Q3 2020 Mobil'nye Telesistemy PAO Earnings Call
[music].
Ladies and gentlemen, welcome to the conference call all the kind of system.
No that's the most frequent.
Oh, I'm sorry, the record it as.
As a reminder, all participants we never said on the knowledge.
After the presentation, but your net.
He talked of question.
On the watch the Penn have difficulty hearing the conference the.
GAAP he thought the euro on the telephone upgrades on sorry.
I now hand, you over to what do you know mobile top up the relation 40 to your first time frame.
Go ahead.
[laughter] welcome everybody took the deep events could be stuck and Pierre here, what the drink the green to financial current open acres out before.
Before we start I must remind you that except for historical information on any comments made during the score make of pick the core black liquor statements important factors, including it and make it to the <unk> 19 kind of panic could of course, our actual results could differ materially from those contained in our projection of core mcclurkin statements. These interest.
In like the country.
The discussion of breach available in our annual report on form 20-F, one of the materials will have to see the trick to be [noise].
If you're getting about any obligation to update on anybody the to make forward looking statements spoken on this conference call on making the adjustments to pay the can make statements to reflect changes interest [noise] echo.
You can find out press the reason because of the patient for the school or now I other website.
The decrease Entercom.
C Corps, President President and CEO of.
Lot of any kind of I trust of Vice President of customer experience market and then the eco system development in Mexico, the Q on and I took the vice president for telecommunications on.
Can you get true President for finance and then the actually lack of life, but EBITDA for financial services Appeals MTS Bank, who will speak in Russia and that'll accounts like.
Now, it's my pleasure to take you through the key to pick on [laughter].
Thank you welcome everyone and thank you for a journey.
I will begin with the headlines and the kind of life of the before handing it over to flow in and that's the fleet growth you coming to the liquid biopsy.
Yeah, I will then give some color on the field when can on the evil ward of <unk> financial results.
Then the rule of that Bob will question I'm very excited to be able to report the MTS because one of the game the leave it at the mother of sample sort of dissolved fulfilled what the went to 24.
Well the what on the group reading your degree of 4.9% year over year to reach 129 billion. The mobile we didnt even of below the growth in both telecom services as well of reducing them to be on could make the TV true with all four of fall the of the Gulf contributing model. If you take me the and the quality of future.
The second from the combined Oh free connectivity to the little more than half of the total upside.
Group adjusted the we'd be the will likewise, the up with full at 3.3% year over year to reach for 58 billion of little mobile.
The increase was primarily driven by service line, having your opex savings in the retail as well as the positive contribution from banking services.
Overall I am encouraged by all the robots year to be before the especially given the volatility in children, just I mean, the Cobi 19, the bumblebee.
Encouragingly in Phil what the what's on mainly on the cash will begin to ease our total than the rest of <unk> normal the duration and they feel the banking 200, the but if it they've you didn't see any of the relatively more the ball marketing by the end of it.
The same time of challenges remain more globally the decline in the national roaming, but also do would all high level of of would come on me consultancy, which with the show pressure on all segments. Most exposed to the micro cycle in particular would be to be in the financial services.
We'll also continue to make broker the CMO of transformation plan, Let me give you a few of the recent highlights.
If you sort of feel in July we announced the new position for the Vice President of <unk> with the few showing the diligence and were happy to have of prudently that in the six of the mix on the priming joining the MTS to pay the rule.
In global the recently launched Immunogen, you here to be more the will adopt the simple outside of some Petersburg and would have strength and partnerships on the next generation technologies, such as the teaming up with come on nickel.
To deploy each on Openstack.
In Fiveg, we continue to engage with the key stakeholders on defining the box board of other than the Russia, and we are populating in pilot project the strengthening our position the head of the future I missed a little low overall, we continue to execute the weight on the feel of the 2.0 strategy.
That would have laid the old for you a year ago.
As you recall that our two from the musical Philips share.
The the best Silicon when the Russia, and the second capture the digital upside to date we're on.
Welcome to the network that we have a strong we call to catch some of the digital wave.
With that I will hand, the door to flow will give the customer experience on the good system update.
Thanks, Doug and good afternoon, and good morning to everyone joining us.
That's when it went as being an unprecedented year for digital uptake both globally as well as for MTS overall, we're making good progress against many of the Cpis. We track closely the share a few first and foremost we've now reached more than 60 line multi product users the Utica.
Customers, who are consuming more than one service across telecom media and Fintech for reference that's a bit on their 10% of the size of our overall mobile subscriber base and going forward, we see significant potential to increase the penetration further in.
In Q3 will flow surging adoption of our loyalty program MPS cash back with registered users more than doubling year over year to 8.4 million.
And we continued to gain traction with our on my MTS App with month monthly active users of around 20% year over year digitizing customer care not only help boost cost efficiencies, but it also provides the highly effective channel for targeted marketing.
And the high value. The segment, we are off the good start with our MTS premium ecosystem, but low which will last launched over the summer today, we have over 4 million users keeping in mind that includes those who automatically qualify by passing of standing threshold on.
We are seeing robust uptake engagement has already reached around 20% of total users by the second month after launch.
Turning to MTS TV, we're seeing very robust net adds in Q3, we gained additional impulse on top of the over the full of momentum from Q2 the.
