Deutsche Telekom Ag · XETR:DTE

Deutsche Telekom — Q4 2010 Earnings Presentation

28 slides from Deutsche Telekom's earnings presentation, Feb 25, 2011

  1. Slide 1: Q4/10 – Results Presentation

    Q4/10 – Results Presentation. Deutsche Telekom. February 25, 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: FY 2010 Highlights – guidance achieved

    FY 2010 Highlights – guidance achieved.  Excl. T-Mobile UK revenue stabilized at €62.4 billion  Targets achieved/overachieved: €19.5 billion adj. EBITDA, €6.5 billion free cash flow FY 2010  Adj. net profit (€3.4 billion) at last year’s level – reported net profit improved to €1.7 billion  PTC s

  5. Slide 5: FY 2010 and Q4/10 excl. UK

    FY 2010 and Q4/10 excl. UK. Q4/09 Q4/10 FY/09 FY/10 in € million ex. UK ex. UK change in % ex. UK ex. UK change in % Revenue 15,416 15,477 0.4% 62,152 62,421 0.4% Adj. EBITDA 4,904 4,550 -7.2% 20,168 19,473 -3.4% Adj. net profit 767 665 -13.3% 3,259 3,413 4.7% Net profit (loss) -135 -607 349.6% 232

  6. Slide 6: FY 2010 and Q4/10 reported

    FY 2010 and Q4/10 reported. Q4/09 Q4/10 change in % FY/09 FY/10 change in % in € million Revenue 16,200 15,477 -4.5% 64,602 62,421 -3.4% Adj. EBITDA 5,070 4,550 -10.3% 20,668 19,473 -5.8% Adj. net profit 905 690 -23.8% 3,390 3,364 -0.8% Net profit (loss) -3 -582 n.m. 353 1,695 380.2% Adj. EPS (in €)

  7. Slide 7: FY 2010 strategy update: Fix – Transform - Innovate on track

    FY 2010 strategy update: Fix – Transform - Innovate on track. Fix Transform Innovate Improve performance Leverage Build networks and Connected life Connected work of mobile-centric one company in processes for the across all screens with unique assets integrated assets gigabit society ICT solutions

  8. Slide 8: Strategy update: growth areas

    Strategy update: growth areas. Ambition Deutsche Telekom growth areas FY 2009 FY 2010 Change 2015 Revenue (€ bn) Mobile Internet 3.4 4.4 1.0 29.2% ≈ 10 Connected Home 5.2 5.5 0.3 5.0% ≈7 Double & Triple play, Home Gateway and Communication Suite Online consumer services 0.9 1.0 0.1 13.1% 2-3 T-Syste

  9. Slide 9: Outlook 2011

    Outlook 2011.  Adj. EBITDA of around €19.1 billion (based on constant currency)1) Guidance 2011  Stable to slightly growing free cash flow from €6.5 billion in 20102)  Execute on challenger strategy in the US and return to growth  Maintain market leadership and stabilize adj. EBITDA despite MTR

  10. Slide 10: Q4/10 Overview

    Q4/10 Overview. Revenue (€ million) Adj. EBITDA (€ million) +0.4% -7.2% 15,416 23 389 15,477 4,904 10 98 4,550 -98 -253 -98 -364 Q4/091) Acquisitions F/X Tax Organic Q4/10 Q4/091) Acquisitions F/X Tax Organic Q4/10 Hungary Hungary Revenue Q4/09 vs. Q4/10 (€ million) Adj. EBITDA Q4/09 vs. Q4/10 (€ mi

  11. Slide 11: US: continued revenue stabilization and strong data ARPU

    US: continued revenue stabilization and strong data ARPU. Service revenues (US$ million) Net adds in ‘000 Net-adds total 0.1% 371 Net-adds contract 137 4,611 4,537 4,605 4,607 4,615 106 -77 -60 -23 -117 -118 -93 -318 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Adj. EBITDA (US$ millio

  12. Slide 12: Recent US 4G speed tests confirm superiority of our network

    Recent US 4G speed tests confirm superiority of our network. 1.78 AT&T iPhone 4 (3G) 2.93 2.13 Galaxy S 4G beats out the AT&T HTC Inspire 4G 3.15 competition with speeds T-Mobile 4.71 of 7-10 Mbps myTouch 4G by HTC 6.18 T-Mobile 7.81 “Only one phone delivered anything Samsung Galaxy S 4G 10.34 you c

  13. Slide 13: Germany: strong revenue and third consecutive quarter of increasing adj. EBITDA

    Germany: strong revenue and third consecutive quarter of increasing adj. EBITDA yoy. Revenue (€ million) Adj. OPEX (€ million) +0.6% -1.7% 6,401 6,189 6,197 6,317 6,442 4,334 4,013 3,907 3,927 4,262 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Adj. EBITDA (€ million) Adj. EBITDA margi

  14. Slide 14: Germany fixed: continued increase in profitability

    Germany fixed: continued increase in profitability. Revenue (€ million)  As already announced in Q3 strong Q4 revenue  Increase in adj. EBITDA, despite commercial efforts -0.7%  Cost reductions compensate for revenue pressure  Driven by simplification, lower procurement costs and selective centr

