Q1 2020 Earnings Call
[music].
Yeah, ladies and gentlemen, welcome to the conference call and yeah.
Customers request this conference will be recorded.
I remind us all participants will be analysts and only mode.
After the presentation, there will be an opportunity to ask questions.
I don't have difficulty hearing the conference.
Press stop here and there are all on your part of <unk> operating system.
And I am pretty now my.
Direct of Investor Relations to worry Keytruda on friend. Please go ahead.
[music] welcome everybody to today's event to discuss MTS Hills, what do you think you financial and.
And usually I must remind everyone that except for historical information any comments made during the school makeup teaches forward looking statements.
Certain factors could cause actual results to differ materially from those contained to no objection school for mclucas statements. These internally.
I'm also discussion of which are available in our annual report and form 20-F, well the materials have distributed today.
MTS disavows any obligation to update.
Forward looking statements spoken on this conference call will make any adjustments to previously made statements to reflect changes in rates.
You can find copies of the presentations and materials used and referenced in this conference call on our Investor Relations website.
Today's presenters.
<unk> <unk>, <unk>, President and CEO, Bob and utilize soaked vice president for custom experience and marketing.
Ecosystem development in that's a good luck to one of my first Vice President for Telecommunications and somebody Kaminski Vice President Finance now, it's my pleasure thing to use any key to kick off.
[music] welcome everyone and thank you for June.
I would like to begin by saying that our Oh no effected by the global could in my view responding me.
This is on the base event at the time that even buck millions of people around the world, including millions of Ballcock almost 10000, so far we employees.
Connectivity could be in agreed to go yes, we are proud to be helping our customers.
Touch with their friends and family as well as colleagues and walk me.
Well the agenda. The school was all through school that is all departments. So much of the discussion, but they won't be understandably them going in Buck.
<unk> 19.
The scale of the situation be game.
You're in February we <unk>, Oh, goodness, you'd see protocols and establish the task force to kind of then like it's already spoken.
Let me go away fuels the steps we're taking.
First and foremost, Ohio utilities, they sell safety or when do you see.
We have no contribution born with 30000 employees, who do you know to work at the same time menial far more because 'cause mission critical jobs in stores and then the field that cannot be done from whom.
Well I pick them, we'll have put in place extensive same.
You'd be some measures such as temporary shoots good evening, Fremont and eating protocols.
In line with local regional and National guidelines.
Secondly, with the launch multiple initiatives to help those being impacted.
Healthcare workers are winding Freakonomics CBC would book that was fighting Kb magnesium and many of our somebody June.
Got the men as well, but I'm idea and restricted access to the central resources, you know cost, including three no anthrax you thought you saw hopped lines in the website.
And for society with supporting multiple public initiatives to help the most impacted in addition, the senior management team has pledged to doesn't need to be 10% of hours. So what is the charity.
And we have launched <unk> dot com funding, we encourage you imply used before.
While our businesses.
Well I'm, hoping you Oh it was supposed to be has been to keep society connected while moving swiftly to adopt how we engage with alcohol.
On the network side were boosted capacity in the reallocated resources and we have successfully Campbell dramatic rise in tracking with minimal disruption.
The sell side, we are putting thing mainline channel. They just decline seemed distribution in doubling down on digital customer care.
And then all the side, we've launched you all four of them come with them to better meet changing customer needs. So I will talk more about those supports.
No I am in college is my holiday rapidly we have adopted the situation is the digital feel companies already embracing new job best practices and cool thing happened feedback Arabian Peninsula development.
And we are now successfully blind those principles remote collaboration.
I would like to think you'll be in time to team for their dedication and professionalism.
In the challenging time.
Well the comp.
While we cannot predict all of those impacts from who read magazine one thing media digital transformation is mouse building.
That MTS, we continued to move forward work.
<unk> gross.
Oh Vista gold.
And then the first quarter with the number of multiple develop.
In pellicle, where do you find out there.
Two could stake in the regional peaks one if you read them in launch the field industrial Fiveg is all in Russia.
<unk>, Yeah, we launched the completely wrong mobile banking yep.
And so thrown girls knock off the minimum wage.
That looking at <unk>, well now anticipating some negative from Fox, we found that he will.
When would you do.
Media, we embarked on the new partnership projects, including JV with channel one in new initiatives Youve gone comprise producing them.
And then b to B with exceptional performance and promising areas, including people. He just good old line growth and Quals implication services.
And we expanded the Dol, putting in new product lines.
I also wanted to highlight that last week. We now you candidates for the board of directors, who have a deep bench expedia to use it grows city deal me the digital transformation.
This conference is a complimentary to our girls strategy and I hope to welcome New members of the board from BG Me EG.
In June.
Now turning to qualities all you need the relatively normal environment and feel squatter, so slowly build group before them on some before the month. So for the year group revenues increased nearly 9% year over year duties your own hundred.
