Transparent and timelycommunication ofcorporate development
Investor Relations’ communications policy againfocused on the systematic implementation of thecorporate strategy targeted at digital transformationand the resulting solid operating results in 2018.
Share price performance and sectorcomparison
Telekom Austria’s shares had a strong start to the new year and reached theirhigh for the year of EUR 8.42 on January 5, 2018. However, this was followed byprofit-taking and, in February, higher-than-expected inflation and thereforegrowing fears of further interest rate hikes in the US caused a difficult situation onEuropean stock markets. Nonetheless, the price of Telekom Austria shares recov-ered and outperformed the European market and the sector until the beginningof May. After the first half of the year, geopolitical tension between the US andNorth Korea and the start of a trade war between the US and China sparkednegative market sentiment that also spread to Telekom Austria’s shares.
The second half of the year began with a recovery in the share price, which con-tinued to rise following the publication of the half-year figures. Telekom Austria’sshares maintained their price level in August despite negative stock market stimu-lus stemming from the intensifying US/China trade war and the Turkish currencycrisis. However, in contrast to general market and sector developments, theshares suffered considerable price losses in September and shed much of theirprevious outperformance over the sector by the beginning of October. As theyear progressed, uncertainty in connection with the Italian national budget andthe unresolved Brexit settlement were among the factors that led to clouded sen-timent on European stock markets. The telecom sector performed well in this dif-ficult environment and also benefited from positive regulatory decisions such asthe approval of the merger of T-Mobile and Tele2 in the Netherlands. The TelekomAustria share price stabilized and the share closed the year at EUR 6.64. With anegative performance of –14.1 % in 2018 the share almost reflected the develop-ment of the sector (Stoxx Telekom: –13.0 %), after having considerably outper-formed the latter in 2017. The Austrian lead index ATX lost 19.7 % in 2018.
Based on the improved operational and financial performance of the Group, anew expected dividend level was agreed by América Móvil and ÖsterreichischeBundes und Industriebeteiligungen GmbH (ÖBIB) in 2016. Starting from fiscal2016, this dividend expectation entails the payment of EUR 0.20 per share to bemaintained or increased on a sustainable basis in line with the operational andfinancial development of the Group. The Management Board of Telekom AustriaAG plans to propose a dividend of EUR 0.21 per share for financial year 2018 atthe 2019 Annual General Meeting.
Financial debt and ratings
The A1 Telekom Austria Group actively uses the local and international debt capi-tal markets to ensure that its financing is broadly diversified, both geographicallyand in terms of its investor base.
Since its first bond in 2003, the A1 Telekom Austria Group has issued nine bench-mark bonds in total. It placed the first hybrid bond with a volume of EUR 600 mn inthe European telecommunications sector in 2013. This bond was repaid on itsfirst call date on February 1, 2018.
Telekom Austria AG is regularly rated by Moody’s Investors Service and Standard& Poor’s Ratings Services. On June 28, 2018, the strong cash flow generationand solid financing ratios prompted Moody’s to raise its rating from Baa2 toBaa1. Standard & Poor’s confirmed its rating for Telekom Austria AG on June 28,2018.
The liquidity of corporate bonds usually declines significantly a certain time afterbeing issued. As credit default swaps (CDS) are not affected by this liquidity re-duction, it is standard international practice to use five-year CDS when analyzingspread development.
Telekom Austria AG’s five-year CDS spread remained at a low level in the report-ing year. Telekom Austria AG’s risk premium tracked sideways at around 30 basispoints in the opening months of 2018, reaching a historic low of 26 basis pointson February 1. The formation of the Italian government in June led to rising riskpremiums and the Markit iTraxx Europe Index climbed above the 70-point mark.As a result, Telekom Austria AG’s CDS spread also rose to its high for the year of42 basis points on June 8. The credit spreads for both the market and TelekomAustria AG subsequently narrowed again. From October, interest rate hikes in theUS and the expiry of the ECB’s bond-buying program led to rising risk premiumsin the market, while Telekom Austria AG maintained its low spread level. Its five-year CDS spread was 36 basis points at the end of the year while the Markit iTraxxEurope Index closed at 87 basis points. ▬
Development of Telekom Austria’s share price
indexed as of January 1, 2018
Telekom Austria share Austrian Traded Index
Stoxx Europe 600 Index Stoxx Europe Telecommunications Index
Telekom Austriashare monthly turnover (in EUR mn; right-hand scale)
Market capitalization as ofDecember 31 (in EUR bn)
ATX weighting as of
December 31 (in %)
stock market turnover
(in EUR mn)
Number of shares outstandingas of December 31
Share price low (in EUR)
Share price high (in EUR)
Share price as of December31 (in EUR)
Key figures of Telekom Austria’s share
Number of shares of
common stock as ofDecember 31
as of December 31, 2018
ÖBIB (Republic of Austria)2)
Free float including employee
and treasury shares
Total number of shares
1)According to registration for the Annual General Meeting on
May 30, 2018
2)ÖBIB will be transformed into a stock company due to the changeof the “ÖIAG Gesetz 2000” according to Sec 245ff AktG. Thecompany will be transformed into Österreichische Beteiligungs AG(ÖBAG).
No shareholding notifications were reported in accordance withsections 130 et seq. of the Austrian Stock Exchange Act in financialyear 2018.
March 26, 2012
June 27, 2013
November 26, 2013
November 30, 2016
Volume (in EUR m)
Telekom Austria AG outstanding bonds
as of December 31, 2018 (issuer: Telekom Finanzmanagement GmbH)