Deutsche Telekom Ag · XETR:DTE
Deutsche Telekom — Investor Day (2012)
33 slides from Deutsche Telekom's investor day presentation, Dec 10, 2012
Slide 1: Deutsche Telekom Capital Markets Day 2012: Europe and Technology
DEUTSCHE TELEKOM CAPITAL MARKETS DAY 2012 EUROPE AND TECHNOLOGY CLAUDIA NEMAT
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: Summary
SUMMARY. 1 We achieved to slow down the historic revenue decline, improved our competitive position as well as operating ROCE, despite a tough environment 2 Our focus: Ensure a sustainable cash contribution, stemming against the macro trend 3 Our aspiration: Return to underlying revenue growth fro
Slide 4: Review 2010 – 2012
REVIEW 2010 – 2012
Slide 5: In 2010 targets for SEE and mobile-only countries were set – we achieved most
IN 2010 TARGETS FOR SEE AND MOBILE-ONLY COUNTRIES WERE SET – WE ACHIEVED MOST OF THEM. COUNTRIES AMBITION LEVEL 2012 ACHIEVEMENTS 2012 Greece Market share1 service revenues: stable 50.3% (Q2/12) Hungary Croatia Market share1 EBITDA: stable 57.4% (Q2/12) Slovakia SEE Romania OPEX: €0.3 bn n
Slide 6: After business review in 2011, we implemented a new leadership paradigm
AFTER BUSINESS REVIEW IN 2011, WE IMPLEMENTED A NEW LEADERSHIP PARADIGM. CHANGED LEADERSHIP PARADIGM – KEY ELEMENTS FROM… TO… 1 COMMERCIAL DRIVE Focus on cash contribution Focus on quarterly EBITDA Focus on revenue + cost Strengthened commercial functions 2 SMART STEERING Individual countr
Slide 7: Commercial drive: we slowed down historic revenue decline
1 COMMERCIAL DRIVE: WE SLOWED DOWN HISTORIC REVENUE DECLINE. WE DECREASED REVENUE DECLINE… … IN SPITE OF TOUGH ENVIRONMENT Europe Total Rev. Ø GDP growth2 -2.0%p € bn, adjusted for FX +0.4% -6.2% -3.3% -1.6% 11.9 FY 2010 FY 2012 12 11.2 10.8 10 Ø MTR in footprint EURc3 -47% 8 7.03 3.76 6 YE 2009 YE
Slide 8: Commercial drive: we improved our competitive position
1 COMMERCIAL DRIVE: WE IMPROVED OUR COMPETITIVE POSITION… REVENUE MARKET SHARE PERFORMANCE IN CORE MARKETS vs. main peers against… Market position +2.4 +2.2 +2.5 +1.7 4 strengthened… +0.5 outperformed Czech Romania Slovakia Romania Czech peer/ 8 leadership Rep. Rep. fostered Leadership +0.1 +0.3 pos
Slide 9: While improving ROCE, and keeping capital productivity on benchmark level
1 … WHILE IMPROVING ROCE, AND KEEPING CAPITAL PRODUCTIVITY ON BENCHMARK LEVEL. DT EUROPE OP. ROCE1 DT EUROPE CAPEX/REVENUE RATIO2 like-for-like like-for-like +12% 13-14% 12.9% 14% Benchmark range for 11-12% mobile/fixed/integrated 10.8% operators3 11% in EBITDA-marg . 2012: FY 2010 FY 2012e 201 0 vs
Slide 10: Differentiated steering creates relevant focus
2 DIFFERENTIATED STEERING CREATES RELEVANT FOCUS. NATCO CLUSTERS STRATEGIC DIRECTION KPIS/AMBITIONS SENIOR LEADERS The undisputed, most admired industry leader Radical gross opex reduction Greece Croatia Business model transformation Stabilize topline Hungary Macedonia Keep leading market
Slide 11: Market trends
MARKET TRENDS
Slide 12: Economic environment: suffering from crisis; peak in cuts of mobile termination rates
ECONOMIC ENVIRONMENT: SUFFERING FROM CRISIS; IN ADDITION PEAK IN CUTS OF MOBILE TERMINATION RATES IN 2013. GDP GROWTH 2012: INTERCONNECTION REVENUE IMPACT OF MOBILE OUTLOOK MIXED TERMINATION RATES CUTS IN DT EUROPE FOOTPRINT % Markets -0.7 € bn Average, revenue weighted: The Netherlands +2.7 0 Polan
