Deutsche Telekom AG · XETR:DTE
Deutsche Telekom — H1 2022 Earnings Presentation
36 slides from Deutsche Telekom's earnings presentation, August 2022
Slide 1: Deutsche Telekom Investor presentation Aug 2022
Deutsche Telekom Investor presentation Aug 2022
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, dep
Slide 3: H1 2022 results sector leading growth
H1 2022 results sector leading growth T-Mobile US • Service revenues up 6.2%, adj. Core EBITDA +7.9%, organically • FCF at € 3,2 bn • Strong customer intake: 2,974k postpaid net adds, 898k HSI net adds • Sprint network being de-commissioned 1 year ahead of time Ex US • Service revenues +1.8% organic
Slide 4: Deutsche Telekom continues to execute on its strategic agenda
Deutsche Telekom continues to execute on its strategic agenda Organic growth Capital allocation/portfolio Shareholder value Adj. EPS >1.75 Strategic review of GD Towers €/share – completed On track 1.22 • Our flywheel works • Proven execution Invest in “leading” fiber & 5G networks… On track and mon
Slide 5: Financials Q2 2022 reported strong growth
Financials Q2 2022 reported strong growth € mn Q2 H1 2021 2022 Change 2021 2022 Change Revenue 26,593 28,168 +5.9% 52,983 56,191 +6,1% Adj. EBITDA AL 9,418 9,891 +5.0% 18,662 19,763 +5,9% Adj. EBITDA AL (excl. US)2 3,680 3,554 -3.4% 7,219 7,255 +0.5% Adj. Net profit 2,113 2,445 +15.7% 3,315 4,683 +4
Slide 6: Financials H1 2022 organic strong growth
Financials H1 2022 organic strong growth H1/22 Adj. EBITDA AL H1/22 Adj. EBITDA AL2 H1/22 Key Financials growth yoy, organic € mn % growth yoy, organic TMUS Adj. Core EBITDA -1.3% Revenue +0.8% -€163 mn growth of 7.9%1 Service Revenues +4.5% GER 4,815 3.3% Service Revenues +€155 mn +1.8% (excl. US)
Slide 7: DT has unique growth opportunities
DT has unique growth opportunities United states Europe • Clear 5 G leader • Clear 5G leader • Unique SRMA opportunity Market share SRMA ~40% 5G coverage Q2/22 Growth with ~20% of the US speed upsell Low teens % 93% 37% 2020 2025 EU GER • Unique wireless high speed opportunity • Clear fiber leader H
Slide 8: Financials 2017–2021 consistent growth in key KPIs
Financials 2017–2021 consistent growth in key KPIs Service revenues Adj. EBITDA AL FCF AL % growth yoy, organic % growth yoy, organic € bn >€18 bn in 2024e 7.9% 7.8%1 8.8 7.2% 7.0 6.3 6.3 3.7% 3.5% 4.9% 5.5 4.2% 2.6% 2.6% 1.6% 1.9% 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 2017 2018 2019 202
Slide 9: DT ex US strong EBITDA growth outperformance
DT ex US strong EBITDA growth outperformance EBITDA AL adj.: DT ex US vs. Ø Peer1 Ø Peer DTexUS in %, organic growth yoy 6 4.8 4.4 3.7 3.7 4 2.8 2.4 2 1.2 1.0 0 0.8 -0.3 -2 -1.4 -2.6 -4 2017 2018 2019 2020 2021 H1 2022 1 Peer group: 8 European Telco groups (Orange, Telefonica, Vodafone, BT, Telecom
Slide 10: Financials Q2 2022 financial net debt up
Financials Q2 2022 financial net debt up on dividend, stake increase TM US, and F/X Net debt excl. leases (AL) (Q2/22 over Q1/22) Leverage ratios € bn • CMD target: back in 2.25 – 2.75x IFRS16 range 106.3 YE24. 0.9 • Tower deal with € 10.7 bn proceeds: lowers ex 4.6 lease leverage by c0.2x, IFRS16 l
Slide 11: Financials well balanced maturity profile with strong liquidity reserve
Financials well balanced maturity profile with strong liquidity reserve DT (ex US) bonds maturing Ex US liquidity position Credit lines € bn € bn Liquid assets 15.0 3.4 3.1 3.2 1.7 8.1 Ø 2.9 3.4 2.0 12.8 3.1 2.2 2022 2023 2024 2025 Liquidity Maturities Maturities Maturities Total maturities reserve
Slide 12: Operations Review Q2/2022
Operations Review Q2/2022
Slide 13: Networks leading with 5G, FTTH well on track