Both on the back of positive contribution from will fall, we'll give cycle.
Most impressively your own hobbled, the topline growth came from Jason segments beyond connectivity.
We have been making steady progress mountain information and that's how being reflected in now being reflected in our fingers.
Group adjusted to be the he was up 1.6% to reach 51.5 billion rubles, driven by growth in core services.
We should miscible talk about in more detail at the same time, we're constrained by high Breeze you'd be positive one in first quarter 2019, excluding BC pick the just the do we be d., so slowly fight with 6% underlying growth year over year or.
Oh I'm happy to see that we delivered yet another strong quarter, so with the results.
With that I will hand to swallow to give a couple minutes bunions and marketing nowadays.
Thank you unlucky.
As we all know the world is facing unprecedented challenges and disruption.
There's always change also brings opportunity and we firmly believe that those would that fastest today well be best position for tomorrow.
In the current environment, our guiding principle is providing comprehensive and consistent support for all customers.
As we do this.
Focus is on something long term relationships and not sure to monetization.
This not only makes good business south, but it's the right thing to do.
As he mentioned we have launched a number of CSR initiatives to support those who are most impacted.
Particularly wanted to highlight the work we have done to provide connectivity for doctors fighting the virus, we've launched a new tower with a three remodel of connectivity, which are offered to thousands of healthcare workers. This was the first perspective, it's kinda in Russia, and we hope it to help to those on the front line.
We've also been seen changes to consumer behavior as people migrated to working starting and socializing proposal.
One more of our daily life lives is happening through digital channels, and we are moving decisively to offer new solutions when you lifestyles.
For example, we launched to stay home bundle or digital services. The packages together MTS TV music library fitness and Tele medicine.
Our smart Mad application.
We are also providing extra rewards with our loyalty program for online purchases of much needed goods, such as grocery and food delivery.
In life Entertainment, we've shifted gears towards online programming watching a series of virtual concerts with some of Russias top performing artists.
Yes can what's your free stream via MTS life with the option for an immersive experience with a VR headset to date.
30 million people have to do and we have a packet.
Packs of event lighten up ahead of us.
Given where we are in the business cycle as we execute on those initiatives, we're taking a cautious approach in terms of opex.
But ultimately this is an investment in the future beyond the recovery phase, we think many changes to consumer behavior will likely persist.
That's why we think now is a good time to begin this closing additional metrics around our ecosystem, though.
In Q1, we continue to see growing adoption of MTS. That's a good example is the MTS bank application with users.
Up more than 70% year over year, breaking the 1 billion Mark for the first time.
Additionally, our flagship self care hop my MTS reached nearly 22 Mulan active users, although going forward, we expect that number to plateau given that we have already attracted our most digitally savvy users to to the platform.
But we are seeing ahead of the curve and now shifting our focus toward expanded functionality in particular by aiming to deepen intact based features and capabilities with set up a joint team with MTS Bank to do just that and we have some exciting developments in the pipeline.
As regards the bank.
We continue to see robust growth in the customer base in Q1, reaching nearly 2.5 million bank clients over half of which are in our key audience of high frequency daily banking users.
And lastly, Emedia, we have stable foundation for 4.6 million Paytv universe with promising prospects to add new customers by leveraging bundled offers and exclusive content.
Overall, we have made steady progress in cultivating our ecosystem and those efforts are beginning to bear fruit.
Now, let me hand, it over to NASA for Telecom business update.
Thank you Slava.
I mentioned connectivity is now more important than ever.
One of the past.
Two and a half months, we have successfully adopted our strategy.
President Schellenger internationally this doesn't require tremendous efforts.
If we direct and call center and redesigning sales channels to signing in place to remote work, we executed and lightening speed and despite disruption successfully maintained although high service quality as well as well so dynamics.
Turning to Q1 results, let me begin with mobile in Russia.
Yes, we saw solid topline performance.
Year over year mobile service revenue growth in Russia, accelerating nearly 7% to reach it out.
Beyond the about.
This is reflected in the impact of adjustments.
So with the beginning of the yet.
In addition, they want to low base effect due to prior to go into effect relatively late in 2019.
Also continue to fine tune, our Dave doctrine.
Paul you subscribers will fall collection, Daniel I know presented with an additional production took to beat on limited. These Bob Thank you fight.
As it really plucked you to travel restrictions, we have seen has stepped off in the roaming revenue.
We expect this is materially impact our results in Q2 and potentially into the second half of the year.
Turning to subscribers than that.
You want our mobile customer base in Russia was up just under 1 million subscribers.
At the same time, even they feel city Q2 will bigger seen significant impact at all.
Visitation is evolving and the back hard to put a cost.
That's out of expected reduction in chore with only pocket compensate for low.
Sleepy Internet decline in subscribers.
However, we're seeing the biggest dynamic disease that loan segments.
Yes.
Talk is secondary seemed users altogether. This represents a small share of total ratings.
