Slide 1: Deutsche Telekom Q1/2018 Results
Deutsche Telekom Q1/2018 Results
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: Review Q1/2018
REVIEW Q1/2018
Slide 4: 2018 Q1 Highlights: growth on both sides of the Atlantic
2018 Q1 Highlights: growth on both sides of the atlantic Growth: investments and innovations Growth: customers Growth: financials Cash capex at €3.1 bn Demand for fiber in Germany Strong growth continues IP-Migration continues in GER (73%) and 10.4 mn German homes with fiber (+37% Revenu
Slide 5: Q1/2018 Innovations: Focus on customer experience
Q1/2018 Innovations: Focus on customer experience Hybrid Access1 Innovation/Network E-service share of interactions subs +21% in % +38% Launch of the largest European aviation 386k FTTH roll-out project in network roll-out 33.0% 320k 24.0% Germany to date completed. Commercial launch in Feb. 2018 Q1
Slide 6: Q1/2018 customers: Strong demand drives momentum
Q1/2018 customers: Strong demand drives momentum MagentaEINS (Germany + EU)1 US Mobile mn +1.4 mn +5.92 6.2 72.6 74.0 4.8 Q1/17 Q1/18 Q1/17 Q1/18 Fiber in Germany Cloud revenues mn € bn +2.8 +7% 10.4 0.37 0.40 7.6 Q1/17 Q1/18 Q1/17 Q1/18 1) FMC RGUs may also appear under other brand name outside of
Slide 7: US: Highly attractive transaction
US: Highly attractive transaction Unique value creation Attractive Benefitting U.S. consumers, Robust Capital Governance Designed opportunity for Deutsche Transaction Terms investments and job creation Structure for Efficient Integration Telekom Shareholders U.S. market highly attractive Stock-f
Slide 8: Guidance 2018: EBITDA outlook raised by €0.1 bn
GUIDANCE 2018: EBITDA outlook raised by €0.1 bn € bn Revenue Adj. EBITDA FCF 2014 – 2018 CAGR +1 – 2% +2 – 4% ≈+10% achievements Q1/18 +3.1%2 +6.6%2 +12.5% 2018 Guidance ($/€: 1.13) Slight increase Old: around 23.2 Around 6.2 New: around 23.3 thereof group excl. US Around 13.2 thereof TM US (US$ bn)
Slide 9: Review Q1/18
REVIEW Q1/18
Slide 10: Q1 2018: Financial Highlights
q1 2018: Financial Highlights € mn Q1 FY 2017 2018 Change 2016 2017 Change Revenue 18,646 17,924 -3.9% 73,095 74,947 +2.5% Adj. EBITDA 5,550 5,549 0.0% 21,420 22,230 +3,8% Adj. Net profit 939 1,190 +26.7% 4,114 6,039 +46.8% Net profit 747 992 +32.8% 2,675 3,461 +29.4% Adj. EPS (in €) 0.20 0.24 +20.0
Slide 11: Germany: revenue impacted by IFRS adj., EBITDA on track
GERMANY: revenue impacted by IFRS adj., ebitda on track Revenue (as reported) Adj. EBITDA and margin (in % as reported) € mn Retail fixed1 Mobile Service Others € mn 38.1 38.8 39.7 39.1 36.9 Wholesale services Mobile handsets & other +1.3% -1.3% 2,055 2,086 2,177 2,094 2,082 5,488 5,676 5,397 5,371
Slide 12: Germany: Sustained growth in service revenues
germany: Sustained growth in service revenues (EXCL. IFRS 15) Mobile service revenue Fixed line service revenue1 Total service revenue1 Q1/17 -0.8% -0.6% -0.7% Q2/17 0.8% -1.2% -0.6% Q3/17 0.9% 0.3%2 0.5%2 Q4/17 1.7% 0.5% 0.9% Q1/18 3.2% 0.2% 1.2% 1) Total service revenue is a sum of fixed line and
Slide 13: Germany mobile: good commercial momentum
GERMANY mobile: good commercial momentum German mobile market service revenue1 (excl. IFRS 15) Contract net adds2 € mn Telefonica Vodafone Telekom 000 368 435 SPs/MVNOs 515 231 137 254 181 (incl. Lebara) 89 228 76 -39 -414 Own branded -862 4,611 -186 4,426 4,479 4,567 ~4.5bn -786 1,292 1,318 1,344 1
Slide 14: Germany: good progress with convergence and data
Germany: good progress with convergence and data Mobile contract customers in MagentaEINS bundles1 Average Consumer Data Usage3 Q1/17 MB Growth 82% 61% 55% 38% 54% yoy % 44% Q1/18 1,920 1,554 1,654 37% 1,244 1,360 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Households in MagentaEINS bundles2 Average data usage up
