MOBILE TELESYSTEMS PUBLIC JOINT STOCK (MBT) 4 Mar 212020 Q4 Earnings call transcript

Company Profile

Participants

Polina Ugryumova	Director of Investor Relations
Alexey Kornya	President and Chief Executive Officer
Slava Nikolaev	First Vice President for Customer Experience, Marketing and Ecosystem Development
Inessa Galaktionova	First Vice President for Telecommunications
Andrey Kamensky	Vice President for Finance
Ilya Filatov	Vice President for Financial Services and Chief Executive Officer-MTS Bank
Ivan Kim	Xtellus Capital
Vyacheslav Degtyarev	Goldman Sachs
Anna Kurbatova	Alfa Bank
Maria Sukhanova	BCS
Henrik Herbst	Morgan Stanley
Nicholas Chan	HSBC
Alexander Vengranovich	Renaissance Capital

Call transcript

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Polina Ugryumova

Welcome everybody to today’s event to discuss MTS Fourth Quarter and Full Year 2020 Financial and Operating Results.

Before we start, I must remind you that except for historical information, any comments made during this call may constitute forward-looking statements. Important factors could cause our actual results to differ materially from those contained in our projections or forward-looking statements. This in turn implies certain risks and more thorough discussion of which are available in our Annual Report and Form 20-F or the materials we have distributed today. MTS disavows any obligation to update any previously made forward-looking statements spoken on this conference call or make any adjustments to previously made statements to reflect changes in risks. on mention we the group have loss for to in of profit want statement XXXX, basis. QX retrospectively comparison also that sale following NVision and I like-for-like a restated our

and always, First call our Kornya, Vice Finance; Customer this and President Ecosystem President MTS Galaktionova, for can Kamensky, Vice presentation are Executive Vice Chief Marketing Financial Today’s in our for release for for IR President Bank, speak press As in of Andrey and Filatov, you Development; Russian will Officer; for Telecommunications; Ilya and presenters website. Alexey Services find and Slava Experience, Inessa First will CEO President Vice I President and translate. who Nikolaev,

to started. Alexey and So that, with get over let me it us turn

Alexey Kornya

us. and global challenges. Thank welcome a was year joining everyone to of At a Polina, unprecedented XXXX level, you,

to begin, their professionalism dedication and I’d we team MTS Before past for like the forth the thank over entire year.

when play in We of proved Against OIBDA. and of a quarter performed adjusted happy Cash that of network XXXX. I’m this group in guidance Our touch. growth rationale sector CapEx team, long-term the year to follow the admiringly our also vital from our backdrop, in strategy. the customers including continues keeping and the engaged, Overall, and through role full our effects and position to MTS was MTS in informed communities reliability line our agility closed report of fourth a our We derivative our guidance with strength. target revenue instruments. in to

through you the walk Let results. me headline

non-core services saw the RUBXXX contributed up new nearly third growth. and was positive an group key beyond impact our billion. X.X% of a driver, group Core year, reach the three line we Overall, For nearly connectivity. year-over-year areas top substantial verticals from additional but revenue were telecom to

seasonality. driven core Group revenue our year-over-year RUBXXX easier adjusted comparables provisions increased well XXXX adjusted the year-over-year X.X% as was travel X.X% quarter, Growth services both multiple due decline MTS long-term growth related impact at positive in OIBDA third to measures the constrained from by and well time, growth was as factors, At margin roaming retail, and telecom the same to well savings part in of reflecting as the to in For MTS COVID-XX. OIBDA accelerated which as around quarter to primarily roaming reflected by temporary high optimization other relatively revenue, as Bank. as one-offs the cost billion.

X.X% the year-over-year For grew billion. to group adjusted quarter, RUBXX.X OIBDA

associates waterfall, XX% mitigate to realized the profit year ticketing from impact from earnings to Bank of the and the improved XX% Forex At high cost was and debt, constrained in impact exposure. group profit net net the assets, level. group time, increased same base discontinuous on by of year-over-year, derivative contracts MTS back in from and full at XXXX, service operations sale Turning impairment change to of of a growth RUBXXbillion growth the negative the used

