Deutsche Telekom Ag · XETR:DTE
Deutsche Telekom — Q1 2023 Earnings Presentation
37 slides from Deutsche Telekom's earnings presentation, May 11, 2023
Slide 1: Deutsche Telekom Q1 2023 results
Deutsche Telekom Q1 2023 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, dep
Slide 3: Q1 2023 results Group
Q1 2023 results Cigelere)
Slide 4: Q1/2023 results a good start to the year
Q1/2023 results a good start to the year Q1/2023 Highlights • Strong organic growth: service revenues up 2.6% and adj. Core EBITDA up 4.4% • TMUS raises guidance for customers, EBITDA and Free Cash Flow • Ex US on track for guidance • DT group guidance for EBITDA AL raised • TM US majority (50.2% on
Slide 5: Financials Q1/2023 organic strong organic growth
Financials Q1/2023 organic strong organic growth Q1/23 Adj. EBITDA AL Q1/23 Adj. EBITDA AL2 Q1/23 Key Financials Due to 20% lower US growth yoy, organic € mn % growth yoy, organic equipment revenues TMUS Adj. Core EBITDA AL 1.3% 1 Group revenues -0.5% +€81 mn growth of 6.6% GER 2,489 3.1% Group serv
Slide 6: Networks leading with 5G, FTTH on track
Networks leading with 5G, FTTH on track FTTH (1 Gbps) 5G TM US 5G ex US Fiber homes Ultra capacity 5G1 Germany mn +3.1 mn POPs +50 % of POPs +3 13.9 275 92 95 10.8 225 8.2 EU 7.2 GER 3.6 5.7 Q1/22 Q1/23 Q1/22 Q1/23 Q1/22 Q1/23 GER Network Leader GER • On track for >2.5 mn homes in 2023 • TMUS wins i
Slide 7: Customers growing strongly
Customers growing strongly Mobile net adds Fixed line net adds2 000 1,318 1,293 000 US (postpaid) Broadband 157 125 Q1/22 Q1/23 Q1/22 Q1/23 378 Ex US (contract)1 343 TV 79 48 Q1/22 Q1/23 Q1/22 Q1/23 1 GER + EU. GER: own brand only 2 GER + EU 7
Slide 8: DT climate targets sharpened ambitions
DT climate targets sharpened ambitions Climate ambitions Drivers of CO2 emissions (FY 2022) ( in line with SBTi requirements) Scope 1: Scope 2: Scope 3: own activities purchased activities value chain 2021 Renewable electricity as of 2021 212 ktons 21 ktons 12,287 ktons (-10% since 2020) (-99% since
Slide 9: Updated Guidance 2023 continued growth - upgrade
Updated Guidance 2023 continued growth - upgrade Adj. EBITDA AL1 TM US DT Ex US FCF AL1 TM US DT Ex US € bn € bn 39.3 ~40.8 ~40.9 >16 >16 ~27.0 ~27.1 11.2 25.6 +4% >+40% ~12.7 ~12.8 7.6 13.7 13.9 13.9 3.6 ~3.54 ~3.54 FY 2022 Guidance 2023 Guidance FY 2022 Guidance Guidance pro forma Update Q1 pro fo
Slide 10: Q1 2023 results Review segments and financials
Q1 2023 results Review segments and financials
Slide 11: T-Mobile US strong financial growth
T-Mobile US strong financial growth Revenues (IFRS) Adj. EBITDA AL (IFRS)2 US$ bn US$ bn -2.3% Mainly explained by +1.3% 20.1 19.6 higher postpaid 6.9 7.0 yoy decline in handset Other revenues 5.0 4.1 upgrades in prior year leasing revenues related to Sprint US$0.3 bn1 Service revenues 15.1 15.5 cus
Slide 12: T-Mobile US consistent growth in all customer categories
T-Mobile US consistent growth in all customer categories Total postpaid net additions1 5G EXTENDED RANGEMore than 5G ULTRA CAPACITY AT&T and Postpaid phone net additions1 mn Verizon combined, FY 000 guidance raised 1.8 854 927 1.7 1.6 1.3 1.3 729 589 538 Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 Q1/22 Q2/22 Q3/
Slide 13: Germany 26th consecutive quarter of EBITDA growth
Germany 26th consecutive quarter of EBITDA growth Revenues (as reported) Adj. EBITDA AL (as reported) € mn € mn +3.0% +4.0% 5,963 6,141 2,393 2,489 Q1/22 Q1/23 Q1/22 Q1/23 Revenue growth (organic) Adj. EBITDA AL (organic) % yoy % yoy 2.7% 2.7% 3.7% 2.3% 3.0% 3.0% 3.0% 3.1% 1.1% 0.8% Q1/22 Q2/22 Q3/2
