OTE Corporate Presentation

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1 OTE Corporate Presentation BNP Paribas 9th Annual High Yield & Leveraged Finance Conference 2013 Tuesday, January 15 th

2 OTE Group Overview 2

The Group today OTE is the leading integrated telecommunications operator in southeastern Europe, providing voice, mobile and broadband services in contiguous markets.

3 The Group today OTE is the leading integrated telecommunications operator in southeastern Europe, providing voice, mobile and broadband services in contiguous markets. OTE s strategy aims at further strengthening its powerful market positions through successful leveraging of new technologies, active customer service and innovative marketing. GREECE Incumbent/Leader Total Lines (000): 3,189 Broadband Subscribers (000): 1,171 OTE TV Subscribers (000): 97 Leader Mobile customers (000): 7,778 BULGARIA # 2 in the market Mobile Customers (000): 4,441 ROMANIA Incumbent/Leader Total Lines (000): 2,360 Broadband Subscribers (000): 1,181 TV Subscribers (000): 1,231 Challenger Mobile customers (000): 6,382 ALBANIA # 2 in the market* Mobile Customers (000): 1,825 In January 2012, OTE completed the sale of its 20% stake in Telekom Serbia (acquired in June 1997), for a total consideration of 397m. Note: Data as of September 30, 2012 *Based on latest available data 3

4 At a Glance Shareholder Structure (September 30, 2012) Group Structure (2) Deutsche Telekom 40.0% Hellenic State* 10.0% Fixed-line telephony Mobile telephony Other operations OTE SA Greece 100% OTE Globe Greece Other 11.2% Greek Institutional Investors 12.6% Listed on the Athens Stock Exchange (Symbol: HTO GA) Share Price: 5.1 (Dec 31, 2012) International Institutional Investors 26.2% AMC Albania Zapp Romania 100% Cosmote Greece 97% 100% 100% 70% Globul Bulgaria Cosmote Romania 54% RomTelecom Romania 30% 100% 99% 94% OTEestate Greece Hellas Sat Greece OTESat-Maritel Greece Other Outstanding Shares: 490,150,389 Market Capitalization: 2.5bn Price-to-Adj. Earnings (12M Trailing): 6.6x 100% Germanos S.E.Europe (2) Major Companies of the Group * Including voting rights attached to 4% of share capital transferred to IKA Pension Fund 4

Group Key Financials Full Year ( mn) OTE Group -

3 Quarterly ( mn) OTE Group - Quarterly Performance

0% 34.4% 2,168.0 1,919.4 1,731.8 35.7% 34.0% 35.4% 35.

1 FY 2009 FY 2010 FY 2011 Q3 '11 Q4 '11 Q1 '12 Q2 '12

margin Revenues Pro Forma EBITDA Pro forma EBITDA

30, 2012) EBITDA * * Breakdown (12M ending Sep.

2% Mobile Romania 9% Fixed Greece 33% Fixed Romania

Mobile Bulgaria 9% Mobile Albania 2% Mobile Romania

5 Group Key Financials Full Year ( mn) OTE Group - Quarterly Performance 5, , ,038.3 Quarterly ( mn) OTE Group - Quarterly Performance 1, , , , , % 35.0% 34.4% 2, , , % 34.0% 35.4% 35.0% 36.5% FY 2009 FY 2010 FY 2011 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Revenues Pro Forma EBITDA Pro forma EBITDA margin Revenues Pro Forma EBITDA Pro forma EBITDA margin Revenue* Breakdown (12M ending Sep. 30, 2012) EBITDA * * Breakdown (12M ending Sep. 30, 2012) Other 8% Mobile Bulgaria 7% Mobile Albania 2% Mobile Romania 9% Fixed Greece 33% Fixed Romania 12% Mobile Greece 29% Fixed Greece 31% Other 6% Mobile Bulgaria 9% Mobile Albania 2% Mobile Romania 7% Fixed Romania 9% Mobile Greece 36% *Gross figures (excl. eliminations) ** Excluding employee retirement plans 5