In of of to the pace group we additional sales continue capacity we telecom, the our saw Strategically, ecosystem drive In of In market the adjacent saw In volatility retail, moved we top e-commerce MTS Bank media, itself, at technology. in digital growth sales. scaling by double-digit mid-pandemic. customer X.X digital grew expanding Strategically, nearly expanded we segments, we FinTech, quote wireless fixed amounted we our at cloud our our our net quarter, coverage, the billion. added we’d modernizing deliver and the beginning RUBXX.X full line digital the the – for new XXX total our forward first profit all and segments. on net year the both more to base line the we in XG OTT For mobile and than In the across XXXX, of X.X by Overall, at future. brands transformation, solutions, in the footprint wire than had optimized users full more And by income edge our ecosystem, conversions, year. of invest and in we doubled tailwinds interest at CLV eSIM stores despite and into and leading growth. growth extra of products revenue and services. million uptake strategy. in and new some and challenges driving digital

head experience to confident I over will company the ecosystem well that, for continued With into I’m we XXXX, update. As customer and Slava success. it hand is positioned for

Slava Nikolaev

FinTech morning Alexey, customers Thanks, proactively we the and global good and moved engagement products digital past to saw and results. of customer and year, deepen us. Mid million are joining everyone over penetration we across and to Today X services services, telecom, good afternoon drive more two media. new more MTS and or than acceleration real using

addressable that an financial to has increase us market pool relationship as already audience million a This program of X users. an with of of and our Our get MyMTS, step to the They’re over care proactive taken established fraction multiproduct our million XX substantial user registered end us. active loyalty is Cashback monthly the a physical our we has users, closer to clients. a MTS has nearly year, prime now seek app, customer By reached base.

words explosive which stability, a standing impressive year-over-year was users at growth, an point These numbers up And Now, pay-TV year-over-year on in to growth million user few many XXXX, MTS X.X years in key QX. after at select by to of in end. XXX% we’re a out our of mass of indicate reached TV speed saw it by piece triple-digit Last critical slate XX% that us to is driver step regional up accelerated expanding overall over-the-top, reaching inflection the media. first content. relative we drastically year an This local makes the our that adding time titles. strategy. puzzle the right audience on library execution international content our year, took now the filling second of year,

We have the in XXXX. a pipeline for lot

So, tuned. stay

ecosystem to subscriptions. Turning

We continue value to refine enrich to MTS premium the proposition.

with to a ecosystem our of launched exclusive critical easy benefits customer to a these a digital value how we lifetime is gigabytes We a in of Yandex kind example a partnerships proposition. is differentiate new video that More dynamic QX, new think are first diverse and our tie-in are shop to services the interface mobile We and one joint For streaming. and and music we users. pricing subscription, include across great in which via a catering we one-stop subscription kind of for component and full tariff, value of different use Partnerships and users our expanded spectrum QX, Plus. offer recently this example, by from combines of to discounts. minutes to needs drive powerful tool services Russia’s

We approach are unified also to to integrating continuing a ID. mobile revamp our in particular, client apps by

as Our separate apps to super indicates prefer Russian single consumers research app. opposed a

time, to they and seamless wow let critical ecosystem. experience a me into functionality pick already Inessa good will made off client With ensure apps, and to dozen choose going So, customers. customer fresh the unique XXXX of are we across model across enhance and we specific in ID a it the that, a the our progress in our lifestyle can think it and more At MTS is services want. for we updates. great we We start continue XXXX. than same delight some to digital they hand We’ve our we and forward. creating Overall, experience over a telephone to and we’re BXB built

Inessa Galaktionova

you, Slava. Thank

seasonality. progress connectivity in in both is core past to the year, we’ve mobile given from and in growth Russia more that’s over business. mobile XXXX underlying across As year-over-year XXXX revenue service X% learned up our QX happy I’m than demonstrated ever, X.X% QX, comps easy we well telecom to dynamics as solid In as reflected steadily essential accelerated connectivity, report, roaming

and addition, boost we offerings are helping see overall increasing that video. promising In convergent reduce charm and customer indicators lifetime ARPU ecosystem

to Turning subscribers.

QX, cohort returning see to indicator dynamics the our end which We’ll million growth. share. data to at of It tracking, market subscriber according overall level. also recorded for promised base, future see our XX.X exceeds at continue We our in our stood health a users illustration of mobile to share nearly an

In reminder standard months wrap expected largest to few of stable private overtime our we’re forward increased via online down Moreover, accessories. we XX% the the around bring the consumer in be who stores to us XX% and And Today, or plan handset told and expanded MTS up been customer to than longer. have around line of optimization digital service provider acquisition delivering well XXXX, have and more for months solid cordless size, with year-over-year. into we cases moving also and showrooms. we as In our breach developing – format compressed our by in as third-party on X.X% retention plan customers, year-over-year four revenue sales into sales to the in retail, XG ads evolve became that a as well steadily mean In divide. whilst see subscribers. the last performance being Russia Offline, of long-term, both XXX,XXX to channels. doubled formats. in are before, to low We growth double-digit digital we estimates according to segment, QX, fit-for-purpose will executed fixed e-com XX plan broadband net year, than or continue more as to I’ve in the on reflection project in online

one network smart you what’s our extract do call other, approach, consumptions out. network. it’s pricing surgeon on that invested for If we absolutely the on ruble hand in data critical every given on we the competitive taken maximum an value development, work and roll To that,

to First, we’re big data deploying sales. network understand better analytics

in future estimate planning. time will coverage our where saved robot capacity conjunction demand Second, we versus network at Today, robots people us expansion critical. towards billions cost live. third, be, by wherefore traditional has targeting looking not And just just of where underground demand becomes already and smart before