Viewership was up by 700015% quarter over quarter increase and breaking that down further it's even more impressive the note.
The loan with the exceptional 50% growth in users quarter over quarter.
So we are moving at full force to capture some of the in home entertainment market.
Net MTS bank, our customer base remains stable. Despite the economic volatility. We've also recently taken some steps to revamp our mobile banking app to provide a more full featured on user friendly experience at the end of Q3 with nearly 1.1 million App users.
We are also pivoting our marketing approach allocating over half of our spend towards bundle Echo system offers and we see encouraging signs with successfully winning market share. According to the consumer brand tracking where perceived as the top three the ecosystem player among leading Russian tack on financial companies within that the very.
The promising leading indicator finally, we are also making progress on the revamping, our App library, which we developed largely in house.
We are adding mobile modular Logan and payment models to more than 10 of our App, that's significantly enhances the user experience by providing a fully consistent interface the across our portfolio.
With that let me hand, it over to the NASA for telecom and because the update.
I just love of.
So your line is another strong quarter Francis of our connectivity.
Let let's talk with mobile.
Wireless service revenue accelerated from Q2 to reach the as falling 3% growth year over year, notably with successful the bridge the gap that resulted from the loss of international roaming usage of two funding relate the channel picture.
But equally impressive in the roaming seasonality as the belief reflects the store on the line the hallmarks of the business.
Looking ahead, you reported historically last quarter for travel so we expect the T. Robbins headwind either through the end of the year.
The more debt. Please at the current vaccine grow low gives us some core operating.
That's all me maybe into the carbon in the new year. So.
Turning to of the mobile customer please feel free free market Crappy Sunglass hut the bar in the seven to 8.2 million as retail operation for the region. That's.
Thats the dip below the performance level wishing the partly reflects the ongoing impact on Oneq ranked stories and the purpose of more.
Most importantly, we continue to see of to then on.
Our high volume these.
These are all subscribers, who have been with us for 12 months on board.
For the until the 0.8, which is on the secular decline fixed line. The revenue it was up a solid 5.4 year over year.
Importantly, we carved out of Q2 momentum forward in consumer broadband with net adds holdings thirdly at the wrong hundred thousand quarter on quarter, we expect some connectivity growth to continue and we see these as its also true in some momentum customer relationship on the retail side the foot.
Traffic the return to help the level in Q free following the declines we saw in Q2, that's reported sales of devices on accessories, which were up nearly 3% year over year. That's the uncertainty remains as of the epidemiological situation continues to evolve which would impact consumer spending during the.
Holiday season.
In the equal with the exceptional performance of online sales up more than 75% year over year and recently reached a major milestone by becoming the first rationally operator, the launch the national wide with the fully remodeled authorization and activation process flow.
Finally, turning briefly to the beauty of each segment 2020 has been the year of digital acceleration and in the two free will continue to to the above the month four minute generation services overall, the revenue in our cloud and digital solutions vertical was up 24% year over year, our cloud business alone. So.
For the 80% of revenue growth was solid double digits, the foremost in our yield as well.
Only in between the revenue was up on impressive 22% year over year that was largely driven by major contracts to bring social facility is on line those projects not only make good business sense. The reaffirm our commitment the breach the digital divide and help improve access the filing quote to cash.
The TV.
With that let me hand, the trulia of banking and find some of the.
For two women.
With the critical of who would want to go for the realistically the since your field on the non renewing grudgingly M. Maybe.
Some of the other productization of illness net income.
Moving on the revenue month of scooters, the spoken of cities and but in terms of go some of the getting the per Lukas Mitchell of federal vertical.
Most of my short because of the present with moving as Bruce do you dilution, but these newly with the.
The rich could you print, there's one could assume the batteries machinery look on Cisco, but.
Thank you Dennis on.
The third quarter proved to be the period, the free comedy in Fintech full of and the negative impact from the pandemic. Despite the ongoing market uncertainty as the previously discussed the Russian banking industry faced the steep decline in demand for creative products at the beginning of Q2. However in early may the industry. So early signs of the month recovery and.
By July 5th returned to pre crisis levels consumer loan issuance by MTS bank could fully recovered by the end of Q2.
Okay two of bunkers adjusted net what the the Richard is much guidance dishes person.
The drill ships.
The rule me little bit probably.
You can get reported the which to me do you feel some of those the trees person I wish the because you can brooks good not restricted each day the person.
The especially me you do the level of globally.
On the news when you look at them sort of you know, but part of it.
The agreed the pursuit of build bunkers, both of which the zero full spectrum portfolio root of margin and Robertson of three to four doses of so wish in person.
Over the past years, the bank's assets grew 14.6% to reach 203 billion middle of.
With the total growth slowed portfolio up 26% and the growth retail loan portfolio in particular opposite of 4.4% to 107 billion rubles.
You'd independent Nick the loan portfolio growth slowed in Q2 the growth the retail loan portfolio of PMT has been the increased 1.2 per cent while in the third quarter was the growth accelerated to eight of the [noise].
My phone models the couldn't even on a quarter to choose the got something about the de we'd need to sort of lots of little more the.
Root of Mvcs symmetry to put up some of the arguments do you feel coming out of the.
Adjusted free, but a bunk group of them due to me the.
Total debt the disembodied the minimum we must one of the loop of Federal Court of though do sort of what state of New York.
