MAGYAR TELEKOM GROUP Q4 2017 RESULTS PRESENTATION FEBRUARY 21, 2018

2 2

Q4 2017 GROUP SEGMENTAL REVENUE AND EBITDA

Group segmental revenues* Group segmental EBITDA*

162

160

158

156

152

0

154

+6.3%

4Q 2017

161.4

SI/IT

151.9

4Q 2016

4.6

2.3

Mobile SI/IT & Energy

3.0

0.0

Mobile

-0.4

Fixed line

0.0

Fixed line

HUF bn

Change Y-o-Y +7.3% -3.0%

Hungary Macedonia

41.0

0.0

42.0

43.0

41.5

42.5

4Q 2017

0.7

Indirect costs

0.5

Measurement diff.

41.8

42.3

4Q 2016

1.2

-0.9

-0.9

Gross profit

+1.2%

Indirect costs

Gross profit

Change Y-o-Y

HUF bn

+0.6% -5.3%

Hungary Macedonia

*Excluding Crnogorski Telekom financials

3 3

2017 HIGHLIGHTS

MACEDONIA Decline in revenues driven by intensifying competition and delay in SI/IT projects

EBITDA reflects gross profit pressure mitigated by cost enhancing measures

MOBILE Ca. 700 thousand subscribers signed up to new postpaid tariff plans (launched in March 2017)

Continued strong growth in data boosted by hard cut limits and the introduction of unlimited packages

FIXED

Increased broadband download speed offering to enhance competitiveness and better exploit network capabilities – ca. 60% of customers subscribed to a high speed internet package

Continued dynamic growth in TV customer base with ca. 90% of gross adds subscribed to the high-end package

REGULATORY CHANGES

Obligatory prepaid registration concluded with over 95% of prepaid revenues secured

Adverse impacts of EU roaming regulation mitigated by increased visitor data usage

Change in the loyalty legislation allayed with increased focus on device offerings

NETWORKS HSI network (above 30 Mbps capabilities) rolled out to over 270 thousand households in 2017 and now

reaches over 3 million households

Further expansion of 4G indoor coverage and 4G+ availability; launch of VoLTE

FMC

Continued strategic focus on the segment as one of the key drivers of future growth

Expanded Magenta1 offering

Expansion of number of households on FMC tariff plan; now stands at 11% of total households

4 4

2017 FINANCIAL RESULTS AND TARGETS*

Higher Hungarian SI/IT revenues driven by uptick in EU fund inflows

Higher equipment revenues reflect change in loyalty regulation

Increased visitor revenues following the change in EU roaming rates from July 2017

around HUF 580 bn

Positive impacts of higher revenues

Continued focus on cost optimization

Absence of one-off profit items (Origo and Infopark Building G sales)

around HUF 182 bn

Balanced distribution of investments throughout the year

Increased spending on fixed customer connections

Savings on efficiency projects realised (e.g. PSTN migration)

around HUF 85 bn

REVENUE

TARGETS

EBITDA

CAPEX

*Excluding Crnogorski Telekom financials and the transaction price received for the disposal of the majority ownership in Crnogorski Telekom

Significantly lower interest payments year-on-year

Better underlying EBITDA performance

Improved equipment and OPEX creditors vendor management

FCF around HUF 55 bn

HUF 610.9 bn (+6.4%)

HUF 185.7 bn (-1.0%)

HUF 86.2 bn (-11.8%)

RESULTS (change year-on-year)

HUF 58.4 bn (+6.4%)

5 5

HUNGARY

Revenue* EBITDA

150

145

140

0

-1.2

SI/IT

3.5

Fixed other

2.7

TV

0.7

Fixed BB

0.3

Fixed voice

-0.8

Mobile other

2.4

Mobile non-voice

3.0

Mobile voice

-0.8

+7.2%

4Q 2017

148.4

Energy 4Q 2016

138.5

0

38

40

+0.6%

4Q 2017

37.8

Other op. expenses (net)

0.9

Employee related

expenses

-1.9

Gross profit

1.2

4Q 2016

37.6

Mobile revenue increase driven by growth in mobile data usage and higher equipment sales revenues

Fixed line revenue up thanks to higher TV, broadband and equipment sales revenue

Increase in SI/IT revenue driven by strong demand for HW&SW delivery projects

Gross profit increase due to higher revenues and one-off decline in bad debt related to a change in impairment rates

Higher employee related expenses due to severance expenses and increased headcount

