Deutsche Telekom Ag · XETR:DTE
Deutsche Telekom — Q4 2016 Earnings Presentation
33 slides from Deutsche Telekom's earnings presentation, Mar 2, 2017
Slide 1: Deutsche Telekom Q4/2016 Results
Deutsche Telekom Q4/2016 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 FY/16
REVIEW FY/16
Slide 4: Our strategy
OUR strategy LEADING EUROPEAN TELCO BEST INTEGRATED WIN WITH LEAD IN CUSTOMER IP NETWORKS PARTNERS BUSINESS EXPERIENCE TRANSFORM PORTFOLIO EVOLVE FINANCIAL TARGETS & EFFICIENCY ENCOURAGE LEADERSHIP & PERFORMANCE DEVELOPMENT 4
Slide 5: Guidance and Achievements: delivering growth
GUIDANCE and Achievements: delivering growth Revenue Adj. EBITDA FCF Dividend1 € bn € bn € bn € per share CAGR 8% CAGR 8% CAGR 10% CAGR 10% 69.2 73.1 21.4 ~22.2 ~5.5 0.55 0.60 62.7 19.9 4.9 0.50 17.6 4.1 4.5 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017 Guidance2 Gu
Slide 6: 2016 Highlights: investments, customers and results
2016 Highlights: investments, customers and results Investments and innovation (FY/16) Customers (FY/16) Financial results (FY/16) Further strengthening of spectrum position in Demand for Fiber in Germany continues unabated Strong growth continues the US and Europe 6.8 million German homes w
Slide 7: Customers: Strong momentum, record new fiber subs
customers: Strong momentum. record new fiber subs MagentaEINS (Germany + EU)1 US Mobile mn mn +1.6 +8.2 4.4 71.5 2.8 63.3 FY/15 FY/16 FY/15 FY/16 Fiber in Germany Cloud revenues mn € bn +12% +2.4 6.8 1.4 1.6 4.4 FY/15 FY/16 FY/15 FY/16 1) FMC RGUs may also appear under other brand name outside of Ge
Slide 8: Innovations: Focus on customer experience
Innovations: Focus on customer experience Hybrid Access1 Innovation/Network Service App subs +83% transactions +140% DT wins network 5G: Guaranteed 283k tests in latency 449k 155k GER/EU/USA demonstrated 187k FY/15 FY/16 Q4/15 Q4/16 Smart Home2 IT-Support3 subs +226% subs +8% First tangible 5G: SK T
Slide 9: Guidance: 2016 guidance achieved, 2017 guidance in line with mid term ambition
GUIDANCE: 2016 guidance successfully achieved. 2017 guidance in line with mid term ambition € bn Revenue Adj. EBITDA FCF 14-18 CAGR1 +1 – 2% +2 – 4% ≈+10% 2016 Guidance ($/€: 1.11) Increase Around 21.2 bn2 Around 4.9 bn FY 2016 performance +5.6% 21.4 bn (+7.6%)2 4.9 bn (+8.6%) 2017 Guidance ($/€: 1.