6 Macroeconomic Environment Greece Real GDP Change (%) Romania Real GDP Change (%) 0.0% 2.8% 3.8% 3.6% 2.5% 2.5% 3.0% 3.3% 3.5% 3.5% -4.0% -6.9% -6.0% % Bulgaria Real GDP Change (%) Albania Real GDP Change (%) 3.5% 4.5% 4.5% 3.0% 2.5% 2.5% 2.5% 2.5% 1.7% 1.0% 1.5% 2.5% 0.5% 1.7% In Greece, unemployment rate will reach its peak in 2013, exceeding 25% & is expected to gradually start falling 2014 onwards Greek General government gross debt as % of GDP to further increase in (170.7% and 181.8% respectively) & start falling 2014 onwards Source: IMF World economic Outlook, October

7 Business Review 7

8 Evolution of Greek Fixed Market ( 000) Fixed Line Operations - Greece Market Overview 5,248 5,203 5,073 4,927 OTE s retail Fixed-Line market share: 63.4% 1,917 2,262 2,458 2,597 OTE s retail Broadband market share: 44.1% 37% 43% 48% 53% 17% 20% 22% 23% FY 2009 FY 2010 FY 2011 Q3 '12 Total Greek Fixed Line Market Broadband / Total Fixed Lines (%) Total Greek Broadband Market Greek Broadband Penetration OTE is the Greek incumbent with 3.2 million lines Declining Fixed-Line Access Market Growing Broadband Access Market - OTE s lower tariffs positively contributed to Greek Broadband market s growth in Q and Q Broadband penetration in Greek population still low compared to EU Average 28% Growing Pay-TV segment 8

Fixed Line Operations - Greece Key Operational Trends Greek Fixed Market - Net Additions ( 000) Greek Broadband Market - Net Additions ( 000) Greek Broadband Market Net Additions ('000) 94 80 (20)

Retail Lines Net additions/(disconnections) Altern.

9 Fixed Line Operations - Greece Key Operational Trends Greek Fixed Market - Net Additions ( 000) Greek Broadband Market - Net Additions ( 000) Greek Broadband Market Net Additions ('000) (20) (36) (114) (116) 50 (49) (99) 83 (24) (107) (52) (43) (51) (75) (55) (94) (6) (8) (8) (4) Q1'11 Q2'11 Q3'11 Q4 '11 Q1'12 Q2'12 Q3'12 OTE Retail Lines Net additions/(disconnections) Altern.Carriers Lines Net additions Total Fixed Market Lines Net Additions/(losses) Q1'11 Q2'11 Q3'11 Q4 '11 Q1'12 Q2'12 Q3'12 OTE Retail Broadband net additions Competitors (LLU & Wholesale ADSL/VDSL) Net Adds Greek Broadband market Net additions Fixed-line market lost about 51k lines in the quarter with competitors adding only 3k lines vs 50k in Q3 11 OTE captured 60% of net adds in Greek broadband market Regulatory approval of OTE s 2xPlay bundled products on May slightly narrowed OTE s competitive disadvantage against alternative carriers Following Regulatory approval OTE commercially launched its VDSL products in November 2012 New OTE brand positioning focusing on customer-centricity boosts the company s standing in the market 9

10 % 70. 0% 60. 0% 50. 0% 40. 0% 30. 0% 20. 0% 10. 0% 0. 0% Fixed Line Operations - Greece Key Operational Trends OTE TV Subscribers ( 000) TV product serves as a good instrument against fixed-line churn 97 Ongoing service upgrade (enhanced sports & movie programs, rich HD content) fuels TV subscriber growth % % 74.1% The switching-off of analog TV services (July 12) helped in new customer additions Total subscriber base reaching approx.105k in early November % 12.5% Very low Pay TV penetration in Greece currently, due to high quality FTA channels Q3'11 Q4 '11 Q1'12 Q2'12 Q3'12 Crisis significantly affecting FTA channels capacity to acquire premium content, opening the way for Pay TV expansion OTE TV Subscribers YoY Growth (%) 10

