Deutsche Telekom AG · XETR:DTE
Deutsche Telekom — Investor Day (2018)
37 slides from Deutsche Telekom's investor day presentation, 2018
Slide 1: Deutsche Telekom Capital Markets Day 2018
DEUTSCHE TELEKOM CAPITAL MARKETS DAY 2018
Slide 2: Germany
GERMANY DR. DIRK WOSSNER “a
Slide 3: Key Messages
Key Messages 01 Market with Stable growth The German telecommunications market has returned to stable growth and Telekom is uniquely positioned within this market 05 Lead in technology – mobile Leveraging our backhaul capacity and unprecedented site expansion while increasing speed and capacity with
Slide 4: Review 2014 – 2018
Review 2014 – 2018 GROUP STRATEGY Germany Systems Solutions Technology & Innovation T-Mobile US Europe Group Development Finance
Slide 5: Solid delivery on key promises
SOLID delivery on key promises Ambition level 2018 Achievements 2017 Delivered/on track Market #1 in FMC with MagentaEINS: 3 mn customers 3.6 mn customers #1 in Mobile service revenue: ≈ 1%1 CAGR #1 Mobile: +1.0%1 CAGR >36% market share > 36% market share #1 Broadband: ≈ +2% CAGR #1 Broa
Slide 6: Germany returned to growth in revenue & EBITDA
Germany returned to growth in revenue & EBITDA Revenue Adj. EBITDA € bn € bn CAGR +1.0%1 CAGR +0.8%4 Mobile service 6.7 6.7 Roaming effect 8.2 8.4 revenue 2014 2017 CAGR +1.1% 5.12 5.3 Broadband Net add revenue 0% 26% share 2014 2017 CAGR +1.2% Wholesale 3.33 3.5 Product revenue 2014 2017 2014 2017
Slide 7: Healthy and stable market environment enables growth
Healthy and stable market environment enables Growth Market insights and trends Mobile market back to growth… …and still positive broadband momentum Service revenue (market), Broadband revenue (market), Stable economy with positive outlook growth rate yoy, % growth rate yoy, % GDP +2.3% in 20181 3 3
Slide 8: We are uniquely positioned in the German telco market
We are uniquely positioned in the german telco market $40 BN 3.6 Mn #1 +20 %1 #1 Most valuable Lead in converged B2B market leader IT/cloud growth Winner of most telco brand in customers in Germany leader in SMB telco service tests Germany Telekom 18 mN ≈ 80 % 95 % Unlimited & streamon Market Leader
Slide 9: Strategy 2018 – 2021
Strategy 2018 – 2021 GROUP STRATEGY Germany Systems Solutions Technology & Innovation T-Mobile US Europe Group Development Finance
Slide 10: Germany contributing to Group strategy
Germany contributing to Group strategy Our strategy Ambition Germany 1 Lead in Customer Experience Grow Strengthen market leadership with stable top line growth in consumer market Lead In Customer Lead in Lead in Business experience technology Productivity 2 Lead in Business Productivity ONE CONNE
Slide 11: Lead in Customer Experience
1 Lead in Customer Experience Key growth drivers Convergence for our Expanding our converged household penetration with MagentaEINS Customers Mobile Continuing our successful more for more multi-brand approach Broadband/TV/Wholesale Leveraging our improved fiber network & TV proposition Leading Cust
Slide 12: Convergence: continue MagentaEINS success story
1 convergence: continue MagentaEINS success Story More for more strategy pays off Growing converged base with focus on value Cross-sell into base and add Secure high share of revenue in +€9.00 additional SIM cards/family converged offer Higher revenue per household offers Additional revenue per hous
Slide 13: Mobile: relevant market segments addressed
1 Mobile: relevant market segments addressed Multi-brand strategy with clear focus on premium segment Market value distribution1 Focus on defending leading position with innovative Premium services (e.g. StreamOn, Unlimited) Differentiate through handset portfolio and pricing Aim for fair-shar
Slide 14: Mobile: differentiation with innovation & more for more
