Deutsche Telekom Ag · XETR:DTE
Deutsche Telekom — Q1 2022 Earnings Presentation
42 slides from Deutsche Telekom's earnings presentation, May 13, 2022
Slide 1: Deutsche Telekom Q1 2022 results
Deutsche Telekom Q1 2022 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 2022 results: sector leading growth
Q1 2022 results sector leading growth T-Mobile US1 • Service revenues up 6.6%, adj. Core EBITDA +10.2% • FCF at US$ 1,649 mn (+26.5%) • Strong customer intake, accelerated integration progress • FY Guidance raised across the board Ex US • Service revenues +1.6% organically • Adj. EBITDA AL +6.1% org
Slide 4: Financials Q1 2022
Financials QO1 2022
Slide 5: Financials Q1 2022 reported: strong growth
Financials Q1 2022 reported strong growth € mn Q1 2021 2022 Change Revenue 26,390 28,023 +6.2% Adj. EBITDA AL 9,245 9,873 +6.8% Adj. EBITDA AL (excl. US) 3,538 3,701 +4.6% Adj. Net profit 1,201 2,238 +86.3% Net profit 936 3,949 +321.9% Adj. EPS (in €) 0.25 0.45 +80.0% Free cash flow AL1 2,585 3,781
Slide 6: Financials Q1 2022 organic: strong organic growth
Financials Q1 2022 organic strong organic growth Q1/22 Adj. EBITDA AL Q1/22 Adj. EBITDA AL2 Q1/22 Key Financials growth yoy, organic € mn % growth yoy, organic TMUS 0.3%1 Revenue +1.7% +€20 mn Service Revenues +4.7% GER 2,388 3.6% Service Revenues +€83 mn +1.6% (excl. US) EU 6.9% Adj. EBITDA AL +2.4
Slide 7: Strong growth in FCF AL and net income
Financials Q1 2022 strong growth in FCF AL and net income Free Cash Flow AL1 Adj. net profit € mn € mn +46.3% -376 3,781 +86.3% 518 3 -414 755 1,051 -408 2,238 2,585 366 738 1,201 Q1/21 Net CF gen. Leasing Capex (excl. Others Q1/22 Q1/21 Adj. EBITDA D&A Financial Taxes Minorities Q1/22 from ops. pay
Slide 8: Decline in net financial debt
Financials Q1 2022 decline in net financial debt Net debt excl. leases (AL) (Q1/22 over Q4/21) Leverage ratios € bn CMD: back in 2.25x–2.75x range YE 24 100.6 -3.8 98.1 0.6 0.8 1.3 3.10x -4.0 2.59x 2.6 Net Debt FCF AL Sales Spectrum F/X Effect CCI lease Derivatives Net Debt Excl. Leases Incl. Leases
Slide 9: Operations Review Q1/2022
Operations Review Q1/2022
Slide 10: Networks leading with 5G, FTTH well on track
Networks leading with 5G, FTTH well on track FTTH (1 Gbps) 5G TM US 5G Germany Homes passed Ultra capacity 5G2 % of POPs +0.5% 3.8% mn mn POPs +7.1% 10.8 91 92 10.4 210 225 7.0 7.2 3.4 3.6 YE/21 Q1/22 YE/21 Q1/22 YE/21 Q1/22 On track for CMD targets Targeting 260m YE 2022 >5,000 antennas with
Slide 11: Customers growing strongly
Customers growing strongly Mobile net adds Fixed line net adds2 '000 '000 1,318 1,210 US (postpaid) Broadband 203 Q1 fixed line net 141 adds impacted by changes in German telecoms law (TKG) Q1/21 Q1/22 Q1/21 Q1/22 390 Ex US (contract)1 308 TV 102 49 Q1/21 Q1/22 Q1/21 Q1/22 1 GER + EU + NL. GER: Own
Slide 12: Germany Review Q1/2022
Germany Review Q1/2022
Slide 13: Germany: 22nd consecutive quarter of EBITDA growth
Germany 22nd consecutive quarter of EBITDA growth Revenues (as reported) Adj. EBITDA AL (as reported) € mn € mn +0.9% +3.6% 5,942 5,994 2,305 2,388 Q1/21 Q1/22 Q1/21 Q1/22 Revenue growth (organic) Q1/22 growth rate impacted by various non- Adj. EBITDA AL (organic) % yoy recurring factors, including
