Deutsche Telekom Ag · XETR:DTE

Deutsche Telekom — Q3 2011 Earnings Presentation

22 slides from Deutsche Telekom's earnings presentation, Nov 10, 2011

  1. Slide 1: Q3/11 – Results Presentation

    Q3/11 – Results Presentation. Deutsche Telekom. November 10, 2011

  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: Q3 2011: Solid quarter – 75% of full year guidance achieved

    Q3 2011: Solid quarter – 75% of full year guidance achieved.  Group revenue of €11.0 billion (-4.1%) and adj. EBITDA of €3.9 billion (-2.7%)  FCF at €1.7 billion in Q3/11 well on track to achieve full year target  Adj. net income increases 49% to €1.3 billion from €0.9 billion in Q3/10  Save for

  5. Slide 5: Q3/11 Overview. Continuing and discontinued operations

    Q3/11 Overview. Continuing and discontinued operations. Revenue (€ million) Continuing operations Adj. EBITDA (€ million) Continuing operations -4.1% -2.7% 11,461 10,990 3,992 3,884 -17 -454 -3 -105 Q3/10 F/X Organic Q3/11 Q3/10 F/X Organic Q3/11 Revenue Q3/10 vs. Q3/11 (€ million) Adj. EBITDA Q3/10

  6. Slide 6: Q3/11 Key financials

    Q3/11 Key financials. (€ million) Q3/10 Q3/11 change in % Revenue from Continuing operations 11,461 10,990 -4.1%  Revenue incl. the US 15,601 14,670 -6.0% Adj. EBITDA from Continuing operations 3,992 3,884 -2.7%  Adj. EBITDA incl. the US 5,021 4,907 -2.3% Adj. net profit 867 1,291 48.9% Net profit

  7. Slide 7: 2011 guidance reiterated

    2011 guidance reiterated. FY Guidance adj. EBITDA and achievement after 9M  As a result of the sale of T-Mobile US guidance of “around 19.1 billion” split into:  Discontinued operations: US with stable EBITDA over FY 2010 of around US$5.5 billion or around €4.2 billion based on F/X-rate of 1.33 (a

  8. Slide 8: US: cost discipline supports margin

    US: cost discipline supports margin. Service revenues (US$ million) Net adds (‘000)1 Contract -1.8% Prepaid 283 312 4,607 4,615 4,556 4,543 4,525 190 228 231 -54 -186 -251 -281 -382 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Adj. EBITDA (US$ million) and adj. EBITDA margin ARPU deve

  9. Slide 9: Germany: strong cost discipline results in further improved EBITDA margin

    Germany: strong cost discipline results in further improved EBITDA margin. Revenue (€ million)1 Adj. EBITDA (€ million) -1.3% -5.0% 6,317 6,442 5,991 5,989 6,004 2,523 2,358 2,384 2,439 2,490 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Adj. opex (€ million) Adj. EBITDA margin (in %)

  10. Slide 10: Germany revenue: continued focus on data & TV opportunity

    Germany revenue: continued focus on data & TV opportunity. Fixed network revenues (€ million)1 Mobile service revenue2 (€ million) -5.1% +0.1% 4,242 4,376 4,063 4,045 4,027 1,813 1,815 1,784 1,747 1,767 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 2play + 3play customers (million) Mob

  11. Slide 11: Germany: #1 in broadband and mobile service revenue

    Germany: #1 in broadband and mobile service revenue. Broadband access lines market share1 (%)  52% of the domestic fixed customer base of 23.7million are broadband customers 46.3 46.0 45.8 45.7 45.5  Line losses almost 40% below last year: 323k (525k in Q3/10) 25.6 26.0 26.4 26.6 26.8 2.7 2.8 3.1

  12. Slide 12: Germany: initiatives in mobile and fixed with strong achievements

    Germany: initiatives in mobile and fixed with strong achievements. Successful promotion of „Special Call&Surf Mobil“ New segments successfully targeted via Service Provider Share of contract Gross Adds consumer Promotion price until Sep. 14th Net Adds contract in k. 466 DT Service Provider 74 +13PP