1 mobile: differentiation with innovation & more for more Innovative more for more strategy Mobile service revenues Innovation Strategy € bn CAGR ≈+2%2 5G CAGR +1%1 3 +3.2% IOT growth YOY Q1/18 3 Magenta Mobil XL 3 L Worry free S M More 4 More 3 Consumer IoT solutions 3 allow ARPU uplift vs. M2M 201
Slide 15: Broadband: growth with FTTx coverage & speed
1 broadband: growth with fttx coverage & speed Broadband revenue growth drivers Broadband revenues Availability of ≥50 Mbit/s € bn BANDWIDTH INCREASE 95% CAGR +3-4%3 62% Higher speeds yield low churn and good 33% gross-add momentum CAGR +1.1%2 2016 2018e 2019e Broadband churn rate 2017, % 18% Increa
Slide 16: TV: content aggregator with smart investments
1 TV: content Aggregator with smart investments TDG is the only growing TV operator Our differentiators drive further growth TV net adds FY 2017, TV market share, k1 % Best content Lead in sports 260 aggregator content 12% 2021e Exclusive series: 3.7 mn views2 Most popular sports content: Smar
Slide 17: Wholesale: driving growth with fiber monetization
1 wholesale: driving growth with fiber monetization Stable Wholesale access base & ARPA growth Ambition Wholesale access base, Wholesale revenues mn € bn CAGR ≈ +2%3 Subscriber Growth CAGR +1% “Kontingentmodell” as reliable long-term model to 3.7 provide access to our fiber infrastructure 3.5 3.3
Slide 18: Service: towards a leading customer experience
1 service: towards a Leading Customer Experience Leading customer experience in products and service Ambition SMS/year for proactive customer Customer loyalty (TRI*M), Big data analytics for early fault detection interactions in points Proactive customer information in case of critical incidents
Slide 19: Lead in Business Productivity
2 Lead in Business Productivity B2B growth areas Connectivity & Infrastructure Mobile, fixed network, cloud IaaS and M2M Agile Workplace Smartphone, tablet, notebook and office software Lead in Business Applications Business Productivity Horizontal, vertical and cloud SaaS GROUP STRATEGY Germany Sys
Slide 20: Mittelstandsinitiative 2.0: secure ICT solutions for SMB
2 Mittelstandsinitiative 2.0: secure ICT solutions for SMB B2B market leadership driven by digitalization Ambition CAGR 2014–2017 € bn 6.5 Growth in mobile & broadband revenues +1% Mittelstands- initiative IT solutions: SAP & cloud infrastructure for SMB with 1.0 automatic provisioning +19% 6.0
Slide 21: Lead in Technology
3 Lead in Technology Drivers for network leadership Fiber Rollout FTTH/B rollout with intelligent area and technology mix within stable Capex envelope Cooperation & Co-Invest Models Increase of coverage with intelligent cooperation models Mobile Extension of leading mobile network position in reach
Slide 22: Fiber rollout: not many white spots left
3 Fiber rollout: not many white spots left TDG building the leading infrastructure in Germany Expected market broadband coverage end of 20192 Vectoring coverage Bandwidth Cable area Non-cable area 95% >>1 Gbit/s 15% Wholebuy DT and White Cable & FTTC area third party spots FTTH/B FTTC ≈ 80% FTTC/(Su
Slide 23: Fiber rollout: smart area and technology mix
3 Fiber rollout: smart area and technology mix Expected German broadband coverage end of 20191 Rollout priorities Bandwidth Cable area Non-cable area Connecting 80% of businesses in >>1 Gbit/s B2B areas business parks with fiber (by early 2020s) Cable & FTTC White 1 2 3 FTTC area area spots 1 Cable
Slide 24: Cooperations and co-invest models
3 cooperations and co-invest models Cooperation models Investment oriented & fair commercial models Joint rollout of fiber Joint ventures infrastructure with larger regional carriers (e.g. EWE) Renting complementary Central office Connection point Renting network elements infrastructure from reg
Slide 25: Fiber rollout: ramping up to 2 mn homes per year
3 Fiber rollout: ramping up to 2 mn homes per year Guardrails fiber rollout Smart Investing Smart Area & Technology Mix Smart Cooperation & Co-Invest Improving rollout efficiency Smart area mix between B2B Joint fiber rollout with regional players with trenching, data driven areas, competitive