Slide 14: Germany service revenues: mobile growing, fixed impacted by one-offs
Germany service revenues: mobile growing, fixed impacted by one-offs Total service revenue growth (organic)1 Public sector one-timer Mobile service revenue growth (organic) % yoy 0.6pp, lockdown boost 0.5pp % yoy 2.1% 2.3% 2.5% 1.7% 1.8% 2.0% 2.0% 1.6% 0.6% Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 -0.8% Q1/21
Slide 15: Germany fixed: commercials temporarily impacted by TKG
Germany fixed: commercials temporarily impacted by TKG Broadband net adds Q1/22 impact of TKG TV net adds Q1/22 impact of TKG '000 '000 93 93 90 84 37 34 32 33 55 17 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Line losses Q1/22 impact of TKG Fiber net adds Retail '000 '000 Wholesale
Slide 16: Germany retail fixed: impacted by one-offs
Germany retail fixed: impacted by one-offs Retail fixed revenues (reported) Broadband revenue growth (organic)2 € mn % yoy +1.5% 3,027 3,072 6.5% 6.4% 6.0% 5.5% 5.0% Broadband revenues +7,9% 1,589 1,714 Single play and other revenues 1,437 1,357 -5,6% Q1/21 Q1/22 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Retail
Slide 17: Germany mobile: healthy customer intake despite TKG headwind
Germany mobile: healthy customer intake despite TKG headwind Magenta EINS share (mobile)1 Data usage2 % GB per month 62% 63% 7.6 5.8 +31% y/y Q1/21 Q1/22 Q1/21 Q1/22 Churn2 Q1/22 impact of TKG Branded contract net adds3 % '000 1.2% 202 193 182 0.8% 147 135 Q1/21 Q1/22 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 1
Slide 18: Germany well on track vs CMD targets
Germany well on track vs CMD targets FTTH New Collaborations Broadband revenues m Own buildout1 % yoy • On track for 2mn additions in 2022 5.0 • Steady upsell: 35% on ≥100 Mbps ~5.4 • GF+ approved (4 mn rural homes) >4.0 (up 8pp y/y) 3.4 10.0 • Multiple new partnerships, esp. • Unchanged gross add m
Slide 19: Other operations Review Q1/2022
Other operations Review Q1/2022
Slide 20: T-Mobile US continued strong performance
T-Mobile US continued strong performance Revenues (IFRS) Adj. EBITDA AL (IFRS) US$ bn US$ bn +1.9% +0.7% 19.9 20.3 5.0 6.9 6.9 Other revenues 5.5 yoy decline in handset Service revenues 14.3 15.3 leasing revenues by US$0.6 bn Q1/21 Q1/22 Q1/21 Q1/22 Service revenue (US GAAP) Core adj. EBITDA (US GAA
Slide 21: T-Mobile US strong growth in postpaid
T-Mobile US strong growth in postpaid 5G EXTENDED RANGE 5G ULTRA CAPACITY Total postpaid net additions Postpaid phone net additions mn mn 1.8 0.8 0.8 1.3 1.3 1.3 0.6 0.7 1.2 0.6 Q1/21 Q2/21 Q3/211 Q4/21 Q1/22 Q1/21 Q2/21 Q3/211 Q4/21 Q1/22 High Speed Internet net additions Postpaid phone churn '000
Slide 22: Europe: 17th consecutive quarter of organic EBITDA growth
Europe 17th consecutive quarter of organic EBITDA growth Revenues (Reported) Adj. EBITDA AL (Reported) € mn € mn -0.9% +3.2% 2,729 2,704 946 976 decline driven by sale of Romania fixed Q1/21 Q1/22 Q1/21 Q1/22 Revenues Adj. EBITDA AL % growth yoy, organic % growth yoy, organic 6.9% 6.9% 4.2% 5.3% 5.4
