Deutsche Telekom Ag · XETR:DTE
Deutsche Telekom — Investor Day (November 2012)
28 slides from Deutsche Telekom's investor day presentation, November 2012
Slide 1: Deutsche Telekom Capital Markets Day 2012: Group Strategy & Outlook
DEUTSCHE TELEKOM CAPITAL MARKETS DAY 2012 GROUP STRATEGY & OUTLOOK RENÉ OBERMANN
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: Safe Harbor Statement
SAFE HARBOR STATEMENT. Additional Information and Where to Find It This document also relates to a proposed transaction between MetroPCS Communications, Inc. (“MetroPCS”) and Deutsche Telekom AG (“Deutsche Telekom”) in connection with T-Mobile USA, Inc. (“T-Mobile”). The proposed transaction will be
Slide 4: Key Messages
KEY MESSAGES. 1 Key objectives achieved against industry trend – 2012 guidance reiterated 2 Significant investments in Germany and the US 3 Agreement with Apple for T-Mobile US 4 Chance to return to modest growth by 2014 driven by revenue stabilization in Germany in 2014 return to underlying
Slide 5: Review 2010 – 2012
REVIEW 2010 – 2012
Slide 6: From Telco to Telco Plus
FROM TELCO TO TELCO PLUS. Telco Telco Plus 2010 2012 2015 Strategy implementation on track Industry situation Finance strategy & 3 yr dividend plan Telco Plus strategy and strategic executed objectives 2013 – 2015 6
Slide 7: 2010 – 2012: Achievements
2010 – 2012: ACHIEVEMENTS. Valuation increase €1.7 bn of DT’s “One Company” in Germany and stake – good operational development 3 major markets Improved position after AT&T deal €4.5 bn Save for Service savings FIX TRANSFORM break-up achieved one year ahead of plan Broadband share kept broadly stabl
Slide 8: 2010 – 2012: TMUS Building Challenger Position
2010 – 2012: TMUS BUILDING CHALLENGER POSITION. AT&T NETWORK VERIZON TOWER MetroPCS BREAK-UP MODERNIZATION SPECTRUM SWAP TRANSACTION COMBINATION AWS spectrum and $4 bn network Enable more $2.5 bn proceeds Creating the leading $3 bn cash investment efficient network Maintaining value carr
Slide 9: 2010 – 2012: Performance Towards Ambition Level
2010 – 2012: PERFORMANCE TOWARDS AMBITION LEVEL. GROUP AMBITION LEVEL 2012 (COMMUNICATED IN 2010) GROUP WIDE TV CUSTOMERS 5.5 – 6.0 mn GROUP WIDE MOBILE CUSTOMERS >140 mn GROUP WIDE FIXED BROADBAND RETAIL CUSTOMERS >18 mn >€6 bn mobile internet revenues REVENUES German revenues stabilized SAVE FOR S
Slide 10: 2010 – 2012: DT With Above Average Shareholder Returns
2010 – 2012: DT WITH ABOVE AVERAGE SHAREHOLDER RETURNS. TSR1 EV/EBITDA2,3 5YR CDS (BPS)3 RATINGS3,4 SINCE 2010 2010 2012 2010 2012 2010 2012 37.3% 4.7x 4.8x 64 68 A- A- 13.5% 4.8x 4.7x 74 91 BBB+ BBB+ -21.6% 5.1x 3.8x 119 292 BBB BBB -27.0% 6.1x 4.7x 91 264 A- BBB -34.0% 5.3x 3.7x 46 124 A- A- -53.1
Slide 11: Market & Trends
MARKET & TRENDS
Slide 12: We Invest for Long Term Growth
WE INVEST FOR LONG TERM GROWTH. Telco Telco Plus 2010 2012 2015 Strategy implementation on track Industry situation Finance strategy & 3 yr dividend plan Telco Plus strategy and strategic executed objectives 2013 – 2015 12
Slide 13: Industry Situation and Major Trends
INDUSTRY SITUATION AND MAJOR TRENDS. PRESSURES OPPORTUNITIES TOUGH ECONOMIC SATURATED MARKETS, IP TRANSFORMATION CHANGING REGULATION GROWTH MARKETS SITUATION CONTINUED PRICE PRESSURE Virtual PBX Efficient QoS Networks 13
Slide 14: Regulation: New Prospects for Higher Investment Levels
REGULATION: NEW PROSPECTS FOR HIGHER INVESTMENT LEVELS. NEW EU REGULATORY POLICY PROPOSAL1 IMPLICATION FOR GERMANY Reliable regulatory framework until 2020 ULL charges stable until 2020 No cost regulation for optical fiber/NGA networks if sufficient competition and non-discrimination Encouragi
Slide 15: Market Projections
