Telekom Austria AG (TA1.F) Earnings Call Transcript

Ladies and gentlemen, I would like to welcome you to today's Annual General Meeting of Telekom Austria, and open the meeting. Due to the COVID crisis, we are unfortunately not able to welcome you here at the company headquarters as we do every year. Following the postponement of the date that was initially planned for May 27, the management board has decided to hold this year's AGM in a virtual format in order to safeguard the health of shareholders and other participants, a very important and correct decision in view of the renewed uptick in the number of infections. Today, we will be holding a virtual annual meeting within the meaning of the company law COVID-19 Act, which will be broadcast entirely on the Internet. I would, therefore, like to welcome our shareholders and all interested parties who are following this Annual General Meeting via the Internet. Here, at the company headquarters, I would like to welcome the gentleman of the management board. Dr. [ Maya ], our notary public, who will supervise the minutes; our 4 special proxies, whom I will introduce personally in a minute; and our technical staff. The members of the supervisory board and the auditors are following the Annual General Meeting via the live stream. The so-called corona AGM has already become common practice, which is why I can be brief when it comes to explaining the formalities. The complete AGM is being broadcast in real time in an audiovisual format on the Internet. The real-time broadcast allows shareholders to follow the course of the meeting and the Q&A period as in the face-to-face meeting. We hope that technology will run smoothly and that you will be able to follow the Annual General Meeting in good sound and picture quality. To be on the safe side, we have prepared 2 live streams. Should the broadcast fail completely, we will interrupt the Annual General Meeting and only continue as soon as the live stream has been restored. Since shareholders cannot attend in person, the following changes will be made regarding the exercise of shareholder rights. Regarding the right to information and the right to speak, the shareholders were asked to send us the questions prior to the Annual General Meeting. Some shareholders have responded to our request, and we will answer the questions already submitted during the general Q&A period. In addition, the shareholders have the opportunity to submit their questions to us in writing even during the annual general meeting, make sure you only use the e-mail address fragen.telekom@hauptversammlung.at and if possible, the question form that has been published. If you send a simple e-mail, we need the first name and the last name or the company name of the shareholder and the date of birth or the company registered number so that we can establish his or her identity and match it to the deposit certificate. As in the case of a regular AGM, we will structure the process in terms of time. Towards the end of the Q&A period, I will announce a specific time up to when questions can still be asked. Please also note, the exercise of voting rights, the right to propose resolutions and the right to object can only be exercised by 1 of the 4 special proxies. I've already welcomed our 4 proxies who are present in this room. These are Mr. Florian Beckermann from the IVA, the Austrian Shareholder Association; Christoph Moser, Attorney at Law; Thomas Niss of Own Austria; and Sascha Schulz, attorney at law. Prior to the Annual General Meeting, shareholders were given the opportunity to authorize 1 of the proxies and issue instructions to him. However, shareholders also have the opportunity to communicate their instructions to the proxy during the AGM. They can issue new directions or change directions already issued. To do so, please write a simple e-mail to the e-mail address of your proxy, to which you have already sent the power of attorney. These are the e-mail addresses of the proxies. For further details, please refer to the Information for Participation as disclosed on the website. Before we come to the agenda, I would like to state as follows. The invitation was published in the newspaper Wiener Zeitung on August 21, 2020, and also distributed electronically via the euro adhoc system. All necessary documents have been available on the website since August 27, 2020. A note that there are no proposals for additions or amendments to the agenda. Therefore, we can only discuss and resolve on the agenda items announced in the invitation. We will now first present the reports and resolution proposals on all items on the agenda on block. Afterwards, the special proxies will read out the motions for resolution that have been submitted. We will then hold the general debate. This is the Q&A period on all items on the agenda and answer all questions received before or during the AGM. At the end of this Q&A period, I will again ask for shareholders' motions or amendment to motions before we will then vote on block on all motions. This summarizes how today's virtual general meeting will be conducted. Let us now move on to the agenda, item 1 of the agenda, presentation of the adopted financial statements and the management report as well as the consolidated financial statements included the consolidated management report and the consolidated corporate governance report, the consolidated nonfinancial report, the proposal for the appropriation of the profit and the Supervisory Board report for the fiscal year 2019. All of these reports have been available on the website as documents for the AGM since the publication of the annual results, in other words, since August 21, 2020. I assume that it is not necessary to read out the documents. The annual financial statements and the consolidated financial statements were audited by Ernst & Young Wirtschaftsprüfungsgesellschaft m.b.H and received an unqualified audit opinion. The management report and the consolidated management report are consistent with the annual and the consolidated financial statements. At this point in time, I would also like to inform you about the work of the Supervisory Board. In the year under review, the Supervisory Board held a total of 7 meetings, including 1 strategy meeting. The main topics of the meetings were: the strategic orientation of the group, the planned investment and financing decisions, and following detailed discussions of the strategic options to optimize the course of business, the approval of the 2020 budget in September 2019. In the 4 meetings held so far this year, the discussions, of course, also focused on the effects of the corona crisis on Telekom Austria. Now to the committee work. The Audit Committee held 5 meetings in 2019 to discuss financial reporting in the context of the annual financial statements and quarterly financial statements. And also performed its oversight duties to monitor the effectiveness of the internal control system, the risk management system and the internal audit. In 2 meetings, the remuneration committee dealt in detail with the remuneration of the management board and the contractual arrangements for the members of the management board. Drawing on external independent expertise, the remuneration committee evaluated the remuneration of the management board in detail and established a remuneration policy, which will be presented to the Annual General Meeting today. I will come back to this in more detail in a moment. The Supervisory Board conducted a self evaluation in the year under review. The Supervisory Board of Telekom Austria is committed to compliance with the Austrian Code of Corporate Covenants and to responsible corporate management and supervision aimed at creating sustainable value. All 10 capital representatives have declared the independence in accordance with Rule 53 of the Austrian code of corporate governance. Pursuant to Rule 43 of the corporate governance code, I would now like to inform you of the principles of the remuneration system for the management board with regard to financial year 2019. Our executive -- our management board compensation is based on the 3-pillar model, which you see displayed on screen. In attending to the first pillar, basic remuneration, basic salary, including benefits in kind. The remuneration of the members of the management board in the year under review, comprised a second pillar, namely a short-term variable, a target based power component. This is called STI, short-term incentive. The third pillar was the long-term variable, share-based target achievement oriented salary component LTI, long term incentive. Allow me to touch on the 3 pillars in detail. The fixed annual salary, the base salary of the members of the management board is based on the salary structure of listed Austrian companies that is determined in accordance with the scope of duties and responsibilities of their respective management board member. The STI is based on the strategy implementation, contains financial and strategic performance indicators in line with the capital market positioning of our company. It is up to the remuneration committee to select financial performance indicators as financial criteria that cover the main pillars of the group's strategy. The target catalog for the 2019 reporting year comprised 85% financial key figures, namely revenue weighted at 42% and operating free cash flow weighted at 43% and a 15% strategic targets. STI payout is limited to 150% of the base salary. In the future and beginning already in the current year, a so-called modifier will be factored in. This is a multiplier that takes into account nonfinancial and qualitative targets. I will go into this in more detail under agenda Item 8. The third component is the long-term variable compensation LTI. This is share-based and spans a 3-year period. The LTI was continued in the reporting year with the issue of the 2019 tranche. The LTI is based on the performance-related allocation of notional bonus shares. Payment is not made in shares, but in cash. And only if the KPIs determined by the Supervisory Board for a 3-year period are achieved. The targets used for the LTI are key capital market relevant performance indicators. It is up to the remuneration committee to define key financial and/or business-related indicators as targets for performance criteria. The KPIs for the LTI 2019 are return on invested capital and revenue market share at 50% each. The achievement of the LTI targets is capped at 175%. In the future, nonfinancial goals are to be given greater consideration in the LTI as well. I will come to this in more detail under agenda Item 8. Further details on the remuneration of the management board for financial year 2019 and the individual breakdowns can be found on our combined annual report starting on Page 43. We will continue to use this 3-pillar model in the future. The changes resulting from the remunerations committees review, which were incorporated into the remuneration policy will be presented under agenda item 8. This concludes my report on the work and the issues that discussed in the Supervisory Board during the business year 2019. The management board will now present to you in detail its report on the business year 2019. First of all, I would like to ask the CEO, Mr. Thomas Arnoldner, to take the floor.