QX. brief with a a two expanded and Gazprom on IoT, XX last to year, Russian deal year-over-year to financial to Digital durational and grew the various hand Ilya in In demand over service network consulting IoT, other growing projects cover revenue to year stages and during play as to Finally, continue enterprise Solutions XG for our space. similar network BXB. XX% we XX% up regions. for that, we’ll Cloud infrastructure with With Russia’s were in launch number in a We’ll Neft companies. number subscribers then me first have a clients, archive let according the see private of and private it update Russian leading we In & we was Russian SME Overall, update.

Ilya Filatov

The billion. [Foreign challenging increased X portfolio RUBXX.X Language] RUBXXX.X up industry. XX.X% Bank [Technical increased year-over-year Net was Difficulty] interest XX.X% billion overall [Foreign you, year the back XXXX provisions XX% to portfolio billion. income full-year banking XX.X% of contributing provisioning. Language] before RUBX.X commission retail loan Thank the loan has income XX.X% billion. the for Inessa. and grew MTS was fee of a to to in [Foreign XXXX reached Overall, and income loan RUBXXX.X growth, operating net On Language] reach

in the overall [Foreign retail operating based services. income upgrade the progress year, like retail banking would our many our develop commission making daily our under I banking accounted smart to condition for income and business, explanations. highlight for Among developing of We’re fee Language] just initiatives stable of to transactional full app. half

of level Overall, remains ecosystem non-performing bank QX at focus coverage at January Language] approach digital to cost envision rate the year. QX, in midterm, personalized minimum to the add bank additional delivered [Foreign and negative we which on injections. [Foreign in full a input XX.X%, X, committed a growth become portfolio actively develop commission share accounts standing by QX. Despite loan [Foreign same executing our We MTS stood time, allows the in Language] channels users the XX.X% do MX.X to stood savings, and integrate approach retail ratio We [Foreign a loan loans to the its to customers. the expand high additional the regulatory data the versus billion The a strategy the the continue X.X% Language] from We capital at conservative as plan of remain plan with to Bank RUBX.X for year, of net financial at for risk and future, our third-party capital risk maintenance services adequacy FinTech MTS of within source feature. digital of near of XXX%. to and have profit XXXX, reserves middle declined goals management. driven capitalization. to a and income and sober provision comfortable In functionality NPL portfolio, in significant advice. Language] with safety This potential retail to the developing we’ll year-end X.X%. closer offers, on in grow the developing added our margin the requirements our healthy sale maintaining to At of is capitalization. in company XX.X%. of vertical reflects above the We

finance Now I will to floor Andrey give update. for the a

Andrey Kamensky

year-over-year cash population. adjusted high the of swap billion sale at The added a a the contracts. in when our reaching country’s in operations. MTS Group XXXX, CapEx from XXXX Group contribution coverage with came our Ukraine from stations network of Forex free proceeds cash by sustained that XG former in dynamic flow RUBXX.X Ilya. XX% when product you, MTS Ukraine In Thank driven excluding from related in former the for XXXX Russia This base we for was impact as primarily investment. XX,XXX base LTE year to as operations. well the RUBXX.X Bank, reflect from NVision, billion amounted included around

entirely free by addition, Ukraine. underlying of excluding reflecting relatively strong the business performance, by core well was nearly this tax work the – cash costs. offset and as the In as flow payments same health financing At low higher CapEx, time, was Russian impacted