Sales most of the Williams much reaching all of your marriage [noise].
Net interest income on the first nine months of Twentytwenty increased 67.4% of 11.3 billion rubles, reflecting the loan portfolio growth overall net income for the nine months period amounted to 251 million the mobile versus a net loss for the first half of the year of 924 million mobile you just essentially free.
Lesions.
From the Steve could you kind of sealants agent growth and assess the logistic interest preference to the Michigan and you will start on sort of talent on the style of you've got some drilling.
Moving some cities because he hasn't stems the something of a minimum of human easier of what's the status of Costco.
I was just a little money is of the Mccracken managed customer regional growth.
Moving on I want to show you the fraudulent part of theaters of photo edition, which could you perhaps on the Roche wishing pushcart input of simple settlement weapon.
I'd like a bunch of get through its the conservative in the apologies the return during the accreted easier on part of sitting at about the share could you just the alerts for much due to growth.
Cost of risk for the overall loan portfolio came in at 4.6% significantly below the 11% sales in Q2 on the decline in cost of free reflects the high base from loan loss provisions booked during the second quarter as well as the animalization of the macroeconomic environment infusing the share from nonperforming loans in the retail.
Portfolio was 10.9 percentage versus 8.1% in the second quarter. However, the bank continues to maintain a conservative approach to provisioning was NPL coverage standing at a 124%.
The non like you on the questions to get the going on I couldn't come forth on them, she they'll consider doing pretty well the total how much of the functions it though.
I didn't push come on my beloved brands lots of the would the since the last three months following the person.
The bid as much of a mute on as up of the so some things moving on like in the will you.
Six of them on bulk dish, which could bit of them.
In terms of capitalization, what he meant at the comfortable level. Our end of 1.0 consolidated regulatory capital adequacy ratio was 16.5 per cent as of October 1st which provides a more the risk cushion in capital reserves versus the minimum of regulator requirements of 10.5 per cent, including buffer.
On buses and the fair value of muscle stretching his focus on that I've read it sort of come out every day.
The other is because you are doing the Polish gizmos.
Moving the split of them would the bump because of political news of the what she's the people in the different schools and also the separate so on the because it.
We are consistently executing on our strategy was the focus on developing digital channels and adhering to a conservative risk management policy. As a result were confident the bancorp the cost for the chips net profit for the full year, well, achieving operational and financial growth.
The deposits and you put it all on day, one of the of course the of meaningful lots of coverage now let me give the flow of John day for a financial update.
The I think your overall.
Overall I understood what the group adjusted EBITDA increased 3.2% year over year to reach over 50 billion rubles growth.
The growth was achieved despite of the steep decline in the national roaming revenue, which is the margin accretive for us.
Well keep the was supported by higher Telecom service revenue as well as Opex savings from our of you Peel optimization actions on that note. The also want to remind investors that we saw a strong contribution to our EBITDA from retail at the end of last year, So moving or how do we expect this factor to moderate in the fourth quarter of this year on top.
For comps.
Moving the profit increased 2.3% year over year to 18.8 billion rubles.
Net profit growth was constrained by the non non comparable base from discontinued operations in Ukraine.
At the same time this was more than offset by positive impact from core business performance as well as lower finance costs.
Now if you worked on Capex.
We continue to invest heavily in our network as well as in new digital growth areas.
In the first nine months of the year group cash Capex amounted to EUR.
63.7 billion rubles per year to date the.
Moving on to the ratio of 17.4% of sales. In addition, the recent FX trends have driven our capex spending higher in the ruble terms since a large portion is allocated toward the radio equipment price and foreign currency.
As you recall, we have a longstanding practice to proactively manage a fix exposure through derivative instruments.
Given the ruble dynamics of this year, we have seen and that positive cash contribution from the expiration of derivative constructions for this purpose.
When adjusting for this positive that our full year 2020 cut the guidance remains unchanged at around 90 billion rubles.
Turning to free cash flow the.
Recently, we have received some feedback about how we reported this metric in particular, given the increasing importance of interbank back.
The banking sector free cash flow was not widely recognized as the particularly meaningful indicator.
All over until the bank funding and the lending operations have produced substantial fluctuations in group free cash flow over certain reporting periods.
Internally, we have always true core cash flow also as the <unk> is the key reference in the recommending our regular dividend payout.
Therefore in the interest of transparency going forward, we will be reported free cash flow from excluding flow excluding excluding the bank on.
On the basis group free cash flow or ex bank amounted to 54.2 billion rubles in the first nine months of this year. This.
This was down 5.3 billion rubles year over year. When also excluding the FCC DRG payment in the first quarter of the previous year.
We believe this represent the robust the cash generation given the non comparable base from 2019, which included the contribution from our from a former operations in Ukraine free.
Free cash flow in nine months of 2020. It was supported by the relatively stronger poor performance in continuing operations as well as lower financing on tax payments versus the year ago period.
Finally, turning to the balance sheet on.
Over the past few years, the we have established the solid track record in delivering material gains by bringing our borrowing costs down the road.
Third quarter, our growth the weighted average interest rate dropped dropped to 6.6% a decrease of nearly 120 basis points year over year, and we continue to take actions to optimize our debt portfolio took.