In contrast, west team great that we're selling more our hybrid of customers will continue to be our strategic focus and target audience for selling digital services.
So while we do expect something we continue to see long term opportunities.
Equation.
Well seek fun in Russia was so positive revenue growth, 1.4% you over here in Q1, two each sheepskin point 3 billion rubles, notably we saw solid performance and consumer broadband and TV more than offsetting declines in Lincoln, Paul exclude and telephony Bispecifics revenue.
We are up over 5%.
More recently you asked as.
Do we have great a higher than for caustic, particularly in Moscow as people are working starting intralinks immortal.
Turning now to get there in the first quarter was sold 46.1% year over year Bravo sales of handsets and accessories.
And the dynamics with so in Q4 that said it would be beaches spots afflicted temporarily.
Bleep due to foreign exchange volatility in particularly as the Robert.
Consumers have we have accelerated purchases of imported devices head of expected price increase in.
In Q.
We're also continued to execute.
Well now optimization program and who were on track to hit our target of up to 400 net closures this year.
The what has no change and it deal is one of the most impacted sectors.
Essential business LNR, our stores have remained open during the crisis, although stores in shopping malls have to close in line with local health guidelines.
Given self cancellation measure we have also seen significant decline tracking well to get that went to separate the to lose a major share or fill rate in Q2.
Well not standing still well moving shipley toward that our approach to the current environment. We have expanded contactless seem to be leaving the conduct of Russian Cts and have added thousands of new seem distribution points in essentially retail outlets, including post offices grocery stores and pharmacy.
In addition, we have received regulatory approval for helping gestational Sim cards and who have already.
Interconnection with getting issue with an app based supplied the execution process.
Looking ahead, we plan to Pelletized this channel as a key level to lower subscriber acquisition cost.
Well, so broadening our Tim this is fiction tracking across all of our sales channels, who want to make sure customers have a great expedia during each and every touch point, where the in store online at the door at that of the our typical strategy simple best Brent based network.
Its customer base.
We had a strong start to the C and despite challenges I'm confident well on that right track with that let me hand to Andres.
Thank you innocent.
As usual I will start with an update on MTS bank before circling back to group for financials.
Given the installation from acquired 19 in Q1. The bank saw continued strong performance in the first three months of the year.
Net interest income rose, 43% year over year to 3.6 billion rubles, driven by 50% growth in the gross loans versus the year ago quota.
Net profit for the bank amounted to more than 200, municipals, which included a negative impact of about 480 billion rubles as we proactively books provision in response to the changing macro environment in Q2.
Inline with our consumer focus portfolio growth was driven by retail loans, which were up.
To 7% year over year to 91.1 billion rubles.
Importantly, we saw a good mix of growth across general purpose loans and the card products contributing to overall portfolio diversification.
Shifting gears from Q1 two Q2.
In contrast to connectivity the banking sector is more sensitive to macro volatility and we have begun to see significant shifts in the indicators. We track by early April sales of new loans were down around 6%, partly reflecting the closure of retail branches, but also changing patterns in consumer spending and.
Leaving.
We have also seen an increase in the requests for loan restructuring.
Given the signals were carrying out a deep and comprehensive assessment of the portfolio.
And were modeling a variety of forward looking scenario as.
Well the full impact means difficult to estimate were taking a cautious approach.
We currently under siege cost of three to further increase in Q2.
That will likely require additional provisions that would be recorded in future reporting periods, which we expect to put pressure on the banks, so EBITDA and nothing.
Nonetheless were confident we will overcome the speed bump.
Moreover, a recent developments have only to the reaffirmed the logic behind those threat.
Now more than ever consumers are shifting to digital digital first thinking from online customer service to virtual cards and the company's less payments.
Coming back to the group in Q1 group net profit came in at 17.7 billion rubles.
Legend flat year over here.
On top of support from corporate Reading performance net profit also saw a significant positive impact from depreciation of the ruble, which we with the losses from a fixed effect more than offset by changes to the fair value of the derivative instruments.
In addition, a decline in finance income versus a year ago, what that was largely offset by lower financing costs, reflecting our ongoing efforts to optimize our debt portfolio.
At the same time that process faced headwinds from relatively high base in discontinued operations in the first what of the previous year in particular.
Mtis formal Ukrainian operations as well as the assessment of the reserve related to its because time.
Excluding discontinued operations in the first quarter of this year net profits from continuing operations increased 33.8% year over year to reach a 17.3 billion rubles.
Turning to Capex and cash flow capital spending for the first three months of the here increased by 3.6 billion rubles as we continue to actively invest in improving capacity and coverage.
Excluding the payment that elite it was because tenants as part of 2019 free cash flow in the first quarter of 2020 declined 6.7 billion rubles year over year and totaled 17.5 billion rubles, largely driven by the two factors first higher capex intensity this year due to.
