Deutsche Telekom AG · XETR:DTE
Deutsche Telekom — Q1 2009 Earnings Presentation
31 slides from Deutsche Telekom's earnings presentation, May 7, 2009
Slide 1: Q1/09 – Conference Call. Deutsche Telekom
Q1/09 – Conference Call. Deutsche Telekom. May 7, 2009
Slide 2: Disclaimer
Disclaimer. This presentation contains forward-looking statements that reflect the current views of Deutsche Telekom management with respect to future events. They include, among others, statements as to market potential and financial guidance statements, as well as our dividend outlook. They are ge
Slide 3: Agenda
Agenda. Deutsche Telekom Investor Presentation. Introduction Stephan Eger Head of Investor Relations Q1/09 Highlights & Operations René Obermann CEO Q1/09 Financials Timotheus Höttges CFO Q&A: If you like to ask a question, please press “* 1” on your touchtone telephone For remaining questions p
Slide 4: Q1/09 Highlights & Operations
Q1/09. Highlights & Operations. René Obermann, CEO
Slide 5: Q1/09 Highlights
Q1/09 Highlights. Revenue growth of 6% Revenue increased +6.2% incl. OTE. € billion Adj. EBITDA + 2.7% incl. OTE. +6% “Save for Service” on track: €4.4 billion run rate achieved. 15.9 Good progress in German and CEE fixed business. +0.2 -0.3 Currency Adj. EBIT turn around at Systems Soluti
Slide 6: German fixed: Best retail broadband net add market share since 2005
Improve competitive- Grow German fixed: ness in abroad with Germany mobile and SEE Best retail broadband net add market share since 2005. Mobilize the internet Build network centric ICT Domestic Broadband Retail customer base (in ‘000) Domestic PSTN customer base (in ‘000) 12.000 +44% 35.000 -14% 10
Slide 7: SEE fixed: Continued broadband growth with stable margins
Improve competitive- Grow SEE fixed: Continued broadband growth with stable margins. ness in abroad with Germany mobile and SEE Build Mobilize the network internet centric ICT SEE fixed line adj. EBITDA and margin Headcount in SEE fixed line € million In ‘000 FTEs 42.1%* 40.0 42.4% 43.1% 43.2% 37.7%
Slide 8: International Mobile: Revenue growth thanks to OTE
Improve competitive- Grow International Mobile: Revenue growth thanks to OTE. ness in abroad with Germany mobile and SEE Build Mobilize the network internet centric ICT Revenue Mobile (excl. Germany) € billion 12% revenue growth driven by +12% OTE and FX. 7.3 More than 70% of organic adj. 0.0 EB
Slide 9: SEE: Apart from Poland high margin levels stabilized
Improve competitive- Grow SEE: Apart from Poland high margin levels stabilized. ness in abroad with Germany mobile and SEE Build Mobilize the network internet centric ICT Revenue in local currency (Q1/08 vs. Q1/09) Ongoing strong or improved margins. Change in % Healthy revenue trends in Croatia
Slide 10: Mobilize the Internet: Accelerated double digit data revenue growth
Improve competitive- Grow Mobilize the Internet: ness in abroad with Germany mobile and SEE Accelerated double digit data revenue growth. Mobilize the internet Build network centric ICT Quarterly data revenue (Europe w/o OTE) 2 Quarterly data revenue (USA)3 w/o messaging (in € million) +44% w/o mess
Slide 11: Systems Solutions: efficiency turnaround initiated
Improve competitive- Grow Systems Solutions: efficiency turnaround initiated. ness in abroad with Germany mobile and SEE Build Mobilize the network internet centric ICT International revenue External revenue International revenue with growth of 6.4% € million € billion External revenue stable -0
Slide 12: OTE Integration: Approaching 200 million global customers
OTE Integration: Approaching 200 million global customers. Revenue contribution FCF contribution Mobile customers € billion € million million 15.9 251 148.4 14.9 229 128.5 +1.0 +22 +19.9 w/o OTE Incl. OTE w/o OTE Incl. OTE w/o OTE Incl. OTE Q1/09 Q1/09 Q1/09 Adj. EBITDA contribution Net income contr
Slide 13: OTE Integration: Synergy buy case fully verified
OTE Integration: Synergy buy case fully verified. Breakdown on major areas Key statements € million App. € 200m fully verified by bottom-up-measures. 257.3 Additional measures already identified. Additional medium-term Highest potential from Procurement (incl. Terminals) 50.0 measures2) (€138m
Slide 14: OTE Integration: Synergy breakdown
OTE Integration: Synergy breakdown. Breakdown on major areas Procurement (incl. Terminals): € million Wireless access equipment, e.g. antennas (26% of procurement) € 207 million Wireless Core & control equipment, e.g. mobile-fixed components Products Access (6%) Other Sales & 18 36 Customer Serv
Slide 15: OTE Integration: Even higher synergy potential identified
OTE Integration: Even higher synergy potential identified. Significant additional opportunities already 1 International Network / Wholesale identified to increase Run Rate. Reduction of out-payments to 3rd parties Evaluation process still ongoing. Further details to follow. CAPEX savings by comm