Thank you very much. On behalf of the management Board, I would like to welcome all shareholders to our live stream for the virtual AGM. I would love to see you in person, but due to the current situation, unfortunately, that is not possible. The year 2019 for Telekom Austria and for this sector, altogether was marked by major challenges. Competition was intensive, technological advancements were high-speeds and this made for a very difficult environment. I think that we can look back on a very successful year with pride. In 2019, we had a very strong operational performance with growth in all markets. And for the first time in 15 years, we saw EBITDA growth in all countries for the first time. Our rebranding was successful. This is the rebranding with the brand A1 and with the implementation in Belarus and North Macedonia. This was continued. This is a continuation of rebranding strategy. We also had ongoing strong demand for ICT solutions as well as A1 Xplore TV in Bulgaria, Austria and Slovenia. We see very strong growth in business -- in the business segment, and we see a significant demand for IT solutions as well as security products. We also laid the foundations for successful 5G launch in Austria with a successful participation in the auction, we had successful task with customers. We had the preparation for the launch test of the largest 5G network. For the 2019 business year, we saw total revenue growth of 2.9%, 3.4% in -- growth in service revenues. This is a very promising result. I think that we are one of the fastest growing or best growing telecom providers in Europe. We saw EBITDA growth of 4.7% before restructuring. This demonstrates solid growth in Austria, particularly with a robust growth in East Europe with Bulgaria, Belarus and Serbia. Free cash flow, aside from auction payments was a strength and thanks to the positive developments, and we saw an increase of 8% to about EUR 416 million. The net result grew significantly from EUR 244 million to EUR 327 million, thanks to the -- we were over to come the impairments due to the rebranding. Our high-value subscriber base is very important. We were able to post a growth of 4.4%. Here in fixed line, we saw a decline of our RDOs of 1%. This decline of our RDOs is primarily driven by the decline in voice telephony in Austria and in lower bandwidth. In home bandwidth as well as TV services, here, we were able, on the other hand, to post very positive growth. As I said, we can be very proud of any comparison with our international peers. We are certainly a champion in growth in this sector. You see this here in comparison with our peers. Over the last 4 years, we have been able to grow on average by 2.4%. We are nearly top of the pack with this, I would like you to take into account -- take -- for you to take into account that Deutsche Telekom's growth is primarily driven by growth in the U.S. market. Here we see progress in net adds. Mr. Mayrhofer will go into that bit in more detail somewhat later during his presentation. Also, when we look at Austria as a production site, as a business site, we were able to see a significant value-added here in the market. So we had external expertise. We saw EUR 2.4 billion here. This is 50% of the gross value-added amongst the telecom providers in Austria. Here, we saw an effect of unemployment of 21,000 drops for ad in total. We have a total fiscal impact of nearly EUR 1 billion every year and we invest, on average, EUR 450 million every year, just in Austria, particularly with regard to digital infrastructure. This is more than all telecommunications providers taken together in Austria. And this investment volume provides the foundation for the successful launch of the 5G network that I've touched on already. At the beginning of this year, we had the 5-giga net that we launched. This is the combination of the largest fiber network in Austria by far in the fastest 5G technology, as I said, by far. In January 2020, we were able to have a very impressive launch of this. We have about 400 mobile 5Gs in 160 municipalities throughout our country. We are expecting nationwide 5G population coverage by the end of 2023. Of course, we are relying on the optimal technology mix of mobile technology 4G, 5G and FTTHC, et cetera, with the goal of providing broadband efficiently and quickly to all of our customers. One important prerequisite for this is our fiber access networks. We have 40 -- 94% of our municipalities that have a fiber access at point. And our fiber optic network consists of 60,000 kilometers. This is twice as much as 5 years ago. Perhaps allow me to take a close look at the issue of 5G as this has been very prominent in the media as of late. Here this is very important to point out that this is not a new technology. In fact, it is just a new transmission protocol. And the underlying technology has been in use for over 20 -- 120 years. We are not going to see a significantly higher number in cell towers. You will see this in the next slide. We will be using similar frequencies that we saw with the previous technologies. The limit values will be recalculated with towers and this will not be exceeded with 5G technology. There is absolutely no evidence-based results so that links 5G with any kind of diseases or illness. Allow me to say a few words about the second 5G auction that just concluded in Austria. We are quite happy with this. We have 30-megahertz in the -- 1,500 megahertz TDD band. We have an increase in spectrum in the existing 2,100-megahertz FDD band from 20- to 25-megahertz. So we have 38% of the available spectrum as a result. So I think we saw a well-balanced distribution here between all of the spectrum areas. Here, this resulted in EUR 66 million. Internationally -- in an international comparison, this is rather inexpensive. We know that the acquisition of frequency requires us to expand our infrastructure. We have an expansion commitment for 349 very rural communities. The combination of frequency fees and the expansion that we are committed to undertake here, we have a very future-oriented approach, thanks to the federal government, and I believe that this will set an excellent example for international competitors. Allow me to say a few words about COVID-19 and the crisis that it has generated. I think in the history of digital infrastructure, we have never really seen the meaning and the importance of digital infrastructure highlighted in this way. Of course, our highest priority remains the health of our employees. We acted very quickly. Practically, overnight, we were able to introduce remote working in our Austrian operations. We have about 300 employees in our call center that were placed in home office, and they were able to complete their call center activities from home. I'm very proud of what our employees have achieved in this context. As you see, we have an excellently organized home office and remote organization. It's very important for our customers to point out that A1 networks were able to handle the enormous volume increase of voice and data traffic, particularly at the beginning of the lockdown period without significant slowdowns or bottlenecks. And we saw that the enormous investments over the last several years certainly paid off, thanks to this situation. Of course, we are continuing to observe the situation in Austria, of course, in all of the other countries where we are active in terms of the measures to be taken. We want to avoid any of the negative impacts on our employees as well as on our bottom line. We do have a responsibility for communication service providers. We were able to provide assistance very quickly. We were able to provide collaboration tools free of charge for businesses, free apps for school students or at a discount for additional TV channels for 1 month, and we provided a great deal in addition to that. We were also in ongoing contact with government officials who are working on this crisis. Within a very short period of time, we were able to set up the coronavirus hotline 1450 in order to pick up some of the spill over from the foreign office and other government office. In addition to this, we also have a spin-off of -- at the technical university in Graz, we have a crisis team there in order to analyze movement data during the lockdown we also have a network identification #stayathome, in order to encourage people to stay at home during the lockdown because they were perfectly well connected, thanks to our network services. Of course, we saw a strong decline in roaming traffic. We saw -- we were expecting a negative short-term impact in long-term opportunities. We are looking at a negative revenue impact for minus 2% for this year. In the retail sector, due to the lockdown, of course, we saw a significant demand for mobile WiFi routers and speed upgrades. But we saw a significant decline in handset sales. We also saw high demand for connectivity in B2B for our home office solutions. On one hand, of course, large-scale customer projects had to be postponed due to the crisis. We are seeing a partial normalization of customer behavior following the lockdown period where digital channels were used very intensely. We see this as an enormous opportunity that is the digitalization amongst our customer areas and in our business and work life has been accelerated. Imagine if we had, had such a crisis 10 to 15 years ago, without access to the type of technologies that we can avail ourselves of today. We are increasing demand for higher fixed line bandwidth. We are seeing a boost in remote work and video conferencing solutions. Of course, we are moving toward cloud services more and more, growth of streaming traffic is something we've seen, particularly as a result of the lockdown. We are seeing increasing demand for cybersecurity solutions. And we are also seeing a higher penetration of e-commerce. So thanks to the shift from physical shops to online shopping. We have incorporated a number of these aspects in our strategy. We anticipated this even last year. Here, we wanted to boost our financial strength. But we are now looking at differing external factors where we look at the increased importance of OTT players. So for that reason, we have further developed our strategy. However, at its core, it has remained more or less the same. Here on the left-hand side, you see the area focused on revenue growth and the various focal areas on organic growth. Here, you see the potential of utilizing our assets more efficiently, also data-driven models and multiplayer services. We're also looking at various market segments in detail to see how we can target these better because we have various market share in to the place and how can we improve in those areas. If you look at growth potential in other segments, of course, I'll come back to that in a minute, but there are other inorganic growth possibilities as well, particularly when we look at the existing markets. On the right-hand side, we are looking at excellence in execution. We are looking at continuous improvement process. So we want to look at external expenses. The digital transformation is important in this context. So we have the digital transformation. We are digitizing our customer experience, self-service interactions, et cetera, et cetera. We want to have a radical simplification of our business process and automating on many process, of course. In the center, this is extremely important. We have the strategy enablers. That are very key for implementing this strategy. You see this here in the center of the logo here, we want to tap the full potential of the data, data to impact. We know that countries are focusing more and more on data. And then there's people and culture. I will come back to that in just a minute. And for the first time in our strategy, we have also the aspect of environmental, social and corporate governance as a key pillar. And I will come back to that in just a moment. Allow me to touch on our platform business. This is important for traditional telcos, physical infrastructure has been important. It's very difficult to replicate this. But on the other hand, it is very capital-intensive. We have fiber optic infrastructure, mobile infrastructure, customer relations as well as physical shops, computer centers, local brands and other sales avenues. Vis-à-vis, you have the new players, the over-the-top service providers that provide a plethora of digital services via a wide variety of platforms without having to provide their own infrastructure for this. Now our ambition within this platform approach is to take the best of both and synthesize these. We want to draw on our strength to combine these 2, look at entertainment, advanced analytics and cloud platforms, et cetera, and new services with television and cybersecurity or IoT solutions. I've talked about people and culture just a moment ago. The culture in our company and our employees are absolutely essential for the proper functioning of our organization and for implementing the strategies. Here, we have 4 key pillars that feed into this area. #1 is agility. We want to create flatter hierarchies. We want to focus more on customers and have quicker processes. Many of the segments of our operations have been adapted toward this more agile approach. Secondly, we have diversity and inclusion. Diversity is a key success factor in our group. It is no coincidence that today, we are launching a new training series focusing on unconscious biases. Learning is the third pillar. It's also very important to focus on online training opportunities. We have carried out 116,000 training opportunities online within our group. With the COVID crisis, with a flexible working hours and home office, we have seen a movement toward this aspect, and we want to take that into account as well. This comes under new ways of working. We have ESG. This is something we've included for the first time in our strategy. We want to be more energy-efficient and more sustainable in our operations. We have discussed this strategy, the management board as well as Supervisory Board. It is based on 3 main pillars. Environment is very important. We have set very ambitious environmental goals. We want to have a reduction of CO2 emissions by 2030 to 0%. We want increase in energy efficiency, and we want to promote the circular economy. It has been a tradition in our group and since 2010, we have had an integrated sustainability management concept. And since 2014, in Austria, we had a CO2 neutral network with 100% of our energy drawn from renewable energy sources. We also provide a device recycling for our customers. So we have 2 large photovoltaic parks in Austria and in Belarus. Second pillar, this digital education under the pillar society. Digital education regarding technology is extremely important. We want to call attention to the potentially negative aspects of these developments. Cyber crime, et cetera, we also went to give people the opportunity to point and the negative aspects out with calling camps. As I said, governance is very important. Diversity. We want to increase the number of women in any positions and throughout the group and the compliance. We want to maintain in a very strong corporate compliance culture as well. In the remuneration program for the management board for 2020 for the LTI program, includes ESG goals and ESG factors will also be included in the STI program in the near future. And I believe that we are looking at very ambitious steps toward a peer comparisons with other companies in our sector. So, so much for the nonfinancial portion, and we are going to take a brief look now at the financial KPIs. And I would like to give the floor over to Mr. Mayrhofer.

