Deutsche Telekom Ag · XETR:DTE

Deutsche Telekom — Q1 2011 Earnings Presentation

22 slides from Deutsche Telekom's earnings presentation, May 6, 2011

  1. Slide 1: Q1/11 – Results Presentation

    Q1/11 – Results Presentation. Deutsche Telekom. May 6, 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: Q1 2011 Highlights

    Q1 2011 Highlights.  Structural solution for US business found, regulatory process started  Germany with 4th consecutive quarter of adj. EBITDA growth. Good momentum in key customer KPIs maintained in mobile and fixed  Systems Solutions with strong revenue growth and almost stable EBITDA compared

  5. Slide 5: Q1/11 Overview

    Q1/11 Overview. Continuing and discontinued operations. Revenue (€ million) Adj. EBITDA (€ million) -3.0% -5.0% 15,054 14,597 4,717 4,480 74 -531 16 -253 Q1/101 F/X Organic Q1/11 Q1/101) F/X Organic Q1/11 Revenue Q1/10 vs. Q1/11 (€ million) Adj. EBITDA Q1/10 vs. Q1/11 (€ million) 6,189 Germany 2,299

  6. Slide 6: Q1/11 Key financials

    Q1/11 Key financials. Q1/10 Q1/11 Q1/10 Q1/11 in € million reported reported change in % ex. UK ex. UK change in % Revenue 15,812 14,597 -7.7% 15,054 14,597 -3.0%  from Continuing 12,002 10,830 -9.8% 11,244 10,830 -3.7% operations Adj. EBITDA 4,890 4,480 -8.4% 4,717 4,480 -5.0%  from Continuing 3,

  7. Slide 7: Strategy update: growth areas

    Strategy update: growth areas. Ambition Deutsche Telekom growth areas1 Q1/10 Q1/11 Change 2015 Revenue (€ bn) Mobile Internet2 1.0 1.2 0.3 28% ≈ 10 Connected Home3 1.5 1.6 0.0 2% ≈7 Double & Triple play, Home Gateway and Communication Suite Online consumer services4 0.2 0.2 0.0 2% 2-3 T-Systems exte

  8. Slide 8: Guidance excl. the US – 2011 guidance reiterated

    Guidance excl. the US – 2011 guidance reiterated. Guidance (in € billion)  Q1 2010 figures include €0.2 billion from the UK  As a result of the sale of T-Mobile US guidance of “around 19.5 ≈19.1 19.1 billion” split into: 0.2 0.0  Discontinued operation: US with stable EBITDA over FY 4.2 ≈4.2 2010

  9. Slide 9: Germany: strong profitability growth

    Germany: strong profitability growth. Revenue (€ million) Adj. opex (€ million) -3.2% -7.0% 6,189 6,197 6,317 6,442 5,991 4,013 3,907 3,927 4,262 3,734 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Adj. EBITDA (€ million) Adj. EBITDA margin (in %) 39.9 39.7 +3.7% 40 39.3 39 38 37.1 +2.

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

    Germany revenue: continued focus on data & TV opportunity. Fixed network revenues (€ million)1, 3 Mobile service revenue1, 2 (€ million) +2.0% -5.1% 4,281 4,234 4,242 4,376 4,063 1,712 1,766 1,813 1,756 1,747 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Connected Home (2play + 3play)

  11. Slide 11: Germany: unique market position to target data market segment

    Germany: unique market position to target data market segment. Broadband access lines market share1 (%)  Retail fiber-customers (VDSL) at 403k (+221k yoy) 46.5 46.6 46.3 46.0 45.9  Solid IPTV growth continues with +40% (361k) Entertain customers yoy now at 1,257k 25.1 25.3 25.6 26.0 26.3  Share o

  12. Slide 12: Europe – ongoing sustainable growth for future profitability

    Europe – ongoing sustainable growth for future profitability. TV customer (million) Smartphone share (%)1 +20% 2.35 2.41 43% 2.21 x2 2.01 2.08 34% 30% IPTV IPTV +50% +50% 0.65 0.71 0.52 0.57 21% 21% 0.47 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Broadband customer (million) Mobile

  13. Slide 13: Europe – integrated operations: strong profitability despite headwind

    Europe – integrated operations: strong profitability despite economic and regulatory headwind and austerity measures. Revenue (€ million) OTE: -12%  Despite challenging regulation no BB losses in Greece. TV -4% -5% -7% subs. exceed 1mn within OTE group up to 1,1mn. 1.397 1.223  Maintained margin i

  14. Slide 14: Europe – mobile centric: front loading of market invest

    Europe – mobile centric: front loading of market invest. Revenue (€ million) Poland: 0% +2%  Revenue stable despite regulation. -4% -8%  Attack via smart investment in high-value customers: 441 440 442 453 Smartphone-share > 38% – stronger data growth +26% 279 268 248 229 Netherlands: Poland Nethe

  15. Slide 15: Systems Solutions: revenues up 6.1% in Q1/11

    Systems Solutions: revenues up 6.1% in Q1/11. Revenues (€ million)  Strong revenue increase yoy of +6.1 % up to €2,260mn  External revenues up +5.5% to €1,616mn Internal revenues External revenues  Strong order entry of €2,593mn due to deals such as +6.1%  Everything Everywhere 2,479 2,131 2,242

  16. Slide 16: Systems Solutions: Q1 margins impacted by higher transformation costs

    Systems Solutions : Q1 margins impacted by higher transformation costs. Adj. EBITDA/margin Adj. EBIT/margin  Adj. EBITDA slightly down to €189mn with a margin of 8.4%  Higher transformation costs for new contracts and to safeguard quality in deals 9.2% 8.4%  Adj. EBIT margin in Q1/11 down to 1.3%

  17. Slide 17: US: continued revenue stabilization and strong data ARPU

    US: continued revenue stabilization and strong data ARPU. Service revenues (US$ million) Net adds in ‘000 Contract Prepaid 295 372 +0.4% 196 41 106 4,537 4,605 4,607 4,615 4,556 -118 -60 -199 -318 -471 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Adj. EBITDA (US$ million) and adj. EBI

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

    Free cash flow: Full year guidance confirmed – Q1 impacted by different seasonality of interest payments and cash capex. Development of free cash flow Q1/11 over Q1/10 (€ million)  Guidance of slightly growing to stable free cash flow over 2010 level of €6.5 billion confirmed 1,439  Cash flow gene

  19. Slide 19: Q1 2011 Save for Service results

    Q1 2011 Save for Service results. Cost base development Q1/10 vs. Q1/11 (€ billion) Contribution Q1/2011 by Business Unit (€ million) Realized -6.9% Germany 134 11.22 USA 52 Europe 55 Systems Solutions 93 0.60 GHS - DT Group 334 0.06  Savings realized in Q1 of €334 million results in run-rate total

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

    Ongoing solid balance sheet ratios and improved rating outlook. in € billion 31/03/2011 31/12/2010 30/09/2010 30/06/10 31/03/10 Balance sheet total 123.2 127.8 127.8 132.8 130.8 Shareholders’ equity 42.7 43.0 43.4 44.8 44.3 Net debt 41.8 42.3 43.7 46.3 40.4 Net debt/adj. EBITDA1 2.2 2.2 2.2 2.3 1.9

  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 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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