  15. Slide 15: Germany fixed: managing for value resulted in stable broadband market share

    Germany fixed: managing for value resulted in stable broadband market share. Broadband lines1) (million) Broadband net add share by competitor2) 47% 47% 47% Cable Telekom Alternative operators 46% 46% 80 24.7 25.1 25.3 25.6 26.0 60 52.3 48.6 2.2 2.4 2.5 2.7 2.8 40 11.0 11.1 11.0 11.1 11.2 17.6 30.1

  16. Slide 16: Germany mobile: continued service revenue growth and profitable market outperformance

    Germany mobile: continued service revenue growth and profitable market outperformance. Service revenues (€ million)  Data revenue growth of 28% boosting share as % of Service Revenues by 4pp to 19% in Q4/10. December MTR impact of €28 mn on service revenues and €13 mn on EBITDA +5.0%  Continued fo

  17. Slide 17: Europe – growth in strategic products broadband and mobile contract

    Europe – growth in strategic products broadband and mobile contract. TV customer (million) Broadband customer (million) 2.35 4.6 +12.2% +23.0% 4.1 1.91 2009 2010 2009 2010 Smartphone share (%)1) Mobile contract subscribers (million) 34 +4.4% 26.3 +142.9% 25.2 14 Q4/2009 Q4/2010 2009 2010 1) Percenta

  18. Slide 18: Europe – integrated operations: mostly outperforming peers

    Europe – integrated operations: mostly outperforming peers despite tough economic and regulatory conditions. Revenue (€ million) OTE:  Traction gained in BB net-adds (+8k) from new tariffs. IPTV -13.2% -6.1% subs. more than tripled to 50k. 1,536 +0.7% -3.3% 1,333  Mobile: contract customer growth

  19. Slide 19: Europe – mobile centric: smart market investment and network enhancements

    Europe – mobile centric: smart market investment and push in network enhancements impacting margins. Revenue (€ million) Poland: +5.3%  Revenue growth accelerated. Market investment in high- -4.3% -0.7% -7.0% value customers, Smartphone-share more than 30% in Q4 451 475 446 427 293 291 256 238  Ad

  20. Slide 20: Update on OTE synergies: initial run rate potential achieved earlier than planned

    Update on OTE synergies: initial run rate potential achieved earlier than planned. Run rate of synergies (€ million)  As of Q4 measures with an annual potential of €215 million are already implemented 215  The total run rate from the buying case has been achieved two years earlier than planned OPE

  21. Slide 21: Systems Solutions: external revenue up 5.4% in FY2010

    Systems Solutions: external revenue up 5.4% in FY2010. Revenue (€ million)  External revenue - delivering on 5% CAGR target with FY2010 growth of 5.4% +3.8%  Closed Big Deals in 2010, such as EON, DHL, DekaBank provide the basis for further revenue growth 2,388 2,479 2,131 2,242 2,205 Q4/09 Q1/10

  22. Slide 22: Systems Solutions: profitability improvement driven by efficiency

    Systems Solutions: profitability improvement driven by efficiency. Adj. EBIT (€ million) / margin (in%)  Adj. EBIT margin in FY2010 improved to 3.7% from 2.6% in FY2009 3.7%  Corresponding adj. EBITDA improvement in FY2010 up 2.6% to €948 million with a margin of 10.5% 0.7% 333 229 69 FY08 FY09 FY

  23. Slide 23: Free cash flow: guidance overachieved by €300 million

    Free cash flow: guidance overachieved by €300 million. Free cash flow (before spectrum) (€ billion)  Development highlights success of central free cash flow steering: 2009  working capital management: significant improvement 7.0 6.5 in payables by introduction of group wide payment 2010 policy 

  24. Slide 24: S4S: 60% of €4.2 billion already achieved – €1 billion net

    S4S: 60% of €4.2 billion already achieved – €1 billion net. Cost base1) development FY/09 vs. FY/10 (€ billion) Contribution -2.2% by Business Unit (€ million) FY 2010 Germany 660 45.39 USA 570 1.52 Europe 370 0.86 44.41 Systems Solutions 560 2.41 GHS 250 2.09 DT Group 2,410  €2.4 billion gross sav

  25. Slide 25: ROCE development driven by UK deconsolidation, PTC settlement and restructuring

    ROCE development driven by UK deconsolidation, PTC settlement and additional personnel restructuring. ROCE bridge 2009 to 2010 Personnel restructuring 4.5% 4.2% 0.6% 3.9% 0.3% 0.2% 0.2% 0.2% 0.2% “clean the garage” 3.9% 3.9% 3.5% ROCE 2009 ROCE 2010 UK PTC 2010 ROCE reported 25

  26. Slide 26: Ongoing solid balance sheet ratios and stable rating

    Ongoing solid balance sheet ratios and stable rating. in € billion 31/12/2010 30/09/2010 30/06/10 31/03/10 31/12/09 Balance sheet total 127.8 127.8 132.8 130.8 127.8 Shareholders’ equity 43.0 43.4 44.8 44.3 41.9 Net debt 42.3 43.7 46.3 40.4 40.9 Net debt/adj. EBITDA1) 2.2 2.2 2.3 1.9 2.0 Gearing 1.0

  27. Slide 27: 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. 27

  28. Slide 28: 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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