Deutsche Telekom AG · XETR:DTE

Deutsche Telekom — Q1 2010 Earnings Presentation

23 slides from Deutsche Telekom's earnings presentation, May 12, 2010

  1. Slide 1: Q1/10 – Results Presentation

    Q1/10 – Results Presentation. Deutsche Telekom. May 12, 2010 1

  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, de

  3. Slide 3: Agenda

    Agenda. Deutsche Telekom Results Presentation. René Obermann CEO Timotheus Höttges CFO 3

  4. Slide 4: Q1 Highlights – Good start into the year

    Q1 Highlights – Good start into the year.  Improved EBITDA, strong growth in free cash flow and net income  Germany: Mobile continues to expand market leadership, outpacing competition. Excellent customer KPIs in German fixed, improved revenue trends, fixed margin impacted by one-timers.  SEE: 22

  5. Slide 5: Q1 financial overview: strong year on year improvement

    Q1 financial overview: strong year on year improvement. in € million Q1/09 Q1/10 Change in % Revenue 15,902 15,812 -0.6% Adj. EBITDA 4,812 4,890 +1.6% Adj. Net income 655 891 +36% Net income -1,124 767 n.m. Free cash flow 416 1,439 +249% Cash capex 2,611 1,934 -26% Adj. EPS (in €) 0.15 0.21 +40%  I

  6. Slide 6: Q1 financial overview: positive adj. EBITDA development

    Q1 financial overview: positive adj. EBITDA development. Revenue (€ million) Adj. EBITDA (€ million) -0.6% +1.6% 15,902 +513 15,812 4,812 +183 4,890 -83 -521 -12 -93 Q1/09 Acquisitions F/X Organic Q1/10 Q1/09 Acquisitions F/X Organic Q1/10 Revenue Q1/09 vs. Q1/10 (€ million) Adj. EBITDA Q1/09 vs. Q1

  7. 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

  8. Slide 8: Strategy update: growth areas

    Strategy update: growth areas. DT’s Growth Areas 2009 Q1/10 2015e Revenue in € bn. Mobile Internet 4 1.1 ≈10 Connected Home Double & triple play, Home Gateway and Communication Suite 5 1.4 ≈7 Online Consumer Services 0.8 0.2 2-3 T-Systems external revenue incl. Cloud Services 6.1 1.5 ≈8 Intelligent

  9. Slide 9: 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; 26,992 26,992 3G 3G sites, sites, up up 1,437 1,437 in in Q1 Q1 HSPA+ HSPA+ (21 (21 Mbps) Mbps) launched launched in in Philadelphia, Philadelphia, New New York, York, Ne

  10. Slide 10: USA: data ARPU growth further accelerating

    USA: data ARPU growth further accelerating. Service revenues (US$ million) Net adds Total in ‘000Contract net adds net adds 415 -2.5% 371 325 4,655 4,654 4,624 4,611 4,537 160 56 Net-adds total -77 -77 -140 -117 -118 Net-adds contract Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Adj.

  11. Slide 11: Germany: trend toward stabilization continues

    Germany: trend toward stabilization continues. Revenue (€ million) Adj. opex (€ million) -2.2% -3.6% 6,331 6,220 6,471 6,401 6,189 4,162 4,004 4,130 4,334 4,013 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Adj. EBITDA (€ million) Adj. EBITDA margin (in %) -2.7% EBITDA margin 39.0 39 3

  12. Slide 12: Germany fixed: adj. EBITDA margin w/o one timers stable

    Germany fixed: adj. EBITDA margin w/o one timers stable. Revenue (€ million)  Revenue trends improved with -4.1% in Q1/10.  One time effects affecting adjusted EBITDA: -4.1%  provisions for incentive payments -45 million, 4,724 4,711  provisions for legal risks approx. -24 million. 4,628 4,673 4

  13. Slide 13: Germany fixed: Excellent customer KPIs

    Germany fixed: Excellent customer KPIs. Broadband lines1 (million) Domestic broadband net add share by competitor Market Share 46 46 46 46 46 80 53 59 Cable 60 49 50 45 24.6 25.0 25.5 43 40 43 DSL competitors 23.8 24.2 2.0 2.2 2.5 2.6 2.7 40 40% DTAG 10.8 10.8 10.8 11.0 11.1 20 18 0 11.0 11.2 11.3 1

