Deutsche Telekom AG · XETR:DTE
Deutsche Telekom — Merger or Acquisition (July 2022)
20 slides from Deutsche Telekom's merger presentation, Jul 14, 2022
Slide 1: Deutsche Telekom & DigitalBridge / Brookfield: Partnering for Value and Growth
Deutsche Telekom & DigitalBridge / Brookfield Partnering for Value and Growth Announcement Presentation 14 July 2022
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: Highly attractive transaction for Deutsche Telekom
Highly attractive transaction for Deutsche Telekom – fulfils all relevant criteria and CMD commitments, and crystallizes value Highly attractive deal for premium-quality GD Towers portfolio 1 • Deal encompasses Deutsche Telekom’s pioneering and industry-leading TowerCo DFMG + MTI: ~40k sites1 • Deut
Slide 4: Transaction encompasses Deutsche Telekom's industry-leading towers portfolio in Germany and Austria
Transaction encompasses Deutsche Telekom’s pioneering and industry-leading towers portfolio in Germany and Austria Deutsche Telekom moved early to create a tower leader Industry leading track record of operational delivery BTS delivery GD Towers carved out already in 2002 2017-21 organic sites added
Slide 5: Deal outline: sale of 51% stake to DigitalBridge and Brookfield
Deal outline: sale of 51% stake to New GD Towers ownership structure DigitalBridge and Brookfield DigitalBridge Brookfield Transaction overview 50% 50% TRANSACTION ▪ Deutsche Telekom sells 51% in GD Towers to DigitalBridge and Brookfield HIGHLIGHTS ▪ Deutsche Telekom financially deconsolidates GD To
Slide 6: Premium valuation achieved, patience rewarded
Premium valuation achieved, patience rewarded ~2.9x increase in value since our CMD 2018 GD Towers EV/ LTM EBITDAaL GD Towers SotP EV (€bn) ~27x1 ▪ Valuation highlights GD Towers transaction EV (€bn) ~17.5 quality of GD Towers’ ~20x assets and management ~12.8 team ~12x ~6.1 ▪ Material valuation pre
Slide 7: ~€10.7bn expected cash proceeds for Deutsche Telekom
~€10.7bn expected cash proceeds for Deutsche Telekom Transaction valuation (100% view) Total cash proceeds In €bn ~27x1 ~17.5 ~4.1 ~13.4 ~4.1 ~10.7 49% ~6.6 51% Transaction EV New net debt Implied PF equity Proceeds from sale of Cash proceeds Total cash proceeds to value 51% stake from debt Deutsche
Slide 8: Material deleveraging for Deutsche Telekom
Material deleveraging for Deutsche Telekom Deleveraging impact ~€10.7bn Pro-forma deleveraging1 ▪ ~0.2x pre leases (“AL”) ~€4-4.5bn ▪ ~0.1x after leases (IFRS 16) ~€6.5bn Potential uses for proceeds ▪ Debt reduction ▪ Accelerated TMUS majority IFRS 16 Cash Net new debt (e.g. via Softbank options) pr
Slide 9: Transaction highlights value upside of Deutsche Telekom
Transaction highlights value upside of Deutsche Telekom Value of Deutsche Telekom portfolio Market cap in €bn ~96 ~81 FCFaL of €3.7bn in 2022E1 ~17.5 ~15 DT ex US GD Towers Transaction EV US Demonstrates valuation upside for Deutsche Telekom as a Implied value ex US currently below realised tower va
Slide 10: Beneficial new MLA protects Deutsche Telekom's interests
Beneficial new MLA protects Deutsche Telekom’s interests Visibility Flexibility • Long-term partnership with balanced contract1 • Renewal rights solely at Deutsche Telekom • Inflation protection with 85% CPI indexation, discretion for entire site portfolio capped at +/- 3% • Reserved capacity for ne
Slide 11: Governance setup aligned with Deutsche Telekom's interests
Governance setup aligned with Deutsche Telekom’s interests Management • Current management team,GOVERNANCE Bruno Jacobfeuerborn (CEO) and Thomas Ried (CFO), to team remain in charge of the TowerCo for at least three years post closing Deutsche • Deutsche Telekom to retain 49% stake and significant m
Slide 12: What DigitalBridge and Brookfield bring to the table
What DigitalBridge and Brookfield bring to the table v v • One of the leading global digital infrastructure investors with • Leading global alternative asset manager with focus on real unrivaled TowerCo expertise estate, infrastructure, renewable power, private equity and credit • Owns, operates, an
Slide 13: Partnership to further evolve GD Towers' strategy
Partnership to further evolve GD Towers’ strategy ▪ Support Deutsche Telekom’s network leadership position in Germany and Austria Growth with anchor ▪ Continue to deliver on ambitious BTS rollout plan with ~5.4k sites tenant committed (of which ~5.2k in Germany) ▪ Deliver network upgrade plan with ~
Slide 14: Attractive growth prospects – reflects new MLA
Attractive growth prospects – reflects new MLA Key financials FY21 FY22 outlook Cumulative growth capex 2022-2027 of >€2bn Tenancy ratio ~1.4x Stable BTS programme with TDG for >6.5k new PF adj. macro sites until 2026, with ~5.2k (~80%) ~€1,070m ~€1,100m Revenue committed in Germany as well as ~0.2k
Slide 15: Transaction fulfils our stated objectives for a towers deal
Transaction fulfils our stated objectives for a towers deal PREMIUM VALUATION MATERIAL DELEVERAGING ▪ ~27x PF adj. EBITDAaL 2021A multiple ▪ ~€10.7bn cash proceeds ▪ Value revealed and patience rewarded ▪ Leverage reduced by ~0.2x pre leases (pro-forma ▪ Premium asset quality confirmed ~0.1x after l
Slide 16: Rapidly delivering on our CMD agenda
Rapidly delivering on our CMD agenda CMD May 2021 Sept ‘21 • TMUS share swap with Softbank • €4.5bn DT share issuance at premium Sept ‘21 • Sale of TMNL • €5.1bn valuation (8.7x EBITDA) Nov ‘21 • Glasfaser Plus fiber JV • 4m additional rural homes Apr ‘22 • €2.2bn reinvest of TMNL proceeds • TMUS st
Slide 17: Deutsche Telekom continues to execute on its strategic agenda
Deutsche Telekom continues to execute on its strategic agenda ORGANIC CAPITAL ALLOCATION SHAREHOLDER GROWTH / PORTFOLIO VALUE Adj. EPS Strategic review of GD €/share ▪ Our flywheel works >1.75 Towers – completed ▪ Proven execution 1.22 On track Deutsche Telekom Group ambitions Invest in “leading” fi
Slide 18: 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 IR Webpage www.telekom.com/investors E-mail investor.relations@telekom.de IR Twitter Account @DT_IR www.twitter.com/DT_IR Contact details for all IR representatives: IR YouTube Channel w
Slide 19: Appendix
Appendix
Slide 20: Bridge to 2021A and 2022E PF adj. EBITDAaL
Bridge to 2021A and 2022E PF adj. EBITDAaL FY2021 to transaction PF adj. EBITDAaL bridge FY2022 to transaction PF adj. EBITDAaL bridge In €m Consensus: €695m ~700 ~(30) Used for calculation of transaction multiple ~(10) 669 ~(20) ~660 ~(10) ~0 ~640 MLA impact of ~€(40)m MLA impact of ~€(40)m n/a EBI