The acquisition of a stake in a regional figures business and the second high base from the divestment of harvest taken as on in the year ago quota.
Turning to the balance sheet.
This year, we're continuing continuing to take timely steps aimed at optimizing our portfolio in the reporting period, we issued 15 billion rubles in exchange traded both with the maturity of 70 years and the coupon rate of 6.6%.
We also raised two loans over the maturity of five and six years totaling 75 billion rubles.
By the end of March our gross debt ethics exposure had been reduced to just 2%.
Total debt at the end of the quarter stood at 423.4 billion rubles with the weighted average interest rate decreasing nearly 30 basis points from the end of last year to 7.4%.
Our net debt to last 12 months adjusted OIBDA ratio stood at 1.6 at the end of the quarter, excluding the effects of if I first 15 and 16.
And that we find this level very comfortable in the current environment now I will hand, it back toward ICSI for his closing remarks.
Thank you Andy.
So it feels since first quarter the world has changed and sold because our outlook for twentytwenty in the interests of transparency I wanted to share some of their bid rationing Lindsay Keith.
With that are concerned alluded to give a sense of what we're seeing.
Importantly, some of the biggest impacts we saw in epidural are now starting to reverse enemy.
In connectivity.
Roaming is a near zero, while local traffic remains highly weighted particularly in fixed line, although the spike put into pops in it because now you had its own to baseline.
In the retail and when you hawk lifts that with them, but it cools the March have begun that even putting.
And we're seeing growth adds in sales what's trending in line.
In PMC Howard do you feel been consideration.
These units you mediation.
Virtual card.
Up more than the Phil.
Despite the sharp decline in overall card issuance.
But if somebody mentioned, the where I expect to me and the impact from economic headwinds.
Finally in digital well see breakneck growth in new users in that bring on my MTS adoption was up 2.5 times and smart more than 14 University was up in explosive them times, that's a powerful could probably four or ventures infield limited FEMA now.
Why in education.
Second the students together.
Yes, well considering be increased uncertainty for the between for the remainder of the year were revising our twentytwenty guidance downward to reflect two or 3% growth in the baby new.
Minus two to flip in the just that we'd be deal, we BD impeding our capex outlook at around 90 billion rubles. Despite distribution were confident in the relatively relative reveal into fall core business as well was also with liquidity position and sustain kids simulation liability.
In terms of shampoo that even humiliation remain fully committed to fulfilling our dividend policy and when to Quincy frozen krill them more this year. We have already played this special dividend in first quarter.
As well as launched the repurchase program to buy back up to 15 billion rubles will fall shares finally, the board because also recommended the full year 29 can give you then when people Infusystem rubles put words in that is sure free approval at the GM in June.
Which by the way, we will be conducting the remotely for the first spine.
We will be group casting b wells in the Wolfcamp when the action.
Right now.
He will join us remotely.
So to sum up we've got the same with first quarter.
We only be gating second quarter, and we're continuing to move forward laying a strong foundation for the future from two years. Thank you and let's open up line for the questions.
Operator.
Take questions now.
Thank you very much well now begin our question and answer session.
You have a question.
Because the Dol Zara and one on your telephone keep that now turn to the key what's your name has been announced you can ask a question.
If you find your question it sounds like it's hard to see attuned to speak you, Ken doll zero and to to come to your question, if you're using speak equipment today peace love to have talked before making a selection.
One moment, please sort of trust question.
The first question the Fiftyth from T cells.
Bank of America. Your line is open go ahead.
Yes, hi, good good evening, everyone. Thanks for calling for deal for Q2 last questions. What's on the on the numbers I have two please ask your questions. So the first one is really on the on the traffic you could countries sure again, yeah data trades.
Okay and how this compares to.
April and the second question would be really on the on the guidance to downgrade, but it looks more like like upgrades to the.
Like business I guess can you. Please tell us what you have it should be done so from a formula for the full year or have you assumed a club is Milwaukee grew up in Newport all slot.
More than 20, and then what type of provisions have you assumed for MTS bank going forward. Thank you so much.
Thanks, you for your question.
Not that traffic trends in.
We see that steel the fixed line the traffic is quite elaborated.
And now we're all would those few months, we saw a much high impact coming from on the in terms of couple of capacity no stretch on the fixed line that rather than my bile. So in my bottle the traffic to the op walk from the pretty a pandemic period. This is about 10%.
And while you know fixed line.
Well.
30, 40% in Moscow, even this is Bob.
So in the same we see some reduction on the streets in me vessels Gabriel in fixed line, but to roll. This situation this thing as such.
And it's harder.
That is concerned.
We would the you know taking the uncertainty and relatively low.
Visibility.
Hi.
How things develop for all.
We would.
Refrain from you know.
Good thing is that by key cooler.
Reviewing options from business lines into these into this guidance.
We think that with little ready to with the businesses.
With the we took in peak on certain recovery.
Both in terms of four.