Thank you very much. Let us now start with Austria. Revenues in Austria from 2018 to 2019 increased by 0.4%. When it comes to the composition of revenues, we saw a decline in revenues from equipment sales, stable business in mobile and also growth in the fixed business. In the fixed business, it was especially ICT solutions that proved to be 1 driver for the positive development in this segment. And Thomas already briefly touched on this fact. Also, of course, in 2020, in the course of the COVID crisis, ICT solutions proved to be especially important due to sound cost management. This increase could also be turned into a growth in EBITDA. Including restructuring. However, EBITDA, excluding restructuring, saw a bit of a decline. Let us now move on to the number of our customers. So our customer base in mobile business, we saw an increase in the number of customers, a small decrease in the fixed business when it comes to broadband customers, and this has to do with the high demand for both mobile, WiFi solutions, a bit of a decline. In the TV business, still growth, growth in the amount of 3.5%. When it comes to our -- the number of our mobile customers, basically, we saw a continuation of the trend of previous years. Also the international business, the international operations saw a positive development in 2019, particularly, revenue development was driven by increases and the excellent performance in Bulgaria, Belarus and also in Serbia. On the product side, in the international operations, both fixed as well as mobile business grew. When it comes to EBITDA, a plus of EUR 68 million. And here, we have a positive effect of EUR 6 million in terms of FX gains. But also excluding this slight positive effect, still satisfactory performance in the international operations. On the customer side of our international businesses, we can say that all in all, in 2019, we had a total of 14.7 million customers. This is approximately 3x as the number we have in Austria. Also on the fixed business sides, both in the TV business and on the broadband side, we saw a positive performance in international operations. All in all, we can say that the group, and you can see this here on the next side, roughly 3% in terms of revenue increase. Also, we saw an increase of EBITDA before restructuring of 4.7%. And once again, I would like to emphasize that all international businesses made a very important contribution to this development. In 2019, we saw net results that increased, thanks to lower depreciation and amortization. Apart from the pleasing operational performance as I've just explained, this had to do with lower depreciation and amortization of our brands. It was already said that this has been a consistent path really that we have been following, which is to say the uniform A1 brand utilization. And of course, some amount of depreciation and amortization of local brand names were the result of this strategy. The rollout of the A1 brand has largely been completed. Which is why those extraordinary depreciation and amortization of brand names has largely been terminated as well. Investment volume in 2019 amounted to EUR 879 million. This is a dramatic increase, largely driven by the first spectrum acquisition in Austria. And also I can tell you that in Belarus, 4G, the capacities were acquired to expand the product portfolio in Belarus and also to round it off accordingly. Moving on to the next page. You see the development of the free cash flow. Also here, sound performance, growth of 4.8% of net cash flow from operating activities, combined with a little bit higher CapEx. This resulted in a free cash flow, excluding the paid frequency in the amount of EUR 415 million. On the next page, you will see the financial debt maturity profile. This can be summarized quite easily. Equity updates down. And this is really an approach that we have been consistently implementing in previous years, and this consistent implementation of a conservative debt policy has really substantially increased our solvency rating. And also, this was appreciated externally. You can see this here on the very right-hand side, Standard & Poor's and Moody's over the course of the years actually clearly improved our rating. All right. Then last but not least, let's move on to our financial debt maturity profile. This is really something that has been spread out evenly through the years. And at the end of 2019, we saw undrawn committed credit lines in the amount of EUR 1 billion. That basically presents my -- our presentation of the financial results. I would like to give the floor to Thomas again.

Thank you very much, Siegfried. Very briefly the development of the share price. I'm sure it's easy for you to imagine, and you can see the performance of the Telekom Austria share here that was characterized dramatically by the COVID-19 crisis. Since 2019 and also the beginning of this year, the share price has, however, been a lot better in comparison with our peers. In comparison with the Stock Corporation Act, we have to give you a report really on the development on the share price. We did not make any transactions really in treasury shares. We still hold roughly 450,000 shares, approximately, this translates into 0.6% to the stated share capital. Now these shares were acquired originally at a share price of roughly EUR 7 billion. This basically completes the review of the share price development, outlook 2020. Well, first of all, let's have a look at 2019. Looking at the original guidance, you can see that we largely exceeded our outlook, both in terms of total revenues and also CapEx as Siegfried Mayrhofer already explained our CapEx was originally for EUR 770 million. However, we spent EUR 798 million, which has to do with our Belarus. For this year after an originally estimate prior to COVID of 1% to 2% in terms of revenue increase, we now estimate a minus of 2% that has to do with the decline in roaming, but also a lower equipment sale and also it has to do with FX. on the CapEx side, we saw that our net awards were able to withstand this huge burden of the COVID crisis. So this 25% delta you see here, of course, has to do with the COVID crisis. But once again, we saw that our networks performed extremely well. All in all, we can say that the crisis will, of course, leave its mark, also on Telekom Austria, but we are in an excellent position to master this crisis and to be able to leverage on the opportunities, especially when it comes to digitalization. We have an excellent balance sheet structure. Our business model is the excellent foundation for digitalization models. Also, we have a excellent liquidity position. We have excellent growth opportunities in Central and Eastern Europe, we hold an excellent market position. And also, we operate a uniform brand presence. In all product portfolios, really, we have a strong focus on fixed as well as on the mobile business we offer excellent ICT, IoT as well as cybersecurity solutions. We have proven to be a reliable and well-established partner to meet all customer expectations. At this point in time, I would like to thank you very much for your attention.

