Deutsche Telekom Ag · XETR:DTE
Deutsche Telekom — Q2 2023 Earnings Presentation
36 slides from Deutsche Telekom's earnings presentation, Aug 10, 2023
Slide 1: Deutsche Telekom Q2 2023 results
Deutsche Telekom Q2 2023 results Investor and Analyst Conference Call August 10, 2023 14:00 CEST, 13:00 BST, 8:00 EDT, 5:00 PDT, 21:00 JST
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: H1 2023 results Group
H1 2023 results Cigelere)
Slide 4: H1/2023 results continued growth
H1/2023 results continued growth H1/2023 Highlights • Organic growth: Group service revenues growing 2.9%, Group adj. core EBITDA +5.8%. FCF AL +10.9% • Guidance for 2023 EBITDA AL growth raised on both sides of the Atlantic • TM US increases outlook for 2023 customer growth • Around 15mn European h
Slide 5: Financials H1/2023 organic strong organic growth
Financials H1/2023 organic strong organic growth H1/23 Adj. EBITDA AL Adj. Core EBITDA AL H1/23 Adj. EBITDA AL2 H1/23 Key Financials Impacted by growth yoy, organic growth of 8.5%1 € mn % growth yoy, organic lower equipment revenues TMUS 3.1% Group revenues -0.4% +€396 mn 5,016 Group service revenue
Slide 6: Networks leading with 5G, FTTH on track
Networks leading with 5G, FTTH on track FTTH (1 Gbps) 5G TM US 5G ex US Fiber homes Ultra capacity 5G1 Germany mn +3.4 mn POPs +50 % of POPs +2 14.7 285 93 95 11.3 235 8.5 EU 7.4 GER 3.9 6.2 H1/22 H1/23 H1/22 H1/23 H1/22 H1/23 GER Network Leader GER • On track for >2.5mn new HHs in 2023 • TM US wins
Slide 7: Customers growing strongly
Customers growing strongly Mobile net adds Fixed line net adds2 000 2,974 2,854 000 US (postpaid) Broadband 240 241 H1/22 H1/23 H1/22 H1/23 870 Ex US (contract)1 781 TV 149 86 H1/22 H1/23 H1/22 H1/23 1 GER + EU. GER: own brand only 2 GER + EU 7
Slide 8: DT climate targets sharpened ambitions
DT climate targets sharpened ambitions Climate ambitions Drivers of CO2 emissions (FY 2022) ( in line with SBTi requirements) Scope 1: Scope 2: Scope 3: own activities purchased activities value chain 2021 Renewable electricity as of 2021 212 ktons 21 ktons 12,287 ktons (-10% since 2020) (-99% since
Slide 9: Updated Guidance 2023 continued growth – 2nd upgrade
Updated Guidance 2023 continued growth – 2nd upgrade Adj. EBITDA AL1 TM US DT Ex US FCF AL1 TM US DT Ex US € bn € bn 39.3 ~40.8 ~41.0 >16 >16 ~27.0 ~27.1 11.2 25.6 +4% >+40% ~12.7 ~12.8 7.6 13.7 13.9 14.0 3.6 ~3.54 ~3.54 FY 2022 Guidance 2023 Guidance FY 2022 Guidance Guidance pro forma Update Q2 pr
Slide 10: Q2 2023 results Review segments and financials
Q2 2023 results Review segments and financials
Slide 11: T-Mobile US strong financial growth
T-Mobile US strong financial growth Revenues (IFRS) Adj. EBITDA AL (IFRS)2 US$ bn US$ bn -2.6% Higher postpaid upgrades +5.8% yoy decline in handset 19.6 19.1 incl. from Sprint 6.7 7.1 leasing revenues Other revenues 4.4 3.4 customers in prior year US$0.3 bn1 and lower lease revenues Service revenue
Slide 12: T-Mobile US consistent growth in all customer categories
T-Mobile US consistent growth in all customer categories Total postpaid net additions1 5G EXTENDED RANGE More than 5G ULTRA CAPACITY AT&T and Postpaid phone net additions1 Industry leading and mn Verizon combined, FY 000 best Q2 in 8 years guidance raised 1.8 854 927 1.7 1.6 1.6 760 1.3 723 538 Q2/2