11 Fixed Line Operations - Greece Headcount reduction New VES Headcount Evolution 10,925 10,569 10,436 New Voluntary Exit Scheme announced in early November 2012 and completed in December 2012 year end,targeting: employees that met the prerequisites for retirement within the coming 3-year period ( ) 8,920 other employees with 15 years of service in OTE 1,516 employees left until Dec 31,2012 Dec'10 Dec'11 9M'12 Post VES Annual Net Cost Savings estimated at about 80 mn 11

12 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, ,500 2,000 1,500 1, ,500 2,000 1,500 1, Fixed Line Operations Romania RomTelecom key Metrics Fixed Lines ( 000) Fixed Telephony lines DSL & Wireless Data Lines ( 000) TV Subscribers (DTH & IPTV) ( 000) DSL & Wireless data lines TV subscribers (DTH & IPTV) 2-Years CAGR: -5.6% 2,646 2,527 2, Years CAGR: 11.7% 1,107 1,181 1,003 2-Years CAGR: 10.8% 1,208 1,231 Q3 '10 Q3 '11 Q3 '12 Q3 '10 Q3 '11 Q3 '12 Q3 '10 Q3 '11 Q3 '12 Incumbent fixed line operator in Romania with strong TV portfolio Tough competitive environment from cable TV and mobile operators offering bundled products at lower prices Broadband penetration at 50% of voice connections TV Services penetration exceeds 52% of connections 12

13 17,000 3, % 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Fixed Line Operations Romania Cost cutting implementation Headcount Evolution RomTelecom Employees Personnel Expenses Evolution ( mn) Personnel Expenses ( mn) 12,512 10,344 10,017 9,179 7,451 7, % 22.1% 21.0% 21.9% % 18.2% Q3 ' M'12 RomTelecom Employees Lines per Employee Personnel Expenses ( mn) Personnel Expenses/Sales Significant headcount reduction programs implementation over the last 5 years Personnel expenses down 10% in Q3 12, extending the sharp declines achieved last year 13

14 Greece #1 Cosmote Greece Leading market position since 2001 Focus on innovation, quality & customer care Facing new MTR glidepath with steep rate reductions Mobile Operations Overview Romania #3 Cosmote Romania Strengthened market position in an intensely competitive environment Customized solutions to boost business customer base New Spectrum acquisition Bulgaria #2 Globul Operating in the region s best performing economy Solid increase in both prepaid & postpaid due to innovative voice and data solutions Steep MTR cuts Albania #2* AMC Highly fragmented market and adverse macroeconomic conditions Aggressive pricing competition Removing inactive users & extending 3G services *Based on latest available data 14

15 Mobile Termination Rates Greece: Regulatory Framework (eurocent/min) Romania: Regulatory Framework (eurocent/min) % -21.9% -20.6% -20.7% % % % % -11.3% % % -56.1% Dec-08 Jan-09 Jan-10 Jan-11 Jan-12 Aug-12 Oct-12 Jan-13 Dec-08 Apr-09 Jan-10 Jul-10 Mar-12 Sep-12 MTR % Rate of MTR change MTR % Rate of MTR change Bulgaria: Regulatory Framework (eurocent/min) % -8.6% % % % -57.3% Jan-09 Apr-09 Jul-09 Jan-10 Jul-10 Jul-12 Jan-13 MTR * % Rate of MTR change * Estimated average for peak/off-peak rates & mobile fixed incoming split Albania Regulatory Framework (eurocent/min) % -14.3% % -21.3% -25.0% -30.7% Dec-08 Jan-09 Sep-09 Mar-11 Sep-11 Sep-12 Sep-13 MTR %Rate of MTR change 15

Mobile Greece Financials Full Year ( mn) Quarterly ( mn) 450.4 2,007.4 1,812.1 1,647.5 403.9 381.3 387.0 398.4 37.0% 36.8% 38.1% 741.8 667.6 628.

