Deutsche Telekom AG · XETR:DTE
Deutsche Telekom — Investor Day (March 2010)
36 slides from Deutsche Telekom's investor day presentation, Mar 17, 2010
Slide 1: Deutsche Telekom Investor Day. Germany.
Deutsche Telekom Investor Day. Germany. Niek Jan van Damme, Christian P. Illek, Thomas Dannenfeldt March 17, 2010
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: Key achievements 2007 – 2009
Key achievements 2007 – 2009 3
Slide 4: Fixed line: goals achieved – a reliable partner
Fixed line: goals achieved – a reliable partner. 2010 20081 20091 Outlook (Guidance Investor Day 2008) Adj. EBITDA - 3.7 % -2.4% Stabilize EBITDA Ongoing cost reduction Adj. Opex € -1.34 bn € -0.94 bn with higher net savings Revenue -7.2% -5.3% Stabilize revenue Broad- Net adds 1.6 mn 0.9 mn >45%
Slide 5: Fixed line: we improved continuously …
Fixed line: we improved continuously … Adj. EBITDA1 (€ bn and margin in %) Revenue1 (€ bn) 33.3% -7% 32.4% 31.2% 21.3 -5% 6.6 6.4 6.2 19.8 18.7 2007 2008 2009 2007 2008 2009 1 Effective July 1, 2009 the fixed-network figures include PASM (Power and Air Condition Solution Management GmbH & Co. KG) wi
Slide 6: … and lowered our cost base by € 2.3bn
… and lowered our cost base by € 2.3bn. Adj. Opex1 in € bn Cost cutting achievements 15.3 € 2.3bn net cost reduction since 2007 due to: Rental, maintenance, energy costs Termination -15% Less 3rd party contracts (esp. call centers) Personnel 13.0 IT 2007 2009 1 Effective July 1, 2009 the f
Slide 7: Within German broadband market we are the clear #1...
Within German broadband market we are the clear #1... BB-Net Adds market (mn) & Net Add Share/ Total Broadband Net Adds 2007 – 20091 Market Share DT Market 47 % (mn) 46 % 46 % 46 % share 43 % 45 % 45 % 4.4 Net-Add Share 4.4 4.6 1.9 1.9 17 % 3.5 2.0 0.7 0.7 2006 2007 2008 2009 Entertain customers 0.0
Slide 8: … whereas our customer base moved to premium value packages …
… whereas our customer base moved to premium value packages … Net Add Share of SP/DP/TP-packages1 Revenue per access Increasing revenue per access due to successful up-selling: TP 2% Total monthly Ø revenue per access 2007-20092: 8% 35% +7% DP 66% 61% 25.1 47% 23.6 SP 33% 31% 18% 2007 2008 2009 2007
Slide 9: ... and our customer service today is superior to our competitors
... and our customer service today is superior to our competitors. Less complaints... ...T-Home customers‘ loyalty superior to competitors Number of complaints1 BB Retail customers: -51% Delta TRI*M index vs. competitors (pts.) 5 2 Q4/07 Q4/08 Q4/09 0 ...higher network stability... -5 -6 -5 Mean T
Slide 10: Our fixed line performance is excellent compared to our peers
Our fixed line performance is excellent compared to our peers. PSTN Access Lines – yoy Growth BB Access Lines – yoy Growth IPTV – yoy Growth 2008/20091 2008/20091 2008/20091 8.3% 129.0% 7.5% 7.0% 44.6% Ø6 4.4% -5.4% 3.6% Ø 26 -7.3% -7.3% -7.2% 19.9% Ø -8 14.7% -10.8% = average of peers w/o Deutsch
Slide 11: T-Mobile Germany achieved top and bottom line targets ...
T-Mobile Germany achieved top and bottom line targets ... 2007 up to 2009 Adj. EBITDA Exceed analysts‘ expectations Save for Service Reduction of non-commercial Opex Stabilizing market share Win and strengthening of market leadership Service Revenues Top performer in Europe Data Revenues
Slide 12: … expanded the service revenue market leadership ...