Savings in HR-related, material and marketing expenses

HUF bn HUF bn

*Mobile voice includes mobile retail and wholesale voice; Mobile non-voice includes data, and SMS; Mobile other includes equipment and other; Fixed other includes equipment, data, wholesale and other

6 6

HUNGARY – MOBILE

Mobile SIMs Mobile ARPU

1,000

6,000

4,000

3,000

0

2,000

5,000

35.5%

64.5%

40.8%

56.4%

Dec 2015

-3.1%

59.2%

43.6%

Dec 2017 Dec 2016

-0.7%

5,293 5,504 5,332 Prepaid

Postpaid

Postpaid

+1.0% 1,085

4,882

Prepaid 1,096

4,799

Blended 3,467

-1.7%

3,326 +4.2%

‘000 HUF

Mobile broadband usage developments ‘000

3,000

500

2,500

2,000

1,000

0

1,500

Dec 2017

2,888

32%

+18.0% +13.4%

Dec 2016

57%

2,547

43%

68%

Dec 2015

2,159

44%

56%

Non-4G

4G

Total mobile data subscriber development ‘000 GB/month

3,000,000

4,000,000

2,000,000

1,000,000

0

5,000,000

3% 2,230,964

57%

40%

74%

24% 2%

4Q 2015

4,354,819

2,898,868

4Q 2017

1%

4Q 2016

29.9%

50.2%

85%

14%

3G 4G 2G

Average data usage in Q4 2017 GB/month

0.1

0.8

2.0

4Q 2017

4Q 2016

7 7

HUNGARY – FIXED VOICE, BROADBAND AND TV

Fixed line customer number development

Fixed Voice, BB and TV ARPU developments

Fixed voice

3,557

2,502

2,340

Pay TV 3,325

Fixed BB

+3.4% 3,437

3,494

-6.5%

-1.8%

4Q 2016

4Q 2017

HUF

Fixed line multiplay residential ARPU developments

3Play

2Play 5,730

1Play

+3.7%

8,264

8,323

5,713

3,079

Blended 6,102

3,154

-0.7%

+0.3%

+2.4%

5,886 Annual churn

11%

15%

11%

8%

Fixed line multiplay residential subs. development

0

1,500

1,000

500

1,410

36%

34%

30%

39%

32%

Dec 2015

29% 28%

1,373

Dec 2016

28%

Dec 2017

1,400

44%

1Play

3Play

2Play

‘000

996 962 969

0

500

1,000

1,500

Dec 2015 Dec 2016

1,461

1,016 1,027

1,412 1,423

1,074

Dec 2017

‘000

PayTV

Broadbad

Voice

4Q 2017 4Q 2016

HUF

8 8

HUNGARY – SI/IT

SI/IT revenue developments

SI/IT revenue breakdown by vertical segments*

SI/IT revenue and gross profit of MT-Hungary Highlights

Strong increase in SI/IT revenues in 2017 as a result of increased EU fund inflows into Hungary

EU funded projects are hardware and software focused and relatively low margin

Infrastructure delivery projects serve as a starting point to developing long term customer relationships and as a foundation for IT service contracts

Revenue increase driven mainly by public sector infrastructure delivery projects

40,000

30,000

20,000

10,000

0

-12.0%

+15.7%

4Q 2017

7,587

26,021

4Q 2016

8,621

22,486

Gross profit

Revenue

HUF bn

HUF bn

*Based on IDC Research 2016, market shares based on revenues

38% 29% Gross margin

0

15

30

45

60

75

90

2016

27%

35%

39%

2015

22%

28%

50%

2017

25%

30%

45%

System Integration /

IT Application services

IT Infrastructure

services

Hardware & Software

w/o mobile devices

0 5 10 15 20 25 30

Healthcare

Education

Government

Transport

Utilities

Telco+Media

Prof. Services

Retail&WS

Manufacturing

Finance

HUF bn

Market Share*

11%

7%

7%

14%

8%

18%

24%

24%

3%

35%

9 9

MACEDONIA

Financials Mobile market

0

2,500,000

2,000,000

1,500,000

1,000,000

500,000

+0.2% +2.2%

Dec 2017

48.6%

51.4%

Dec 2016

50.2%

49.8%

Dec 2015

47.3%

28.0%

24.7% Telekom

One.Vip

VIP (T. Austria)