MARKET PROJECTIONS. TELECOMMUNICATION INFORMATION & COMMUNICATIONS TECHNOLOGY € bn € bn 242 6312 217 31 3% Connected Home1 28 158 525 43 18% 84 Mobile Internet 18% Cloud Services & 82 Virtualized IT Traditional 146 -3% 473 communication Conventional 2% 127 ICT 443 2011 2015 2011 2015 p.a. Growth mar
Slide 16: Transformation of Revenue Mix
TRANSFORMATION OF REVENUE MIX. DEUTSCHE TELEKOM GROWTH AREAS AND AMBITION 2015 REVENUE MIX DT GROUP MOBILE INTERNET ≈€10 bn 100% 24% CONNECTED HOME ≈€7 bn 40 – 45% ONLINE CONSUMER SERVICES ≈€2 bn T-SYSTEMS EXTERNAL (INCL. CLOUD) ≈€7 bn 76% 55 – 60% INTELLIGENT NETWORKS ≈€1 bn 20101 2015 Growth areas
Slide 17: Strategy 2013 – 2015
STRATEGY 2013 – 2015
Slide 18: We Invest for Long Term Growth
WE INVEST FOR LONG TERM GROWTH. Telco Telco Plus 2010 2012 2015 Strategy implementation on track Industry situation Finance strategy & 3 yr dividend plan Telco Plus strategy and strategic executed objectives 2013 – 2015 18
Slide 19: Strategic Objectives 2013 – 2015 per Segment
STRATEGIC OBJECTIVES 2013 – 2015 PER SEGMENT. GERMANY EUROPE USA DBU T-SYSTEMS Market Unit: Stabilize revenues Return to underlying Reinvigorate growth Generate Profitable growth in 2014 growth in 2014 double-digit growth Telekom IT: Spend reduction 19
Slide 20: Telco Plus
TELCO PLUS. Seamless Best-in-class connectivity More innovation Secure cloud customer for the by cooperation solutions experience Gigabit Society Corporate Innovation Priorities Dynamic Cloud Services INNOVATE Intelligent Networks SMB Business Marketplace Continued efficiency improvement, target €2
Slide 21: Integrated Network Strategy Germany
INTEGRATED NETWORK STRATEGY GERMANY. 1 LTE rollout + 2 Fiber rollout ge LTE: 85% coverage in 2016 d c overa + a n Fiber: around 65% coverage es t br oad b in 2016 with an option B towards 80% (subject to 3 Vectoring public co-funding) + Hybrid Devices LTE DSL 4 Hybrid access 21
Slide 22: Network Modernization US + Apple Partnership
NETWORK MODERNIZATION US + APPLE PARTNERSHIP. NETWORK MODERNIZATION PROGRESSING RAPIDLY APPLE PARTNERSHIP mn population 225 225 225 4G LTE 200 200 4G HSPA PCS 170 4G HSPA AWS TMUS has entered into an 100 100 agreement with Apple to bring products to market together next year 0 TMUS 2013 financia
Slide 23: Financial Outlook
FINANCIAL OUTLOOK
Slide 24: Investing into DT's Future – Capex and FCF Profiles
INVESTING INTO DT’S FUTURE – CAPEX AND FCF PROFILES. CAPEX PROFILE 2012 – 2015 Integrated Network Strategy € bn +1.2 Gross Capex FTTC/Vectoring: ≈€6 bn 9.8 9.5 Capex Germany: 8.3 2013: ≈€3.4 bn 2014: ≈€4.1 bn 2015: ≈€4.3 bn 2012e 2013e 2015e Network modernization & PCS integration FCF PROF
Slide 25: Investing into DT's Future – Financial Summary
INVESTING INTO DT’S FUTURE – FINANCIAL SUMMARY. EQUITY TELCO PLUS DEBT New Shareholder Undisputed access Remuneration policy COMPETE TRANSFORM INNOVATE to debt capital markets Dividend1 Rating: A-/BBB FY 2012: €0.70 VALUE CREATION Net debt/adj. EBITDA: FY 2013: €0.50 2-2.5x EFFICIENCY MA
Slide 26: 2013 Guidance & Mid Term Ambition
2013 GUIDANCE & MID TERM AMBITION
Slide 27: DT Group Guidance 2013 and Mid Term Ambition
DT GROUP GUIDANCE 2013 AND MID TERM AMBITION. GUIDANCE 2013 MID TERM AMBITION (EXCL./INCL. PCS) (INCL. PCS) GROUP REVENUES Growing 2014 GROUP Adj. EBITDA ≈€17.4 bn/≈€18.4 bn Growing 2014 GROUP FCF ≈€5 bn/≈€5 bn ≈€6 bn 2015 GROUP Adj. EPS Improvement to ≈€0.8 2015 GROUP ROCE Improvement to ≈5.5% 2015
Slide 28: Key Messages
KEY MESSAGES. 1 Key objectives achieved against industry trend – 2012 guidance reiterated 2 Significant investments in Germany and the US 3 Agreement with Apple for T-Mobile US 4 Chance to return to modest growth by 2014 driven by revenue stabilization in Germany in 2014 return to underlying