Lishan Oh requirements.
In some other aspects.
Starting from our summer.
But.
Genuinely we think that this is quite strong.
Guidance I agree here with you our that quite a strong guidance thinking there.
You know rural market economic situation in the strong grooming effects, which was sold in the second quarter.
Oh, Okay picture, except but just to make sure you have assumed.
You can be.
Yes, I guess, but you have assumed.
Further provisions are up and just back into the into the next quarters into the guidance right.
Yes, yes, we will assume.
Our significant provision, which we'll probably see in the second waterfront in our financial.
Our financial segments.
Thank you so much work here. It is it is it is important to say that outweigh these poor let's see.
He is quite surber.
In financial segment, and always was that was as such.
Sure, though of course, or Frisco, and we even started Ics expecting some slow down in the in two Twentytwenty, we would be in 2019, we stopped it.
We're putting your more threeq at east.
Acquirements.
Well.
B to C loomed, but pool.
In the bank and that will have a positive impact on our.
Provisioning this year, so we've been quite cautious.
Stop peaking.
Element measures early enough.
Thank you so much about thank you.
Thank you next question is from Evanta Kim Axcelis capital. Your line is open. Please go ahead.
Good afternoon.
Just a follow up on the previous questions. So you don't want to share how much your plans for previous Im chats bank for the second quarter.
Just to make sure and my two questions are.
First on retail footprint do see their procurements to accelerate.
Holder of the stores.
How do you see.
That market's evolving.
While the year.
My second question is on the acceleration in domestic mobile service revenues, excluding roaming in the second quarter, you saw a 40% and increase in demand for voice and data packages in April some returned to baseline in may of course, but.
That 40% increase is quite significant so do you expect the acceleration domestic mobile service revenue in the second quarter and how significant that's got to be thank you.
I'll take the provision and the next two will.
I will.
Yes.
On Friday should I would like to specify two important best fix fiercely it's too early to indicate because their ultimate cry vision for the fuels water will depend on the certain consumer behavior in.
In the but equilibrium dash.
They've been stashed, which we'll see upon completion of the second quarter.
So in the sense, a we wouldn't be even he built between the keep the you own to give you any guidance is in this respect because it's too early firstly and secondly.
Just to stress once again.
We have been quite sort of roll in terms of fall what he's bonuses we stopped.
Enough.
India is starting from the end of 2019.
Our immoral this simply in east approach.
And that also allows us to leave me.
Actual additional oh.
As we as we think we'll see in the second quarter.
Regarding the retail footprint.
The problem is thought to southern tweak your plan to close around 400 shops.
So on first quarter, we closed there aren't on a 170 shops and actually we have played into to close the rest optimal or September but charger today.
Karen team, we were forced to close much higher anomaly in April in me. So I knew we will follow on dissertation on the on the market.
We'll see.
How many shops will open at the end of Q2.
At the moment, we don't plan to close more than 400, but we'll definitely.
Video dissipation on the market.
We'll take that.
Actions.
Based on the Q2 results.
This is on the retail footprint regarding the acceleration of.
Of roaming and effect on Q2.
We.
Yeah.
Once again well.
Mentioned that in Q1, it was effect on debt on the pricing and on that low base.
We'll be someplace in Q1.
So we don't expect.
And if it can change in kitchen.
Okay. Thank you.
Thank you for next question is from Andre it's not the checked up here, yes, yes.
Go ahead.
Hi, Thank you for the opportunity I have a follow up on the guidance in the previous questions more related to ER revenue trends.
Dates the trends create sake, I, just understand or if you could give us more color because you indicated that the trends are stabilizing and improving already in may could you give us just an idea of what happens to service revenue trends in mobile in April and then.
In terms of the guidance going forward, what you'd be able to give us an indication in terms of what the assumptions regarding mobile service revenues are for the for the.
But for the update guidance please.
Hi, I will take this question. This is club any color I can tell you that.
Service revenue.
When we're talking about service revenue the major impact of softness or any we had was roaming.
And given that we've got most of this impact already in April I can tell you that in these terms the trends and may seems to be seems better.
Nothing old news.
In addition to that.
So no no number that you're willing to give us for for example April but what the traffic trends look like.
No no no no particular numbers, who you probably know our revenue streams and roaming we've filled with many times so.
Actually we expect them to come back at some point in other revenues. We again, we don't see many will decline in mobile ratings.
Okay. Thank you and second question. If I May you finished the acquisition of reach on broadband provider.
Can I understand or.
Clearly, there's more demand for fixed broadband in Russia, filling underpenetrated market or is this up essentially given the current.
Increasing demand for fixed broadband.
First several acquisitions that we might expect seventh yet in the space.
Well, it's I don't think that.
The by T core growth in broad when demand is improving.
Operation a view.
He approaches or.
The price of the assets.
I knew the down was more off warrants. So I wouldn't say that it's putting through E. Principally change is always approach. So we do look at opportunities in the market.