Slide 14: 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) Lebara loss accounts % yoy % yoy for 1.3pp lower service revenue trend 1.8% 1.7% 1.6% 3.5% 1.2% 2.5% 2.7% 2.0% 1.7% 0.6% Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 Q1/22 Q2/22 Q3/22
Slide 15: Germany fixed revenues: strong broadband growth
Germany fixed revenues: strong broadband growth Retail fixed revenues (as reported) Broadband revenue growth (organic) € mn % yoy +3.6% 3,066 3,177 4.7% 4.7% 5.0% 4.7% 4.4% Broadband revenues +4.7% 1,691 1,770 Single play and other revenues 1,375 1,406 +2.3% Q1/22 Q1/23 Q1/22 Q2/22 Q3/22 Q4/22 Q1/23
Slide 16: Germany fixed KPIs: net adds improved, strong upselling continues
Germany fixed KPIs: net adds improved, strong upselling continues Broadband net adds impact of TKG TV net adds impact of TKG 000 000 63 74 74 55 45 51 50 21 32 17 Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 Retail customers with ≥100Mbit/s tariff FTTH Customers (base and pre-marketed
Slide 17: Germany mobile KPIs: strong customer intake
Germany mobile KPIs: strong customer intake Branded contract net adds1 Data usage2 000 368 GB per month 11.4 274 225 7.6 193 194 +51% yoy Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 Q1/22 Q1/23 Churn2 Anniversary of new TKG Magenta EINS share (mobile)3 % reduces churn % 1.2% 63% 63% 0.8% Q1/22 Q1/23 Q1/22 Q1/23 1
Slide 18: Europe 21st consecutive quarter of organic EBITDA growth
Europe 21st consecutive quarter of organic EBITDA growth Revenues (as reported) Adj. EBITDA AL (as reported) € mn € mn +3.8% +0.7% 2,682 2,784 976 983 Q1/22 Q1/23 Q1/22 Q1/23 Revenues (organic) Adj. EBITDA AL (organic) Q1 Headwinds: % growth yoy % growth yoy HU special tax ~1.9pp 7.0% Energy costs ~
Slide 19: Europe strong commercial performance
Europe strong commercial performance Mobile contract net adds Net adds negatively impacted Broadband net adds 000 by 33k re-classifications from 000 243 251 contract to prepay in Hungary 179 150 92 76 83 104 70 70 Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 FMC net adds TV net adds 0
Slide 20: Systems Solutions EBITDA AL on track for full year guidance
Systems Solutions EBITDA AL on track for full year guidance Order entry (LTM) Revenues (as reported) Adj. EBITDA AL (as reported) € bn € mn € mn +2.0% +10.3% -10.9% 4.1 927 946 68 75 3.7 Q1/22 Q1/23 Q1/22 Q1/23 Q1/22 Q1/23 • Order entry driven by phasing rather than Revenues (organic) Adj. EBITDA AL
Slide 21: Financials Q1/2023 reported driven by phasing and tower sale
Financials Q1/2023 reported driven by phasing and tower sale € mn Q1 2022 2023 Change Revenue 27,746 27,839 +0.3% Adj. EBITDA AL 9,873 9,963 +0.9% Adj. EBITDA AL (excl. US)1 3,701 3,427 -7.4% Adj. Net profit 2,238 1,959 -12.5% Net profit 3,949 15,360 +289.0% Adj. EPS (in €) 0.45 0.39 -13.3% Free cas
Slide 22: FCF AL and net profit
FCF AL and net profit free cash flow impacted by phasing, net profit by non-recurring factors Free Cash Flow AL1 Adj. net profit Recurring adjusted EPS € mn € mn growth is 19%. (from €0.31 to €0.37) -5.3% -12.5% 3,781 200 -275 -101 3,579 397 -409 -28 2,238 80 -64 -284 1,959 Impacted by TM US phasing
Slide 23: Net debt leverage ex leases at 2.31x
Net debt leverage ex leases at 2.31x Net debt excl. leases (AL) Leverage ratios € bn -10.7 Incl. Leases 103.7 Excl. Leases -3.6 93.0 -10.7 4.3 -0.7 3.06 3.07 2.87 2.70 2.58 2.31 FY/22 FCF AL Towers SBB TM US F/X and others Q1/23 2021 2022 Q1/23 23
Slide 24: Q1 2023 results Main takeaways
Q1 2023 results Main takeaways
Slide 25: Q1 2023 Key messages a good start to the year
Q1 2023 Key messages a good start to the year • Strong and consistent commercial performance in all 2022 results/CMD targets 20241 Recurring EPS markets Adj. EPS in €/share 1.83 • Germany on 26, EU on 21 successive quarters of organic 0.32 >1.60 >1.75 EBITDA AL growth 1.20 • On track for ex US guida