At this point in time, I would like to take this opportunity to thank the management board, and in particular, our employees for their commitment and performance last year. I'm now going to read out the resolution proposals on all agenda items. Agenda item 2, resolution on the appropriation of the net profit. The annual financial statements show a net profit in the amount of EUR 327,442,000. The management Board and Supervisory Board propose to distribute a dividend in the amount of EUR 0.23 for each eligible share that is a total of EUR 152,739,513.43. And to carry forward to new account, the remainder in the amount of EUR 174,702,486.57. The dividend will be paid out on October 2, 2020. Agenda Item 3 of the attenders of resolution under discharge of the members of the management board for the fiscal year 2019. The management board and the Supervisory Board propose to grant discharge to the members of the management board for the fiscal year 2019. The agenda item 4, resolution on the discharge of the members of the Supervisory Board for the fiscal year 2019. The management board and the Supervisory Board propose to grant discharge to the members of the Supervisory Board for the fiscal year 2019. On to agenda Item 5, resolution on the compensation for the members of the Supervisory Board for the fiscal year 2019. The management Board and the Supervisory Board of Telekom Austria proposed that the following remuneration is to be granted unchanged versus the previous year to the elected members of the Supervisory Board for the 2019 financial year. First, for the Chairwomen, EUR 40,000; for the Deputy Chairman, EUR 30,000; and for every other Supervisory Board member, EUR 20,000. Two, for the Chairman of a committee, EUR 12,000; and for every other committee member, EUR 10,000. The remuneration for committee members is limited to 1 committee mandate. Accordingly, committee members are only entitled to remuneration once even if they belong to several committees. Three, the fixed attendance fee of EUR 400 is to be granted for each member of the supervisory board for each of the meetings of the Board or committee meetings, which are -- which the member attends. Remuneration is paid on a pro rata basis, which is calculated daily, if a member of the Supervisory Board or committee did not belong to the Board or the respective committee for the entire financial year. I would like to add that the works council representatives on the Supervisory Board performed their work on an honorary basis. They do not receive Supervisory Board remuneration as such, but only an attendance fee. Agenda Item 6, elections to the Supervisory Board. Now the mandates of Karin Exner-Wöhrer and Alejandro Cantú Jiménez will expire as of the end of today's Annual General Meeting and are not to be extended. Pursuant to the Articles of Association of Telekom Austria, the Supervisory Board consists of up to 10 members to be elected by the AGM. With the extension, we will reach this number again. Due to the separation resolution, the capital and also the employee representatives must fulfill the gender quota separately. With the extension of Karin Exner-Wöhrer's term of office, the gender quote of 30% women on the side of the capital representatives will be reached again. The Supervisory Board, therefore, proposes to elect the following individuals to the Supervisory Board with effect from the end of this AGM. One, Karin Exner-Wöhrer until the end of the Annual General Meeting that resolves on the discharge of the members of the supervisory port for the fiscal year 2022; and two, Mr. Alejandro Cantú Jiménez until the end of the Annual General Meeting that resolves on the discharge for the fiscal year 2022. We will vote separately on each candidate. The candidates have submitted declarations pursuant to section 87 Para 2 of the Austrian Stock Corporation Act, which have been published to -- on the website together with their CVs. There is no need to introduce the 2 candidates as they have already been acting and valued members of the Supervisory Board of the company for several years and are therefore, known to you. On behalf of both key candidates, I would like to state that they are very much looking forward to their Supervisory Board responsibilities in the event of their reelection, and we'll be happy to accept the election. [Foreign Language] Item 7 on the agenda, election of the auditors of the financial statements and of the consolidated financial statements, Supervisory Board proposes to elect Ernst & Young Wirtschaftsprüfungsgesellschaft as auditor and group auditor the fiscal year 2020. Item 8 on the agenda, resolution on remuneration policy. The second shareholders' rights directive was implemented with the adoption of the 2019 Stock Corporation Amendment Act. Under these new legal provisions, publicly listed companies are required to present a remuneration policy for the remuneration of the management board and the Supervisory Board to the Annual General Meeting every 4 years at the latest. At Telekom Austria, this is required at today's AGM for the first time. The vote at the AGM is understood as a recommendation. The remuneration committee prepared the remuneration policy with the help of external independent expertise and has submitted a proposal to the Supervisory board. The Supervisory Board discussed the remuneration principles in detail and approved the remuneration policy in its present form the policy has been published on the company website since August 27, 2020. It is important to us that the remuneration of the management board comply with current regulations, be in line with market standards and at the same time, be competitive. To this end, we have analyzed the remuneration systems of our peers taking into account benchmarks of ATX companies and adjusted a 3 pillar model, mainly along the following lines. Firstly, nonfinancial indicators will significantly influence the variable components, namely both STI and LTI. A modifier was introduced for the STI already for this year, which incorporates nonfinancial ESG targets from our sustainability strategy. This modifier can influence the achievement of objectives by a maximum of 15% in both directions. In this way, the modifier establishes a direct link to the company's sustainability strategy with the aspects environment society and governments, ESG. This applies, for example, to priority issues in the following areas: reduction of CO2 emissions, energy efficiency, recycling management, our circular economy, digital education, diversity and compliance. Starting this year ESG targets will also be included to a considerable extent in the long-term variable remuneration. 1/3 of the achievement of the LTI 2020 targets depends on our future long-term financing being classified as green bonds or as a sustainable finance certificate. Secondly, this is a key structural change in this policy. In the future, long-term variable remuneration is to account for a larger share in relation to the short-term variable remuneration. You can see this here on the chart that is on screen. The STI will be reduced from 42% to 28%. And the LTI will be increased from 23% to 37% of total remuneration. This will be achieved through the following adjustments. On one hand, the target compensation for the STI will be reduced from 120% to 80% of the base salary. The STI cap will be 110.4% of the base salary in the future. On the other hand, the target compensation of the LTI will be increased from currently 65% to 105% of the base salary. The LTI is capped at 175% of the LTI target compensation. This is, of course, a major switch with -- which will require fundamental modifications, and this constitutes significant changes to existing contracts. In order to make this fair, these changes should only take place upon conclusion of the new management board contracts. This will be the case in 2020 latest when the existing contracts expire. I'm convinced that the remuneration of the management board in this adopted form of the 3-pillar model guarantees a performance-related remuneration that is also in line with the market. Finally, I would like to comment on the remuneration policy for the Supervisory Board. There are no changes to the remuneration of the Supervisory Board. As in the past, you, ladies and gentlemen, as shareholders, will decide on the remuneration of the Supervisory board on an annual basis, as required by our Articles of Association and the applicable legal provisions. The Supervisory Board, therefore, proposes that the remuneration policy for the management board and for the Supervisory Board be adopted. This concludes the presentation of the reports and the proposed resolutions on all agenda items. I will now announce the attendance numbers for today's AGM. According to participates list, 458 shareholders are represented by the 4 special proxies, and they are entitled to cast 165,528,291 votes. The Annual General Meeting has the necessary quorum for all agenda items. I will now ask our special proxies whether shareholders have submitted any motions for resolutions. If so, please read these out. If not, please confirm that you have not yet received any motions for resolution. Mr. Beckermann?

Yes. My name is Florian Beckermann from the IVA. I would like to thank the 400 shareholders with about EUR 25 million. Thank you very much, shares for their trust. I have no proposals for resolutions.

Mr. Moser.

Thank you very much. I represent a number of shareholders. And one shareholder has submitted motions for resolution.