One (T. Slovenia)*

327

487

566

463

515

522

426

327

-8.0%

0.0%

+5.8%

-7.8%

KPIs (mobile/fixed voice/fixed BB/TV) Highlights

4Q 2017

4Q 2016

22,600

0

2,650

2,700

-3.4%

4Q 2017

2,592

-6

4Q 2016

2,684

Mobile

-87

Fixed SI/IT

154

800

1,000

900

700

0

-4.2%

Other expenses

(net)

4Q 2016

923

-193

884

Gross profit

4Q 2017

customer number QoQ change

ARPU (MKD)

Subscribers Revenues (MKD mn) EBITDA (MKD mn)

Increase in mobile data revenues offset by 30% cut in the mobile termination rate, which took effect in December 2016

Intensifying competition in the mobile segment put pressure on ARPU levels

Equipment sales supported by increased subsidy levels on promotional offers

Strong TV revenue growth partly mitigates competition induced revenue pressure in fixed voice and broadband

Temporary SI/IT revenue pressure due to delayed projects

EBITDA decline driven by gross profit pressure, partly counterbalanced by cost savings measures

-3%

+2%

+9%

-4%

10 10

2018 TARGETS

EBITDA around HUF 190 billion

CAPEX

REVENUE around HUF 600 billion HUF 610.9 billion

HUF 185.7 billion

HUF 86.2 billion

2017 RESULTS1

HUF 58.4 billion FCF around HUF 60 billion

1Excluding Crnogorski Telekom financials and the transaction price received for the disposal of the majority ownership in Crnogorski Telekom 2 Subject to the Board of Directors’ future proposal to the General Meeting, which will be made in due course, when all necessa ry information is available and all prerequisites to making such proposal are met

around HUF 90 billion

2017 RESULTS AND PUBLIC TARGETS FOR 2018

HUF 25 DPS HUF 252

APPENDIX

12 12

Total mobile market* Fixed voice market**

Fixed broadband market** TV market**

MARKET POSITIONS IN THE HUNGARIAN TELCO MARKET

3,000,000

9,000,000

6,000,000

12,000,000

0 Sep 2017

48.0%

24.6%

27.4%

-1.0%

Sep 2016

46.8%

25.0%

47.8%

27.9%

24.3%

28.2%

Sep 2015

3,000,000

2,500,000

2,000,000

1,000,000

500,000

1,500,000

0

37.7%

21.0%

14.5%

14.2%

14.9%

41.4%

22.1%

Dec 2015

9.4% 9.0% 15.8%

+5.3%

Dec 2017

37.6%

22.1%

16.3%

8.8%

15.3%

Dec 2016

4,000,000

2,000,000

0

3,000,000

1,000,000

28.9%

+1.0%

Dec 2017

14.3%

24.3% 25.1%

Dec 2016 Dec 2015

4.5%

27.4%

15.8% 16.7% 4.9%

25.5%

26.4% 26.9%

4.7%

27.6%

26.9%

0

1,000,000

500,000

2,000,000

1,500,000

3,500,000

3,000,000

2,500,000 12.8%

+0.8%

11.9% 11.1%

3.2%

12.7%

52.3%

Dec 2017

3.3%

56.0%

12.4%

17.0%

13.1%

Dec 2016

3.2%

54.0%

17.9% 19.3%

Dec 2015

Invitel

UPC

Other

MT

DIGI

DIGI

Invitel

MT

UPC

Other Subscribers

Subscribers

Subscribers

Subscribers

MT

Telenor

Vodafone

UPC

Invitel

Other

MT

DIGI

*Based on internal calculations from Vodafone Group and Telenor Group reports **Based on the total fixed voice channels/BB access/pay TV access market estimated by the National Media and Infocommunicat ions Authority (NMIA)

13 13

MAGYAR TELEKOM – CONSOLIDATED INCOME STATEMENT

HUF million Change

Mobile revenues 78,656 83,258 5.9%

Fixed line revenues 48,888 51,488 5.3%System Integration/Information Technology revenues 22,797 26,368 15.7%

Revenue from energy services 1,516 328 -78.4%Revenues 151,857 161,442 6.3%

Direct costs (62,781) (72,094) -14.8%

Employee-related expenses (20,513) (22,068) -7.6%Utility tax 0 0 n.a.

