Deutsche Telekom Ag · XETR:DTE
Deutsche Telekom — H1 2001 Earnings Presentation
33 slides from Deutsche Telekom's earnings presentation, Aug 28, 2001
Slide 1: Deutsche Telekom Analyst Presentation
Deutsche Telekom Analyst Presentation August 28, 2001 ===!"§ Deutsche Telekom
Slide 2: Disclaimer
Disclaimer This presentation contains certain statements that are neither reported financial results nor other historical information. These statements are forward-looking statements within the meaning of the safe-harbor provisions of the U.S. federal securities laws. Because these forward-looking s
Slide 3: Highlights and Strategy
Highlights and Strategy Dr. Ron Sommer CEO ===!"§ Deutsche Telekom
Slide 4: Strong fundamentals
Strong fundamentals Strategic direction right on track ■ Improved operational earnings power ■ Mobile EBITDA margin increased from 13% in H1/00 to 23% in H1/01 ■ T-Com EBITDA margin above 30% in H1/01 ■ EBITDA losses at T-Online International further reduced ■ Delivering on our promises ■ H1/01 reve
Slide 5: First-half 2001: key figures
First-half 2001: key figures Double-digit increases in revenues and adjusted EBITDA Euro (billion) H1/2001 H1/2000 ∆ Euro ∆%* Net revenues 22.5 19.2 3.3 16.9% Adjusted EBITDA** 7.2 6.5 0.8 11.9% EBITDA (reported) 8.2 11.2 -3.0 -26.6% Cash from operations 6.8 5.2 1.6 30% * Calculated on the basis of
Slide 6: Powerful presence in Europe and USA
Powerful presence in Europe and USA Almost one quarter of group revenues from outside Germany International Revenues in € billion 25,000 22.5 25% 20,000 19.2 16.8 15,000 23% 10,000 18% 5.2 Consolidated 5,000 net revenues 9% 3.4 1.5 International revenues 0 H1 1999 H1 2000 H12001* 2001e * Including o
Slide 7: VoiceStream. Changing the Group's growth profile
VoiceStream. Changing the Group’s growth profile ■ Double-digit revenue CAGR (2001 - 2004) ■ Group EBITDA CAGR (2001 - 2004) increases from 6.6% to 13.9% ■ WorldClass tariff implemented, offering seamless roaming at an attractive price for TMO customers ■ Leveraging of DT’s purchasing power leads to
Slide 8: T-Mobile T-D1 No. 1 in Germany
T-Mobile T-D1 No. 1 in Germany Shift towards high-value customers Contract net adds in percent of total net additions ■ No. 1 in Germany % on total subscribers 40 and blended ARPU 35 ■ Net adds in contract are picking up 30 (38% of total net adds) 25 ■ Prepay SACs in Q2 20 reduced from € 133 to € 60
Slide 9: T-Com – At the forefront of DSL technology
T-Com – At the forefront of DSL technology Well on track for 90% coverage by year end T-DSL installations DSL customers as of H1/01 Customers (millions) (000) 1.2 Lines installed 1200 Of which lines installed 1.0 Outstanding contracts 1000 0.8 800 600 0.6 400 0.4 200 0.2 0 Qwest DT SBC Verizon FT Be
Slide 10: T-Systems – No. 2 systems house in Europe
T-Systems – No. 2 systems house in Europe Strong growth after successful integration ■ Top line growth 46% ■ Main drivers of revenue growth are Computing Services (+20%)*, Desktop Services (+16%)*, and Network Services (+13%)* ■ Successful e-business/convergence services take-up ensures long-term gr
Slide 11: T-Systems – Global network infrastructure
T-Systems – Global network infrastructure € 500 million capex in 2001 Responsibilities for international network infrastructure and international carrier services will shift from T-Com to T-Systems ===!"§ Deutsche Telekom August 2001 Page 11
