Deutsche Telekom AG · XETR:DTE
Deutsche Telekom — Q2 2010 Earnings Presentation
26 slides from Deutsche Telekom's earnings presentation, Aug 5, 2010
Slide 1: Q2/10 – Results Presentation
Q2/10 – Results Presentation. Deutsche Telekom. August 5, 2010 1
Slide 2: Disclaimer
Disclaimer. This presentation contains forward-looking statements that reflect the current views of Deutsche Telekom management with respect to future events. These forward-looking statements include statements with regard to the expected development of revenue, earnings, profits from operations, de
Slide 3: Agenda
Agenda. Deutsche Telekom Results Presentation. René Obermann CEO Timotheus Höttges CFO 3
Slide 4: H1 2010 Highlights – Excellent execution
H1 2010 Highlights – Excellent execution. Well underway to achieve full year guidance: Excluding T-Mobile UK revenue stable year over year in H1 Adj. EBITDA at €9.9 billion in H1 Net income improved from -0.6 to €1.2 billion in H1 Excellent execution in Q2: Germany: Good progress in stab
Slide 5: Q2 financial overview: year on year improvement
Q2 financial overview: year on year improvement. Q2/09 Q2/10 Q2/09 Q2/10 change in % in € million reported reported excl. TM UK excl. TMUK excl. UK Revenue 16,238 15,531 15,386 15,531 0.9% Adj. EBITDA 5,258 5,012 5,107 5,012 -1.9% Adj. Net income 756 814 831 836 0.6% Net income 521 475 599 722 20.5%
Slide 6: Well underway to achieve our guidance
Well underway to achieve our guidance. Revenue (€ million) Adj. EBITDA (€ million) +0.9% -1.9% 15,386 +23 +399 -277 15,531 5,107 +7 +110 -212 5,012 Q2/09* Acquisitions F/X Organic Q2/10 Q2/09* Acquisitions F/X Organic Q2/10 Revenue Q2/09 vs. Q2/10 (€ million) Adj. EBITDA Q2/09 vs. Q2/10 (€ million)
Slide 7: Strategy Update: Fix – Transform - Innovate on track
Strategy Update: Fix – Transform - Innovate on track. Fix Transform Innovate Improve perfor- Leverage Build networks and Connected life Connected work mance of mobile- one company in processes for the across all screens with unique centric assets integrated assets gigabit society ICT solutions US
Slide 8: Strategy update: growth areas
Strategy update: growth areas. DT’s Growth Areas H1 2009 H1 2010 Change 2015e Revenue in € bn. Mobile Internet 1.6 2.1 0.5 27.9% ≈10 Non-voice revenues w/o SMS and messaging Connected Home Double & triple play, Home Gateway and Communication Suite 2.5 2.8 0.3 9.5% ≈7 Online Consumer Services 0.4 0.5
Slide 9: US: improved revenue trend and strong data ARPU
US: improved revenue trend and strong data ARPU – contract customer base growing again. Service revenues (US$ million) Net adds Total in ‘000Contract net adds net adds Net-adds total -1.1% 371 325 Net-adds contract 4,654 4,624 4,611 4,537 4,605 106 56 -77 -77 -140 -117 -118 -93 Q2/09 Q3/09 Q4/09 Q1/
Slide 10: Operational priorities for 2010: improve the US market position
Operational priorities for 2010: improve the US market position. 3G 3G coverage: coverage: 208 208 million million POPs; POPs; 27,581 27,581 3G3G sites, sites, up up 589 589 in in Q2 Q2 Network Network HSPA+ HSPA+ (21 (21 Mbps) Mbps) now now reaching reaching 85 85 million million POPs; POPs;
Slide 11: Germany: strong execution over the last 4 years
Germany: strong execution over the last 4 years. Customer base H1/06 H1/10 1,007k 687k Line losses 19% 46.2% Share of retail broadband & Competition IPTV as of total base H1/06 H1/10 14.6mn 17.2mn Mobile contract customers Broadband net add market share 5% 50% Mobile service revenue market s
Slide 12: Germany: strong execution over the last 2 years
Germany: strong execution over the last 2 years. YOY Change – Revenues & adj. EBITDA (%) Domestic market shares (%) Revenue adj. EBITDA service revenue market share mobile1 broadband market share +3 47 46 0 47 37 35 35 -7 FY/08 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2008 2009 2010 2008 2009
Slide 13: Germany Q2 2010: close to stable revenues and EBITDA growth
Germany Q2 2010: close to stable revenues and EBITDA growth. Revenue (€ million) Adj. opex (€ million) -0.4% -2.4% 6,220 6,471 6,401 6,189 6,197 4,004 4,130 4,334 4,013 3,907 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Adj. EBITDA (€ million) Adj. EBITDA margin (%) +2.4% 40 39.3 39.0
Slide 14: Germany fixed Q2 2010: continued top line recovery
Germany fixed Q2 2010: continued top line recovery. Revenue (€ million) Lowest revenue decline since 2008. Adjusted for settlement with Tele2 (affecting profitability -2.9% by 0.7pp) EBITDA margin improved. 4,628 4,711 4,673 Due to adj. net Opex savings of 2.4% yoy, adjusted 4,530 4,496 EBITDA
Slide 15: Germany fixed Q2 2010: excellent customer KPIs
Germany fixed Q2 2010: excellent customer KPIs. Broadband lines1 (million) Strong leadership in the broadband market: Stable Broadband retail market share of 47%; Market Share 47 47 47 47 47 Net add market share of 52.3% in Q2/10. YTD we saw Cable 25.3 a cumulated net add market share of 50.1%.