Networks leading with 5G, FTTH well on track FTTH (1 Gbps) 5G TM US 5G Germany Homes passed Ultra capacity 5G2 % of POPs +2pp 8.7% mn mn POPs +11.9% 11.3 91 93 10.4 210 235 7.0 7.4 3.4 3.9 YE/21 H1/22 YE/21 H1/22 YE/21 H1/22 ▪ On track for 2022 and CMD targets ▪ Targeting 260m YE 2022 and 300mn in 2
Slide 14: Customers consistent strong growth
Customers consistent strong growth Mobile net adds Fixed line net adds 000 000 US (postpaid) Broadband 5,486 5,495 716 764 4,459 4,515 585 645 3,620 506 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Ex US (contract)1 TV 2,167 1,689 1,690 1,628 456 1,523 359 343 366 347 2017 2018 2019 2020 2021 2
Slide 15: Customers growing strongly
Customers growing strongly Mobile net adds Fixed line net adds2 000 000 2,974 US (postpaid) 2,486 Broadband Best Q2 ever for 367 postpaid and account Clear leader in 240 growth net-add market share H1/21 H1/22 H1/21 H1/22 Ex US (contract)1 TV 781 607 YoY growth driven by both Europe and 166 Continue
Slide 16: ESG on top of our agenda
ESG on top of our agenda ENVIRONMENT SOCIAL GOVERNANCE • Climate Targets: • DT as supporter in the crisis: (strong • Move of Group Corporate Responsibility • Net zero (Scope 1&2 emissions) until 2025 supporter of Ukraine refugees across the department to CEO successfully footprint) implemented • Net
Slide 17: Germany Review Q2/2022
Germany Review Q2/2022
Slide 18: Germany 23rd consecutive quarter of EBITDA growth
Germany 23rd consecutive quarter of EBITDA growth Revenues (as reported) Adj. EBITDA AL (as reported) € mn € mn +2.7% +3.1% 5,903 6,064 2,354 2,426 Q2/21 Q2/22 Q2/21 Q2/22 Revenue growth (organic) Adj. EBITDA AL (organic) % yoy % yoy 3.4% 3.8% 3.8% 3.6% 3.6% 2.7% 3.0% 1.8% 2.1% 0.9% Q2/21 Q3/21 Q4/2
Slide 19: Germany service revenues: growing across the board
Germany service revenues: growing across the board Total service revenue growth (organic)1 Mobile service revenue growth (organic) % yoy % yoy 2.5% 2.6% 2.3% 2.1% 2.0% 2.0% 1.8% 1.7% 1.6% 0.6% Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Revenue growth (reported) Fixed service revenue
Slide 20: Germany FTTH on track with buildout and monetization
Germany FTTH on track with buildout and monetization Progress with FTTH buildout Progress with monetization Homes passed, mn Share of ≥ 100 Mbps contracts Retail broadband ARPA2 % of broadband base €/month 33.0 33.3 34.2 32.5 New Collaborations 25.0 17.6 ~5.4 Own 3.4 10.0 buildout1 2019 2020 2021 20
Slide 21: Germany ongoing strong execution and digitization
Germany ongoing strong execution and digitization Service Digitization Customer satisfaction First contact resolution App penetration E-sales share1 TRI*M % +5% % % 52 55 66 24 25 69% 69% 43 56 61% 19 42 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 Employee satisfaction Customer compl
Slide 22: Germany consistent growth
Germany consistent growth Total service revenue Adj. EBITDA AL % growth yoy, organic % growth yoy, organic CMD: 2.5–3.0% CAGR 2020–2024 3.7 2.8 2.4 1.8 1.7 1.5 0.8 0.7 0.6 0.1 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 • 2021 positively impacted by non-recurring public sector revenues • 2022
Slide 23: Other segments Review Q2/2022
Other segments Review Q2/2022
Slide 24: T-Mobile US consistent growth leader
T-Mobile US consistent growth leader Key opportunities Service revenue (US GAAP)1 Customer growth % growth yoy, organic Postpaid net adds in mn • SMRA 8.3% • B2B 6.1% 6.3% 6.6% 5.2% • Home internet 2017 2.8 3.6 • Sprint Integration 2017 2018 2019 2020 2021 2018 3.1 4.5 Key advantages Adj. EBITDA (US
Slide 25: T-Mobile US strong financial growth