Slide 12: T-Online – Focus on profitability
T-Online – Focus on profitability EBITDA break-even for Germany 2002 and for the TOI Group 2003 targeted T-Online Germany ■ New tariffs positively accepted and successful migration of narrow-band flat-rate customers Club Internet ■ The French market is in a strong consolidation phase ■ New offerings
Slide 13: Flowback management (1)
Flowback management (1) Flowback management successfully until block trade Performance European Telcos 31/ 5/01-24/ 8/01 20 10 0 -10 Deutsche Telekom -20 France Télécom -30 Telefonica Telecom Italia -40 British Telecom -50 Vodafone -60 6/8/01 KPN -70 Sonera 31/ 5/01 14/ 6/01 28/ 6/01 12/ 7/01 26/ 7/
Slide 14: Flowback management (2)
Flowback management (2) 57% of new shares already recycled (in million T-shares) 1,168 590 Free float 578 Insider total ■ Successfully redistributed 58 Sold pre-closing ■ approx. 600 million shares held by US investors Pre-released (28% of freefloat) 22 and sold (Sonera) as of June 30 498 43% of sha
Slide 15: Flowback – Sonera
Flowback – Sonera Pre-release from 09/01 lock-up in accordance with publicly disclosed right ■ Framework enabling a program of small transactions between beginning of July and end of August ■ 21.9 million shares sold ■ Average volume traded per trading day: 1.37 million shares ■ Average share price:
Slide 16: Flowback management
Flowback management Core shareholder shares free of lock-up Insiders (DT shares) from 1/9/01 (ADTV) from 1/12/01** (ADTV) Hutchison Whampoa (171.2m) 82.6m (4.1x) 88.6m (4.4x) Telephone and Data Systems (131.5m) 52.6m (2.6x) 78.9m (3.9x) Sonera Corporation (49.1m)* 11.8m (0.6x) 37.3m (1.9x) SCANA Com
Slide 17: Our agenda going forward
Our agenda going forward Turning potential into performance Quality offensive – Operating performance Debt reduction – Integration – Innovation DSL Top VoiceStream Convergence Value-added Positioning integration Global content Focus on Improved Networks Premium SME market customer services mix Impro
Slide 18: Financials
Financials Dr. Karl-Gerhard Eick CFO ===!"§ Deutsche Telekom
Slide 19: Strong financial position
Strong financial position Proactive financing activities over the last 18 months Financing activities (€ billion) Asset disposal program (€ billion) Global Bond 15.0 Global One 2.9 Syndicated Loan 18.0 T-Online 2.9 Samurai Bond 1.5 Cable Assets 3.2 Eurobond 8.0 Wind 2.7 EMTN 8.3 Sprint (FON + PCS) 3
Slide 20: Net debt position
Net debt position Increase in net debt due to VoiceStream partially offset by asset disposals Net debt (01/01/01) € 56.5 bn First consolidation VoiceStream 8.3 Cash component VoiceStream 4.9 Sprint -3.5 WIND -2.7 Dividend (net) 1.4 Radiomobil 0.6 Net debt (current) € 65.5 bn Financing reserves* € 28
Slide 21: Debt reduction
Debt reduction We plan to reduce our net debt by around 1/4 until the end of 2002 € billion 65.5 -5.0 -2.5 Cable -1.0 -1.0 assets -10.0 Real estate Fance Telecom Other assets Approx. +4.0 50.0 T-Mobile debis IPO today End 2002 ===!"§ Deutsche Telekom August 2001 Page 21
Slide 22: Improved equity ratio
Improved equity ratio Equity increases from € 42.7 billion to € 70.5 billion € (million) 177,027 180,000 150,000 39.1% 124,242 (€ 70.5 bn) 120,000 32.9% (€ 42.7 bn) 90,000 42.8% 60,000 equity 48.6% debt 30,000 18.5% 18.1% non-interest 0 bearing liabilities 31/12/2000 30/06/2001 ===!"§ Deutsche Telek
Slide 23: Strong Cash Flow