Slide 13: Telco: newcomers increase the heat, taxes and auctions create challenging environment
TELCO: COUNTRY-SPECIFIC NEWCOMERS INCREASE THE HEAT, TAXES & CUMULATION OF AUCTIONS CREATE A CHALLENGING ENVIRONMENT. MVNO launch Spectrum 1 Special Four- MNO MVNOs/ auctions (3Q12) telco taxes markets 2 brands 2012 – 2014 nd MNO launch planned … planned Greece ’14 (2013) Hungary planned 3 ’13 2) Cr
Slide 14: Growth opportunities to compensate decline of commodity telco
NEVERTHELESS, GROWTH OPPORTUNITIES TO COMPENSATE DECLINE OF COMMODITY TELCO. MARKETS REVENUES DT EUROPE FOOTPRINT € bn 67 42 65 36 6 Mobile Internet +€2 bn 4 11 Connected home +€1 bn 2 Blue Ocean CAGR: 10 topics +6% 8 IP Services +€3 bn 5 17 19 B2B/ICT +€2 bn Red Ocean CAGR: 2012 2015 topics -6% 201
Slide 15: Strategy 2013 – 2015: Ensure sustainable cash contribution
STRATEGY 2013 – 2015 ENSURE SUSTAINABLE CASH CONTRIBUTION
Slide 16: Our aspiration
OUR ASPIRATION. ENSURE SUSTAINABLE CASH CONTRIBUTION TRANSFORM REVENUE + TRANSFORM DELIVERY MODEL (COST) “Blue ocean”: “Red ocean”: Overall: Reduce revenue decline in 2012, stop Cum. indirect Opex reductions of €0.6 bn in 20131, return to moderate growth in 2014 by 20153: Net indirect cost reduc
Slide 17: Our strategy: ONE DT (Europe)
OUR STRATEGY: ONE DT (EUROPE). Seamless Best-in-class connectivity More innovation Secure cloud customer for the by cooperation solutions experience Gigabit Society INNOVATE 1 All-IP Transformation 2 B2B Big Bang TRANSFORM 3 Mobile Internet Push/Innovation Excellence COMPETE 4 Cost Revolution/Operat
Slide 18: All-IP transformation creates one common infrastructure for all services
1 ALL-IP TRANSFORMATION CREATES. ONE COMMON INFRASTRUCTURE FOR ALL SERVICES. FROM THE “OLD PSTN WORLD”… …TO THE “NEW IP ERA” ice ice … … Vo Vo VoIP D ata ATM ATM D ata SDH … Ethernet … … Ethernet IP Network ATM IP Network sis tion is the ba IP transforma y, as well as for e-compan ice innovation ser
Slide 19: All-IP transformation retires all legacy systems
1 ALL-IP TRANSFORMATION RETIRES ALL LEGACY SYSTEMS. FROM THE “OLD PSTN WORLD”… …TO THE “NEW IP ERA” Many legacy systems, no separation of BSS1 and OSS2 Retired legacy systems, clear separation of BSS1 and OSS2 Application Application Control Control BSS1 Transport Transport Aggregation Aggregation A
Slide 20: Radical and fast PSTN migration in Croatia and Macedonia
1 RADICAL AND FAST PSTN MIGRATION IN CROATIA AND MACEDONIA. AMBITIOUS MIGRATION PLAN BENEFITS DISMANTLE 1,712 tons of material LEGACY dismantled; equals mass of EQUIPMENT 325 male African elephants 1,300 k1 350 k (27%) 43 GWh yearly energy Croatia 2014/15 REDUCED consumption decreased; ENERGY equals
Slide 21: DT first operator worldwide to implement TeraStream in Zagreb
1 DT IS THE FIRST OPERATOR WORLDWIDE TO IMPLEMENT TERASTREAM IN ZAGREB, CROATIA. ALL-IP TRANSFORMATION TO COPE WITH EXPOTENTIAL TRAFFIC GROWTH BUILDING BLOCKS TeraStream (“NT goes IT”) BENEFITS OF TERASTREAM Broadband Network Gateway (BNG) Applying enterprise cloud model to Simple in design, lean
Slide 22: B2B Big Bang: focus, cooperation and execution