Slide 23: Europe strong commercial performance
Europe strong commercial performance1 Mobile contract net adds Broadband net adds '000 274 '000 176 171 149 150 98 83 76 87 70 Q1/21 Q2/21 Q3/21 Q4/21 Q1/222 Q1/21 Q2/21 Q3/21 Q4/213 Q1/22 FMC net adds4 TV net adds '000 223 226 224 '000 196 169 71 48 58 26 31 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Q1/21 Q2/2
Slide 24: Group Development ongoing strong performance
Group Development ongoing strong performance Revenues +5.5% Adj. EBITDA AL € mn € mn 782 825 +12.7% 356 513 536 NL 316 151 190 NL GD Towers 282 284 Others 169 173 GD Towers -13 5 -4 -7 Others Q1/21 Q1/22 Q1/21 Q1/22 Revenues Adj. EBITDA AL org. growth excl HfS1 % growth yoy, organic % growth yoy, or
Slide 25: GD/Towers strong growth
GD/Towers strong growth Total sites Austria Recurring rental revenues '000 DFMG € mn 39.5 40.5 +0.9% 7.0 (organic +7.0%) 7.0 253 256 32.5 33.51 Q1/21 Q1/22 Q1/21 Q1/22 Opex AL per site Adj. EBITDA +2.2% € ‘000 € mn (organic +8.0%) 3.0 2.8 224 229 EBITDA AL: +2.4% 169 173 (organic +10.2%) Q1/21 Q1/22
Slide 26: Systems Solutions recovery as expected
Systems Solutions recovery as expected Order entry (LTM) Revenues Adj. EBITDA AL € bn € mn € mn -4.1% -1.9% +17.7% 4.6 4.4 1,015 996 73 62 Q1/21 Q1/22 Q1/21 Q1/22 Q1/21 Q1/22 Revenues Adj. EBITDA AL % growth yoy, organic % growth yoy, organic 18.1% • Strong growth in Public Cloud and Digital 16.5% S
Slide 27: Outlook 2022 and beyond
Outlook 2022 and beyond
Slide 28: Inflation exposure challenges being addressed
Inflation exposure challenges being addressed € bn in 2021 Group as % of Rev. Mitigations • US: 2/3 secured via PPAs • GER: Comprehensive multi-year hedging and removal of renewable energy Energy costs 1.5 1.4% surcharge create stable outlook for costs • Scope to reduce volumes, establish PPAs Perso
Slide 29: Guidance 2022 outlook improved
Guidance 2022 outlook improved TM US DT Ex US TM US DT Ex US Guidance update reflects new Core EBITDA AL Adj. Adj. EBITDA AL guidance of T-Mobile US € bn € bn 36.5 ~36.5 >36.6 33.7 ~35.5 >35.6 • TM US adj. Core EBITDA AL 22.7 22.3 >22.4 included at mid-point of US$ 19.9 21.3 >21.4 25.8bn – 26.2bn US
Slide 30: Q1 2022 main takeaways
Q1 2022 main takeaways Adj. EPS (CMD target 2024) € /share >1.75 • TM US: strong merger execution, EBITDA and customer growth, 1.22 guidance raised • Ex US: 6% organic EBITDA AL growth; Germany with 22 and EU with 17 successive quarters of organic EBITDA AL growth 2021 2024e • Dip in German fixed li
Slide 31: Appendix
Appendix
Slide 32: FCF AL excl. US
FCF AL excl. US € bn Q1 2022 Q1 2021 Adj. EBITDA AL 3.7 3.5 Cash Capex -1.6 -1.7 Proceeds from sale of fixed assets +0.0 +0.0 Special Factors Cash -0.4 -0.4 Interest ex leasing -0.1 -0.2 Cash Taxes -0.1 -0.2 Other (working capital etc.) +0.8 +0.4 FCF AL 2.3 1.4 32
Slide 33: Organic growth rates
Organic growth rates In % Q1/22 over Q1/21 FY/21 over FY/20 Group revenue +1.7 +4.5 Group service revenue +4.7 +3.5 Service revenue excl. US +1.6 +2.0 Group Adj. EBITDA AL +2.4 +1.9 Adj. EBITDA AL excl. US +6.1 +4.8 Group adj. core EBITDA AL1 +8.5 +7.8 1 adj. EBITDA AL excl. TM US handset leases 33