This is [indiscernible]. This concerns item on agenda 8, I would like to read this out. And then I would like to elucidate the reasons for this. The remuneration policy for the management board should be reworked and should be presented to the next AGM. Here, we need to take into account that sustainability criteria should be taken into consideration more fully. The sustainability criteria should be on equal footing with financial criteria, particularly regarding the weighting of these criteria. I would like to point out that the sustainability criteria in this context should be in compliance with Austrian law, particularly with regard to nonfinancial matters and should be limited in an unbinding way. And I think that this should be applied to current management board contracts. Here we need to publish this, and this should be carried out in the future. For the reasons for this, allow me to read out the document on the remuneration policy for the management board points out our sustainability current criteria that need to play an important role, and this has been pointed out on a repeated basis. The remuneration policies of various publicly listed companies have presented this way as well. For that reason, Telekom Austria should also take into account sustainability criteria. Unfortunately, we do not think that these aspects have been taken fully into consideration or adequately into consideration. Allow me to quote from the attachment on Page 5. It says under criteria of variable annual remuneration. This has to do with the STI, short-term incentive nonfinancial goals, regarding the long-term performance of the company, regarding sustainability policy, and this has to do with the modifier, 0.5%, 1.15%, and these are to be included in the target achievement. And this is to create a direct link to the sustainability strategy, particularly with governance and the focal points in reducing CO2 emissions, energy efficiency, diversity, compliance, et cetera. Regarding the implementation of the focal areas, the remuneration committees to set this modifier and this is to be multiplied by the various other criteria. Even though you find questionable aspects in the document in other places, I think we need to ask a number of questions here. Nonfinancial goals are not placed on an equal footing with the financial goals but are used only as a modifier. Secondly, setting this modifier, this means the target achievement is a nonbinding guideline regarding transparency vis-à-vis the market. And it is subordinate to financial goals. As I said, this is a 15% modifier up and down. However, this seems to be too small regarding sustainability criteria, and particularly their importance to the company. Within the context of rating agencies and capital markets, I don't think it is understandable why the central instrument for providing incentives to the management board should focus only or primarily on our financial criteria. Regarding nonfinancial criteria. There is no tie to objective criteria here. The question is whether or not this should be tied to hard KPI's and whether or not these are effective and efficient target criteria. The necessary competence here are lacking in order to potentially and adequately gauge the target achievement and the management board. For that reason, we need to focus on here, the aspects of the variable remuneration. For that reason, we need more satisfactory transparency regarding the target achievement, particularly with regard to sustainability criteria. I would like to focus critically on the nonfinancial reporting. And this should outline the most important sustainability criteria, particularly with regard to transparent labeling, more progress needs to be achieved here. The sustainability strategy allows 4 indicators to be indicated with which the management can be measured. However, there is a lack of the possibility factor with regard to methodology. I think there are better examples for responsibility, remuneration policy, for example, using systemically criteria for this policy. One example for this would be capture traffic comp. On Page 6, I think this can be used as inspiration for you. Allow me to quote. For every business year, there are 4 nonfinancial criteria that are determined to cover a multiyear period. These can also be determined independently aside from the annual report. And this is tied to a payout of EUR 10,000. And this is paid out based on a target date for the management board. So shareholders are faced with the question, why a company like [ CAPS ] which is well-known for its governance policies, able to take such a step, whereas Telekom Austria is unable to do this with the many resources that it has at its disposable. For this reason, I would like to point out that there are similarities in the remuneration policy with the Austrian Post. Here, there are also commonalities with the composition of the management board. And using modifiers here is also in use of the past, but I think this has also been criticized at the AGM of the Post for that reason. Allow me to repeat this criticism on Page 7. The focus of the modifier is on the evaluation of a nonfinancial target achievement, the multiplier that can influence the target achievement by plus/minus 30%. And the multiplier, unfortunately, cannot lead to an increase in the payment. With regard to ESG indicators and sustainability strategy, this should be taken into account. There are focal points that are set every year by the remuneration committee for the post modifier, also focuses on customer satisfaction, delivery quality as well as other stakeholder criteria with greater diversity in management. And a criteria catalog has also been submitted in this context. So you see a radical similarity between the 2 companies. So my first question is that to how these 2 policies were so similar? And whether you copy from another -- from each other? Or were the same consultants involved in the development of this policy? Thirdly, I would like to ask -- has integration -- how the modifier was determined in terms of its value for Telekom Austria? And why it is significantly lower than the modifier used for the Austrian Post. Regarding content, we must point out that it's rather unclear why nonfinancial goals should not have been included here with regard to the LTI. We believe that a long-term vision for the STI is still important and it should be tied to the LTI. For that reason, I think this should become an ongoing policy for the company. So sustainably criteria for the STI should be determined. Many people in Austria may think, well, it doesn't really matter at all, who cares, but I think this is extremely important, particularly as it's being highlighted here. I think that focusing on sustainability criteria is a first step. But unfortunately, it seems to have remained in its infancy. For that reason, the remuneration policy is still not up to the contemporary needs. And I think this entails a certain risk for shareholders. And unfortunately, this provides insufficient incentives for the management board within this context. There are many studies regarding this that have been carried out in academic setting, particularly with the long-term successful management of the company and how the inclusion of sustainability criteria play into this in order to boost performance. And I think this ties into the management board's duty to take care. The remuneration policy for the Supervisory Board should also include this. And this was not very clear in the last year -- in last year's AGM. For that reason, we need to have more of a focus on these issues, particularly with regard to the shareholder structure against the backdrop of sustainability activities. The sustainability strategy published online focused on this year. Telekom Austria group assumes this responsibility by promoting sustainable works in its operations, SG is enshrined in our operational goals by using less energy, becoming more energy efficient. Here, you see a quote from the WBAG regarding the legal obligation. The reduction of the CO2 emissions is important. The company is a key player in Austria. For that reason, it bears important social responsibility, Federal President, Alexander Van der Bellen in 2019, pointed out this important role. The remuneration policy needs to take these into consideration, particularly when we're focusing on sustainability policy criteria. The importance of this has become ever clearer, and the focus on sustainability criteria will become more important and greater in the future. Focus on sustainability will be important, particularly with regard to financial performance. When customer -- when business relationships with customers are to be expanded, I think we need to have certain sensibility and focus on these issues. Sustainability criteria are extremely important. And with the company performance here, but this is not the case. In the company report, we have commitments to sustainability criteria, but it's not just -- but we do not want to engage in green and/or blue washing in this context. Contract policy needs to tie into this. For that reasons, the shareholders, they need to maintain their vigilance with regard to the interest of the company regarding sustainability. And of course, this plays into the regulatory obligations and social obligations that companies today are expected to take into account. These are the comments I would like to make regarding the remuneration policy of the management board. For that reason, regarding the duty to provide information under the stock cooperation act, I question whether or not adequate information has been provided for that reason. We would like to know what the consulting invoice -- services invoicing has been for the remuneration policy, which consultants were involved, and which peer groups were used as for comparison purpose, particularly with regard to achieving sustainability goals. Beyond that, I would like to have a clarification regarding what I quoted from the remuneration policy, particularly with regard to the Supervisory Board. This also ties into the binding implementation of the achievement of sustainability goals. And based on the assumptions that nonfinancial criteria are not considered as relevant, I would like to point this out, and I believe that this needs to be pointed out with regard to the remuneration policy. And my previous AGM experience has showed me that sustainability, it does not seem to play that big of a role, particularly with regard to management, Supervisory Board members of a particular age. In conclusion, allow me to add that the remuneration policy does not seem to reflect a significant commitment to the issue, and I believe that the publication of all these documents on the company website are only a sort of continuation of this regarding the Corporate governance report, Page 4 is the information on expenses and dividend policy. This conveys a picture of a company that is not as committed to sustainability criteria. And I believe that in our current time, this is an indicator that needs to be clarified.

Thank you very much. Any other motions? No. That's it. Ms. Niss, please.

I represent more than 30,000 retail shareholders and from none of the shareholders we have received a motion.

Dr. Schulz.

I have not received the motion by shareholders.