2 B2B BIG BANG: FOCUS, COOPERATION AND EXECUTION. KEY LEVERS IN B2B ACHIEVEMENTS ASPIRATION Focus, Cooperation & Execution Ensure focus, set clear targets B2B/ICT +8% 2012 YTD growth in line with targets B2B/ICT revenue € bn B2B segment oriented organization implemented by YE 2012 in all Nat
Slide 23: Mobile Internet/Innovation Excellence: LTE broadband experience and commercial push
3 MOBILE INTERNET/INNOVATION EXCELLENCE: LTE BROADBAND EXPERIENCE AND COMMERCIAL PUSH. LEADING MOBILE NETWORKS INCREASING MOBILE INTERNET REVENUES MEASURES LTE coverage Mobile Internet revenue Best in class smartphone portfolio Number € bn leveraging BUYIN of NatCos Outstanding mobile Internet e
Slide 24: Cost revolution
4 COST REVOLUTION. TRANSFORM DELIVERY MODEL (COST) 2012 – 2015 DECREASE OF INDIRECT COST DIRECT COST DEVELOPMENT eCompany transformation by further automation of services & products In next two years direct costs will further diminish due to lower Operational excellence by e.g. technical servi
Slide 25: Financial outlook
FINANCIAL OUTLOOK
Slide 26: Our aspiration: return to moderate growth in 2014 – revenue shift to growth areas
OUR ASPIRATION: RETURN TO MODERATE GROWTH IN 2014 – REVENUE SHIFT TO GROWTH AREAS. REVENUE TURNAROUND WILL BE ACHIEVED BY… …REVENUE TRANSFORMATION REVENUE REVENUE SPLIT € bn, stable FX stable FX Like-for-like1 CAGR +1.4% 3% 4% B2B/ICT ca. 12 17% >14 Pockets 24% of growth3 Reported CAGR -0.6% ca. 14
Slide 27: Transformation: reasonable investments in growth secure future business opportunities
TRANSFORMATION: REASONABLE INVESTMENTS IN GROWTH SECURE FUTURE BUSINESS OPPORTUNITIES. CAPEX TRANSFORMATION REFLECTING BUSINESS MODEL CHANGE CAPEX € bn, stable FX, like-for-like, w/o spectrum 1.7 1.7 KEY LEVERS 2015 19% 20% Cap. labor, CPE, Other Increasing CAPEX for further rollout of Growth Area
Slide 28: Increasing return on capital due to opex savings and lower asset base
INCREASING RETURN ON CAPITAL DUE TO OPEX SAVINGS AND LOWER ASSET BASE. REVENUE CAPEX >14 ca. 14 1.7 2014 1.7 OPERATING ROCE +1.5%p 2012 2015 2012 2015 OPEX SPECIAL FACTORS 9.7 9.3 2012 2015 0.2 0.1 2012 2015 2012 2015 in € bn, stable FX, company estimates for all figures; 2012 = FY2012e; 2015=FY2015
Slide 29: Ambition level 2015
AMBITION LEVEL 2015
Slide 30: Our ambition: economies of scope and scale secure stable cash
OUR AMBITION: ECONOMIES OF SCOPE AND SCALE SECURE STABLE CASH IN A DIFFICULT ENVIRONMENT. AMBITION LEVEL 2015 FINANCIAL STABILITY IN EUROPE TECHNOLOGY LEADERSHIP All-IP migration in HR and MK ALL-IP oFCF adj. stable In other countries All-IP migration launched TRANSFORMATION TeraStream trial in HR b
Slide 31: Summary
SUMMARY. 1 We achieved to slow down the historic revenue decline, improved our competitive position as well as operating ROCE, despite a tough environment 2 Our focus: Ensure a sustainable cash contribution, stemming against the macro trend 3 Our aspiration: Return to underlying revenue growth fro
Slide 32: Backup for investors
BACKUP FOR INVESTORS
Slide 33: No one-size-fits-all: NatCos' strategic priorities to best compete
NO “ONE-SIZE-FITS-ALL”: NATCOS’ STRATEGIC PRIORITIES TO BEST COMPETE IN RESPECTIVE MARKETS. Greece Hungary Croatia Macedonia SENIOR Strengthen leadership in mobile Speed up very successful revenue Drive revenue & business model Stabilize leading market position, LEADERS and fixed broadband, boost co