Slide 15: Germany Fixed: strong broadband customer growth
GERMANY Fixed: strong broadband customer growth German broadband market1 Entertain customers mn +67k +46k +70k +104k +95k3 Cable 000 +76 +69 +65 +50 +54 32.6 32.7 33.0 33.4 33.8 Telco Competitors 2,955 3,024 3,089 3,139 3,193 7.4 7.5 7.6 7.8 7.9 DT 12.1 12.2 12.3 12.4 12.5 DT net adds 13.0 13.0 13.1
Slide 16: Germany fixed: revenue trends heading towards stabilization
GERMANY fixed: revenue trends heading towards Stabilization Fixed network revenue retail (as reported) Broadband revenue1 (excl. IFRS 15) € mn Broadband revenues Single play revenues Other revenues € mn +5.3% Broadband 3P 1,314 1,313 1,314 1,318 1,384 Broadband 2P -0.9% 328 334 342 346 351 Q1/18 und
Slide 17: Germany: Network roll-out and IP-migration on track
germany: Network roll-out and ip-migration on track INS – Status LTE rollout INS – Status fiber rollout2 POP +1pp Coverage in % and 73% 66% Coverage in %1 millions of households 93% 94% +11% 28.0 31.2 Q1/17 Q1/18 Q1/17 Q1/18 Status IP accesses (retail & wholesale) Status IP accesses (retail & wholes
Slide 18: TMUS: continued industry leading growth
TMUS: continued industry leading growth Revenue and service revenue Net adds US-$ bn +6.0% 000 1,854 1,433 Total revenue 1,142 1,333 1,329 Service revenue Total net adds +8.7% 9.6 7.2 10.2 7.3 9.9 7.4 10.7 7.6 10.4 7.7 Branded: Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Postpaid 914 817 817 1,072 1,005 Prepa
Slide 19: TMUS: executing on key drivers
TMUS: executing on key drivers Branded postpaid phone churn Bad debt expenses & losses from sale of receivables % % of total revenue 2.0 1.9 1.33 1.6 1.4 1.18 1.07 1.0 Q1/16 Q1/17 Q1/18 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Branded postpaid phone churn on record low level Decrease reflects ongoing focus
Slide 20: Europe: Strong growth in customer base
europe: Strong growth in customer base Contract Net Adds BB Net Adds4 000 000 372 364 81 88 2251 265 56 602 203 47 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 FMC Net Adds TV Net Adds 000 000 216 201 51 56 175 167 44 45 1303 27 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q1/17 Q2/17 Q3/17 Q4/17 Q1
Slide 21: Europe: growing revenue and EBITDA
EUROPE: growing revenue and EBITDA Revenue Organic revenue development € mn € mn +0.2% +1.1% 2,805 -6 2,811 3,002 12 2,781 2,860 2,945 2,811 2,781 24 0 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q1/17 Cons./ FX Revenue Mobile Q1/18 Decons. growth regulation Adj. EBITDA Organic adj. EBITDA development € mn € mn +
Slide 22: Europe: ongoing investments in network leadership
EUROPE: ongoing investments in network leadership IP migration LTE rollout IP share of fixed network access lines LTE outdoor pop coverage 107 100 % +10pp mn and % 61 71 89% 95% Q1/17 Q1/18 Q1/17 Q1/18 Customer base1 Fiber rollout1 mn +4.9% TV Fiber household coverage +7pp +6.6% Broadband % 33 +4.2%
Slide 23: Systems Solutions: full year outlook unchanged - Q1 impacted by phasing
SYSTEMS SOLUTIONS: full year outlook unchanged - Q1 impacted by Phasing T-Systems financials Revenue € mn € mn -2.3% Total revenue Adj. EBITDA 1,704 1,688 1,707 1,819 1,665 -2.3% -40.6% 1,704 1,665 96 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Adj. EBIT and margin in % 57 € mn -0.1 2.4 2.2 2.5 -2.3 41 38 45 -2 Q
Slide 24: Group Development: steady underlying delivery - TM NL revenues impacted by IFRS 15
