of shares ofcommon stock as of 31December
Number of sharesoutstanding as of 31December
ATX weighting as of 31December (in %)
Key figures about the
Telekom Austria share
Vienna Stock Exchange
ATX Prime Market
1 ADR = 2
Basic information about the
Telekom Austria share
American Depositary Receipts (ADR)
Volume (in EUR mn)
Telekom Austria AG outstanding bonds
as of 31 December 2017 (Issuer: Telekom Finanzmanagement GmbH. Hybrid bondissued by Telekom Austria AG)
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