T-Mobile US strong financial growth Revenues (IFRS) Adj. EBITDA AL (IFRS) US$ bn US$ bn -1.1% -2.4% 20.1 19.8 Yoy decline in handset 6.9 6.7 Yoy decline in handset Other revenues 5.4 4.4 leasing revenues leasing revenues by US$0.5 bn1 by US$0.5 bn1 Service revenues 14.7 15.5 Q2/21 Q2/22 Q2/21 Q2/22
Slide 26: T-Mobile US best ever Q2 postpaid growth
T-Mobile US best ever Q2 postpaid growth 5G EXTENDED RANGE 5G ULTRA CAPACITY Total postpaid net additions Best ever account Postpaid phone net additions mn additions with 380k mn 1.8 0.8 1.7 0.7 0.7 1.3 1.3 1.3 0.6 0.6 Q2/21 Q3/211 Q4/21 Q1/22 Q2/22 Q2/21 Q3/211 Q4/21 Q1/22 Q2/22 High Speed Internet
Slide 27: Europe fastest growing large European telco
Europe fastest growing large European telco FTTH (1 Gbps)1 Total service revenue growth Digitization Organic, % • 1.4 mn additional homes passed in 2021 • App penetration 64% • 7 mn homes YE 21 • Truck Rolls reduced by 200k in 2021 leading 1.8% 1.9% 2.0% to a significant CO2 reduction. 0.4% 0.7% 201
Slide 28: Europe 18th consecutive quarter of organic EBITDA growth
Europe 18th consecutive quarter of organic EBITDA growth Revenues (Reported) Adj. EBITDA AL (Reported) € mn € mn -2.7% -0.9% 2,823 2,747 994 986 decline driven by sale decline driven by sale of Romania fixed of Romania fixed and Hungarian special tax Q2/21 Q2/22 Q2/21 Q2/22 Revenues Adj. EBITDA AL w
Slide 29: GD/Towers strong growth
GD/Towers strong growth Total sites Austria Recurring rental revenues 000 +0.9k € mn DFMG +4.5% 39.8 40.7 (organic +8.9%) 7.0 7.1 249 261 32.8 33.61 1.3k new build Q2/21 Q2/22 Q2/21 Q2/22 Opex AL per site Adj. EBITDA +2.7% € 000 € mn (organic +6.5%) 3.0 2.8 226 232 EBITDA AL: +2.4% (organic +7.2%) 1
Slide 30: Systems Solutions turnaround continues
Systems Solutions turnaround continues Revenue drivers Revenue Transformation drivers % growth yoy, organic IDC savings € bn • Public Cloud +19%1 1.1% 0,39 • Digital Solutions +14%1 2021 0,06 • Ongoing legacy decline (MIS -14%1 ) -1.0% -1.1% 2020 0,11 -2.1% • MIS now down to 32% of TSI revenues vs.
Slide 31: Systems Solutions steady recovery
Systems Solutions steady recovery Order entry (LTM) Revenues Adj. EBITDA AL € bn € mn € mn -0.1% +13.9% -12.8% 4.8 1,006 1,005 82 4.2 72 Q2/21 Q2/22 Q2/21 Q2/22 Q2/21 Q2/22 Revenues Adj. EBITDA AL % growth yoy, organic % growth yoy, organic 16.5% 18.1% • Revenues stabilizing, helped by growth 13.6%
Slide 32: Outlook
Outlook
Slide 33: Inflation exposure
Inflation exposure € bn in 2021 Group as % of Rev. Mitigations • US: 2/3 secured via PPAs • GER: Comprehensive multi-year hedging and removal of renewable energy Energy costs 1.5 1.4% surcharge create stable outlook for costs • Scope to reduce volumes, establish PPAs Personnel expenses (adj.) 17.6 1
Slide 34: Guidance 2022 raised on both sides of the Atlantic
Guidance 2022 raised on both sides of the Atlantic Core EBITDA AL Adj. TM US DT Ex US Adj. EBITDA AL TM US DT Ex US € bn € bn ~36.5 >36.6 ~37.0 ~35.5 >35.6 ~35.9 22.3 >22.4 ~22.7 21.3 >21.4 ~21.6 14.2 14.2 14.3 14.2 14.2 14.3 • Guidance raised for T-Mobile US and Group Orig. Guidance Guidance New Gu
Slide 35: H1 2022 main takeaways
H1 2022 main takeaways • TM US: strong merger execution, EBITDA up 10%, record customer growth, Adj. EPS (CMD target 2024) guidance raised for the 2nd time € /share • Ex US: 4.4% organic EBITDA AL growth; Germany with 23 and EU with >1.75 18 successive quarters of organic EBITDA AL growth. Guidance
Slide 36: Further questions please contact the IR department
Further questions please contact the IR department Investor Relations Contact details Phone +49 228 181 – 8 88 80 E-Mail [email protected] Contact details for all IR representatives: www.telekom.com/ircontacts IR Webpage IR Twitter Account IR YouTube Channel www.telekom.com/investors www