Deutsche Telekom AG · XETR:DTE

Deutsche Telekom — Investor Day (February 2015)

24 slides from Deutsche Telekom's investor day presentation, Feb 26, 2015

  1. Slide 1: Deutsche Telekom Capital Markets Day 2015

    DEUTSCHE TELEKOM CAPITAL MARKETS DAY 2015 Bonn, February 26/27, 2015

  2. 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, dep

  3. Slide 3: Lead in business

    Lead in business Reinhard Clemens, Board member for T-Systems Group STRATEGY Cost and Portfolio Transformation Lead in business Superior Production Model Europe Germany T-Mobile USA Finance 3

  4. Slide 4: Key Messages

    KEY MESSAGES 1 DT Group “Lead in Business” initiative will tap the significant growth potential of the B2B market. 2 Best networks, scalable platforms, security and outstanding cloud experience differentiate us in the market. 3 TSI 2015+ as a radical paradigm shift:  focus on profitable growth area

  5. Slide 5: Market trends

    Market trends Group STRATEGY Cost and Portfolio Transformation Lead in business Superior Production Model Europe Germany T-Mobile USA Finance 5

  6. Slide 6: Customers expect our support in three major areas

    Customers expect our support in three Major Areas Cloud & IT Transformation  Guidance for the transformation of legacy IT into the cloud environment  SME’s demand easy to use cloud products with transparent pricing models digital Business Models  Interactions are increasingly based on digital exc

  7. Slide 7: The business customer market grows in all segments

    The Business customer Market grows in all segments EUROPEAN B2B MARKETS (ADDRESSABLE) Market volume ICT MARKET THEREOF: THEREOF: THEREOF: € bn EUROPEAN CLOUD MARKET DIGITAL BUSINESS1 INTERNATIONAL TC2 CAGR +2.9% CAGR +21.4% CAGR +24.8% CAGR +3.2% 219 56 195 37 32 33 26 13 2014 2018 2014 2018 2014 20

  8. Slide 8: Strategy Lead in Business 2015–2018

    Strategy Lead in Business 2015–2018 Group STRATEGY Cost and Portfolio Transformation Lead in business Superior Production Model Europe Germany T-Mobile USA Finance 8

  9. Slide 9: Our strategy

    our strategy LEADING EUROPEAN TELCO BEST INTEGRATED WIN WITH LEAD IN CUSTOMER IP NETWORKS PARTNERS BUSINESS EXPERIENCE TRANSFORM PORTFOLIO EVOLVE FINANCIAL TARGETS & EFFICIENCY ENCOURAGE LEADERSHIP & PERFORMANCE DEVELOPMENT Group STRATEGY Cost and Portfolio Transformation Lead in business Superior P

  10. Slide 10: Business customers represent a significant share of DT's revenues

    Business customers represent a significant share of DT’s REvenues REV. BY CUSTOMER SEGMENTS 2014 COMPETITIVE ENVIRONMENT (REV. 20141) DT Group Revenue: €62.7 bn € bn (rounded) Global Players Pan European Player 44 Offshore Specialists Wholesale 7% 28 US 36% 23% B2B 24 €14.5 bn 19 18 15 13 12 10 10 9

  11. Slide 11: High market potential especially in Mid-Market IT

    High market potential especially in Mid-Market IT BEST INTEGRATED WIN WITH LEAD IN CUSTOMER IP NETWORKS PARTNERS BUSINESS SPLIT OF TC AND IT REVENUES 2014 PER SEGMENT1 EXPERIENCE TSI MU TDG GK DT EU Multinational Companies T-Systems MU €6.0 bn €5.7 bn €2.8 bn MNC Business cust. Europe IT IT DT-Europ

  12. Slide 12: Group initiative 'lead in business' to boost B2B revenue in ICT

    Group initiative “lead in business” to boost the B2B revenue in ICT DT-EU GERMANY TSI MARKET UNIT Strengthen B2B in Europe: German Mid Market initiative: T-Systems 2015+:  Focus on Fixed + Mobile + Cloud service  Nationwide sales and service presence  Transformation program incl. new set-up offer

  13. Slide 13: Key differentiators of Deutsche Telekom Group

    Key differentiators of Deutsche Telekom Group Public Cloud Automotive Partnership with Best network in Leader: Salesforce, Cisco, GER ~1 mn cars on Microsoft Customer Cloud con. car platform Private & Public Platforms >1500 Security satisfaction at Cloud DC Connectivity Most trusted specialists 84pt