To conclude our strategic focus on some financial management, the simple a strong balance sheet man I thought the capital allocation and robust cash flow now.
Now, let me hand, it back to Alexey for his closing remarks.
[noise] thinking on the day oral where I'm imaging will the growth book, what's the liquidity as well as our three vertical the Bianca miscellaneous income.
In the 20 to 20, we have not only relative to the occasion on the operationally we feel the accelerated though of digital transformation strategically in the.
We are seeing that reflected the knowledge results in light of our year to date with the latest solid financial performance and limited use visibility towards the year end, we anticipate Winfrey, we are raising our full year guidance to revenue growth of at least 3% from slipped to 3%.
The slip to 2% growth in adjusted the busy from minus two to flip.
While maintaining our cash copies of guidance or put on 90 million Lubys women moving the fixed from the city with your consumers.
Turning to share folder, you mean, the remediation we have now complete the tolerating the will give you the we out for the year, we slightly out before on our bullets the targets in the liver. The the total of weighted 9.5 rubles per ordinary share. We are also on track to complete our 2020 buyback.
Robin on what it around the 15 billion rubles, all eight of this year, where the totaling over 100 million rubles. The share holders sits in the new vehicle for him to yours.
Finally, as one of Russia, the leading public companies, we are committed to close the engagement with the with the the come the unions.
That's why we were particularly proud to have been made him. The best executive team you know six the growth the broader immunity June in that range. It range institutional interest of Sir with.
Any of the immigration Andreev volume. The your NIE were also recognized as number one and now when you do the casing. The news. We appreciate your support and we look forward to continue on the conversation integrated wins, the one M.B. yours.
So to sum up we have well maybe weighted through challenges we are moving forward on our growth strategy with the lever in three <unk> third quarter.
And we are well positioned to deliver the solid close to the year.
So with that let me hand, it back to volume of working on the.
Thank you Kate and thank you to the rest of the speakers as would take questions. Please be aware the maybe a slight delay for translation operator with that let's open up the line for questions.
So we will now begin our question and answer session.
I have a question for our speakers line size now and one on the telephone keypad knowledge and tell the Q.
What's the name of unannounced you cut off the question. If you find your question at the end set before the channel to speak you can die as you know and true to come. So your question. If you think because equipment today most of the handset before making the selection on monthly what of the question.
The first question is from on high Sabocheck, Oh, well on the South Penn.
Hi, everyone. Thank you on congratulations on the results I have a couple of of the ask questions before I get back in the queue. So I was wondering in terms of the mobile service revenue is a you've highlighted that most of the headwinds that you say so far are sort of a going away now so I was wondering mark.
About the competitive situation on your plans to.
Increased prices as we've come to expect in the first quarter. One of your competitors has reported so far I was highlighting sort of mixed message in terms of.
Currently there being more competition on the market, but at the same time, it being a a rational expectation that the market as a whole again goes through another round of repricing in the first quarter. So your views on that please my first question on second question in terms of the store accounts. So you clearly are still.
Managing the the overall numbers or are you ready at this stage what the stars actually opening up but you closing them further to give more sort of color as to what you expect in terms of closures for the.
Near term unrelated to that the third question. Please in terms of of the guidance. So you if I just look at the swing in your EPS guidance, a two day versus what we've seen so far it's it it sort of implies more than what you expect on the top line on in terms of growth.
Since changed I was just wondering.
Where the assumption of improved profitability versus what you've seen so far as it's precisely coming from thank you.
Some of the thank you I'll take the fearsome filled the them on the method of war on for a of the sick.
It's part of the competitive for overall kind of basis, if environment are we see.
Relatively stable, we don't see major challenges. However, it is worth noting that the are you on on being quite the ex <unk>.
Excuse me in the reducing prices in some regions the recently.
However, we don't see we don't see it is the major Oh no major change in the overall competitive landscape of the you know what all pricing policies or we would like to mobile though this on a on these developments on a in the amount of.
The recently.
And are you taking became the was the developments, we really mean I'm relatively positive for the awards overall competitive for the situation will inform of Oh.
In our guidance speaking about the old guidance, Oh commodity so for all four of our understanding of for you know competes it's different by on them and it was well is the I'm you know the some more marketing income on me in the.
Oh, the potential of a lots it with you.
So all of the other day here, we we use all of that additional the broad sure to revise guidance are only in the period when we open up the visibility towards the low.
Regarding the retail so we or well not on a change in our approach towards a with the optimization, so well know king and watching carefully with situation on the market would definitely by the end of the not playing into review.
Oh, I see small shop, so of for for the on we look most of the fixed on their trucks, which we have reported or during the <unk> Q2, you to resolved.
Until till the end of the year, we don't have finance all of the plans to sort of use as far the at the same time will definitely see how the situation is going to other to develop in case, we see.
See some on some elements on the first you need to true reviews on Nick Yeah, we'll definitely do that the parts of a pretty healthy and pretty happy will follow the subways, the well fine so even though you're right. If the there will be a level of below 10, the necessity on the market. The mobile do some optimization. What then we'll just informed the.
The next the on right.
Thank you for that can I have just one shortfall of.
Is there an explicit answer that you can give us in terms of your specific approaches we have a as we got two very close to one of Q are is it. Your plan currently to again go through repricing as we saw in the past couple of years.
