INVESTOR RELATIONS

INVESTOR RELATIONS

Main focus of Investor Relations‘ transparent and timely communication in the financial year 2016: Consistent implementation of the Group’s strategy and its solid company results, higher dividend proposal, increase in free float and the successful placement of its ninth benchmark bond.

SHARE PRICE PERFORMANCE AND SECTOR COMPARISON

The Telekom Austria shares had a weak start to the reporting year, as well as the ATX and the sector, and reached its low for the year of EUR 4.66 on 9 February 2016. Following the publica- tion of full year 2015 results, Telekom Austria’s share price increased, reaching its high for the year of EUR 5.73 on 15 March 2016. In April and May, the Telekom Austria share traded mostly sideways with a slight upward trend. In the run-up to the British referendum on leaving the Eu- ropean Union, the stock came under selling pressure in June and lost further ground when vot- ers unexpectedly decided in favour of ‘Brexit’ in the middle of the year.

After an extended period of sideways movement, Telekom Aus- tria’s share price marked a significant increase towards the end of the year and finally closed on 31 December at EUR 5.61, up 11.2% on the start of the year.


The Stoxx Telecom industry index and the ATX, the benchmark index of the Vienna Stock Exchange, declined during the first quarter of 2016 due to concerns about macroeconomic market conditions and the weakness of the oil price. In early Q2, both indices started to rise again as the oil price recovered, but de- clined again at the end of June due to the British referendum. After the abolition of retail customer roaming, the sector sub-

sequently continued its downward trend. Meanwhile, the ATX rose on the back of strong com- pany results, posting a year-on-year increase of 9.2%. The Stoxx Telecom, by contrast, fell by 15.7% in 2016.

DIVIDEND

On 22 July 2016, Telekom Austria Group announced that América Móvil and Österreichische Bundes- und Indus- triebeteiligungen GmbH (ÖBIB) agreed that day on a new ex- pected dividend level starting with the financial year 2016. This decision is based on the improved operational and finan- cial performance of the Group. This new 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.




FINANCIAL DEBT AND RATINGS

The Telekom Austria Group actively uses the local and in- ternational debt capital markets in order to ensure that its fi- nancing is broadly diversified, both geographically and in terms of the investor base.


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


A bond that matured in January 2016 was repaid as scheduled from existing liquidity. On 30 November 2016, Telekom Fi- nanzmanagement GmbH successfully placed a bond with a face value of EUR 500 million, a maturity of ten years and a coupon of 1.5%. The issue proceeds from the placement were mainly be used to refinance the EUR 500 million bond which matured in January 2017 and was paid back in due time, as well as for general company purposes.

Credit Ratings

Telekom Austria AG is regularly rated by Moody’s Investors Service and Standard & Poor’s Ratings Services. On 17 August 2016, Standard & Poor’s confirmed its BBB rating (stable out- look) for Telekom Austria AG. Moody’s also retained its Baa2 rating (stable outlook), which was most recently confirmed on 6 November 2016.


Spread development

The liquidity of corporate bonds generally declines significantly within a certain period follow- ing 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 rose to around 96 bps in early 2016 in the wake of concerns about the condition of European banks and falling oil prices. At the same time, the Markit iTraxx Europe Index reached its high for the year of around 112 bps. The spread for both the company and the index then declined until early March. The subsequent sideways move- ment was followed by a moderate increase following the result of the Brexit referendum. How- ever, the Telekom Austria spread and the Markit iTraxx Europe Index then fell to their lows for the year of around 52 bps and 42 bps respectively. Both spreads remained at a low level until the end of the year.

Shareholder Structure

as of 31 Dec 2016

More insight: Investor Relations informs in a timely and transparent manner about the company development and future chances in the telecommunications sector that are being opened up by trends like digitalisation.

Detailed information on shareholder notifications in the year under review can be found at http://www.telekomaustria.com/en/ir/shareholder-structure

Contact

Telekom Austria Group Investor Relations

Tel.: +43 (0)50 664 47500

investor.relations@telekomaustria.com

https://www.telekomaustria.com/en/investor-relations

Susanne Reindl, Head of Investor Relations

susanne.reindl@telekomaustria.com