Turning to sheet. the balance

the progress to the of QX, to and notable favorable the average At projects with of stood At than the a down XXX tenure our schedule. portion VEB.RF debt the agreement weighted signing raising Overall portfolio finance rate less the should at gross with state-subsidized with Sberbank, a make a steady our and points digital basis of healthy as including the rate comfortable preferential loan relatively restructuring level end at at our rate. continued with year, In QX to on environment. We well we of loan actions, the and the interest debt as of comfortable optimizing declined took X.X%, outstanding year-over-year. number current XX% remains repayment level. end remain total interest a

for Now, closing Alexey his remarks. let me hand it to back

Alexey Kornya

I’m Thank new we you, as core and growth, segments. encouraged connectivity both progress Andrey. well growth the by the XXXX our results solid as achieved

favor. of account, roaming our evolved Taking updated OIBDA uncertainty segments. X% XXXX with providing remain Looking have base, year and as recovery higher room deliver new target as is group factors the in Such travel same we’re significant we XXXX winds there roaming growth our will and in or head both resumes. ahead, of international reflection timing guidance all and in a in growth into low initial have for the time, that of revenue adjusted ahead. MTS we confidence the At This in tail momentum a pace working in ARPU sustained XXXX.

particular several is billion In RUBXXX addition, is for to reflect including factors, see We in of we competitive CapEx expect strategy should growth investment smart in prepared around the as related, come XXXX our and cash RUBXXX we year. in a make for and We the that Forex execution billion for recognize environment critical this bets are plans segments. to our increase, the the future. which new material year

shareholder remuneration, a we buyback for policy Turning minimum the above in to target, a program. slightly carried top special out and of billion out year our which dividend came we RUBXX on paid dividend

a shareholders. Although record for in returns delivered MTS high XXXX

the policy. current year last be dividend will Looking XXXX ahead of our

back fewer flexibility in payout into ago, cash the a embarked shares Two above in an are that this Moreover, on on As provides outlook, our provides predictable following this increase consideration you results, XXXX effect outstanding, absolute we will can we there new telecom. upside market MTS share. MTS XXXX. is performance. in additional We of XXXX. based XXXX, appreciate recommend that increasing to context, on plans Well, journey management dividends level regular will policy dividend years In which our operational fair policy than more given our We share baseline. a a in expectations decision buybacks taken in to formulating limit when in the know, also around of our take dividend strong the minimum become payout strong understand it an the payout. per position our

well underway. now are We

the forward. up have We out mapped road

We and with toward gained Russia’s network-native team have products we a have of services. and momentum becoming put place a strong premier digital in system

So that, with let hand back Polina me to it for Q&A.

Polina Ugryumova

Thank to you, the speakers. you thank Alexey, rest the and of

line As translation. Operator, we for take the that, questions, there that please let’s be for questions. the may open a slight be delay aware with

Operator

you. Thank gentlemen, [Operator will Xtellus session. Kim of and first the question we Ladies from And now Instructions] Capital. is begin we received Ivan question-and-answer our

now open. is go line Please Your ahead.

Ivan Kim

from Two evening. please. questions Good my side,

CapEx, CapEx is guidance fairly the I wondering wide. on was First

be the So what that now mark RUBXXX where question. – revenue the on years? is kind on that know The to service higher RUBXXX let’s exit the That’s January-February on second what a was for you will good, be the will spend billion? in CapEx RUBXXX trends And assume domestic spending And it that strong, in billion, driven the few decelerate then question also didn’t first would growth. over of seeing the growth is next above billion by. just So business. mobile term, pretty prompt to you’re safe there say, you then longer

the same growth So in January-February? you. kind are seeing X% of Thank

Alexey Kornya

actually. year, see in question. and new Forex the our embark and so Ivan, range at – initiatives, overall basically digital affect they that there investments, whether some be thank will is you CapEx we’ll and will face that a we projects year defined projects, ideas, CapEx, which investment next pace for will dynamics, be will which this where new the

pass Inessa. And three factors. over revenue, to with services So the I’ll it mobile

Inessa Galaktionova

Yes.

will answer pretty my be So short.

will slight growth year, price the with was actually be it positive discussed a some QX. regulator, increase, we you as dynamics in expect yes. which So know, This do

So expect mobile not positive we but the in on trend the level in QX. growth, do QX revenue of

Ivan Kim

can on just billion up longer-term –? the longer-term think CapEx? this. So will now stay CapEx you for Thank Okay. the you RUBXXX follow above And I Alexey, do

Alexey Kornya

Not yes. necessarily. Yes,

for the it the depend will of including Forex on need XG think dynamics. factors, I and number investments

Ivan Kim

Thank Okay. you.