Group Development: steady underlying delivery - TM NL revenues impacted by IFRS 15 Revenue Mobile service revenue trend yoy (NL) € mn NL % -0.9 +0.9 -5.2 -7.4 -14.6 MSR trends as -6.4% reported Towers 1.6 564 562 545 561 528 Other1 0.6 341 345 327 342 309 MSR trends 217 6 -0.7 -1.0 excl. regulation
Slide 25: Group Development: Tower business doing well
Group Development: Tower business doing well Total site development Recurring rental revenue k +3.7% €m +3.1% 27.2 27.4 27.6 28.1 28.2 181.4 180.6 182.6 184.3 187.1 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Opex per site (avg. sites) EBITDA & EBITDA margin development k€/site -8.8%
Slide 26: Financials: FCF, net debt, net income and EPS
FINANCIALs: FCF, Net debt, net income AND EPS Free cash flow1 Adj. net income € mn +12.5% € mn +26.7% 1,228 1,382 94 -583 1,190 -475 460 939 942 -201 169 -1 Q1/17 Cash gen. from Capex (excl. Interest Q1/18 Q1/17 Adj. Financial D&A Taxes Minorities Q1/18 operations spectrum) & Other EBITDA result Net
Slide 27: Financials: balance sheet ratios in target corridor
FINANCIALS: balance sheet ratios in target corridor € bn 31/03/2017 30/06/2017 30/09/2017 31/12/2017 31/03/2018 Balance sheet total 148.6 141.5 139.8 141.3 138.0 Shareholders’ equity 39.8 38.6 39.1 42.5 43.7 Net debt 50.0 55.2 52.6 50.8 50.5 Net debt/adj. EBITDA1 2.3 2.5 2.3 2.3 2.3 Equity ratio 26.
Slide 28: Executing our strategy
Executing our strategy 1 Leading European Telco: Integrated market leader with superior margins and returns. 2 We strengthen our differentiation by best customer experience and by continuously investing into leading access networks and our transformation programs. 3 We transform towards a lean and h
Slide 29: Sneak preview: 2018 capital markets day
sneak preview: 2108 capital markets day Grow Lead In Customer Lead in Lead in Business experience technology Productivity ONE CONNECTIVITY INTEGRATED SECURE ICT SOLUTIONS & PERFECT SERVICE GIGABIT NETWORKS & BIG IOT Save for Growth Investments Simplify, digitize, accelerate 29
Slide 30: Conference call with Q&A session
Conference call with q&a Session The conference call will be held on May 9 at 2:00 PM CET, 1:00 PM GMT, 8 AM ET. DT Participants: Tim Hoettges (CEO), Thomas Dannenfeldt (CFO), Hannes Wittig (Head of IR) Webcast Dial-in The link to the webcast will be provided here 20 minutes before the DE 0800 965
Slide 31: 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 investor.relations@telekom.de Contact details for all IR representatives: www.telekom.com/ircontacts IR Webpage IR Twitter Account IR YouTube Channel www.telekom.com/investors www
Slide 32: Appendix
Appendix
Slide 33: 2018: IFRS 15 Impact on results
2018: IFRS 15 Impact on results Outlook beginning of year 2018 Current view Revenue Adj. EBITDA Group -0.15 bn max. +0.1 bn1 Unchanged Germany --1 to -1.5% Impact of IFRS 9 (-) and Unchanged IFRS 15 (+) will be neutral US +0.5% +0.2%1 Unchanged Europe neglible neglible Unchanged Group Development no
Slide 34: Germany mobile: service revenue (excl. IFRS 15)
germany mobile: service revenue (EXCL. IFRS 15) Reported mobile service revenue Impact of mobile regulation1 Impact of convergent offers2 Q1/17 -0.8% 2.2% 0.8% Q2/17 0.8% 1.7% 0.8% Q3/17 0.9% 2.8% 0.7% Q4/17 1.7% 1.9% 0.5% Q1/18 3.2% 1.0% 0.7% Medium term guidance (2014 – 2018 CAGR): Re-iterated ≈ +
Slide 35: German Fixed: service revenue (excl. IFRS 15)
german Fixed: service revenue (EXCL. IFRS 15) Growth rates YOY Wholesale revenue Broadband revenue Fixed line service revenue1 Q1/17 0.0% 1.4% -0.6% Q2/17 -0.4%2 0.8% -1.2% Q3/17 2.8% 0.6% 0.3%2 Q4/17 2.7% 0.6% 0.5% Q1/18 3.4% 1.8% 5.3%3 0.2% Medium term guidance (2014 – 2018 CAGR): Re-iterated +0.0
Slide 36: Thank you!
THANK YOU!