We continue to more neutral.
It is part of our strategy to grow more not a guy. He clearly now fixed line presence in the regions to be extended this but also possible in the come on nickel, we liable sold the we'll we'll continue with this approach.
Okay. Thank you very much.
Thank you next question is from every truck.
The senior like open. Please go ahead.
Yes. Thank you good afternoon.
Couple of question as well.
As a first Warner he is a.
Could you share with us they be easily.
Yeah, and all that you have experience in a pretty low beginning of may or may be in term of trend to give us a bit took an idea on how the provisions may look you know for MTS Bank.
The second.
Question is regarding your Capex I mean, we've seen there is much more traffic can fix like I was wondering are you starting to shift a bit more capex more towards fixed or digital as there was some acceleration of digital adoptions. That's just purely mobile or do you stay with your current plan.
Ads.
Plan you know at the end of last year.
And out of these capex, how much fazio atop the Nike sportswear, yeah robot yellow.
Is there is Oh my second question I'm. Just finally, just a comment do you believe that could be a very good opportunity to to drastically reduce fuel pump sales tough retail shops.
Especially as the online.
Retail has increased quite significantly and do you believe you will compete it does make ready move more towards that roots rather than just physical outlets.
Thanks.
Yes.
Okay, Let me, let me once again to take.
Bank.
Question on NPL and provisions.
We should the figures on our NPL imports properties as a full effect.
Opt to appeal.
20 in our slide deck.
So in terms of like being.
On new vehicle, so we didn't see much of the growth in NPL.
BT some growth in coastal police can be book with market economic development would be additional fusions to come.
But the adjusted EBITDA It what I said to give you more do you feel the or more specific.
No indication, we will be pretty mature.
We.
We think that would fit was sold would be but let's see approach in.
You have kept to see called the situation develops towards the end of second quarter.
We give guidance with the peaking you'll be gone there are the in additional operational required for MTS thing.
Yes, I'll take the second question about the Capex as we reiterated our forecast for this year.
For the same as an amount as we said before.
You should bear in mind that too if you compare our capex.
Versus previous year that.
We are spending a bit more if you take how the Ukraine.
Our issuance out and this increase.
That's a.
Specifically has to do with more capex that they're spending on six.
Business, because it's growing and it is a part of our strategy, we are focusing on the conversion products more and more.
And of course digital products, which became a part of our.
Strategy and.
And our operations.
Okay, I will repeat down so aggregate in great detail footprint. So first of all we don't.
We don't need a vertical optimization in the retail first of all the costs how would it they'll change in your its way politics.
Ill.
And.
Secondly.
We have plans to close this year around 400 shops in Q1.
Along with 170 and direct 150, we're planning to close in Q2.
And as you know and as just mentioned Dan.
It can slide.
Appeal. It was closed due to current due to occur on others around 50% of our chain and me around 25% So actually Atlanta.
The date, so it was the big.
Big part of our retail chain was what's close so at the moment with don't plan to close more than 400 shop. This year, but will litigate, we'll see the situation on the market and if it well.
Required and if we see some.
Additional proof that we need to optimize to set a number of.
Shops overlap definitely and I'll start, but at the moment, we kicked off blessed to close alcoholic shop this year.
Right. Okay, maybe just a follow up on the Capex how much for these yes. It is the is going to be spend for the yellow about yellow or you know in data storage how to 90 billion.
Ruble.
Actually we do not disclose the the parts of the Capex where else, let also reference to the total amount.
Alright, Okay, you asking about where you hear about yeah, yeah, yeah, Yeah, just for the judge ourselves a 19 million euros.
Yep.
Luca I the it we are our guidance the either.
50 billion with the five year period.
We are seeing that will be trending.
Little bit towards the beginning or do a stop all of those.
Oh for implementation of full year, our law. So you can assume.
That that will be around.
If you divide 50 by five.
Okay, that's that's a rough indication.
Yep understood.
Thank you.
Thank you. The next question is from Alexandre and where they have thread through capital. Please go ahead.
Yes, the doctors on this as an example go national brands.
And just two follow ups I think from my side. So distrust one is on the rising data consumption in April and the me I'm just wondering how.
How it's possible for you.
And.
To up sell your cost come worse. This higher speed date attendance decline in probably bigger back against a mile. The thing that it's peaceable do it can this and wire meant and you. All are you start to see that the customers are taking our high speed dedicated swore.
Packages from your mobile network.
So I'm just trying to understand what sort of upsell opportunity.
And your.
Fixed line and mobile network. That's my first question and the second question is also on your competitive environments mobile.
So you've done the price increase.
Early in the current quarter cleanly and I think most of your competitors did the same.
Also in Naperville, we've seen that Chile to historic quite substantial increase the prices for you that it's some of the region just trying to understand if it's a major change to the competitive environment, I mean that it becoming even better.