Operator

from The Goldman next question we Degtyarev Vyacheslav received Sachs. of is

Your Please go open. ahead. line is

Vyacheslav Degtyarev

the Thank of Yes. questions. Couple for much very presentation. you

comment that Do if you the and deploying short few economics period the you’re with those my how Firstly, And can subscribers, And of recover the on scope investments one in a second early there? the details can on CapEx also Thank benefits XG XXXX on of time? use a was you are in that would provide cases there. for? of premium investments you CapEx the also partnership any the results whether you Yandex the there be, and

Alexey Kornya

the CapEx, in requirements the be still XG as in And XG as CapEx CapEx there for there I’m network will for Since local no XXXX. passing XXXX. the over On well Slava. XG uncertainty second, no equipment frequencies to material remains material rollout,

Slava Nikolaev

It’s of could Plus works cheaper and very MTS Premium it could charge vice versa a get free too. and simple. also customers MTS a get Yandex at month of price

I current base, expanding of are we at stage a on show results this services of think definitely to but and benefit too subscriber delivering at use two of this good very are partners to we in MTS curve selecting will who results. initiative – customers. We a think customers see message of the response to Current the discount. So results. And it’s are that the the we still significant speak of for the ecosystems mutually that number is when about this early course, we it’s we – were believe, early

closer but it’s going be MTS to not Premium, X% to it’s expect be to X% from or of So XX% to XX%. I – it

Vyacheslav Degtyarev

much. very you Thank

Operator

we question received [indiscernible]. from next is The

now Kurbatova Mr. Are now ahead. Alfa maybe? line to Stander we is is Please Bank. [ph], So from line Your Anna you go mute on questionnaire. go on next the open. open. your It’s

Your now line is open. go Please ahead.

Anna Kurbatova

very much question. my Thank evening. you Good for taking

media or maybe amount And the some on some within on so Arena. what’s article, is the of wonder year. if guidance. your content for and less, if terms also you established on your interesting terms question this in of could CapEx completed projects provide last guidance update with development. First the of you there, you the progress could because year update entity second rollover going MTS represents follow-up I which not the more it’s were one ago in-house question, And the in give the plans also

when be go you. will So Thank operational. it –

Alexey Kornya

guidance, high because CapEx is projects the of on it portion Well, time-consuming this investments. rollover is historically, infrastructure

it’s about CapEx. So XX% our usually of

decisions So usually on higher comes are is taking XXXX XXXX late a rollover. But of the CapEx XXXX. early course,

improvement you can So think which of year. all, capability define from update, we see the full first We each impressive are vertical the CapEx to itself. on say earlier media told a figures themselves. in that of see And product the apart I by level I you that have a we also major

application that all marks great We customers, our thing. has is by in which a much given have stores higher

you’re customers or Second, we of we of TV and date, see original not because year, that relaunch saying content new of soon have better lot a libraries have is a most importantly later a very better this with retention features. MTS major And application. to think pretty I soon, in the going the I’m

the of are are and tuned, an flow of in international this concerts, offline now be some proper ability Arena, and launch going easy main middle as interesting soon. for and expect say, still year. how On to it which the MTS technically I to there concerns be the because that, match point will is still travel not but ready create to the – to It is task So is there it’s it’s going it’s about an going lineup be pandemic. to we stay before restricted

I year. suggestions it’s be be – date unclear So, to autumn, It’s but going that still still determined. – to slightly closer my it to unclear. this has exact it’s still would the is definitely

Anna Kurbatova

much you CapEx. quick just follow-up that. for a on very Thank Maybe,

– related there let’s well, – some to project operators of allowed Yarovaya last You to in save were terms are say year. something

I or later mean, COVID years, capacity the allowed government to – respond pandemic. the yes, expansion, to So, some

underspent Yarovaya, if it on on projected year bit thank you, you what last going does this what year, to and you. could softer of for initially more be you some So, will plus year, what’s for it’s the last understand or was say, So, for that let’s invest need trajectory? was be So, the on will – mean there? XXXX something year kind update

Alexey Kornya

ease limitations Yarovaya spent now The not you. phase Thank to are does relate infrastructure of first or Yarovaya the buildup.

So planned. what have was to effectively, initially we’ll build

So there graphics – easiness of infrastructure the just future provided adjustments, initial by the you after mentioned. those was

infrastructures However, capacity. the to need kind the still XX the built That’s of initial five be period at billion over initial of intact. commitment, the initial initial year design and identified we is which

Anna Kurbatova

Thank very much. you

Operator

next the Maria And question from from is Sukhanova BCS.

Your open. Please line ahead. is now go

Maria Sukhanova

three Yes, questions. I afternoon. Good yes. have

expanded experiment article a true? That’s that they your works. So this socially words, discussions mentioned Could significant thirdly, of for and and inadequacy think is mentioned both video. in it existing the it you access of that free to with on was first understanding Is was you have one carriers see increase one, and are be Second, happening in which please talks might that specify also an conversation you there kind the this that offers, how how This have a you you an or the And what you’ve if into convergent there average – do customers. any of percentage? better number it. saying you sides price share could us, this?

