Results for the first three months of 2024

Results for the first three months of 2024

• Strong commercial performance continues, revenue up by 4.8%, offsetting ongoing inflationary pressures, with adjusted EBITDA AL up by 6.9%
• Net Profit lower by 1.7%
• EUR 1.53 dividend proposed, the highest in over a decade

As a result of positive business developments across consumer and business segment Hrvatski Telekom has in Q1 2024 recorded a 4.8% YoY revenue growth, which was driven by strong performance in mobile, fixed service and system solutions.

Despite continued inflationary pressures on our cost base, we have managed to contain operating expenses increase to 5.5% YoY, supported by operating model transformation and efficiency initiatives. This, alongside with the strong commercial momentum has helped our adjusted EBITDA AL grow by 6.9% YoY.

Net Profit reached EUR 26.6 million with 1.7% decrease due to an exceptional item.

In Q1 2024 investments amounted to EUR 39.3 million and will further accelerate in the second half of the year, above the level of 2023, excluding spectrum, confirming HT's dedication to provide the platform for the country's digitalization.

Strengthened network leadership

We continued to strengthen our network leadership by further investing in our network infrastructure across Croatia, in both urban and rural areas. Our networks are now operating at the highest levels ever, with improvements across key parameters, as evidenced by recent umlaut 'Best in Test' recognition, with us once again winning the awards for the best mobile network for the fourth year in a row and the best fixed broadband network for the third year in a row.

During Q1, we continued to expand our already largest FTTH network in the country, increasing our footprint by additional 21% in new households and businesses YoY. This brings us an important step closer to our goal of covering over 1 million households with gigabit fiber speeds. We are leading the way in building fiber networks across Croatia and are already providing high-quality gigabit fiber networks in over 130 towns and municipalities in 20 counties, laying the foundations for the country's economic growth and social progress.

All-time high customer experience

As a result of our investments in superior network experience, constantly improving product and service channels experience, customer experience reached historic high levels, according to TRI*M and NPS industry benchmarks.

The best content portfolio further strengthened with Netflix partnership

Hrvatski Telekom has a reputation for providing customers with the best content . Starting with April, along with the already available exclusive and in demand content, our customers are able to enjoy Netflix integrated into their MAXtv. By partnering with Netflix, the most popular streaming platform globally, we have raised our already the best content portfolio to a whole new level.

Attractive capital return program for shareholders

Hrvatski Telekom's capital allocation strategy clearly demonstrates the Company's strong focus on shareholder returns and intention to return value to shareholders.

On 20 March 2024, the Management Board and the Supervisory Board of Hrvatski Telekom proposed to the General Assembly of the Company the distribution of Net Profit from 2023 in such a manner that a part of the Net Profit amounting to EUR 119,340,000.00 is to be used for the pay-out of dividend to shareholders in the amount of EUR 1.53 per share.

This, proposal represents the highest dividend in over a decade, with a ratio of the dividend payment in relation to realized profit of 95.3% and growth of 39.1% compared to the previous year.

In Q1 2024 Hrvatski Telekom, within the framework of ongoing Share Buyback Programme has purchased additional 54,725 Company shares on the Zagreb Stock Exchange, paying an equivalent value of EUR 1.6 million for the acquisition of the Company's shares in the reporting period.

Unchanged Outlook for 2024

Although the environment remains challenging, our primary objective is to continue with our growth trajectory. We are aiming for a low single-digit revenue increase, mid-single-digit growth in both EBITDA AL and CAPEX AL compared to 2023. Our stance on regional expansion remains unchanged, as we diligently assess potential M&A opportunities.

Commenting on the business results for Q1 2024, Konstantinos Nempis, CEO of Hrvatski Telekom, stated:

"In the first quarter of 2024, Hrvatski Telekom demonstrated strong commercial performance across all segments, achieving growth in revenue and EBITDA AL despite a challenging macroeconomic environment and persistent high inflationary pressures on our cost base.
We continued to strengthen our network leadership by expanding our gigabit 5G coverage and FTTH footprint across Croatia. We were once again recognized with industry benchmark awards for the best mobile and fixed broadband network. Our continuous investments in ICT infrastructure, coupled with ongoing improvements in network and service quality, as well as enhancements to our unique content portfolio, have led to historically high levels of customer experience across both consumer and business segments.
Looking ahead, we remain committed to our investment plans, which are crucial for the country's digitalization. We also aim to leverage digitization and new technologies to improve efficiencies and mitigate the inflationary pressures on our business operations. At the same time, we are focused on further enhancing customer experience and employee engagement. I am confident that with Nataša Rapaić taking over as CEO in July, Hrvatski Telekom will successfully continue its growth journey."

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