  14. Slide 14: Germany mobile: market leadership expanded, strong margin

    Germany mobile: market leadership expanded, strong margin, excellent revenue and operational KPI development. Service revenues (€ million)  Continued market outperform in Q1, driven by Service Revenue Growth of 3.3% , despite EUR -32 million impact +3.3% from MTR Regulation in Q1/10.  Contract net

  15. Slide 15: Europe: Significant yoy margin improvement in all businesses

    Europe: Significant yoy margin improvement in all businesses. Adj. EBITDA margin Q1/09 vs. Q1/10 (in %)  Europe with nearly stable revenues (-1%) MTR and roaming impact of approx. 6.4pp on revenue; adj. EBITDA up 42%, 21 48 38 supported by margin improvements in all operations. 46 14  NL: service

  16. Slide 16: SEE: solid margins maintained in a difficult economic environment

    SEE: solid margins maintained in a difficult economic environment. Adj. EBITDA margin Q1/09 vs. Q1/10 (in %)  22% revenue and 16% adj. EBITDA growth – supported by F/X and OTE. 46 47  Despite tough environment ongoing high EBITDA-margin of 39% 42 40 for Q1/10 through tight cost control 46 42  TV

  17. Slide 17: Systems Solutions: revenue returns to growth in Q1

    Systems Solutions: revenue returns to growth in Q1, efficiency bears fruit. Order Entry (€ mn) External Revenue (€ mn) Internatl. Revenue (€ mn) Adj. EBIT/margin (€ mn)1 +7.3% +2.4% +5.7% 2.2% 1.6% 0.7% 47 2,010 2,156 1,496 1,532 634 670 34 16 Q1/09 Q1/10 Q1/09 Q1/10 Q1/09 Q1/10 Q1/08 Q1/09 Q1/10 Ou

  18. Slide 18: Free cash flow: strong improvement yoy

    Free cash flow: strong improvement yoy. Free cash flow development per quarter (in € million) +246% 3,286 1,863 1,404 1,439 416 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Free cash flow development Q1/09 vs. Q1/10 (in € million) 226 1,439 677 416 120 Q1/09 Working Capex Other Q1/10 Capital improvements 18

  19. Slide 19: Cost base reduction of €0.5 billion, S4S contribution

    Cost base reduction of €0.5 billion, S4S contribution of €0.34 billion in 2010. Cost base development Q1/09 vs. Q1/10 Contribution (€ (€ billion) billion) by Business Unit (in € million) YTD 2010 Germany 41 -2.0% USA 65 0.34 -0.07 -0.16 Europe 85 11.45 -0.34 SEE - 11.22 Systems Solutions 92 GHS 56 D

  20. Slide 20: Group balance sheet: Solid ratios

    Group balance sheet: Solid ratios. in € billion 31/03/10 31/12/09 30/09/09 30/06/09 31/03/09 Balance sheet total 130.8 127.8 129.3 132.9 133.8 Shareholders’ equity 44.3 41.9 41.6 41.5 45.2 Net debt 40.4 40.9 42.4 45.0 42.8 Net debt/adj. EBITDA1 2.0 2.0 2.0 2.2 2.0 Gearing 0.9x 1.0x 1.0x 1.1x 0.9x Eq

  21. Slide 21: Guidance 2010 confirmed

    Guidance 20101 confirmed. Guidance assumes constant currencies and no further significant economic deterioration Adj. Group  Around Around €20 €20 billion billion (deconsolidation (deconsolidation impact impact of of T-Mobile T-Mobile UK UK approx. approx. €0.4 €0.4 to to 0.5 0.5 billion) billion)

  22. Slide 22: 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 22

  23. Slide 23: Thank you for your attention!

    For further questions please contact the IR department: Investor Relations, Bonn office Investor Relations, New York office Phone +49 228 181 - 8 88 80 Phone +1 212 424 2959 Fax +49 228 181 - 8 88 99 Phone +1 877 DT SHARE (toll-free) Fax +1 212 424 2977 E-Mail [email protected] E-Mail in

Deutsche Telekom — Q1 2010 Earnings Presentation on 6ix