Inessa Galaktionova

Yes.

tariff the very on limited once. actually, question first it’s the answer will adjustment; I First,

terms of even So, material the we it’s increase. – in level don’t of even not

Slava Nikolaev

rate answer when it six, question, I talking about can there X.X different less plus times, turn we’re second and that, the times. conversions is X.X the are On usually, is mobile offers, by

client already like whenever products then it’s we more or three tariff, conversion three for slower more services, and times. to new if it’s to the flow have one up significant, in So, gets

Alexey Kornya

And on the right discussions accessible place. internet now project, the in

constellation So, early from what it the to the initiative too final be say, government. of this will is

Maria Sukhanova

you. Thank

Operator

[Operator the Ivan Capital]. Kim follow-up one Instructions] of next [Xtellus And a is

line Your open. is

Ivan Kim

Yes. on two buyback. Hi, questions again. just quick

you before. capital buyback So, Bank on year? do that And injections then the mentioned you MTS foresee conduction secondly, this

So, sort RUBX a there guidance give Thank we you what shall about that. if range billion of any expect or us on you. can

Alexey Kornya

Thank questions. Ivan. I’ll Yes, take you. both

the are it buyback come. But results most XXXX, soon It’s program. buyback going we to program, very will based of the On yet. not very think good actually, that on probably, announce I defined another

MTS on of terms the actually, will Bank In dynamic bank. of the injection; capital it depend

year. quite So far, growing we the this see first rapidly based on that of it’s month

So it would a less than depend will billion. far – that, be estimation so course, bit the on it but RUBX of is

Ivan Kim

Great. Thank you much, very Alexey.

Operator

The next question is Morgan Herbst from of Stanley. Henrik

Your is ahead. open. Please go line

Henrik Herbst

XXXX. know Yes. questions Thanks few flow A now, first – you just with expectations the the for one, very much. bit cash and you us little CapEx. that’s if I mean can a please. for EBITDA I you can help

about part the then to essentially that investments business. TV at be content, returns you lower do churn, there it So content investments how is a with is about start et you a with anything us of it think you help cetera, returns in XXXX? standalone think business You or least about mobile business? maybe, should generating business, think should working Slava, when how in of particular sort as And of in the we secondly, the standalone coming from and aware can we think about capital into going

do think investments much. you So, about very Thanks how that the in business?

Slava Nikolaev

Henrik, thank you very much.

In from to think we work we on CapEx. although another working on optimize gave year components one terms usually, the in the of of terms it. the cash I not – flows cash the flow, and all you to have EBITDA on capital the constantly XXXX, working material the guidance it’s for actually; the

it think or be comparable with I less would So, more this year.

Alexey Kornya

activity analytics of forth? However, particular own at content and specific we on are the considering a following production, certain of more As far of as doing in and our we this all complex we content the not it being or production course, with so the partners – are or acquired investments on content looking concerns, and what are so is course, way.

business, We’re which of and TV. as product this we our convergent includes IP of But offers, looking achieving TV, satellite also investments, return effectiveness. on TV, bundling at far cable effectiveness media overall, into the as packages are our this the

So, more will have us mobile, cable. not content all million just it’s platform, investments. of be only delivering I our having customers media than content, where complexity, media includes we’re do now, content right those scale, means which TV, to And we it all delivered. the OTT, IP X and of business. online allows And wide is in mentioned, our which satellite, That a

Henrik Herbst

Thank you right. very All much.

Operator

one from Stander again. the And [ph] next is Mike

line Your ahead. open. now go is Please

cannot Mr. Stander, we So, still hear you.

next from take HSBC. Nicholas of Chan we’ll one the So,

Please open. now go is line Your ahead.

Nicholas Chan

thank Hi, you for presentation. the

Can quite give what QX. strong XXXX? integration color outlook on key also Just bit in were drivers were one a of you for some question, revenues and the

Alexey Kornya

the We question? apologize. it repeat Could didn’t get We fully. you

Nicholas Chan

Yes. quite integration in were so revenues QX. strong yeah,

So, drivers you give key also a us on the bit what any outlook color and for can XXXX? were of

Alexey Kornya

You that of growth were is the revenue drivers the... what and what – revenue mean

Nicholas Chan

integration revenues?

Alexey Kornya

revenue, Integration Okay.

Nicholas Chan

Yes.