Slide 10: Review Q4/16
REVIEW Q4/16
Slide 11: Q4/2016: Financial Highlights
Q4/2016: Financial Highlights € mn Q4 FY 2015 2016 Change 2015 2016 Change Revenue 17,859 19,543 +9,4% 69,228 73,095 +5.6% Adj. EBITDA 5,143 5,265 +2.4% 19,908 21,420 +7.6% Adj. Net profit 959 973 +1.5% 4,113 4,114 0.0% Net profit 946 -2,124 n.m. 3,254 2,675 -17.8% Adj. EPS (in €) 0.21 0.21 0.0% 0.9
Slide 12: Germany: growing EBITDA in Q4 and FY
GERMANY: growing ebitda in Q4 and FY Revenue reported Adj. EBITDA and margin (in %) € mn € mn 40.0 41.1 40.5 38.1 Retail fixed1 Mobile Service Others 36.9 Wholesale services2 Mobile handsets & other +2.8% -0.5% 2,086 2,180 2,225 2,250 2,145 5,659 5,452 5,406 5,551 5,632 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16
Slide 13: Germany: total service revenues stable
germany: total service revenues stable Mobile service revenues Fixed line service revenues1,2 Total service revenues1,2 Q4/14 1.8% -2.2% -0.9% Q1/15 2.8% -2.3% -0.6% Q2/15 0.1% -2.0% -1.3% Q3/15 -0.4% -0.7%3 -0.6%3 Q4/15 -0.4% -1.4% -1.1% Q1/16 -1.7% -0.5% -0.9% Q2/16 -0.8% 0.4%4 0.0%4 Q3/16 0.2% -1
Slide 14: Germany mobile: steady commercial momentum
GERMANY mobile: steady commercial momentum German mobile market service revenue1 Contract net adds2 € mn Telefonica Vodafone Telekom 000 609 Service providers/ 514 MVNOs 362 Own branded -0.7% 464 334 231 4,635 284 93 156 4,567 4,490 4,525 4,533 5 78 137 151 145 180 1,378 1,336 1,358 1,394 1,349 -2.1
Slide 15: Germany: convergence and data monetization
Germany: great progress with convergence and DATA MONETIZATION Mobile contract customers in M1 bundles1 Average Consumer Data Usage3 Q4/15 MB Growth 35% 35% 61% 81% 87% yoy % Q4/16 1,200 34% 1,000 684 846 25% 643 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Households in M1 bundles2 Average LTE usage uplift3 Q4/15
Slide 16: Germany Fixed: record growth in fiber with 674k new customers
GERMANY Fixed: record growth in fiber with 674k new customers German broadband market1 Entertain customers mn +48k +62k +64k +65k +87k Cable 000 +51 +53 +41 +41 +61 30.9 31.3 31.7 31.9 32.2 Telco Competitors 2,683 2,736 2,777 2,818 2,879 6.7 6.8 7.0 7.1 7.3 DT 11.6 11.8 11.9 12.0 12.0 DT net adds 12
Slide 17: Germany fixed: fixed retail momentum stabilizing
GERMANY fixed: fixed retail momentum stabilizing Fixed network revenues retail Broadband revenues € mn Broadband revenues Single play revenues Other revenues € mn +1.6% Broadband 3P 1,289 1,296 1,303 1,307 1,310 Broadband 2P -1.1% 296 303 308 312 317 2,462 2,410 2,420 2,395 2,434 993 993 995 995 993
Slide 18: Germany: fiber coverage reaching 64 percent as promised
germany: fiber coverage reaching 64 percent as promised INS – Status LTE rollout INS – Status fiber rollout2 POP +3pp Coverage in % and 64% 55% Coverage in %1 millions of households 90% 93% +17% 23.0 27.0 Q4/15 Q4/16 Q4/15 Q4/16 Status IP accesses (retail & wholesale) Status IP accesses (retail & wh
Slide 19: TMUS: strong growth in all key metrics
TMUS: strong growth in all key metrics Revenue and service revenue Net adds US-$ bn +10.6% Total revenue in 000 Total net adds 2,062 2,221 1,881 1,970 2,101 +23.7% Service revenue 8.2 6.4 8.6 6.5 9.3 6.8 9.2 7.0 10.2 7.1 Branded: Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Postpaid 1,292 1,041 890 969 1,197 P
Slide 20: Focus on TMUS: Important drivers keep trending well