  14. Slide 14: T-Systems Market Unit

    T-Systems Market Unit Group STRATEGY Cost and Portfolio Transformation Lead in business Superior Production Model Europe Germany T-Mobile USA Finance 14

  15. Slide 15: What we promised in 2012 and what we achieved

    What we promised in 2012 and what we achieved – improved Ebit & all time high customer satisfaction AMBITION LEVEL 2015 DELIVERED/ ACHIEVEMENTS 2014 (FROM CMD 2012) ON TRACK  Above market growth (2% CAGR REVENUE GROWTH MU  €6.9 bn (€-0.9 bn) expected, starting from €7.8 bn) € bn Discontinuation De

  16. Slide 16: Change of revenue mix and increased profitability are key elements of TSI 2015+

    Change of Revenue Mix and Increased profitability are the Key Elements of TSI 2015+ TSI 2015+ TRANSFORMATION PROGRAM € bn T-SYSTEMS MARKET UNIT CAGR +3% 6.9 Grow Transform STOP Grow 36% 52%  Grow: Invest in non-labor intensive, virtualized services, e.g. M2M, Transform 54% platform business, Dyn. W

  17. Slide 17: Grow: initiatives have already realized significant growth

    Grow: initiatives Have Already Realized Grow Transform STOP Significant Growth SELECTED EXAMPLES GROWTH 2014 REV. AMBITION 2014–2018  Partnering for cloud related services (e.g. Salesforce partnership) +€300 mn Cloud Revenue  Private cloud offering: Dynamic Services Revenue 2014  Push new securit

  18. Slide 18: Transform: measures in classic ICT business improve profitability

    Transform: Measures in Classic ICT Grow Transform STOP Business Improve Profitablity SELECTED EXAMPLES RESULTS 2014 REV. AMBITION 2014–2018 Personnel  Reduction of workforce via automation, 6% MU total Restruc- workforce partnering and efficiency gains turing reduction (nat.) Revenue 2014 Consoli-

  19. Slide 19: Stop: discontinued activities in 2014

    Stop: Discontinued Activities in 2014 Grow Transform STOP SELECTED EXAMPLES RESULTS 2014 REV. AMBITION 2014–2018 ~500 FTE  Partnering for labor intensive services (i.e. Field Service) rather than keep own organization: Sale of IDS reduction: Field Revenue 2014 Portfolio Services €0.6 bn  Action pl

  20. Slide 20: Divisional set up as next step of our transformation

    Divisional Set up as Next step of Our Transformation TSI 2015+ T-SYSTEMS MARKET UNIT TC IT DIGITAL DIVISION DIVISION DIVISION Grow Transform STOP P. Molck-Ude F. Abolhassan A. Bronder Business objective: Business objective: Business objective:  New structural set up Grow international TC Grow dynam

  21. Slide 21: Financial outlook

    Financial outlook Group STRATEGY Cost and Portfolio Transformation Lead in business Superior Production Model Europe Germany T-Mobile USA Finance 21

  22. Slide 22: T-Systems: key levers for ROCE improvement addressed

    T-Systems: KEY LEVERS FOR ROCE IMPROVEMENT ADDRESSED REVENUE GROWTH (CASH) CAPEX € bn € bn CAGR >1% OPERATING ROCE CAGR -6% 1.2 8.6 ~0.9 2014 2018 2014 2018 MU CAGR: ~+3% Tel-IT CAGR: ~– 6% EBIT ADJ. SPECIAL FACTORS (EBITDA)1 € bn 2014 2018 € bn CAGR 43% CAGR -25% WACC 127 0.7 0.5 0.3 1.5 %2 6.0 % 2

  23. Slide 23: Mid term ambition level

    Mid term ambition level Group STRATEGY Cost and Portfolio Transformation Lead in business Superior Production Model Europe Germany T-Mobile USA Finance 23

  24. Slide 24: Mid term ambition level

    Mid term Ambition level MID TERM AMBITION LEVEL YEAR REVENUE TSI >1% CAGR expected 2014–2018 REVENUE MU Above market growth 3% CAGR expected 2014–2018 QUALITY MU Maintain TRI*M index above peer average at current levels of 84 points 2018 ADJ. EBIT MARGIN TSI Around 6% 2018 ADJ. EBIT MARGIN MU Around

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