Alexey Kornya

you’re getting services deconsolidation integration after a quarter Honestly which fully speaking, without not line of are NVision, this because revenue. figures already referring, we showing this the year

we sale of with offline, So, we to will our what to exactly IR We’ll quite suggest Also, check, what can the line what and on good strong refer, team cloud to and particular we equipment? check email have dynamics. you you might take dynamics so some our that refer it you specify specify. connect I of positive have is growth where we business,

Nicholas Chan

Thank sure. Sure, you.

Alexey Kornya

Okay.

Republic, Czech impact with koruna. our even I business, from Czech that growth material. from – some of think dynamics but this quite Forex get positive in – wasn’t equipment in strong plant have a and because the this Czech We we production in positive – it we the – good business the

Nicholas Chan

all Thank right, All you. right.

Operator

now Alexander open. The Vengranovich ahead. is your line Capital]. next question [Renaissance is go from Please

Alexander Vengranovich

questions my Two afternoon. good from side. Yes,

your So, mobile first one on retails.

in some the of the previous seen slight we’ve number was quarter, So, seen through whole there year. fourth increase stores, trends of over which that kind contradicts the the we’ve

And you on So, counts I’m your M&A just your store wondering of you market is you plan how whether should – the your this stores this which strategy competitors about and that? look year, to BXB business. number continues on probably a reacting trend, of question reduction that do year? second maybe, the the is how see continue

endeavor. of acquisition you at was is products different there the looking MTT, of the article might in in focusing the BXB which be lots new that on recently, So an types an of potentially, press

So the aggressive for and whether you, segment? on these the plan to BXB your offering have cloud the Do you continue for I’m cloud your plans whether a you business, focus of just to of maybe, BXB you development your player two for wondering services, it obviously, enrich is any a clients for type number product because market. are

You the strong have of capacities. terms in data also presence storage quite

year color your forward? you to provide more with Thank regards the what segment this this please going can business development also So, of some and you. plans on are

Inessa Galaktionova

will I question Okay. the regarding retail. first take

the first of So, have stores. stable with of situation we all, a number retail

further the the factor the optimization, say bring big because we big So, of we our we any any or a any consideration into And any novel increased as of self-distribution. see thoughts say distribution, in influence Yes. optimized actually, how taken in stores. already decreased for for not XXXX, don’t – to a not stores. in to kind retail to XXXX we’re optimization QX, XXXs are already

So, phase any footprint in as we don’t in the optimization. dynamics the competitive happening retail see well, current

do – to as steps plan we well in don’t any that So area.

Alexey Kornya

even XG in BXB the different especially through segment, them, strong potential positive also I will of to existing a need which topics, need internet for segments, versus be And And as development growth our They complimentary. opportunities, yes. to non-organic beyond of are segments. have more which as considering is that case we perspectives business good because M&A be think yes, be we speaking be in where look our era, very see corporate And customers about segment. business need those important, which If BXB slightly delivered to we and they We as we to well we the will non-organic with and growth as the believe market existing to those talk we a it is concern, have development in things will brought yes, very much for expanding interesting about be market at internal and that verticals. things. particular of our far technological positive strategy businesses, opportunities vertical, do

BXB this think of ecosystem. developing importance. is of in more now becoming focus context, So, And BXB in our we a

to which ago, number three investments. including separate of a we become H make is of years And and one BXB one digital the yes, and cloud, areas mentioned, cloud the reason, market us cloud interesting two, for see promising which that vertical. a in most visible segments two we that build you we For already, will this of we a businesses, we’ll rightly were most as potentially be the Russia in year, in incorporate helped cloud although in not we are cloud, investing. segments, this provider is And

Alexander Vengranovich

you. Thank

Operator

from of is question Anna Kurbatova next Alfa The Bank.

now go open. ahead. Please is line Your

Anna Kurbatova

basically, just Thank you taking one for my much follow-ups. clarification. very first the is

with QX And with new double You in a speech for rough by provisioning, mentioned policy. to so, estimate, was number question check possible like in the also amount the share the the if impacted dividend us provisions. a the rough that to timeline EBITDA of the second introductory

the will in dividend it new would make may directors and XXXX. board Yes from policy the So, will correct be – that to April? maybe, assume of a be April, decision applied

interim October, be the I announced paid you will Thank policy. normally This Am is line So, amount question. correct? in with you. the in which November already the new that dividends,

Alexey Kornya

provision caused activities. related first and specific business OIBDA you much. I’ll were to and as that by of question. operational of we by besides the constrained mentioned take the terms fourth in Anna. to all judgments made prudent the booked was on provisions that we Yes, number parts pandemic. bank dynamic factors of provisions quarter, concerning some them it positive also, make the we the and quarter, now factors, in very the in the some we fourth that saw actually, are Thank biggest the

a business dividend specific there’s that in business will of So, that mentioned we a speech, – something, a policy. dividend index of revise I about regular my core this not making. no that’s as year policy, speaking And kind actually we’re

next the into that take And upside taking which for of higher consideration in strong we year. following be and we figure consideration, into dividend will this fixed good timing our then of delivering. the or recommend will dividend policy. understanding limiting we the spring an year will next year, the So dividend new our this traditionally policy results current dividend are a And is policy

recommend We board, will to the high the figure.

there if are upside, reason and results guidance. the that strong good demonstrating So

Anna Kurbatova

Thank you.