Slide 16: Germany mobile Q2 2010: sustained top line growth
Germany mobile Q2 2010: sustained top line growth and continued focus on profitability. Service revenues (€ million) Continued market outperformance in Q2, driven by service revenue growth of 6.1%. +6.1% Strong uptake of +9pp in smartphone share of handsets sold (32%) leading to strong data grow
Slide 17: Europe Q2 2010: stable margin in a challenging environment
Europe Q2 2010: stable margin in a challenging environment. Adj. EBITDA margin Q2/09 vs. Q2/10 (%) EU: TV customers up 31% to 2.1 million yoy. Net adds of 67,000 in Q2/10 31 3939 22 Regulatory effects: Revenues (- € 110 million) und 581) 49 EBITDA (- € 31million) 48 45 NL: Very good performanc
Slide 18: T-Mobile NL Q2 2010: Deep Dive – synergies work!
T-Mobile NL Q2 2010: Deep Dive – synergies work! Total OPEX development (€ million) Satisfying synergy run rate of more than € 100 million p.a. with a planned increase of 30% until 2012. -15% Integration: Lower cost, higher synergies and a shorter time period than planned show great success. 377
Slide 19: Update on OTE synergies: well on track
Update on OTE synergies: well on track Run rate of synergies (€ million) As of Q2 measures with an annual potential of €164 million are already implemented 164 The total run rate from the buying case will be overachieved one year earlier Opex 40% Current expectation is to achieve at least €215
Slide 20: Systems Solutions Q2 2010: accelerated revenue growth in Q2
Systems Solutions Q2 2010: accelerated revenue growth in Q2. Revenue (€ million) Revenue increase continues: Revenue growth of +2.9% up to €2,242 million +2.9% International revenue grew +7.9% up to €707 million 2,179 2,388 2,242 2,125 2,131 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 External Revenue (€ mill
Slide 21: Systems Solutions Q2 2010: profitability improvement driven by efficiency
Systems Solutions Q2 2010: profitability improvement driven by efficiency. Adj. EBIT / margin (€ million) Sequential increase of Q2 profitability EBIT +€18 million up to €76 million in Q2/10 3.4% 2.7% Adj. EBIT margin in Q2/10 improved to 3.4% from -0.3% 76 2.7% in Q2/09 58 -7 Q2/08 Q2/09 Q2/10
Slide 22: Free cash flow: strong improvement yoy – on track to achieve guidance
Free cash flow: strong improvement yoy – on track to achieve guidance. Free cash flow (before spectrum) development per quarter and half year (€ million) +6.1% +60.9% 2,928 1,404 1,489 1,820 Q2/09 Q2/10 H1/09 H1/10 Free cash flow (before spectrum) development Q2/09 vs. Q2/10 (€ million) 47 170 -118
Slide 23: Net cost reduction of €0.6 billion in H1
Net cost reduction of €0.6 billion in H1. Cost base development H1/09 vs. H1/10 (€ billion) Contribution by Business Unit (€ million) YtD 2010 -2.6% Germany 240 22.68 USA 193 0.33 Europe 210 0.22 Systems Solutions 247 22.10 0.98 GHS 93 0.51 DT Group 983 € 0.98 billion savings on corporate level w/
Slide 24: Balance sheet: Solid ratios
Balance sheet: Solid ratios in € billion 30/06/10 31/03/10 31/12/09 30/09/09 30/06/09 Balance sheet total 132.8 130.8 127.8 129.3 132.9 Shareholders’ equity 44.8 44.3 41.9 41.6 41.5 Net debt 46.3 40.4 40.9 42.4 45.0 Net debt/adj. EBITDA1 2.3 1.9 2.0 2.1 2.2 Gearing 1.0x 0.9x 1.0x 1.0x 1.1x Equity ra
Slide 25: Q&A
Q&A - Please press “*1” to ask a question. René Obermann CEO Timotheus Höttges CFO For remaining questions please contact the IR department after the call 25
Slide 26: Thank you for your attention!
For further questions please contact the IR department: Investor Investor Relations, Relations, Bonn Bonn office office Investor Investor Relations, Relations, New New York York office office Phone Phone +49 +49 228 228 181 181 -- 88 88 88 80 80 Phone Phone +1 +1 212 212 424 424 2959 2959 Fax Fax +4