Slide 26: Mobile: best network in Germany
3 Mobile: best network in Germany Reach of LTE network LTE Pop coverage 95% 98% 94% ≈ 80% mobile sites connected via fiber 27,000 mobile sites end of 2017 Best Winner of all major mobile Mobile Network network tests 2017 2018e 2019e GROUP STRATEGY Germany Systems Solutions Technology & Innovation T-
Slide 27: Mobile: extending mobile leadership position
3 Mobile: Extending Mobile leadership position Key priorities Ambition: Best customer experience 250 Unprecedented site expansion Network (≈ 2,000 additional sites p.a.) expansion Differentiation with customer driven 200 Average data rate (Mbit/s) rollout 150 Ambition 2021 Improve coverage of
Slide 28: Network innovation: forerunner in 5G technology
3 Network innovation: forerunner in 5g technology 5G enabling new speed and efficiency levels Pilot use cases with strong partners 1,000x Higher network capacity WTTH/FWA Trials successfully completed potential Capex savings potential through 10x synergetic rollout with FTTH Lower latency 10x Hi
Slide 29: Value transformation
4 value Transformation Key drivers for cost reduction Automation €300 mn Data analytics and smart processes Operational Excellence Predictive servicing and maintenance, €250 mn less complaints and process optimization -750 mn Indirect costs1 Platform Retirement 9.9 Retirement of platforms, investmen
Slide 30: Automation: bots for customer interactions and simplifying processes
4 Automation: bots for customer interactions and simplifying processes Key drivers for cost reduction Example: Field Service App Agile bot development to automize Robot transactions, repetitive tasks mn MY Orders Significant reduction of development time compared to Measurement traditional IT 20
Slide 31: Operational excellence: improving service processes
4 Operational excellence: improving service processes Reduction of complaints through efficiency measures and self-service Ambition Customer complaints per quarter past today -84% Mein Magenta App Data analytics Training of experts Dedicated product teams as central contract to solve occurring to so
Slide 32: Platform retirement: simplification and end of life
4 Platform Retirement: simplification and end of life Key drivers for cost reduction Example: BNG transformation Standardized production model for all access technologies Legacy architecture BNG migration and IP transformation for mass market will be finished in 2019 Retirement of multiple leg
Slide 33: Lean and agile organization
4 Lean and agile organization: accelerated decisions and improved collaboration Key areas of agile methods and organization Increased agility… Share of projects with agile/flexible delivery Consolidation of management functions and reduction of hierarchy 60% to foster accountability Introduction
Slide 34: Financial outlook
Financial outlook GROUP STRATEGY Germany Systems Solutions Technology & Innovation T-Mobile US Europe Group Development Finance
Slide 35: Financial Outlook
FINANCIAL Outlook Revenue growth Cash Contribution2 Cash Capex € bn € bn € bn CAGR >1%1 stable 21.9 4.2 CAGR +4–5% 3.9 2017 2021e 2017 2021e Adj. EBITDA Special factors (Cash) € bn € bn stable CAGR +2–2.5%1 0.3 8.4 2017 2021e 2017 2021e 2017 2021e 1 Average growth rate not adjusted for IFRS 15 impac
Slide 36: Mid term ambition level
Mid term ambition level GROUP STRATEGY Germany Systems Solutions Technology & Innovation T-Mobile US Europe Group Development Finance
Slide 37: Mid term ambition level
MID TERM AMBITION level Mid term ambition level Year LEAD IN CUSTOMER EXPERIENCE #1 in Mobile service revenue: CAGR ≈ +2%1 2017–2021e #1 Broadband revenue: CAGR +3–4%2 2017–2021e MagentaEINS share of broadband households: ≈ 30% 2021e LEAD IN BUSINESS PRODUCTIVITY Growing B2B revenues by +€50