… expanded the service revenue market leadership ... Development of Top 5 Incumbents Service Revenues TMD vs. VOD in National Markets T-Mobile Delta Market Share Service Revenues last 4 yrs. (pp) 36.2 Vodafone 0.4 0.4 35.8 35.8 35.9 35.4 35.2 Advantage Advantage 34.9 about about 2pp 2pp 34.9 -1.3 34
Slide 13: … and improved data revenues, supported by increasing smartphone penetration
... and improved data revenues, supported by increasing smartphone penetration. Smartphone Share of new Contract Customers Growth rates Data Revenues (w/o Service Provider) Growth yoy (%) ≈ x3 Market w/o TMD 46% 46% TMD 43% 33% 33% 30% 24% 2007 2008 2009 2007 2009 For T-Mobile Deutschland GmbH Data
Slide 14: Through tight cost control T-Mobile Germany outperformed EBITDA analyst consensus
Through tight cost control T-Mobile Germany outperformed EBITDA analyst consensus. Non Commercial Opex TMD (2007 base) Analyst Consensus vs. TMD Actual Adj. EBITDA (€ bn) Analyst Consensus TMD TMD actual 100% 3.1 95% 90% 3.0 2.9 0% 0.0 2007 2008 2009 2007 2008 2009 For T-Mobile Deutschland GmbH Anal
Slide 15: “Telekom Deutschland” is an important move for the future
“Telekom Deutschland” is an important move for the future. 2005/2006 2007/2008 2009 2010 Business T-Online One Sales & “Telekom Customers Integration One Service Deutschland” Integration One integrated sales, Competitive offerings, improvement of Convergent offerings, BB market share Increased custo
Slide 16: Strategy Outlook
Strategy Outlook 16
Slide 17: Our core beliefs are the guidelines for our strategy
Our core beliefs are the guidelines for our strategy. Quality Delight customers with top quality – secure price premium Networks Increase bandwidth – invest in network roll-out Transform “Entertain” to an infotainment platform – Products realize growth opportunities Offer best customer service – Cus
Slide 18: The strategy for Germany underlines the group strategy
The strategy for Germany underlines the group strategy. New Group Strategy: Fix – Transform – Innovate Improve Build networks Leverage Connected Life Connected Work performance of and processes One Company in across all with unique mobile-centric for the integrated assets screens ICT solutions asset
Slide 19: Quality leader through superior orchestration of networks, products and customer service
Quality leader through superior orchestration of networks, products and customer service. Connected Life (Consumer) Connected Work (Business) Sales & Service One consistent user interface Similar user experience at all channels Target group oriented sales structures Optimized, regional customer
Slide 20: Networks: Growing traffic demands require new network technologies
Networks: Growing traffic demands require new network technologies. Global Internet Traffic Forecast1 Network Technologies >32 FTTH Exabytes/month 35 Internet Video CAGR 30 File Sharing ≈25 25 Web/Email >40% Fixed 20 Others ≈19 VDSL 15 ≈13 10 8.8 6.0 5 DSL 0 2008 2009 2010 2011 2012 2013 2.4 >2 LTE
Slide 21: Networks: Buildout will be value optimized
Networks: Buildout will be value optimized. € Unit costs Value optimal mix of fiber, copper and mobile in hybrid network structures Fixed Access: Homes passed/coverage 2012 DSL: >97% Price VDSL: >31% Up to 10% FTTH2 Attractiveness1 Mobile Access: Pop coverage 2012 2G: >99 % EDGE: >99%
Slide 22: Consumer lock-in through continuous buildout of integrated platforms …
Consumer lock-in through continuous buildout of integrated voice/data and application platforms … Connected Life Connected Community Connected Entertain Connected Home Integrated Entertainment Platforms Integrated Home Management Integrated Voice/Data Platform across all Screens across Screens Examp
Slide 23: ... like our integrated IPTV program manager …
... like our integrated IPTV program manager … Program Manager – Access Across Three Screens Highlights Programming the set top box via web program manager or while on the road TV Guide with convenient search function TV and personal favorite lists mobile Notification and reminder functionalit
Slide 24: … and innovative cloud services for business customers