Slide 16: Action plan US, UK and Poland
Action plan US, UK and Poland. USA UK Poland Roll-out of 3G network: around 200 New management team with strict Opex cut program, triple digit million million covered POPs end of 2009 focus on repositioning of our PLN volume: 2G roaming overbuild to reduce business in a difficult environment
Slide 17: Targets 2009 incl. OTE
Targets 2009 incl. OTE Targets DT standalone Targets DT including OTE Adj. Group EBITDA Down 2-4% from 2008 level DT 09 guidance + ca. €2 bn1) Free cash flow Around €6.4 billion Around €7.0 billion Guidance assumes constant currencies and no further significant economic deterioration 2008:
Slide 18: Q1/09 Financials
Q1/09. Financials. Timotheus Höttges, CFO
Slide 19: Group financials: Revenue growth driven by OTE
Group financials: Revenue growth driven by OTE. € million +6% F/X impact: Change in consolidation: Organic change: 15,902 14,978 +163 (+1%) +1,038 (+7%) -276 (-2%) 5,077 TMEU 4,992 -320 +465 -61 4,137 TMUS 3,461 +524 +102 +51 BBFN 5,677 -25 +552 -323 5,882 TSI 2,200 -16 -23 -54 2,106 GHS 884 -49 +43
Slide 20: Group financials: Adj. EBITDA growth due to consolidation impact
Group financials: Adj. EBITDA growth due to consolidation impact. € million +3% F/X impact: Change in consolidation: Organic change: +55 (+1%) +382 (+8%) -310 (-7%) 4,686 4,812 -69 +152 -229 1,551 TMEU 1,698 +134 +32 -70 1,061 TMUS 966 -11 +189 -60 BBFN 1,892 2,010 +1 -12 +18 TSI 204 +16 +29 211 GHS
Slide 21: Free cash flow: Impacted by front-loading effects
Free cash flow: Impacted by front-loading effects. Free cash flow Q1 2009 Cash capex increase: front-loading in volume € billion (€0.3 billion) and shift in payment schedule +0.1 -0.8 (€0.4 billion) 1.6 Capex front-loading drivers: Change TM EU: accelerated 3G roll-out adj. TM US: accelera
Slide 22: Save for Service. Well ahead of plan with €4.4 billion run-rate
Save for Service. Well ahead of plan with €4.4 billion run-rate. Cost base development1 Contribution € billion by Business Unit Q1 09 07-Q1/09 0.41 Mobile 41 904 0.11 11.43 0.67 Broadband/Fixed Network 129 2,207 -0.27 10.51 Systems Solutions 75 759 GHS 24 505 DT Group 269 4,375 Q1/08 Changes in FX M
Slide 23: Headcount development: Domestic restructuring continues
Headcount development: Domestic restructuring continues. Headcount in Germany Group headcount +14.5% (compared to YE 2008) due to OTE consolidation In ‘000 FTEs Employees in Germany: net -13,700 FTEs (-9.4%) yoy 158.3 153.8 151.9 Employees International: net +36,700 FTEs 148.9 145.0 142.4 Fi
Slide 24: Net income: Impacted by UK goodwill write-down
Net income: Impacted by UK goodwill write-down. € billion Q1 09 Q1 08 EBITDA 4.9 5.0 Depreciation and amortization - 4.7 - 2.7 - of which UK goodwill write-down - 1.8 - 0.0 Net financial expense - 0.7 - 0.7 - of which net interest expense - 0.6 - 0.6 EBT - 0.5 1.6 Income taxes - 0.4 - 0.6 Earnings a
Slide 25: Adj. net income decreased by 12.7% to €655 million
Adj. net income decreased by 12.7% to €655 million. Q1 09 Q1 08 € billion adjusted adjusted EBITDA 4.8 4.7 Depreciation and amortization - 2.9 - 2.7 Net financial expense - 0.7 - 0.6 - of which net interest expense - 0.6 - 0.6 EBT 1.2 1.4 Income taxes - 0.5 - 0.5 Earnings after taxes 0.7 0.9 Minorit
Slide 26: Q1/09 – Net debt development
Q1/09 – Net debt development. € billion Net debt 31/12/2008 38.2 Free cash flow - 0.3 OTE consolidation 4.3 F/X and other 0.6 Net debt 31/03/2009 42.8 26
Slide 27: Solid Balance sheet ratios
Solid Balance sheet ratios. € billion 31/03/09 31/12/08 31/03/08 Balance sheet total 133.8 123.1 118.4 Shareholders’ equity 45.2 43.1 44.5 Net debt 42.8 38.2 35.9 Net debt / adj. EBITDA n/a 2.0 n/a Gearing 0.9x 0.9x 0.8x Equity ratio (excl. dividend) 31.2% 32.3% 34.0% Comfort zone ratios 2 - 2.5x Ne
Slide 28: Strong liquidity bolster
Strong liquidity bolster. Liquidity reserves 28 bilateral credit facilities of €600 million each adding up to €16.8 billion. € billion 3-year maturities with extension requests after 12 months already. Loan terms insure quality of our liquidity reserve 22.3 No financial covenants No MAC Cl
Slide 29: Maturity profile as of March 31, 2009
Maturity profile as of March 31, 2009. Maturity profile Total €4.4 billion bond maturities in 2009 € billion OTE Sufficient unused bilateral credit lines 2.1 DT Funding 2009 done so far: 1.2 Eurobond: €2 billion 0.6 0.6 Schuldscheindarlehen: €0.2 billion 4.6 4.6 Issuance after Q1 20091)
Slide 30: Q&A. Please press *1 to ask a question
Q&A. Please press “*1” to ask a question. René Obermann CEO Timotheus Höttges CFO 30
Slide 31: Thank you for your attention!
Thank you for your attention! For further questions please contact the IR department: Investor Relations, Bonn office Investor Relations, New York office Phone +49 228 181 - 8 88 80 Phone +1 212 424 2959 Fax +49 228 181 - 8 88 99 Phone +1 877 DT SHARE (toll-free) Fax +1 212 424 2977 E-Mail investor.