Results for the first three months of 2023

• Good commercial performance, revenue up by 6.3% YoY and EBITDA AL by 1.0% YoY
• Won the largest RF spectrum share with EUR 135.3m investment in further mobile network development
• EUR 1.10 dividend proposed, representing a pay-out ratio of 94%

As a result of positive business developments Hrvatski Telekom in Q1 2023 recorded 6.3% YoY revenue growth, which was driven by good performance across all revenue categories.

Adjusted EBITDA AL increased by 1.0% YoY, supported by good commercial performance and continued transformation of our operating model, which compensated for inflationary pressure mainly coming from energy costs.

Net Profit grew by 16.7%, primarily driven by lower depreciation, positive net financial result, and better EBITDA.

Investments remained at the high level, totaling EUR 45.6 million (-3.5% YoY), representing the leading investments on the market and HT’s strong contribution to country’s digitalization.

Won largest RF spectrum share

Following the public auction procedure and the EUR 135.3 million investment for RF spectrum Hrvatski Telekom was awarded 2x105 MHz with which we maintained our leading position in terms of spectrum shares for mobile networks.

Licenses for the use of the radio frequency spectrum are being assigned for the period of 15 years, validity starting from 19 October 2024.

The successful completion of the spectrum auction is yet another proof of Hrvatski Telekom's commitment to building its mobile network further, at the same time additionally improving the capacities of the already leading network and ensuring even better network quality and market best experience for our customers.

Strengthened network leadership

Hrvatski Telekom remains committed to its investment plans in network quality, 5G development and fiber infrastructure roll-out.

In line with this we continued to focus on building our fiber-optic infrastructure across Croatia, expanding further our FTTH coverage by almost 20% YoY. HT’s fiber gigabit infrastructure is multiple times bigger than that of the nearest competitor.

In mobile, Hrvatski Telekom was focused on the development of 5G network and the preparation of capacities for the summer season. 5G coverage at end of Q1 was 51.5% of the population, with 5G present in 108 cities and municipalities. At the beginning of 2023 Hrvatski Telekom's mobile network was once again recognized as being the best, winning three Ookla® Speedtest Awards™ for Best Mobile Network, Fastest Mobile Network and Best Mobile Coverage. In the mobile network quality research organized by regulator HAKOM, Hrvatski Telekom’s network was also recognized as the best mobile network in the country.

Along with providing the best network experience Hrvatski Telekom puts great focus on further improving the market leading customer satisfaction. A testimony to this is a recent regulator's report on customer complaints for 2022, which clearly shows Hrvatski Telekom as being the best.

Driving the ESG agenda

Along with since 2021 running entirely on electricity produced from renewable sources, Hrvatski Telekom living up to its ESG commitments increased further the energy efficiency of its networks, while also recently launching its new 'Call you have to take’ platform aimed at environmental protection and circular economy.

Attractive capital return program for shareholders

Our capital allocation strategy clearly demonstrates Hrvatski Telekom’s strong focus on shareholder returns and our intention to return value to our shareholders.

On 23 March 2023, the Management Board and the Supervisory Board of Hrvatski Telekom proposed to the General Assembly of the Company the distribution of Net Profit from 2022 in such a manner that a part of the Net Profit amounting to EUR 86,631,479.00 is to be used for the pay-out of dividend to shareholders in the amount of EUR 1.10 per share.

The amount of EUR 1.10 per share represents a ratio of the dividend payment in relation to the realized profit of the Company of 93.9% and growth of 3.6% compared to the previous year.

Management Board currently expects a minimum dividend of EUR 0.80 per share for the year 2023.

In Q1 2023 Hrvatski Telekom purchased additional 85,299 Company shares on the Zagreb Stock Exchange, within the framework of ongoing Share Buyback Programme. Hrvatski Telekom paid an equivalent value of EUR 2.1 million for the acquisition of the Company’s shares in the reporting period.

​​Unchanged outlook for 2023

In 2023, we are aiming for a low-single digit increase in revenues and EBITDA AL, and a mid-single digit decrease in CAPEX AL compared to 2022. Our regional expansion outlook remains the same as we continue to monitor and evaluate potential M&A activities.

Commenting on the business results for Q1 2023, Konstantinos Nempis, CEO of Hrvatski Telekom, stated:

“Our first quarter results demonstrate good business development and strong financial performance, with top line growth across all key categories reflecting our dedication to constantly improving our operations and us delivering on our goal of profitable and sustainable growth.

In Q1 we have further strengthened our network leadership winning again awards and recognitions for the best mobile network. By also winning the largest spectrum share at recent radio frequency spectrum auction, Hrvatski Telekom has ensured the preconditions for mobile network superiority in the future, while contributing to the state budget EUR 135.3 million. We continued expanding our by far the largest fiber infrastructure in the country, building not only in the cities, but also in sub-urban and rural areas, ensuring everybody has a chance to thrive and progress out of digitization. Our dedication to constantly improving customer experience and employee engagement has resulted with them continuing to reach new highs.

In a year which will certainly be demanding from an economic and business standpoint, we remain committed to supporting our customers, economy and the society overall, continuing to deliver the best network and customer experience, contributing to Croatia’s growing need for accelerated digitalization, while growing value for our shareholders.”