Because like everybody's trying to.
On you know optimize its markets in proposition for the customers and they didn't node for the disruptive oximetry from ceded to anymore. The markets. So do you see any changes.
On the cross quarter with regards to the competitive environment. Thank you.
Okay.
With the first question.
First of all I want to times thrust that we see higher data consumption.
Primarily in fixed line.
Though overall trend that we see.
From the beginning of the year on including the time after.
The.
People tend to get higher tariff plans higher high price tariffs with bigger allowances.
And you probably remember that consequently in February we.
Started to go away from fewer unlimited tariff plans.
Mhm, making you know.
Additional.
Services for foreign limited for with for a separate price.
So.
First we see.
Increase.
In the entire pricing with us.
And second World with Weve already told you that many many times that.
Elements, but its environments in Russia is improving.
And I think that.
What do you see in the first quarter is just the result of that.
Seen tell a two following our moves.
For a long time, now and I'm completely not priced.
That they're increasing their prices falling our changes so I wouldn't say that it's a major change of competitive environment.
Just something that led to very stable increase of our mobile revenues in the Indiana last year and the beginning of this year.
So I think it's just.
Remaining the same triple S.
Nine to.
Obama.
Yeah. Thank you.
Yeah.
Thank you for the next question has shrunk now that that.
Goldman Sachs. Your line is please go ahead.
Yes, Thank you I'd watch for the presentation.
A question just given guidance.
You haven't low what your margin guidance for the full year. Despite the loss of the high margin roaming revenues.
Let's.
Talk a little bit the ball the mitigating factors.
You're implementing across.
Business, maybe on the personnel sides marketing digital subscriber acquisition cost et cetera.
And secondly, a question on the B to B digital and cloud before basically can you elaborate how it performed in Q2 or whether that is an acceleration or that ultimately out or you observe certain challenges. Thank you.
Let me, let me tell young.
Guidance.
Actually we move reviews, all guidance by expensing the range. So we put the range.
In starting on maybe we'd be the offer a minus two to flip.
So that gives us certain or gives you visibility and gives us certain.
No.
Or better than the breadth of flexibility.
We'll see how the situation develops towards the end of course were peaking and number two new initiatives in order to optimize.
Our costs.
Starting from our revising our roaming agreements.
Reducing our marketing budgets.
In many other initiatives, which will help us too.
Our key chop for with.
Really busy kind of guidance.
Seeing as saying that.
We we think and he I probably agree with you as a strong guidance.
In a very busy but we'll have to take certainly force in order to de lever.
And now on BT get to be digital yet, we see double digit growth in this segment.
Argon equally if we look.
And now we believe that demand this strong demand will stay there.
So we have very good.
Infrastructure.
We are weak why busy.
One of the bleeding.
Our data centers some initial data centers.
I want US we show now.
We will start filling this year, so that gives us additional law.
Contribution to our revenue so will we quite positive will no doubt.
That's a cloud and b to B business digital development.
Okay. Thank you very much.
Thank you the next question from.
It would have inova of Citi Your line.
Go ahead.
Thank you very much I had a couple of a couple of questions asked first is on just wanted to change.
You could share your thoughts on.
Board member Nations did mention strong candidates.
Sixtyv like yours.
You have any project mine.
Following the appointment them.
Election.
HM off.
And Bob.
The.
Yes.
Okay.
Hi.
Thank you that's right.
Background.
Okay. Thank you.
My first question.
And fashion.
Okay.
Second question is on.
No.
Right.
With that Youre ample capacity.
Michael Dupont.
Yes.
Demand for.
And performance.
Well.
Yes.
Yes.
Network architecture by far.
As for flights in the whenever that comes.
People.
Content that they need more localized presence up there but.
That's about some trends could be about software quality of service.
Maybe last one arm on any warm and performance.
Tickled pink.
Considering Tom demand are strong.
Thank you have to me.
Yeah.
No.
With all day events that you have to know tricky from.
The first we'll go as an uplifting.
Right.
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Customer loyalty army or you could monetize process, rather embarrass him.
I'm, sorry, it's lumpy with.
And also the.
You could be phase.
Okay. Thanks.
Yes.
Okay.
Well on.
If you few words on board of directors nominations I think.
The new board is strengthening in order to respond.
To help the comp when you would the new strategy equity seems to be but at the G. M.
Outside of your hotel.
Products the proposition so all those craft fall confronting and.
Leading.
In the media in Russia.
As you know we signed an agreement with the PRB channel on strategic partnership.
Yes.
The sense to drill to develop our media together.
And in the sense it is a logical.
In addition to wallboard speaking our strategic partnership.
And she is expertise MQ marriage.
My Deysher umbrella is beauty experienced professionals in.
Being in developing it could systems.
And it seems so we are facing a little duplicative you might recall showing challenges and question should be helping us.
Too long to get Roop will report on response.