… and innovative cloud services for business customers. Connected Work from the Cloud Customer Perspective on Connected Work in One Package Deutschland LAN comprising IP-Access –10 Mbit/s sym. with QoS, nationwide Hosted PBX Incl. IT: control-center for Connected Work, Net based address book
Slide 25: On top we differentiate ourselves through superior customer service
On top we differentiate ourselves through superior customer service. On Top Services (comes with additional service fees) IT On Site Service Flat fee On Site Service Customer Premises Equipment service package Service Differentiation (based on customer value/lifecycle status) Top Service for
Slide 26: How to tackle cable
How to tackle cable. Network VDSL sales push (Entertain and Double Play) Value based fiber rollout (up to 10% FTTH1) Value based white spot rollout (fixed/mobile) Service Product Best basic service experience Integrated fixed/mobile within industry platform approach Service packages tail
Slide 27: Financial Outlook
Financial Outlook 27
Slide 28: Based on achievements and a clear strategy we will strengthen the key drivers
Based on achievements and a clear strategy we will strengthen the key drivers for our financial performance. Stabilization of Exploit pockets of growth Revenue Leverage customer value Reduction of non-commercial Opex Save for Service Increase of loyalty and service quality Shift Capex from
Slide 29: Various revenue growth areas supporting revenue stabilization
Various revenue growth areas supporting revenue stabilization. Further Growth Pockets of Growth 2010 – 20121 Opportunities Mobile Digital Entertain beyond 2012 Data Services2 >60% of all con- >1.5 mn Entertain > 50 mn Energy / Smart metering tract customers customers growth customers3 Conn
Slide 30: Higher share of premium products will drive customer value and loyalty
Higher share of premium products will drive customer value and loyalty. Access Lines (share) Customer Loyalty1 0% 3% 12% 100% TP: 69 29% Example Fixed: 41% 46% SP vs. TP DP: 57 71% 56% 42% SP: 40 2007 2009 2012 Contract Subscribers Consumer (share) Customer Loyalty1 100% 20% Flat: 682 Example Mobile
Slide 31: We optimize rigorously our cost base …
We optimize rigorously our cost base … Domestic Fixed Line Business1 Opex Target Germany (€ bn) (Opex Δ YE2006 – YE2009 in %) > -1.5 -17.0% 16.6 ≤15.1 -9.7% -6.9% -5.5% 2009 2012 +10% 0.9% 7.6% Revenue/ 8.0% FTE Ø -3.2% 2009 2012 1 Source: UBS, FT: 2006 extrapolated based on FT data, DT: internal, d
Slide 32: … Major S4S savings on non-commercial Opex
… Major S4S savings on non-commercial Opex. Ambition 2012: Opex Savings1 Examples 2010 – 2012 (selected examples) Efficiency in fixed line operations, e.g. Efficiency Volume of complaints: -20% yoy in fixed line ≈ € 0.6bn Automatization in provisioning of service: +10 pp operations Share of re
Slide 33: S4S delivers better efficiency, higher quality and stronger customer loyalty
S4S does not only deliver better efficiency but also higher quality and stronger customer loyalty. Ambition 2012 Benefit/Reason why Premium pricing with stable market shares Customer loyalty > + 10 %1 Low market investment because of low churn rates, when contracts are renewed Higher cross- an
Slide 34: We invest in sustainable and demand driven growth …
We invest in sustainable and demand driven growth … Capex (€ bn) Key Capex Drivers Results 2012 +14% Mobile Data / Internet: High bandwidth anywhere ≈ € 1.5bn Enhance quality of 3G network & LTE roll-out1 revenue 3.6 3.1 Bandwidth demand fixed network /IP TV Expand market leadership broadban
Slide 35: … by focusing our investments on growth areas and efficiency gain
… by focusing our investments on growth areas and efficiency gain. Maintain high investment levels with focus on growth and efficiency Capex 2012 Examples Push VDSL/3G/4G1 FTTx Revenue Growth and Innovation ≈ 55 % Entertain/Connected life and work New Business (e.g. Energy, Health) Broadba
Slide 36: Our ambition level 2012: Expand market leadership and improve financial performance
Our ambition level 2012: Expand market leadership and improve financial performance. 2009 Ambition Level 2012 Market share broadband 46% stable Market share service revenues (mobile) 36% stable Entertain customers 1.1mn 2.5 - 3mn Data revenues (mobile) € 0.9bn ≈ € 1.5bn Customer Loyalty Index fixed