9 FY 2009 FY 2010 FY 2011 Revenues Pro Forma EBITDA Pro forma EBITDA margin Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Revenues Pro Forma EBITDA Pro forma

16 Mobile Greece Financials Full Year ( mn) Quarterly ( mn) , , , % 36.8% 38.1% % % 40.2% 41.6% 40.9% FY 2009 FY 2010 FY 2011 Revenues Pro Forma EBITDA Pro forma EBITDA margin Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Revenues Pro Forma EBITDA Pro forma EBITDA margin Cosmote Greece CAGR: Revenues -9.4%, Pro forma EBITDA -8.0% Cosmote Greece Revenues down 11.5% affected mainly by MTR and Roaming tariff drop Improved EBITDA margin reflecting better efficiencies in the cost structure 16

17 Mobile Romania - Financials Full Year ( mn) Quarterly ( mn) % 21.4% 24.5% 23.9% 22.1% 25.6% 15.0% 16.3% FY 2009 FY 2010 FY 2011 Revenues Pro Forma EBITDA Pro forma EBITDA margin Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Revenues Pro Forma EBITDA Pro forma EBITDA margin Cosmote Romania CAGR: Revenues +3.5%, Pro forma EBITDA +23.7% Revenues decline by 2.2% in Q3 12 Service revenues down 6%, due to consecutive interconnection rate cuts in March and September 2012 EBITDA margin up to 29.1%, due to ongoing efforts to enhance operating efficiency in the face of intense competition 17

18 Full Year Quarterly Full Year Quarterly Bulgaria & Albania Operations - Financials Mobile Bulgaria ` % 40.7% % % 37.0% % % 39.6% FY 2009 FY 2010 FY 2011 Revenues Pro Forma EBITDA Pro forma EBITDA margin Mobile Albania Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Revenues Pro Forma EBITDA Pro forma EBITDA margin % % % % % % % 41.1% `` FY 2009 FY 2010 FY 2011 Revenues Pro Forma EBITDA Pro forma EBITDA margin Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Revenues Pro Forma EBITDA Pro forma EBITDA margin Globul CAGR: Revenues -5.5%, Pro forma EBITDA -7.5% Sharp service revenue drop chiefly due to national & international MTR cuts AMC CAGR: Revenues -19.6%, Pro forma EBITDA -33.1% 6.6% Revenue drop in the quarter reflecting aggressive pricing competition 18

19 Key Management Focus Areas / Actions: Delivering on our promises One Group: New management with Group oriented approach Closer integration between fixed & mobile in Greece & Romania Exploitation of synergies Customer experience: Cost reduction: New OTE shops concept Call centers optimization - single customer care number new training procedures Single internet portal for all OTE audiences Easy-to-read, customer friendly bills Employee cost-containment measures in Greek fixed line operations ( 32mn annual cost savings) Closer integration between fixed & mobile in agreement with the Union in Greek fixed line operations ( 160mn cost savings within ) Reduction on Youth Account benefit saving nearly 10mn on annual personnel cost Scrutinize every cost line (network maintenance, marketing, contractors etc.) New Voluntary Exit Scheme concluded in Dec 12 with the participation of 1,516 employees. Estimated net annual cost savings ~ 80mn Debt Management: Debt management strategy to meet maturity obligations Partial refinancing of 900mn RCF - Received Bank Commitments for a 1-year extension of 500mn Raising Debt at Subsidiaries Level - 153mn already raised by Globul Disposal of Assets (Hellas Sat & Globul) 19

20 Financial Review 20

21 Full Year Capex ex-spectrum /Sales Operating Free Cash Flow Evolution ( mn) Q1 Capex /Sales OTE Group Cash Flow Trends 1,418.0 Net Operating Cash Flow up 11.8% in the quarter 1, ,208.2 Working Capital improvement Lower interest and tax payments Reduced payments for SRI, Youth account and VRS programs (169.3) (155.9) (106.9) Free Cash Flow up 68.8% (618.2) (742.5) (890.9) FY 2009 FY 2010 FY 2011 Q3'10 Q3'11 Q3'12 Net Operating Cash Flow Free Cash Flow (ex-spectrum) Capex ex-spectrum 21