Well you free fall if I understood. The the the the question. This is a way of that with our plans for the pricing.
I think ER taking ER.
ER facing or at least from a pricing the bulk months or in the overall the broadridge it's too early.
To give any guidance on the already pricing on April which in the storage over the next year.
Alright, Thank you very much.
The next question is from even come off like some of which Hill. Your line is now open.
I mean, I've got kind of the please.
Please do well on the same some of this more or less first on the rich optimization awesome corn particular, I watch now because it looks like the the rest of the market is brady to of optimize Susan oil optimized quite a bit.
And it's not the mice versus of the March the is watching you or would you do a growth.
For the that's the first question on non the second question on the pricing.
The first standpoint from a regulatory standpoint [noise].
Federal Antimonopoly service was and be more active recently I'm asking fell to two.
Hi Inn on retracts or would the do it in may with the price increase.
So do you think of they could die inquiries on would be a factor again or any future action that you might take thank you.
I will take the first question regarding the retail optimization, so to the on its well not the whole watching on the steps what the competitors are doing because of our lead the on the markets and the App.
We just watching on all of the tracking well that's because.
Because we do see that even during the summit on it if Congress after Q2, but now we see that there is some of 'em how the C. There is some oh I change you're seeing the in the traffic so the slowing down and definitely we have some plans on the on the sales so we'll see.
Actually the depends on the market situation not on debt movements of I would call. It yeah.
That's that's really the on the with the optimization.
In the it's sort of a with Ah lisanti monopoly authorities. So I use the cities for a price Oh, the pricing you price upgrades Oh it is the factor.
In on that would be nice to see that the except non or the they have more oh influence over the year old the overall pricing in one of them into the situation. So were aware of wishing, but I would say that the overall competes if the environment.
It usually a you're always the bigger factor the.
On the regulation limited at least in pricing on <unk> in pricing policy. So we have not seen a father being the major Oh limitation.
Oh, the award of a reasonable pricing in the market, but rather the the overall come pieces of situation than the compete fusion of become more aggressive way other than the market. So this being the major a of the major Fox the fall overall pricing falls.
Oh, great. Thank you very much.
The next question is from Alex some of them kind of which of the capital. Your line is the open.
On a year of good afternoon on so question from my side on the consists of the development well.
First one can you explain the.
The second thing.
I mean, the accounts payable.
Yes, mainly on the subscription revenue the split of between the different segments.
And so just wanted to understand how much of it goes into mobile and how much into the other segments and the second question is what's sort of the target the integration of the difference in the system.
At in kind of the segments you you have in mind the Youre five years throughout the June for example, the talking about.
Mine's Yeah SAP.
On the cash back.
Banking solutions with the number.
Or whatever you can share thinking.
<unk>.
Okay No [noise].
For the first question a we we didn't know the slow the allocation of of a premium revenue in two different services, but I can tell you that the methodology of doing that or as I've truly reflects the actual usage of all of those are the.
On the trust the being given to subscribers. So it's a kind of natural and it doesn't the though.
Redistribute a than the natural flow of revenues.
On the second question Oh, we can say that we were anticipating having 10 million subscribers in Fintech we are.
On the 10 million the subscribers of our pay TV is where our main targets are for the for the for the nearest of strategic period as well as the at least 40% of our subscribers of becoming our ecosystems of stuff.
Okay.
The next question is from Henry Cops of Morgan Stanley.
Your line is the open.
Yeah, Hello, Thanks, so much of Oh.
The two questions actually firstly I just want to ask about your mobile service revenue trends, which are doing day looks very strong.
I guess, you've got a part of the three percentage points the touch wouldn't from funding, which means that you got on line.
Service revenue growth of 6% on the subscriber the day studies.
Yes, so lots of slug of down year over year. So just wondering what's the what's driving the <unk> are you seeing any benefits from sort of kind of it in terms of more day. So you see just sort of travel should we think about that as sort of the.
Pretty much sustainable on line right unless we go into Q4 on I guess.
The 21, depending on the bromine she could see.
Sort of.
Yeah, So the four 6% service revenue growth.
The.
I also wanted to follow up on on the non performing loans, which I mean, it sounds like you're pretty confident in the midst of send the that's sort of the temporary can you maybe give some.
More insights into what sports.
Principally on the spot but.
What's driving the increase in non performing loans and how you can feel so confident the that trend the someone's going to reverse.
And then the last point I guess is in terms of your sort of portfolio of assets. Just there's been a recent speculation the price since you were lifted the on.
Moving on to Bank business I know you probably can't talk about individual potential deals, but more generally how do you think about your.
Average portfolio on where do you see any GAAP sons and or on the so you can sort of current T. Slim line your price on your send the social not thank you very much.
[noise] Henry Thanks for the first of all of your question actually the by asking your first question the almost onsite Ah answered on the so on top of first of all I'm now, we we managed to on.
Moving now to close the gap of no roaming my first of all by very strong cost somebody.
Who is definitely be treating on you was the more data.
On the ARPU is growing also during that time, our cost of much I really focus on the offline service. It because it's very important to have a the Linda those time or.
Very good the quote of the service mobile on FICC saw the these it's actually the then the main the elements and also as you remember when we saw him on price increase beginning of the year. That's also helpful slides into free jazz by keeping a lot of might by calling one day gap.