Slide 26: Q1 2023 results Appendix
Q1 2023 results Appendix
Slide 27: Group Development
Group Development Revenues (as reported) GD Towers only Adj. EBITDA AL (as reported) GD Towers only € mn -88% included for 1 month in € mn -81.7% included for 1 month in 825 2023. In addition, 2022 356 2023. In addition, 2022 included T-Mobile NL included T-Mobile NL 102 65 Q1/22 Q1/23 Q1/22 Q1/23 R
Slide 28: Organic growth rates
Organic growth rates In % Q1/23 over Q1/22 Group revenues -0.5 Group service revenue +2.6 Service revenue excl. US +2.2 Group Adj. EBITDA AL +1.0 Adj. EBITDA AL excl. US +0.6 Group adj. Core EBITDA AL1 +4.4 1 adj. EBITDA AL excl. TM US handset leases In this presentation the Group is presented in ac
Slide 29: TM US: EBITDA reconciliation
TM US: EBITDA reconciliation Q1/23 • Handset leasing revenues decreased – as expected US$ mn • Bridge in Q1/23 on expected level and in line with full year +9.1% yoy +3.6% yoy +1.3% yoy guidance of US$ 0.8 to 0.85 bn 7,052 7,199 7,014 147 -185 • Comparatively low bridge in Q1/22 is explained by US$
Slide 30: FCF AL excl. US
FCF AL excl. US adj. EBITDA AL due to de-consolidation of the Dutch business and GD Towers. € bn Q1 2022 Q1 2023 Organic growth rate of +0.6% Adj. EBITDA AL 3.7 3.4 Cash Capex -1.6 -2.0 Capex front-loaded in 2023 Proceeds from sale of fixed assets +0.0 +0.0 Special Factors Cash -0.4 -0.2 Interest ex
Slide 31: Financials well balanced maturity profile with strong liquidity reserve
Financials well balanced maturity profile with strong liquidity reserve Ex US bonds maturing Ex US liquidity position Credit lines € bn € bn Liquid assets 19.5 2.5 12.0 2.4 2.2 Ø 2.15 1.5 2.5 0.0 5.0 7.5 2.4 2023 2024 2025 2026 Liquidity Maturities Maturities Maturities Total maturities reserve 2023
Slide 32: Balance sheet deleveraging as promised
Balance sheet deleveraging as promised € bn 31/03/2022 30/06/2022 30/09/2022 31/12/2022 31/03/2023 Balance sheet total 292.4 301.7 321.4 298.6 303.8 Shareholders’ equity 87.7 88.5 94.5 87.3 98.7 Net debt excl. leases (AL) 98.1 106.3 109.5 103.7 93.0 Net debt excl. leases (AL)/adj. EBITDA AL1 2.59 2.
Slide 33: Guidance 2023 compared to consensus
Guidance 2023 compared to consensus € bn Guidance 2023 in € Guidance 2023 in € Consensus in € @ 1.05 @ 1.09 @ 1.09 Adj. EBITDA AL Group ~40.9 ~40.0 40.4 ex US includes one month of GD 13.9 13.9 14.0 Towers in 2023. Guidance is without thereof ex US GD. thereof TM US ~27.1 ~26.1 26.4 Consensus uses €
Slide 34: Outlook 2022/23 as per annual report 2022 (1/2)
Outlook 2022/23 as per annual report 2022 (1/2)1 € bn 2022 pro forma 2023e 2024e Revenue Group 113.7 Slight increase Slight Increase Germany 24.7 Slight increase Increase US (in US$) 79.3 Slight increase Slight increase Europe 11.2 Increase Slight increase Systems Solutions 3.7 Stable Slight increas
Slide 35: Outlook 2022/23 as per annual report 2022 (2/2)
Outlook 2022/23 as per annual report 2022 (2/2)1 € bn 2022 pro forma 2023e 2024e Cash Capex Group 20.7 16.8 Stable Germany 4.4 Slight increase Slight increase US (in US$) 14.0 Strong decrease Stable Europe 1.8 Stable Stable Systems Solutions 0.2 Stable Stable FCF AL Group 11.2 >16 Strong increase Ad
Slide 36: Investor + Analyst Webcast with Q&A session
Investor + Analyst Webcast with Q&A session The conference call will be held on May 11 at 14:00 CEST, 13:00 BST, 08:00 EDT, 05:00 PDT, 21:00 JST DT Participants: Tim Höttges (CEO), Christian Illek (CFO), Hannes Wittig (Head of IR) Detailed time stamps in video description for slides + Q&A: Live
Slide 37: 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