Focus on TMUS: Important drivers keep trending well Branded postpaid phone churn Bad debt expenses & losses from sale of receivables % in % of total revenues 2.8 1.73 1.46 2.0 1.8 1.9 1.9 1.28 Q4/14 Q4/15 Q4/16 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Branded postpaid phone churn on record-low for a fourth q
Slide 21: Europe: accelerating customer momentum in mobile and convergence
europe: accelerating customer momentum in mobile and convergence Contract Net Adds BB Net Adds 000 000 +220% -18% 381 84 79 67 69 219 54 119 88 153 Q4/151 Q1/16 Q2/16 Q3/16 Q4/16 Q4/15 Q1/16 Q2/16 Q3/16 Q4/162 FMC Net Adds TV Net Adds 000 000 +88% -16% 157 180 73 61 144 49 96 39 16 17 Q4/15 Q1/16 Q2
Slide 22: Europe: increased market invest weighs on financials
EUROPE: increased market invest weighs on financials Revenue as reported in € mn and organic change yoy in %1,2 Organic revenue development -0.4 -1.2 +0.1 -0.5 € mn -0.5% -2.6 3,397 -0.9% -41 3,370 3,397 3,080 3,106 3,223 3,338 3,354 16 -8 -2 -14 3,338 -10 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q4/15 Cons./
Slide 23: 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 109 92 +12pp mn and % 47% 60% 71% 84% Q4/15 Q4/16 Q4/15 Q4/16 Customer base1 Fiber rollout1 mn +3.2% TV Fiber household coverage +6pp +7.5% Broadband 26% +3.7% M
Slide 24: Systems Solutions: Q4 EBITDA impacted by legacy write down
SYSTEMS SOLUTIONS: q4 ebitda impacted by legacy write down T-Systems Financials Revenue Market Unit in € million and change yoy in %1 € mn 1.5 6.6 -3.0 -7.5 -7.4 Total revenue Adj. OPEX Adj. EBITDA 1,724 1,728 1,592 1,546 1,597 Tel-IT MU -8.6% -2.7% -72.2% Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 2,163 2,011 1
Slide 25: Financials: FCF, net debt, net income and ROCE
FINANCIALs: FCF, Net debt, net income and roce Free cash flow Q4/161 Adj. net income Q4/16 € mn € mn -10.5% +1.5% 998 893 959 973 -287 291 -109 122 -444 208 -204 332 Q4/15 Cash gen. from Capex (excl. Interest & Other Q4/16 Q4/15 adj. Financial D&A Taxes Minorities Q4/16 operations spectrum) EBITDA r
Slide 26: Financials: balance sheet ratios in target corridor
FINANCIALS: balance sheet ratios in target corridor € bn 31/12/2015 31/03/2016 30/06/2016 30/09/2016 31/12/20165 Balance sheet total 143.9 143.6 143.5 143.1 148.5 Shareholders’ equity 38.2 38.4 37.0 37.6 38.8 Net debt 47.6 47.6 48.7 48.5 50.0 Net debt/adj. EBITDA1 2.4 2.3 2.3 2.3 2.3 Equity ratio 26
Slide 27: 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 28: Conference call with Q&A session
Conference call with q&a Session The conference call will be held on March 2 at 2:00 PM CET, 1:00 PM GMT, 8 AM ET. DT Participants: Tim Höttges (CEO), Thomas Dannenfeldt (CFO), Hannes Wittig (Head of IR) Webcast Dial-in The link to the webcast will be provided here 20 minutes DE 0800 9656288 + cod
Slide 29: 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 30: Appendix
Appendix
Slide 31: Germany mobile: service revenues
germany mobile: service revenues Reported mobile service revenues Impact of mobile regulation1 Impact of convergent offers2 Q4/14 1.8 0.3% 0.2% Q1/15 2.8 0.3% 0.7% Q2/15 0.1 0.4% 1.0% Q3/15 -0.4 0.1% 1.4% Q4/15 -0.4 0.1% 1.4% Q1/16 -1.7 0.1% 1.1% Q2/16 -0.8 1.0% 1.1% Q3/16 0.2 2.3% 1.0% Q4/16 -0.3 1
Slide 32: German Fixed: service revenues
german Fixed: service revenues Growth rates YOY Wholesale revenues2 Broadband revenues Fixed line service revenues1,2 Q4/14 -1.7% -0.2% -2.2% Q1/15 -1.9% 0.0% -2.3% Q2/15 0.0% 0.2% -2.0% Q3/15 3.0%3 0.9% -0.7%3 Q4/15 -0.6% 1.3% -1.4% Q1/16 2.9% 1.8% -0.5% Q2/16 3.4%4 1.8% 0.4%4 Q3/16 0.5%5 1.7% -1.4
Slide 33: Thank you!
THANK YOU!