Julian My eye International roaming.
That's the kind of federal of them so.
He was the worth the shifting of four by senior sales computer.
She seems to be a much body to how do you sort of you know when you ship when it comes to once you make the most of the what do you live with the impact reaching theater and the two interesting instead of which the depressed.
[laughter] lead the north or see any significant free related to raise the Nancy is as we have even frozen.
Maybe the more strict oh for the C or building the provisions and this was the like you mentioned so on a comedy Trisha currently stands at 124%.
The.
The filled the is it the relates to the specifically bank or how we see the different on some of our big portfolio with the Tcs. The group Oh, you frame of getting this right the right.
Oh, I see athletic wish [laughter].
Yes, sodium brought I guess on some more generally thank you.
[noise] well well in terms of <unk> financial services I think we Oh, we see that the before was a in the active side is mostly crazy GAAP.
Oh Wow, a we are basically the strong in all point of sales the jinyan on creative.
In terms of portfolio a difference and the overall you see of the you know of use the financial service or the middle.
Yeah.
Dan the old the a the we are not giving them on being a net good system because the predominantly focused on wanting to see we.
We should financial CEO of financial sector, while all of your 'em, we view ourselves being on the at least the three other.
A three industries are actively.
And ER in the sense was there for you.
More diverse portfolio or you know or you know pulled the mix.
All right. Thanks, Thanks, so much.
The next question as from doing the actual flow I see your line is the open.
Oh hi.
[music].
I would want the SEC on.
What what are the Companys plans in terms of the Capex for next year, especially with the with the.
Oh, well, especially when the Fiveg coming and what is your perspective on GAAP and secondly, what are your thoughts around the next the key growth area.
Yes that you see outside of the data and Weiss. Thank you.
So actually the answer to the first question in terms of the capital plans for the for next year I think it's too early.
To share about the of course, the you know the factors that can be behind that.
And of course, the in terms of Fiveg actually nothing nothing actually to share so far on no nothing of the plans.
And yes.
Yes.
It was it was when you talk about the she growth theater, it's I think we.
You know you can pretty much see that from our threat the jury because of our strategy of when we talk about usually the low upsides or do you.
Sure. So the potential your true to the areas, where we see a a potential for growth and development growth. So all four of our food and the loyalty fall walk on the minimum wage.
So we are focusing more on a three.
Segment of three markets, we should be on coming CBC and beyond traditional still equal the use of financial services and we see the financial services are moving through the major transformation of the movies in the upside the in the books you can leave some consumer finance in the lease a daily use the show financial.
On services for B to C segment, then the now the signal to the media. We see also the major transformation in the way how Oh do they kind of thing being consumed is I'm moving on so here, we will see along the way and the parts you need to you on the cloud service.
Mrs on him in but you go of cloud businesses.
In closing a you'd given that the the thinks the solution.
For the inclusive of some Ah DPG segment is being before so.
For theater, where we we expect to see growth. So these are all the now strategy and ER, we focus on the we feel a belief that the sealy cool a in the aastra use of the your growth So no ER growth the you growth.
And the we see potential for growth in the sick that as well.
Thank you.
The next question is a follow up from on first I bet check on your line of Snow Pentagon.
Hi, Thank you I wanted to follow up on on your of six business, so going back to the second quarter you suddenly share showed.
A big acceleration in terms of the fixed broadband product, especially so your comment I kind of missed that this level of sort of mid single digit growth you saw on as a sustainable for the foreseeable future button on the third quarter. The the growth of it was back to sort of one two per cent. So I was wondering is does because you.
Who are perhaps more aggressive than fixed mobile consolidation Oh, sorry.
SNC the bundling the products to get there may be a booking the discounts where that's in the and the fixed service or why the suddenly the or the revenue growth rate dropped to below what but what you said you would be expecting.
[laughter], Okay in the second quarter of would have also well firstly, let me or let me know the first to our expectations on the growth in the fixed line. We believe that that is the potential of growth in fixed line.
And the we keep keep on grazing in the developing on the EPS would offend seeks the business of course, we do think that the or we can see mid single digit the growth rates in the segment.
On a without feeling funny. If you are pulling down we would script theme of more than five percentage growth in the sector in the sort of core.
EPS for differences between second quarter and what the of the was there a one of Fox them in the second what the related to be to June one sort of so with the so flow was to the social.
Oh, the <unk> being kind of makes the or what sort of social a social.
Oh I see.
Uh huh.
[noise] [noise], social socially imports, so sort of social the significant facilities.
Being a you know being of Fox the in the second quarter.
So all of this they're bad debt the effects, it's a high second what the we.
But we'll continue to see on next year also the fixed from these are the services and now we'll see we expect to see of fixed line business being contribute the dual little growth as well.
Yes, maybe somebody some thoughts on like say on Sept reside in these bits of the allocation on so it's really it's not like want one off the assets. This is the one even like he shouldn't be quite the government contracts, they're not equal it's free to from the year saw the ER on the the the part of the quantify just lucky the than Q2, but that means that the.
It's the just played through the through the on not on the equal parts that that's the the reason on this at a high growth since in the on future.
Hi, Thank you on sorry, I misunderstood I think on I didn't catch the the part where you were saying that the growth could have been or would have been mid single digit if it were not for something can you. Please repeat that.