Thank you very much for this confirmation. Before we now come to the Q&A period of our AGM, we will interrupt the session for a short 10-minute break. This will give you the opportunity to send in further questions. [Break]

Welcome back, ladies and gentlemen. We will now move on to the Q&A portion of our AGM and to answer all the questions, we received both before and during the Annual General Meeting. Once again, I would like to give you the e-mail address for sending your questions, including follow-up or additional questions. We're going to start with the questions received by the IVA, the Austrian Shareholder Association, and will then move on to the block of questions received by 1 Austria. IVA, please. Voting card number 91, Florian Beckermann. The question regards the COVID 19 impact, the situation not only concerns the AGM, but also the entire business operations. What are the positive digitalization effects? Can you give us an estimate? What growth figures and in what business model? Well the digitalization and innovative solutions, of course, create new opportunities. Cooperation as well as the exchange by our social media or other platforms offer enormous potential in productivity as well as the attractiveness of the working environment should be promoted in the first half. We estimate that, let us say, a 1-digit million amount in terms of cost savings in terms of travel expenses, conversion on online webinars, et cetera. Question B, Florian Beckermann, COVID-19 impact, how about this effect, how can they be broken down on the various markets? We only have an estimate for the entire group and not a specific breakdown of the individual markets. On the basis of our footprint and the cost structure, the lion's share is, of course, generated in our domestic market, Austria. Voting card number 91, Florian Beckermann question. Business development, broadband expansion that has been discussed for many years in Austria. How about the state of the art in comparison with the entire investment plan? Could you please give us an update? Also is A1 debt operator that invests the most. So answer to that also, we are heavily involved in other networks. The broadband expansion for us means to provide customers with an excellent basis. There can be many ways for that. A1 Austria makes sure what technology really are first -- the biggest customer benefit in what region, therefore, a broad array of technologies, fiber to the home, 5G, hybrid, et cetera, are used. And each investment that is made in the field of that technology offers to a better product supply as it works. Next question, voting card number 91, Beckermann, regarding the bonds. For the potential reissue with the green certification within the meaning of a green bond, should we not strive for that? What obstacles are there regarding such really a quality feature? For A1 green funding, and the same goes really for other telecoms are, of course, a target, but that, of course, needs careful and diligent preparation. And the next significant refinancing need will only become appropriate in December 2021, when EUR 750 million need to be refinanced. Next question also by voting card number 91, regarding administration. Looking back on the current situation in Austria and Germany. Could you give us an update on the auditor's work? Now in the course of the preaudit and also the regular audit, there were regular personal contact of the Supervisory Board members with the auditors. In addition to that, auditors in the meeting of the audit committee give regular reports. There, the risk-based focus is really any findings as it were are discussed regularly, and in great detail. The statutory term is 10 years. This is really laid down by the relevant EU Directive. So including the audit of the 2024 annual financial statements, any corrected as well as noncorrected findings as well as a description of the entire audit will be made available to the Supervisory Board in the so-called Article 11 report in the 2019 annual financial statements. There was no need to report on any relevant findings. I would like to continue with another question also received by voting card number 91 from the IVA. The question is as follows. In regards to COVID-19 impact, what negative impact can we see on our headcount, for example, office spaces, et cetera? Right now, there is no effect that we reckon with, in addition to the current restructuring that we have made in previous years. With regard to office spaces, also before COVID-19, in course of the digitalization approaches, we checked, for example, where the office spaces could not be used differently. And also, we are going to continue this process in the current situation. Next question also comes from voting card number 91, Florian Beckermann from the IVA. Question regards COVID-19 impact. Home office, mobile offices, have become a standard. What kind of measures have you taken, both internally as well as externally in terms of setting up a new business model? In my presentation, I already talked about the internal aspects. Mobile working used to be common practice even before corona, but not fully, of course, and we take great pride in the fact that conversion to our home office in March 2020 was so successful and that had to do with the great commitment shown by our employees and also the superiors, mind you. Now in particular, at the beginning, we paid great attention to communication, for example, due to regular e-mails that were sent on a daily basis, video conferencing solutions, and of course, transparency was extremely important. Now these are really benefits that we can leverage on, flexible working, for example, for employees and also employers, of course, will be a great benefit. And we have developed a certain framework offering common guidelines. But of course, a lot of voluntary options are involved as well. I previously explained that at the beginning of the lockdown in Austria, demand for mobile working was, of course, extremely high on the private customer side, especially demand for net cubes and greater bandwidth were seen, and also we saw greater demand from corporate customers for VPN solutions, et cetera. There is still continuing increase in demand. And we are continuing our work in coming up with attractive home office solutions, but also we are addressing educational solutions that was important for us in the past. We offered home schooling solutions, but we are in the process of elaborating additional solutions. Voting card number 91, once again, Florian Beckermann from the IVA. Business development, what terms of cost effect are expected from 5G. From today's perspective, we estimate that with the budget, with the rollout of budgets, actually, the 5G rollout can be handled. The expansion focus will turn step-by-step from 4G to 5G. Now in the first step, this will be on the expansion of existing solutions. Optimum frequency, equipment, site management, et cetera, will help us to keep our cost stable. Of course, new business models will open up. New business opportunities will be opened up. 5G offers lower latency, lower response times due to the network in combination with extremely great bandwidth in the enterprise business segment, for example, new solutions will be developed. For example, campus solutions or network slicing, where virtual parts of the network will be made available and allocated exclusively to one customer. In the private customer, retail customer business, we reckon with new applications in gaming, in streaming, you name it, IoT, for example, are also in virtual reality. And in particular, of course, rural areas here can be reached with new bandwidth. Next question. Once again, voting card number 91, question regards the development of business crisis, of course, are also the opportunity for, let us say, other big business opportunities. What's in there for A1? Of course, we are reviewing every option that is in line with our growth strategy. And in particular, in the current situation, we do this very diligently. Now the priority, as explained in the presentation earlier is, of course, on market consolidation with a focus on convergence and the potential growth in the CEE region. We are trying, in addition to our core business to grow really by other companies, which is to say, with a -- way rather, we expect additional digitalization potential. In terms of geography, of course, a big focus is on Central and Eastern Europe as is laid down in our shareholder agreement. We should not forget, of course, that our M&A strategy, of course, has to be in compliance with our rating target. Next question, voting card number 91, asked by Mr. Beckermann from the IVA. It regards the business development, the participation of Telekom Austria with e-charging stations. Is that a potential field of business? Answer. Well, of course, we are cooperating here with one charging station provider in terms of really connecting those stations and also in terms of servicing those stations. But apart from that, in particular, when your question relates to our own infrastructure, we are constantly evaluating this topic. And from today's point of view, this is not regarded as a separate business field. This has to do with the maintenance and also the set up expenses which are enormous. So this is not a positive business case from today's perspective, apart from the activities that I mentioned earlier. Next question, voting card number 91, the question relates to the participation of Belarus. What is the impact of the political situation on employees, the situation and business performance? Answer. Well, at the beginning, please let me explain the following. I do believe that with our commitment in Belarus, we are making a valuable contribution to civil society. Also, we enabled the local population really with our product to be able to connect with the rest of Europe, with Western Europe. We are promoting digitalization. Also, of course, international career paths are an option within our group. That is a reality. That has become a reality, and we are showing the population that there are, of course, some free market alternatives. And as a company, of course, it is a principle for us not to engage in political discussions and debates. And we have a commitment really to have our services or to place our services really and to offer them within the existing political framework because the protection of our own employees is of utmost priority. And of course, we cannot violate existing laws, and that is something we do not want to do. For us, of course, human rights and free speech are very important instruments. And that becomes clear in the fact that our employees, of course, can take time off to protest, to joining protest marches and things like that. And also, we are diligently observing and monitoring the situation. And at the present time, we cannot give you a definitive estimate as to the further business performance as this is in part beyond our control. This has not always to do with the political development, but also with FX development. And this is something I should like to explain. We see a depreciation annually of roughly 20%. And this is, of course, going to have an impact in this year's results. That completes the IVA's questions. Ms. Hlawati, please?