Strong Cash Flow Capex and interest payments more than covered by cash from operations € (billion) 30% 7.0 6.8 6.5 6.0 5.5 5.2 7% 5.0 4.7 4.5 4.4 H1/00 4.0 H1/01 Net cash from Cash from operations operating activities ===!"§ Deutsche Telekom August 2001 Page 23
Slide 24: Revenue breakdown
Revenue breakdown Changing our business mix dramatically Revenue breakdown as of H1/00 Revenue breakdown as of H1/01 2% 6% 23% 3% 6% 43% 21% 18% 53% 25% T-Com T-Mobile T-Systems T-Online Others ===!"§ Deutsche Telekom August 2001 Page 24
Slide 25: T-Mobile
T-Mobile H1/01 EBITDA already on level of entire year 2000 Euro (million) H1/2001 H1/2000 ∆ Euro ∆% Revenue 5,973 4,557 1,416 31.1 % EBITDA (reported) 1,375 597 778 130.3 % Adjusted EBITDA 1,375 597 778 130.3 % Adj. EBITDA-Margin 23.0 13.1 n/a n/a ===!"§ Deutsche Telekom August 2001 Page 25
Slide 26: VoiceStream – key figures
VoiceStream – key figures VoiceStream performance on track VoiceStream incl. one month of Powertel Q1/2001 Q2/2001 H1/2001 Covered POPs (million) 112 145 145 Subscribers (‘000) 4,390 5,953 5,953 ARPU (blended) $ 51 51 51 Service revenues ($ million)* 638 744 1,382 Adjusted EBITDA ($ million) -134 **
Slide 27: VoiceStream and Powertel
VoiceStream and Powertel Closing purchase price and goodwill in comparison with the announcement values in July 2001 Total July 2000 Total Purchase price (€ billion) VSTR PTEL US-GAAP US-GAAP HGB thereof share exchange 24.9 6.4 31.3 45.8 28.4 ■ thereof cash component 4.9 0 4.9 8.5 4.9 ■ thereof init
Slide 28: VoiceStream and Powertel
VoiceStream and Powertel Expected goodwill and license amortization Amortization Income effect Income effect € billion Amount period plan 2001 following years Licenses HGB 24.1 20 0.7 1.2 Goodwill HGB 25.0 20/7/3 0.9 1.5 Total HGB 49.1 n/a 1.6 2.7 Licenses US-GAAP 24.1 20 0.6 * 1.0 * Goodwill US-GAA
Slide 29: T-Com
T-Com Stable adjusted EBITDA margin Euro (million) H1/2001 H1/2000 ∆ Euro ∆% Revenue 13,062 13,312 ** - 250 - 1.9 % EBITDA (reported) 3,942 4,065 - 123 - 3.0 % Adjusted EBITDA 4,042 * 3,947 *** 95 2.4 % Adj. EBITDA-Margin 30.9 **** 29.6 **** n/a n/a * Value adjustment for inventories and others of €
Slide 30: T-Systems
T-Systems Convergence world drives future growth Euro (million) H1/2001 H1/2000 ∆ Euro ∆% Revenue 6,717 4,593 2,124 46.2 % EBITDA (reported) 354 3,327 - 2,973 - 89.4 % Adjusted EBITDA 472 * 463 ** 9 1.9 % Adj. EBITDA-Margin 7.0 10.1 n/a n/a * Adjusted for losses on accounts receivable for domestic c
Slide 31: T-Online
T-Online* EBITDA improvement from Q1/01 to Q2/01 Euro (million) Q2/2001 Q1/2001 ∆ Euro ∆% Revenue 346 361 - 15 - 4.2 % EBITDA (reported) - 25 - 27 2 7.4 % Adjusted EBITDA - 25 - 27 2 7.4 % EBITDA TOI** - 57 - 66 9 13.6% * Division including DeTeMedien. * * TOI = T-Online International Group without
Slide 32: Others
Others H1/2001 vs. H1/2000 Euro (million) H1/2001 H1/2000 ∆ Euro ∆% Revenue 3,623 3,361 262 7.8 % EBITDA (reported) 2,510 465 2,045 439.8 % Adjusted EBITDA 1,554 * 1,289 ** 265 20.6 % Adj. EBITDA-Margin 42.9 38.4 n/a n/a * Without the sale of Sprint FON (€ 956) incl. consulting and sales costs. ** W
Slide 33: Outlook
Outlook ■ Full focus on operational business and fundamentals ■ T-Mobile remains the main driver for continued EBITDA improvement in H2/2001 and beyond ■ Improvement of visibility of the U.S. wireless business represents key objective in H2/2001 (EBITDA, Capex, revenue, market share) ■ Continued deb