Yeah, what I was referring that the <unk> the significant bottle for the decline in fixed line to the funny.
If we excluded for these factor.
The fixed line on the other part of the fixed line business the should more than 5% of go on.
Understood. Thank you and then one more share of caller. Please if I may on the or any sort of visibility your plans on the on any potential future buybacks. I think you went into 2020 I'm not expecting one but then you launched a smaller one because of where the share price drop can you share any views on how you would it.
The approaching any potential future buybacks, and then sort of short term at the stage.
For the yeah. The block on 'em was EUR 15 billion.
No I will will complete my quick follow the same on the fall on moving forward is for moving forward with on kind of any blends of the yet.
Sure.
All right. Thank you I'm sorry, the does that mean that you don't expect any or that you will be deciding between all of <unk> are allocating between dividends and buybacks in the future or that there are no plans, how do I read that answered. Please go.
No we have not decided that the yelp and as we all we see on cities Oh, the dividend policy, which were full and many of them great towards the the towards the at least the dividend policies. The discretional a step on the benzene or mobile little financial before them on some of the results of the company.
Understood. Thank you very much.
The next question is from day, yet you Prohema of Citibank. Your line is the open.
Hi, Thank you very much on congratulations on the strong without the had two questions. If I may ask the first is on the T.S.P. me I'm just trying to teach and ask if you could share on things pick up the Oh, Okay, Ginger E G and the other shifts the manageable.
HM ones and Wes if you could comment whether there was any specific feature that yeah.
The customer is fine appealing which makes them.
On top of the pullback and second question is on competition again, I apologize for that to dwell on that subject, but if you could comment on of what.
On the maybe where exactly the line is the especially on the line has also been mentioned by like any to management of last week.
The the they are being more of the situation regions and will be line mentioned that <unk>. They just launched some.
The U.S.
I thought he does tie the switch on which have not final yet do you see like each and Dan's question specific segments Jackie Thanks of the line.
The the also mentioned they plan to have more of a segmentation Paul that's coming out.
Yeah, just color on what you said on the competition that sentiment and each day.
The steel and each time.
Hi.
Oh no I just the fact that it's nothing to do the down any new cash, but so we're not going back on the Miss it on.
Kitchen.
Yes, any color would be.
I appreciate it and that sort of question on retail on line faster. So its line Oh on like the sales have been based on the channel have been growing quite strongly interest you. The called me and do you see rationale for and driving on line parts to that and I guess you said.
Oh, that's the on this.
Good day station, which is now seems to be easy and the from the here and of course, what did happen the climates in the past you just the Pos that you would be exploring and the going forward and when do you plan on she maybe just to see if he tries on my share in your overall retail sales.
[noise] day I'll answer the first question on the MTS premium again, if the question was the English versus total of users total users the as with other with Formula and ER on the second month of our launch we've seen a 20% of users are actually.
Actively ER.
Using some of the benefits one on more benefits the purple who are provided by by on kids premium.
So just a whole lot of sasselov on that.
I told you the sense also paying user.
Both.
Overall, we would adopt divide the of of course I.
I think that out of beta users or the the percentage would of been naturally more but I don't have the sustainable free.
Okay. Thank you.
[noise], if the competition or the the price adjustment well like you. Let me start from the junior high performance of the drain on all four of them a use of that and we see the overall can be if the environment is being.
Quite a stable in a I would say even benign looking for steel. However, we see that the or bulk foods the region.
The line, we price adjustments or they were not in the specific segments of the work across the board of.
But the once again, we don't see their piece of the being a game changer them to market.
So regarding the online offline a as we mentioned on the difference in the some day mi simulated the usage of fall on line and during Q2. The way we saw a huge increase of follow on line sales. The so on and the peak it was the.
Around 40% of our Geno sales coming through on line I mean, Fourpoint 40 sales.
No yeah, it's the more more stable the percentage the sites are around 30% and it's the staying on the same level yeah on spot that the almost all day shops, the opened and other but there is still a huge them on by buying a I would say through the up on line in order to low almost doubling year on.
On the other cells for online more seem costume current yeah, even the for the three times gross and net sales of headphones and access rights of way almost doubling.
We we have the same old look for for next year. So well, we absolutely sure that on line is going to play at a one of the key role model for the team cars and four on boots itself on it next year and we're doing everything just thoughts on how the app.
Well, the or who to ask line or I thought that the enjoying through offerable on line actually channel.
Regarding the I guess him a as you know on he came on right now on the launch of the sea watching their pilot or other.
The mood.
Well, we I'm the tasting day, how it's working out of watches the Dumont and are again I'm a roommate. It all depends on the on the regulations how quickly it will be launched officially in Russia, but the WAF one of the PPR and as soon as they relate to raise done. So we I really didn't just to to to prep.
Most of the every every user of who wants the.
Thank you very much.
The next question is from an uncle Bob on the Bank. Your line is the open.
[noise], Oh, I'm thinking that much for taking my question on.
Oh My the question [noise].
The GAAP [laughter] I'm sorry. This is philina your line on it doesn't have to on what anyone else can you please try and gain.
Good day <unk>.
I know you attacks relative to you on my most of the microphone.
But.
[noise] can you tell them in the house.