Depreciation and amortization (30,811) (27,839) 9.6%Other operating expenses (29,341) (27,514) 6.2%

Total operating expenses (143,446) (149,515) -4.2%

Other operating income 2,546 2,486 -2.4%Operating profit 10,957 14,413 31.5%

Net financial results (7,633) (4,701) 38.4%Share of associates' profits 32 159 396.9%

Profit before income tax 3,356 9,871 194.1%

Income tax expense 16,858 (4,708) 127.9%Profit for the period from continuing operations 20,214 5,163 -74.5%

Profit from discontinued operation 307 0 n.m.Total profit for the period 20,521 5,163 -74.8%

Q4 2016 Q4 2017

14 14

MAGYAR TELEKOM – CONSOLIDATED BALANCE SHEET

HUF million Change

Current assets 193,978 189,027 -2.6%Cash and cash equivalents 10,805 5,399 -50.0%

Other current financial assets 5,104 8,162 59.9%

Non current assets 981,551 920,634 -6.2%Property, plant and equipment - net 483,174 458,343 -5.1%

Intangible assets 260,165 229,174 -11.9%

Total assets 1,175,529 1,109,661 -5.6%

Equity 581,333 580,073 -0.2%

Current liabilites 277,561 226,581 -18.4%Financial liabilities to related parties 72,589 35,191 -51.5%

Other financial liabilities 22,600 8,757 -61.3%

Non current liabilites 316,635 303,007 -4.3%

Financial liabilities to related parties 247,179 231,646 -6.3%Other financial liabilities 50,098 47,608 -5.0%

Total equity and liabilites 1,175,529 1,109,661 -5.6%

Dec 31, 2016 Dec 31, 2017

15 15

MAGYAR TELEKOM – CONSOLIDATED CASH FLOW STATEMENT

*Free cash flow defined as Net cash generated from operating activities plus Net cash used in investing activities, adjusted with Proceeds from / Payments for other financial assets and Repayment of other financial liabilities

HUF million Change

Net cash generated from operating activities 154,825 157,388 1.7%

Investments in tangible and intangible assets (97,723) (86,197) 11.8%

Adjustments to cash purchases 1,327 (4,603) 446.9%

Purchase of subsidiaries and business units (128) (3,791) n.m.

Cash acquired through business combinations 0 0 n.a.

Payments for / proceeds from other financial assets - net (88) (2,867) n.m.

Proceeds from disposal of subsidiaries 3,484 1 n.m.

Proceeds from disposal of PPE and intangible assets 9,902 2,629 -73.4%

Payments for interests in associates and joint ventures 0 0 n.a.Net cash used in investing activities (83,226) (94,828) -13.9%

Dividends paid to shareholders and minority interest (21,312) (29,403) -38.0%

Net payments of loans and other borrowings (40,423) (67,732) -67.6%

Repayment of other financial liabilities (8,347) (7,485) 10.3%

Repurchase of treasury shares (550) (2,139) -288.9%

Net cash used in financing activities (70,632) (106,759) -51.1%

Free cash flow from continuing operation 57,297 58,440 2.0%

Dec 31, 2016 Dec 31, 2017

For further questions please contact the IR department:

In addition to figures prepared in accordance with IFRS, Magyar Telekom also presents non-GAAP financial performance measures, including, among others, EBITDA, EBITDA margin, and net debt. These non-GAAP measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with IFRS. Non-GAAP financial performance measures are not subject to IFRS or any other generally accepted accounting principles. Other companies may define these terms in different ways. For further information relevant to the interpretation of these terms, please refer to the chapter “Reconciliation of pro forma figures”, which is posted on Magyar Telekom’s Investor Relations webpage at www.telekom.hu/investor_relations.

Abbreviations: 3G: third generation, 4G: fourth generation, ARPU: average revenue per user, BB: broadband, IP: internet protocol, IT: information technology, LTE: long term evolution, MOU: minutes of use, MTR: mobile termination rate, NRA: National Regulatory Authority, POD: points of delivery, R/E: real estate, RPC: revenue producing customer, SAC: subscriber acquisition cost, SRC: subscriber retention cost, SI: system integration, SIM: subscriber identity module, SMB: small and medium businesses, TWM: Total Workforce Management, VAS: value added services, WS: wholesale

DISCLAIMER This investor presentation contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore should not have undue reliance placed upon them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors are described in, among other things, our Annual Reports for the year ended December 31, 2016 available on our website at http://www.telekom.hu.

Péter Bauer Head of Investor Relations Phone: +36 1 481-7676 e-mail: bauer.peter@telekom.hu

Rita Walfisch Investor Relations Manager Phone: +36 1 457-6084 e-mail: walfisch.rita@telekom.hu