We have received 3 more questions from IVA, voting credit number 91 regarding Supervisory board, and I'm going to answer that question #1, how many meetings took place in 2019? Answer, 7 meetings in total, including 1 strategy meeting. Second question, what about the participation? How many meetings were held online? Well, regarding agenda Item 1, I gave you a report on our work, and I showed you one chart where the presence of figures were shown to the attendants, really. If you want to, I can read that out again, Carlos García Moreno 6 out of 7; Mr. Thomas Schmid, 4 of 4, but that has to do with the fact that he was appointed in the last AGM that was held on May 29. Carlos Jarque 7 out of 7; Alejandro Cantú Jiménez, 5 out of 7; Karin Exner-Wöhrer 7 out of 7; Oscar Von Hauske Solís 7 out of 7; Daniela Lecuona, 7 out of 7; Bettina Glatz-Kremsner, 2 out of 3, also that has to do with her period -- term of office that ended at last AGM; Peter Kollmann, 7 out of 7; Peter Hagen, 7 out of 7; Mr. Hotz, 6 out of 7; Mr. Luksch, 4 out of 7; Mr. Alexander Sollak, 7 out of 7; Gottfried Kehrer, 7 out of 7; Renate Richter, 7 out of 7. So how many meetings were held online in 2019. There was no actual virtual meeting, Supervisory Board members were present physically. And in individual cases, the Mexican members followed our meeting by video conferencing. What about the outlook for the Supervisory Board work in 2020? Well, so far, we have held 14 meetings in 2020 due to corona. The meetings on May 5, and July 22 were held in pride on aligned meetings before that were meetings where there was a physical attendance on May 5. There were 7 members. Mr. Schmid, and I myself were physically present, all other supervisory board members participated through video conferences on July 22; 6 Mexican members and a couple of members in Austria are participated online. All others were present physically. Now let us move on to answering the questions of 1 Austria.

I'm Thomas.

Now we come to the questions for 1 Austria, represented by Mr. Niss.

Thank you very much. I would like to read out the first question. What effects will the corona crisis have on the A1 Telekom Austria Group in the short, medium and long term? Please give the -- your answer from the point of view of the customer, employee, and the group.

First of all, as we've said before, we see our company as a critical infrastructure operator. We have proven our worth, of course, at this, particularly with regard to the increases in data and voice traffic. We have been able to manage these with only minor restrictions. So we also had very few bottleneck -- bottlenecks. These were manageable. Half of the stores in Austria were opened all the time and our call center employees were there for our customers 24/7, without any interruption and many of our staff were able to be in home office; on the field several also, on-site for trouble shooting installations. We also provided important telecommunication services for most business and private customers. There was a great demand for speed upgrades and net cubes. And of course, we saw a decline in demand for headsets, our online channels on the website as well as our call center and other services such as the live shop saw a significant surge. So we were able to strengthen our relationship with our customers. On the other hand, the digitalization will be accelerated due to the crisis. And we see a reduction in fewer -- in emissions with fewer trips and with smart buildings. We have seen an increase in this. In online collaboration for cloud streaming services, this has seen an increase, but we do not know what negative impacts will result from this, particularly as a result of the overall economic crisis. From the point of view of our employees, the majority of our staff have been working at home since the beginning of the crisis, including the call center, as we have already mentioned. An employee survey at the beginning of May showed that the majority, about 70% of the answers indicated that they were doing very or fairly well. One of the main challenges that they cited was the lack of a personal contact with their customers as well as their colleagues. And another challenge was the ergonomics in their work station in the home office. For the period after the pandemic, employees would like to make better use of mobile working, mobile activities, home office, et cetera, and maintain flexible working hours and digital momentum. We saw an impact due to lower roaming, this was due to restrictions on travel. For the -- as a result, roaming revenues are expected to continue to be impacted for the rest of the year. We are expected to see a decline of about or an impact on the reduced roaming to be around 2% of revenues. Reduced revenues from the sale of equipment will be 2.9%. And we are expecting here a moderate decline in sales revenues of about 2%. So the next question once again from Mr. Thomas Niss, for 1 Austria's standard. This is a voting card 258. This is a question regarding the 5G rollout. Has the crisis accelerated or slowed this down? Where will we be at the end of this year? What about additional digitalization measures and which -- such measures should be taken? While the COVID crisis has perhaps pushed the rollout back a bit, but we continue to work on the assumption that we will be able to provide 5G in full coverage by the end of 2023. But we will have rolled out more sites. It was our 3.5 megahertz area and this will be 440 more as planned. Regarding digitalization measures, I'm not quite sure if I've understood correctly, particularly what you're referring to with this question with regard to the company. Whether our various digitalization measures that we have focused on and that we could highlight, for example. For example, the strong shift to online work and the digital shift in general, the improvement of customer experience as well as the channelization toward online shops and the reduction of our footprint or the increase of our self-service area and activities. We've tried to use robotics and advanced analytics to automate repetitive procedures and work our processes. So we have received an international price for this, it's called SARA, this is for Superior Analytics of RAN. But we're also working on digitizing other processes and automating these processes as well. This was the question as a result to our relations with the public. But the digital services offered by A1 have been positively received in Austria. I think that we'll be able to expand this in the next year. An important measure for advancing and achieving progress in digitalization would be the continued rollout of our fiber optic network and the establishment of a subsidy regime that would focus more on demand and less on the supply side. Next question, once again from Thomas Niss, on behalf of 1 Austria Fund, with voting card 258, the situation in Belarus seems to be very intransparent from a Western European point of view. You are certainly better informed about this. What impact do you expect to see due to political instability in the country? Allow me to refer to the answer that I gave prior to this question, was an answer that I gave to a previous question. The next question, once again, voting card 258 Thomas Niss, for 1 Austria standard phones. Have individual A1 markets in CEE developed differently over the last several months? Are there any best practice examples? Or are there stragglers that we need to pay particular attention to? Restricted mobility business closures and stricter travel restrictions have had a significant impact to a varying degree on our business in second quarter 2020. Here, we saw a significant impact in traffic volumes, roaming handset sales. As I said, these were all negatively impact. EBITDA from international business decreased by 0.9%. This is primarily due to negative currency effects in Belarus and roaming losses in Croatia. However, our Bulgarian segment once again showed strong growth. Excluding negative currency effects, EBITDA from international business grew by 3.2%. Regarding best practice, this was certainly the seamless functioning during the lockdown. This is not just how our networks functioned seamlessly in all of our countries during this phase, particularly with regard to the increase in our voice and data traffic. But this seamless operations also refer to internal processes in sales and service. Now we come to the second -- next question, also from Thomas Niss, on behalf of 1 Austria with the voting card 258. For A1, innovation has always been a high priority on the agenda. What are you currently working on? What innovative accents are you looking to set? Of course, technology and infrastructure leadership is a key priority for us, and we focus on research and development to a great deal. We have research collaboration projects with partners from science and industries as well as the joint projects from national and international institutions. Here, these provide the essential foundation for the development and introduction of future technologies and for market and customer-oriented communication solutions. Allow me to give you an example. We have a cooperation project with the Technical University of Vietnam and The Christian Doppler Laboratory for reliable wireless connectivity for society on the move. They have been a cooperation partner from the very beginning. And we even launched the first dual computer science program in Vienna with data science and dual learning. And we're also focusing on our 5G playground currently in Klagenfurt. In Southern Austria, we're focusing on innovative solutions here and providing the appropriate infrastructure for this to take place. Allow me to point out our Start-Up Campus in this context as well, where there are a number of innovative start-ups for school folks as an app. I think I've touched on this already. This is an important home schooling app that had seen a rising demand during the lockdown. And VDM, of course, is another example of this. Our start-ups in cybersecurity or mobility. So this takes me to my next question once again from Thomas Niss, for 1 Austria, 258 is the voting card. The question is the company A1 has clearly formulated ESG goals. But an IHS report recommends, however, stronger focus on environmental and climate protection issues. What does A1 wish to do in this respect to, particularly with regard to supply chain to large customer base and mobile phone customers in Austria, also in SEE and CEE, particularly with a focus on acting more sustainably as a whole? Of course, we are aware of the positive and negative impacts of our business activities on the environment. We recognize, of course, that there is a further potential for improvement in terms of our CO2 performance. We are currently looking into measures to significantly reduce our own CO2 emissions within the company, and there are also other measures aimed at increasing energy efficiency. These are also being evaluated in consultation with our local management in our opco. So for example, generating electricity from renewable sources, with regard to car fleets or reducing the fleet or the uses of the fleet or converting to a climate-friendly heating systems. But we have seen clearly positive effects in our industry. Against the backdrop of digitalization, ICT projects such as those that we offer have the potential to reduce their CO2 emissions worldwide and reduce these significantly. And here, we can make a clear contribution to combating climate change. Our products contribute to reducing CO2 emissions. We reduced the need for business trips. We provide visitor conferencing or chats. IoT product portfolio also provides solutions for building technology, smart metering, smart boilers, smart home solutions, in order to reduce energy use and fleet management solutions. We also have data service centers and some are outsourcing and virtualization in efficient data centers to optimize energy consumption and minimize CO2 emissions. Beyond that, we also offer a product portfolio that is very energy friendly, and we have been doing this since -- this year since 2020. And A1 in Austria has been offering solar panels for installation on your own balcony of your company or home. The other question comes from Thomas Niss from Own Austria Standortfonds with Voting Card 258. What is A1 doing to attract more women and to place them in management positions? We have a number of measures here in Austria. We have a very successful network of women and they provide a platform for women to exchange ideas and experiences and to support each other. We have had so-called networking meetings, women's network lunch, where women took place. And these provided important mutual support in a professional context. We also support parents in reentering the workforce after parental leave. And since 2019, we have offered seminars in order to assist parents returning to work in reconciling job and family. With business at breakfast, our employees, who are on parental leave, have the opportunity to keep up-to-date. In addition, we have orientation and return talks that are offered during a parental leave on an ongoing basis. And this is important to provide important feedback to ensure a successful reentry after parental leave. We also provide flexible working models and sabbaticals. And from country to country, we have child care initiatives and baby months that -- as I said, that vary from country to country. Next question has to do with 4 ESG ratings for Telekom Austria Group. This is once again from Thomas Niss, from Own Austria, Voting Card 258. As I said, we are represented in various sustainability indices. So what are the costs that are involved in here? Well, there are no additional costs for A1. A1 has been in the amount of EUR 925 for the CDP ratings. Additional -- total costs were not charged separately. The next question also comes from Voting Card 258. Mr. Niss, from Own Austria Standortfonds. Can Mr. Mayrhofer, please give us an outlook for the coming months or the coming -- or the existing financial year as much as possible? What is dividend policy for the A1 Telekom Austria Group? And what can we expect in terms of dividends?