22 OTE Group Debt Maturities OTE Group Debt maturity profile as of September 30, under IFRS Maturing Aug 13: OTE proceeded with further buybacks of its Aug 13 Bond after Sep 12. The outstanding liability as of Dec 31, 2012 is 1,007mn ,170 On Nov 9, 2012, OTE agreed a 500mn extension of the 900mn RCF to Feb Maturing Feb 15: Maturing May 16: Bonds Syndicated & Other Loans On Nov 9, 2012, OTE agreed a 500mn extension of the 900mn RCF to Feb 14 On Dec 20, 2012,OTE s subsidiary Globul raised 153mn under a Syndicated Loan Agreement, which has a 4- year tenor with an amortizing repayment schedule (2013: 8mn, 2014: 15mn, 2015: 31mn, 2016: 99mn) and a margin of 5.5% over Euribor 22

23 OTE Group Liquidity & Refinancing Plan 9M 12 Liquidity Bridge & Refinancing Plan ( mn) Refinancing Plan Partial Refinancing of 900mn RCF - OTE received Bank committments for a 1-yr extension of 500mn - Loans at Subsidiaries' level Free Cash Flow Asset Disposals - Hellas Sat - Globul 1,037 Dec'11 (326) (12) (822) 1,088 Sep'12 On Dec 20, Globul raised 153mn under a Syndicated Loan Agreement - Banks' option to incease committments 200mn - 4yrs tenor - margin 5.5%p.a over Euribor 400 1,170* Cash & Other Fin. Assets Operating Cash Flow CapEx Assets Disposals/ (Acquisitions) Other Cash Inflows/ (Outflows) Debt Additions/ Cash & Other (Repayments) Fin. Assets Dec'12 Syndicated Loan Agreement Feb '13 RCF Aug '13 Bond* Feb '14 RCF Apr '14 Bond *OTE has proceeded with further buybacks of its Aug 13 Bond after Sep 12. The outstanding liability as of December 31, 2012 is 1,007mn 23

24 Appendices

25 Recent Corporate Developments Management changes in OTE Group Successful completion of Euro 500mn Bond Issuance Full utilization of 900mn Syndicated Credit Facility OTE completes the sale of its 20% entire stake in Telekom Serbia, receiving the amount of 397m Approval by the Regulator of OTE s new 2Play products with up to 25% lower prices Romania Spectrum Auction successfully completed Following Regulatory approval, OTE launches VDSL products Raised 153mn Loan at Globul Level Feb Mar Apr Jul Sep Oct Nov Dec 2012 Jan Feb Mar Apr May Jun Jul Sep Oct Nov Dec OTE signs 900mn Syndicated Revolving Facility OTE adopts new cost cutting measures DT reaches 40% stake in OTE Collective Labour Agreement, reducing payroll cost by approximately 160mn for the period OTE launches satellite TV services OTE signs an agreement to sell its 20% stake in Telekom Serbia Repayment of the outstanding 756.9mn Syndicated Facility maturing in Sep 12 OTE TV subscriber base exceeds 100K customers New Voluntary Exit Scheme completed with the participation of 1,516 employees 25

26 OTE Group Financial Highlights IFRS ( mn) Q3 '12 Q3 '11 % Diff 9M '12 9M '11 % Diff Revenues 1, , % 3, , % EBITDA % 1, , % as % of Revenues 36.5% 35.4% +1.1pp 35.6% 33.1% +2.5pp Pro forma EBITDA* % 1, , % as % of Revenues 36.5% 35.7% +0.8pp 35.6% 34.5% +1.1pp Net Income/(Loss) % % Basic EPS ( ) % % CAPEX % % Cash flows from operations % % *Pro Forma EBITDA excluding VRP impact & provisions related to employee exit programs 26