Operator

is next And Henrik follow-up Stanley]. the the [Morgan Herbst of

open. ahead. You line now Please go is

Henrik Herbst

Yes. Thanks very bit much, I realize, little it’s getting late.

concern follow arguably you’re last I changed. Just wanted some your up. to In check. I suggest the I concerned raise Thank too would call, check pricing decision were guess, but to mean, about wanted to anything a you I just competition. not around just you. mobile whether quick expressing competition, double

Andrey Kamensky

really of I impact by of that. – are we be said, And we’ve see competitors. where know on any our those that Yes. in healthy them I given the You fourth mostly saw compared We in are no our see from those we movements. quarter some seen first in the as quarter, seems operators it different – real that Russia now. couldn’t don’t our agree of some especially pretty in convergent. figures that fourth new propositions but pricing to movements environment continuation the They is are

is believe that XXXX. pricing So going to be healthy we strongly environment in

Henrik Herbst

much. very you thank Great,

Operator

next Capital]. the Alexander is of And a [Renaissance Instructions] Vengranovich follow-up [Operator question

again, ahead. Your line now is please go open

Alexander Vengranovich

MTS And the you taking on just Thank the Bank. one question for follow-up.

haven’t the of look on visible obviously impact of big improving MTS So, the the during in if you at [ph] was the number. any the number Bank. COVID-XX no there that increase customers on seen number customers consistent And we

maybe you please the is with you your can year. – number a share customers for of number accelerate of want or kind whether to and stable of this these concern us you plans acquisitions customer So

intact to might the also mentioned additional plans an launch indication capitalization. provide require you products, use and So, that and bank

these are So things connected between other. each

new number Thank derive the you. the to actually is bank. idea main the of of customers the So

Ilya Filatov

you your most the number clients Language] critical methods [Foreign is Obviously of at for the questions. one Thank Bank development. active bank of the MTS for

will back confirm last environment, growth of and dynamics what year. that million the the day, our sales Looking strategy in less performance before. looks the customers well we of addressed beginning on the pace clients overall achievement back the on Bank FinTech the as expected in clients. XXXX active we we When current Bank or why at XX below into has XXXX, clients XXXX as November, was That’s we our MTS Bank number can of reference more new are which of clients to

the Bank clients, using MTS but clients of about close the services which average well, above the of non-bank end is Looking all XXXX which to injection is achieve we expectation with clients support not this accounting of talk in And first financial Bank as clients, MTS about still we as thinking targeting Regulation, growth, regulation. maintain a capital Bank, when to our market well if XX are than the in that at FinTech within about the potential together thinking growth – as to rather by Group. a compliance MTS injection MTS million we are are active problem.

injection bank goal rate growth capital to for the So maintain the is average. market above simply the main

retail and XX% to the which performed As example, Bank. am was is answered XX%, significantly industry year grew this the loan by overall around I we to last in an X% segment – question. like sure below, XX% X% MTS your

Alexander Vengranovich

yes. think, I Yes,

less, or am yes, I So more less. more okay. or

XX account overall it’s terms that’s different this be the which services, to have key the of this one mean, I bank the usage the of million – whatever just might of probably use, issues in month, of the client define I transfer service the obviously clients. right. client and think minute a your difficult ecosystem, obviously the value during clients to we dramatically

And so on this. this is concern just my

add can’t more to I that. So

business looking that be you. segments. your Thank in we’ll dynamics at So

Polina Ugryumova

you, Sasha [ph]. Thank

IR you get from side. We to have taken concerns, back your definitely offline your we’ll source,

Alexander Vengranovich

Thank you.

Operator

hand no there’s to back for questions, closing remarks. I’ll As the further speakers

Polina Ugryumova

gentlemen, listening. very and thank you for Ladies much

future. we near in will make usual, a on replay our As IR the web call page this of available

to have Investor MTS out If you any questions any reach hesitate at please not do to Relations further time.

inboxes appreciate Thank we In and MTS the you. meantime a wish in phone open. are everyone day. pleasant and your lines interest Our

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