  13. Slide 13: Europe – growth in key market KPIs

    Europe – growth in key market KPIs. TV customer (million) Smartphone share (%)1 +19% +67% 2.59 2.62 50% 2.21 2.35 2.41 46% 43% 34% 30% 0.65 0.71 0.73 0.77 0.57 IPTV +35% IPTV +35% Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Broadband accesses (million)2 Mobile contract subscriber (mi

  14. Slide 14: Europe – integrated markets: focus on robust margins in difficult environment

    Europe – integrated markets: focus on robust margins in difficult environment. Revenue (€ million) Greece: -5% -1%  Financials show signs of progress: both revenue and adj. -6% -7% 979 930 EBITDA trends improved compared to Q1 and Q2 314 296 491 486  Recent agreement with unions on working hours a

  15. Slide 15: Europe – mobile centric: focus on profitability

    Europe – mobile centric: focus on profitability. Revenue (€ million) Poland: -7% +1% -8% -8%  Underlying revenue -1.1%. Adj. EBITDA underlying +5% 472 438 450 455  Rebranding with positive impact on contract net adds 296 272 254 234 Netherlands:  Underlying revenue +1.1% and adj. EBITDA +32.7%. P

  16. Slide 16: Systems Solutions: revenue growth of 2.3% in Q3/11

    Systems Solutions: revenue growth of 2.3% in Q3/11. Revenue (€ million)  Revenue increase yoy of +2.3% up to €2,256 million  External revenues up +2.1% to €1,587 million +2.3%  Strong order entry vs. Q3/10 of €1,926 million due to 2,479 2,276 renewals and additional business in customer base (e.g

  17. Slide 17: Systems Solutions: Save for Service cost savings

    Systems Solutions : Save for Service cost savings. Adj. EBITDA/margin Adj. EBIT/margin  Adj. EBITDA at €204 million with a margin of 9.0%  Adj. EBIT margin in Q3/11 down to 2.4% from 3.3% in Q3/10  Ongoing impact of higher opex related to big deal execution and quality assurance 10.1% 9.0% 3.3% 8

  18. Slide 18: Free cash flow: full year guidance confirmed

    Free cash flow: full year guidance confirmed. Development of free cash flow Q3/11 vs. Q3/10 (€ million)  Guidance for cash flow confirmed  Q3 cash flow impacted by higher capex, esp. in Germany, and interest payments  We expect reversal of capex trends in Q4 which will support free cash flow gene

  19. Slide 19: Q3 2011 Save for Service: 3.9 billion out of 4.2 achieved

    Q3 2011 Save for Service: 3.9 billion out of 4.2 achieved. Cost base development 9M/10 vs. 9M/11 (€ billion) Contribution Q1-Q3/2011 -7.4% by Business Unit (€ million) Realized 33.05 Germany 424 0.60 USA 287 0.25 Europe 247 1.47 Systems Solutions 476 GHS 34 0.64 DT Group 1.468 30.59  Total run rate

  20. Slide 20: Ongoing solid balance sheet ratios and improved rating outlook

    Ongoing solid balance sheet ratios and improved rating outlook. in € billion 30/09/2011 30/06/2011 31/03/2011 31/12/2010 30/09/2010 Balance sheet total 124.6 123.1 123.2 127.8 127.8 Shareholders’ equity 40.7 39.3 42.7 43.0 43.4 Net debt 43.4 43.3 41.8 42.3 43.7 Net debt/adj. EBITDA1 2.3 2.3 2.2 2.2

  21. Slide 21: Q&A - Please press *1 to ask a question

    Q&A - Please press “*1” to ask a question. René Obermann CEO Timotheus Höttges CFO Niek Jan van Damme CEO Germany For remaining questions please contact the IR department after the call. 21

  22. Slide 22: 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

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