Much better [laughter] I apologize this year, so [laughter] well. Thank you very much my first question the is.
Regarding your guidance of weather eat Oh, Youre on you of the plan and the only the door growth projections. They can to call on the disposal of them. These room and the second one on if you just possible for you to give a comment on the situation on a.
In the build out of a switch the youre on consolidate the two subsidiary there because the.
Well of course, there on the Yonah here on number since the Q low Oh, like Oh, well enough, where we of the growth sales of having you know well meet the teams while the I personally the ones expensing. Some may the pressure on mobile operations. There is a in the relation with the silly but.
Well, we could put the challenging situation. So any comments on the is the current situation of the ability of the military markets would be but he was the grateful. Thank you.
Okay.
Thank you for a guidance the views of a include the consolidation of from the usual, but a in the cold enough with the U.S GAAP will do anyway. It's on the complete the comparative basis. So we'll have with the year over year, Oh 84 of the all full year results on the completion.
<unk>.
Ah you like a we've done it with the disposal will fall Ukrainian business.
As for or be a lot of Russia or are we going to see oh, the major the the major items box the no abuse of the dynamics there in the market from a whatsoever the.
They're in the market or even a thought.
Phil for the <unk> the Sixtym the some growth in local currency as you could see from all the whole thing and more than 10 percentage growth in Oh, we'd be the once the game or local currency or we expect to end up with the strong views on the lot of Ashland. Once again are we going to see.
On the major the the the major.
On disruption to our leases debt.
Thank you very much sales.
The next question is a follow up from you on Kim of ex tell a couple of.
The honest the open.
[noise] Oh, Yeah quick question on your high quality Treasury stock I'm sort of any I wouldn't hearing any sort of fracs on with regards to gosling bad or partial accounts on about thank you.
Yeah. The answer is the same actually as we always say that the strategically we believe that the it doesn't make sense actually the accounts lives, but the now where actually we more of a we more concerned about the possibility to be in the deliver dividend payments according to our dividend.
So in the short term, we do not the see the the opportunity.
Okay. Thank you.
As a reminder, if you would like to ask the question the press zero and one.
The next question is from the <unk> to me on in cost of the Maritime Your line is now open.
I think it goes on presentation I have two questions. Please firstly on the Opex of Jimmy the show a it seems that some of your free you continue to the sum of cost optimization, even on top of the store closures and positively contributed more than the 1 billion through your are you.
Can you. Please give details on peace Corps once the temporarily until late at the core beat or some of them are the carried GAAP like potentially selling the accumulation more presidential leads right and.
And secondly on the as the bank.
Oh, MTS Bank reported a nice improvement in margins year on the year. Despite the cost of risk was actually up year on year. So do think assuming no extra probably jones. So one be done lots of nothing income levels of once a day nimble and overall when do you think you can reach you on 20% on we target.
Income.
Yes, I will I will take the first question in terms of the Opex optimization. The of course, the major part is coming from of the theme it's coming from the round of course, the end, it's coming from a the payroll, but the course of this is not the only retail because.
We have or some other sectors, which also.
Were affected negatively by the pandemic that book two of them. Therefore actual is the response to that we have to reconsider some of our of course and of course, the most of it or the payable and then in the most of the cases. This is the rent. So that's the the magically m. the major lines that sort of where we consider doing the thing.
As the no further questions on him back to the speakers for the confusion.
True.
The what the second question live lives of from the six flow.
When you see paid interest the double digit growth, though the of the low.
True this is part of any color Jim.
Of course.
Oh, Okay, yes.
Yes.
On the ships.
Maybe one of the group of people.
Well in the <unk>.
Okay. So okay, that's going on here.
Oh, we do can from that we estimate a the hood what to was much better in terms of the operational efficiency of as compared to the second quarter, a one of the speak about the whole banking segment, but.
But that said, it's just of already mentioned during our Q2 disclosure we do expect the for the full year on the Bancorp reported ER positive flow dissolved in terms of the net income however, we cannot or it kind of define to the accurate estimate of this and net income under stage.
I think the sorry, Jeff just the cracker moving piece credential lower lease rates of might the thing in one of the quarters.
[laughter] if any can you please repeat your question.
On my question is on a net leasing costs of four Youre doing the stores are you said your mind you on your managed to get somewhat but more of being at the show rates into free you think it might the sustainable in Q4 and potentially the next year.
Yeah, you really felt the optimization on the young people a free.
Yep.
Well a young the eliminates a we sure are we saw some kind of recovery.
In a I think we achieved certain of the museum, which we will carry on however, the materiality on the subsea musician, the even more debt high as we sort of working or the <unk> in the second quarter and foster, leaving so call it the.
However, we are we do expect to see some key or the warm on them through musician Oh, We're all in on what do you feel of for the next year.
Thank you that's helpful.
So now then also the question.
<unk>.
Ladies and gentlemen, thank you very much for listening as usual, we will make a replay of the school available on no I ever with the each in the near future. If you have any food. The questions. Please do not hesitate to reach out the MTS investor relations at anytime Oh invokes the sinful on line on Rolls and in the meantime, what the Shacey interest in MTS and.
The wish everyone, a happy and healthy holiday season.
Ladies and gentlemen, thank you for your attendance just call. The thing concluded you may disconnect now.
[music].
Mm Hmm.
[music].