As a result of the COVID-19 pandemic and the reduction in travel activity resulting from this, we expect a negative effect on roaming on revenues of about 2% for the year 2020. Decreased revenues from the sale of equipment and headsets and negative currency effects from Belarus will also have a negative impact on revenues. Overall, we expect to see a moderate decrease in revenues of about 2% for this year. The dividend policy is aimed at a sustainable, with emphasis on sustainable, dividend payout with the potential to grow in line with the group's operational and financial performance. The dividend proposal for the financial year 2019 has been adjusted from EUR 0.21 to EUR 0.23. This increase reflects the growth that we have posted in free cash flow, excluding frequency payments.

So allow me to continue with a question that Mr. Niss has entered on behalf of Mr. Biaga for Voting Card 386. How much does the annual report cost?

Well, the cost for the combined annual report came to EUR 71,000. And the number of reports were 110 in Germany and 50 in English.

So the next question comes from Mr. Thomas Niss on behalf of Mr. Berthold Biaga. This is the Voting Card 386. Sir, how much does the sustainability report cost? And how many copies were produced?

In 2017, limited with regard to the annual report. And as part of the combined annual report and the cost of this report, as I said, came to EUR 71,000. So the report is really only available in digital form. And upon request, we will be happy to print that out for you in hard copy form.

Allow me to continue with the question sent in by Mr. Thomas Niss on behalf of Mr. Berthold Biaga, Voting Card 386. Sir, what about the virtual AGM? How much will that cost?

It will cost about EUR 50,000.

What were the expenses of last year's AGM?

Well, in the previous year, the AGM cost were roughly EUR 67,000 and approximately 170 people were present.

Voting Card #386, Mr. Biaga, once again, what about the insurance cost?

In 2019, insurance costs amounted to EUR 4.6 million.

Additional question, Voting Card #386 owner, Mr. Biaga. What are the name of the insurance companies?

We cooperate with the following insurance companies: AIG, Liberty, AXA dem HHC, Vienna Insurance Group, Wiener Städtische, Uniqa Versicherung, EAV, Wustenrot and Allianz.

Additional question asked by Voting Card #386. How about the damage suffered by storm, et cetera?

All in all, in 2019, in the motor vehicle, EUR 1.6 million; additional property damage, EUR 1.68 million; due to nat cats, approximately EUR 11,000.

Another voting -- another question asked by 386, Mr. Biaga. Thank you very much to the maintenance team for performing or working outdoors when the weather is bad. Who are the people working there? What is the share of external staff? And how much was paid for external maintenance work?

Well, the majority, really, of those expenses you asked about, or rather the work you asked about is done by our own employees. At this point in time, I would like to thank our work done outdoors, very often in cold temperatures, in winter time, up in the mountains. That's really extraordinary what they are doing. The maintenance team of the field force at the end of the year 2019 combined 1,875 FTEs. To cover the peaks, of course, we hired team, which is 41 FTEs. Third-party service work in 2019 combined 3 -- amounted to EUR 3 million.

Another question asked by Voting Card #386, Mr. Biaga. How much are you going to spend for the 5G expansion?

There is no way I can answer this in one sentence. That very much depends on the coverage we want to create. A1 Telekom Austria has decided to place the 5G rollout within the existing business plans. That means that A1 Telekom Austria Group is not going to use an additional investment wallet for this rollout. But also, we assume that by the end of 2023, we will have reached the large majority of the population in Austria.

Next question, 386, what are the cost really of maintenance for the tower and the conversion for the 5G rollout?

So for convergent, in other words, a combined network between fixed and mobile, it cannot really be broken down that easily. And that would actually be detrimental to the concept of convergence. So both big portions, as it were, of the infrastructure are open to fixed as well as the mobile business. All in all, for maintenance, EUR 82 million were spent in 2019. 5G, what can I say here? As Thomas Arnoldner already explained in his presentation, this is more of an expansion than a conversion, which is to say, existing locations, of course, will be used whenever this is possible. New locations will -- are only going to be set up where this is necessary in order to guarantee and ensure 5G coverage. 4G technology will remain in existence and is going to be expanded there as well where the coverage or the necessary capacities are not sufficient. So all of these operations will be placed within the framework of the existing financing -- of the existing financing framework.

An additional question asked by Mr. Biaga, Voting Card #386. What are the costs of the 5G rollout in the 349 communities that were mentioned today?

As of today, and that is the answer. We cannot answer that because the frequency auction was just ended a couple of days ago as the election of these communities, town cities, et cetera, will have to be made in the future, and costs may vary, of course, strongly. We cannot give you a final answer as of today.

Another question asked by Mr. Biaga, Voting Card #386. How much do you spend on the lease of towers in Austria as well as abroad?

In total, in Austria, we spent roughly EUR 41 million for tower leases. In the international businesses and the international markets, that is, of course, significantly less. In Bulgaria, roughly below EUR 10 million, for example; in Croatia, roughly EUR 10 million; Belarus, smaller than EUR 10 million; the same goes for Croatia and Slovenia and Macedonia, EUR 2 million.

How high is the fair value of the share? That was a question that was asked by Mr. Biaga.

In 2019, the fair value of the share amounted exactly EUR 4.

Another question, Voting Card #386, Mr. Biaga. How much do you spend for equipment subsidies in Austria and abroad, and there is no such subsidy in Belarus?

The answer is, in total, which is to say in terms of subsidies for each device sold in the A1 Group in 2019, EUR 73 were spent. In Austria, roughly twice as much with EUR 158. And in the international markets, let's say, between EUR 40 and EUR 68. The lowest amount was achieved in Belarus with EUR 28. And/or in Belarus, these subsidies, or rather the sale of devices, records a positive margin. So all in all, no subsidies across the board in Belarus.

Another question. How about sports sponsoring, the cost of that in Austria and aboard abroad?

Roughly EUR 10 million, same level as last year in Austria in 2018 and/or in '19. All in all, EUR 8 million were spent. The detailed breakdown for sponsoring in Austria, the majority goes to sports activity, sports sponsoring.

Another question asked by Mr. Biaga. How much do you spend on employee training?

Well, in 2019, EUR 7.9 million. That is the answer.

Another question by Mr. Biaga. What about the average revenue in Bulgaria per customer? How about last year? And what is the total number of customers' average revenues in Bulgaria?

The ARPU was at EUR 6.3 in the first half and EUR 6.10 in 2019 or EUR 5.60 in the 2018 fiscal year. There are 3.8 million customers in the first half in Bulgaria.

Thank you very much. I would like to continue with a block of questions asked by Mr. Biaga, Voting Card #386. How about the cost of these proxies? And how many do they represent?