Slide 34: Outlook 2022/23 as per annual report 2021 (1/2)
Outlook 2022/23 as per annual report 2021 (1/2)1 € bn 2021 pro forma 2022e 2023e Revenue Group 106.5 Stable Slight increase Germany 24.2 Slight increase Increase US (in US$) 81.0 Stable Slight increase Europe 11.0 Slight increase Stable Systems Solutions 4.2 Stable Slight increase Group Development
Slide 35: Outlook 2022/23 as per annual report 2021 (2/2)
Outlook 2022/23 as per annual report 2021 (2/2)1 € bn 2021 pro forma 2022e 2023e Cash Capex Group 17.7 19.3 Strong decrease Germany 4.1 Increase Increase US (in US$) 12.2 Strong increase Strong decrease Europe 1.7 Stable Stable Systems Solutions 0.2 Stable Stable Group Development 0.3 Strong increas
Slide 36: Financials excl. TM US
Financials excl. TM US Adj. EBITDA AL Cash capex FCF AL € bn € bn € bn 14.6 14.2 14.0 13.8 7.7 7.7 7.7 7.3 3.9 3.7 3.5 3.3 2020 2021 2021 2022e 2020 2021 2021 2022e 2020 2021 2021 2022e pro forma pro forma pro forma CMD targets1 • 2–3% CAGR in 2020–24 • Increase for FTTH of ~€ 0.5 bn • ~€ 4.0 bn in
Slide 37: Balance sheet: rating outlook improved by S&P
Balance sheet rating outlook improved by S&P € bn 31/03/2021 30/06/2021 30/09/2021 31/12/2021 31/03/2022 Balance sheet total 273.9 270.5 273.4 281.6 292.4 Shareholders’ equity 77.5 77.0 78.9 81.5 87.7 Net debt excl. leases (AL) 98.3 96.8 99.3 100.6 98.1 Net debt excl. leases (AL)/adj. EBITDA AL1 2.6
Slide 38: Well balanced maturity profile with strong liquidity reserve
Financials well balanced maturity profile with strong liquidity reserve DT (ex US) bonds maturing Ex US liquidity position Credit lines € bn € bn Liquid assets 19.8 3.9 3.4 3.2 Ø 3.1 12.8 1.3 8.6 3.4 2.0 3.9 7.0 2022 2023 2024 2025 Liquidity Maturities Maturities Maturities Total maturities reserve
Slide 39: GD/TMNL strong performance continues
GD/TMNL strong performance continues Contract net adds Mobile service revenue growth '000 % growth yoy, organic 70 6.4% 58 5.1% 52 47 4.9% 3.5% 12 0.6% Q1/21 Q2/21 Q3/21 Q4/21 Q1/221 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Broadband net adds Adj. EBITDA AL growth '000 % growth yoy, organic 38.9% 19 15 16 29.4
Slide 40: Society and Environment: strong ESG performance in all dimensions
Society and Environment strong ESG Performance in all dimensions Societal agenda Environmental agenda Customer satisfaction Energy consumption/intensity2 Tri*M • Switch to 100% electricity from renewables accomplished mn MWh 67.3 72.7 73.4 12.8 13.3 • Eco Rating: Successful launch of industrywide in
Slide 41: Conference call with Q&A session
Conference call with Q&A session The conference call will be held on May 13 at 2:00 PM CET, 1:00 PM GMT, 8 AM ET. DT Participants: Christian Illek (CFO), Srini Gopalan (CEO GER), Hannes Wittig (Head of IR) Webcast Dial-in • The link to the webcast will be provided 20 minutes before the DE 0800 58891
Slide 42: 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