27 Fixed Line Operations - Greece Financial Highlights IFRS ( mn) Q3 '12 Q3 '11 % Diff 9M '12 9M '11 % Diff Revenues % 1, , % EBITDA % % as % of revenues 27.7% 29.1% -1.4pp 29.2% 28.0% +1.2pp Pro Forma EBITDA* % % as % of revenues 27.7% 29.8% -2.1pp 29.2% 29.0% +0.2pp Operating Income % % CAPEX % % *Pro Forma EBITDA excluding VRP impact & provisions related to employee exit programs 27

28 Fixed Line Operations - Romania Financial Highlights IFRS ( mn) Q3 '12 Q3 '11 % Diff 9M '12 9M '11 % Diff Revenues % % EBITDA % % as % of revenues 29.1% 23.0% +6.1pp 26.7% 17.9% +8.8pp Pro Forma EBITDA* % % as % of revenues 29.1% 23.2% +5.9pp 26.7% 23.7% +3pp Operating Income/(loss) 17.4 (3.0) (31.7) - CAPEX % % *Pro Forma EBITDA excluding VRP impact & provisions related to employee exit programs 28

29 Mobile Operations Total Financial Highlights IFRS ( mn) Q3 '12 Q3 '11 % Diff 9M '12 9M '11 % Diff Revenues % 1, , % EBITDA % % as % of revenues 38.6% 37.7% +0.9pp 37.5% 35.2% +2.3pp Pro Forma EBITDA* % % as % of revenues 38.6% 37.7% +0.9pp 37.5% 35.8% +1.7pp Operating Income % % CAPEX % % *Pro Forma EBITDA excluding VRP impact & provisions related to employee exit programs 29

30 OTE Group Revenue Bridge Q3 11 to Q3 12 ( mn) 1, % or (133.7) (59.7) (51.9) (1.7) (22.7) (2.6) 1.0 (6.6) (7.0) ,178.8 Q3 '11 Cosmote Group Absolute YoY Change in Revenue: (77.9) Q3 '12 Group Revenues Greek Fixed- Line Mobile Greece Mobile Albania Mobile Bulgaria Mobile Romania Cosmote Eliminations RomTelecom All Other Adj & Elimin. Group Revenues In Q3 12, OTE Group revenues down 10.2%, reflecting: Deterioration of revenue decline rate in Greek fixed due to tough macro environment Impact of more than 28mn in Mobile revenues from MTR cuts The effect of termination rate cuts in the Romanian fixed wholesale revenues 30

31 Q3 11 to Q3 12 OTE Group Pro forma EBITDA Bridge -8.2% or (38.3) ( mn) (26.8) (20.1) (1.6) (7.1) 0.3 (1.8) Q3 '11 Cosmote Group Absolute YoY Change in Pro forma EBITDA: Q3 '12 (23.8) Proforma EBITDA Greek Fixed- Line Mobile Greece Mobile Albania Mobile Bulgaria Mobile Romania Cosmote Eliminations RomTelecom All Other Adj & Elimin. Proforma EBITDA Group EBITDA affected from MTR cuts Despite Revenue drop, Group pro forma EBITDA margin increased to 36.5%, reflecting continuing cost-cutting efforts in all operations Greek fixed line: 17.7%% drop in total personnel-related costs Total operating expenses (excl.d&a and one-offs) in Romania down 11% Operating efficiency and effective cost cutting measures lead to an EBITDA margin increase in almost all mobile operations 31

32 Q&A For more information please contact OTE Investor Relations Dimitris Tzelepis, Head of IR Tel: Fax: or visit: 32

OTE Corporate Presentation. London, Sep 2010

OTE Corporate Presentation. London, Sep 2010 OTE Corporate Presentation London, Sep 2010 Forward-Looking Statement Any statements contained in this document that are not historical facts are forwardlooking statements as defined in the U.S. Private