Or two to develop in particular in data center strategy Robins. That's also very good experience with them as one.
And.
Hi gone.
He is.
He has experience.
Intelcom being technical Chief technical in the eyes and Ian.
Oh.
Digital banking.
Being HCCI technical digital expertise in all leading banks.
Mr. Guy he is the beauty.
Because the beauty blurb experience the different industries and would stop stops in the with.
How you build up the business on how you do applaud businesses. So these are very strong conditions, we believe to our board.
One can node that.
All sort of except for yeah.
Majority of board members is now independent.
That is also very strong indication that you know strategic.
Yeah.
Strategic approach your strategic stance, which will get from the board.
Yes, that's that's probably some thoughts on all in this fixed to the board.
Would you be data center capacity.
Utilization we are not.
We are.
North using that Kabili for when we don't see the primary source for internal usage and by sequel.
When we talk about in the payment the media or something like that these are just the minority to yet for all about the capacity.
Utilisation them the by a primary our use of course is a commercial sort of will bell older witchcraft.
Oh, no step through our internal but he internal uses but.
Did you got to fend that has moved up would be used the roadmap, what's the prime deploy middle ground will be used the commercial to develop than that and to build the beauty to use things in the sense with.
You know, we have a lot of capacity with deals.
And required significant capacity, which will mean you guys in.
The beats year next years going forward.
Okay.
Well entertainment.
Actually that's very interesting question that goes through.
First we will realize when we look we were launching these.
Virtual conference, we realized that definitely not the time in place to to monetize that heavily on the third base at the moment.
But.
I was really great impact on on our image and on loyalty with goes a lot of positive response and in addition to that could that I can tell you that.
The actual the cost of contract in the in this and they were.
Is really great. It's one of the lowest.
In the history of such events, but at the same time.
I think that.
Coming back to normal we will be able to monetize that.
Because first of all Weve, but we have to us for the already for sometime we had an interesting VR project that maybe wasn't that popular.
And the.
Pre koby times, but now as we see.
Huge demand in online.
Concerts.
In the currently in Russia, we we believe that we'll be able to provide concerts steel free of charge a normal.
Just a normal quality, but will charge for afwerki and we will charge also for for VR through 60, another additional capabilities that we already have.
On our platform so it's actually good in both ways.
Yes.
That's very helpful. Thank you very much.
Thank you. The next question if I missed the cannot of guests from bank. Please go ahead and it's nothing.
Oh, yeah. Thank you what how much was up I think it just.
Two quick follow up question, one on the dividend the Atlanta Charlotte.
In your presentation that fuel.
All right I mean can meet that because a dividend payment some during the year 2020.
Somebody else you went from the year this doesn't.
If it doesn't mean that.
There is some do you see some flexibility.
Intellectual because a dividend payments.
In the years 2000, thank you one.
Yes, Hey look look into the current dividend policy.
That's question number one question on but to what relates to the.
Completed integration now you rostelecom until it to do you see any changes and the competitive environment.
Let me put away just because they did Rachel if there's any additional pressure potentially on your business.
Thank you.
Yes, so the answer to the the to the first question is very simple.
On to stick to our dividend policy, which is held for three years. So there is no changes that we foresee for 2021 in terms of dividends.
Speaking on the competitive environment.
Firstly I'm, a little arm is or what I'd mentioned.
We think that it did you mean.
Youre stable.
We don't see any pediatric patients or need.
A significant.
Improvement.
You are in place we think it is stable off and that gives a certain optimism I would though.
With that that way in this sense, we don't see.
You can see if shift from consolidation or frosty liquid wins, you look to.
Be having any specific impactful now on the current competed super environment I would rather see we gotta Genie consolidation in the market.
Because they think that all were all consolidation of the market as a group in positive steps in the all leads to.
Where do you shouldn't will you accretion in the markets. So I think it's Rob.
The move in deposits of detection.
Okay, let's say our thinking what how much.
Thank you we now three seats to follow up question of Under-age Sabocheck, Yes your line.
Please go ahead.
Hello, Thank you, Oh, I'm, not predicting that but I'm going to try it can you.
Give us an indication of what's a amount.
If your gross adds is currently coming from beyond as and I'm really interested what part of your service certainly in growth, but it's a bus market is driven by.
The losses that that's the on this reporting thank you.
Yes, well.
That we cannot say Saudi is severely.
PCV question and I don't think that this isn't necessarily.
The this also fall growth so I wouldn't really core mental now compete that that was there anything.
Okay. Thank you.
Thank you very much and no further questions I would like to unpack TV.
Ladies and gentlemen, thank you very much for listening if you have any further questions. Welcome you as usual to contact MTS Investor relations at any time EVEP cost of this discussion will be available soon and our website. If he was three political in the meantime, wet shave the interest and wish everybody a happen.
Sounds to me.
Okay.
Ladies and gentlemen, thank you play I attended this call I think because again you may disconnect.
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