Slide 13: Germany 27th consecutive quarter of EBITDA growth
Germany 27th consecutive quarter of EBITDA growth Revenues (as reported) Adj. EBITDA AL (as reported) € mn € mn +1.9% +4.1% 6,038 6,150 2,429 2,528 Q2/22 Q2/23 Q2/22 Q2/23 Revenue growth (organic) Impacted by lower equipment Adj. EBITDA AL (organic) % yoy revenues. Service revenues +1.6% % yoy 2.7%
Slide 14: Germany service revenues: growing across the board
Germany service revenues: growing across the board Total service revenue growth (organic)1 Mobile service revenue growth (organic) % yoy % yoy 1.8% 1.7% 1.6% 1.6% 3.5% 1.2% 2.7% 2.0% 1.7% 2.1% Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Revenue growth (reported) Fixed service revenue
Slide 15: Germany fixed revenues: strong broadband growth
Germany fixed revenues: strong broadband growth Retail fixed revenues (as reported) Broadband revenue growth (organic) Content contract re-negotiation € mn % yoy in Q2/22 (impact on growth rate +2.9% approx. 50bps) 3,102 3,191 4.7% 4.7% 5.0% 4.7% Broadband revenues 4.0% 1,721 1,790 +4.0% Single play
Slide 16: Germany fixed KPIs: net adds improved, strong upselling continues
Germany fixed KPIs: net adds improved, strong upselling continues Broadband net adds impact of TKG TV net adds impact of TKG 000 000 63 74 74 67 45 51 50 32 36 21 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Retail customers with ≥100Mbit/s tariff FTTH Customers In addition: mn/% of c
Slide 17: Germany mobile KPIs: strong customer intake
Germany mobile KPIs: strong customer intake Branded contract net adds1 Data usage2 000 368 GB per month 319 12.0 274 225 8.0 194 +51% yoy Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Q2/22 Q2/23 Churn2 Normalization post TKG Magenta EINS share (mobile)3 % change in 2022 % 1.0% 63% 64% 0.8% Q2/22 Q2/23 Q2/22 Q2/23
Slide 18: Europe 22nd consecutive quarter of organic EBITDA growth
Europe 22nd consecutive quarter of organic EBITDA growth Revenues (as reported) Adj. EBITDA AL (as reported) € mn € mn +6.2% +3.9% 2,729 2,899 986 1,024 Q2/22 Q2/23 Q2/22 Q2/23 Revenues (organic) Adj. EBITDA AL (organic) % growth yoy % growth yoy 4.5% 5.5% 5.1% 4.9% 2.6% 4.0% 2.2% 1.2% 0.9% 0.5% Q2/
Slide 19: Europe strong commercial performance
Europe strong commercial performance Mobile contract net adds Broadband net adds 000 251 000 243 179 173 92 83 104 70 76 72 Q2/22 Q3/22 Q4/22 Q1/231 Q2/23 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 FMC net adds TV net adds 000 000 186 173 185 169 152 32 32 34 29 17 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Q2/22 Q3/22 Q4/22
Slide 20: Systems Solutions on track for stated targets
Systems Solutions on track for stated targets Order entry (LTM) Revenues (as reported) Adj. EBITDA AL (as reported) € bn € mn € mn -9.4% +1.8% +6.3% 3.9 3.5 942 959 79 84 Q2/22 Q2/23 Q2/22 Q2/23 Q2/22 Q2/23 • Order entry driven by phasing Revenues (organic) Adj. EBITDA AL (organic) • Revenue driven
Slide 21: Financials H1/2023 reported driven by phasing and tower sale
Financials H1/2023 reported driven by phasing and tower sale € mn Q2 H1 2022 2023 Change 2022 2023 Change Revenue 27,888 27,221 -2.4% 55,634 55,060 -1.0% Adj. EBITDA AL 9,891 10,038 +1.5% 19,763 20,002 +1.2% Adj. EBITDA AL (excl. US)1 3,554 3,484 -2.0% 7,255 6,911 -4.7% Adj. Net profit 2,445 1,887 -
Slide 22: FCF AL and net profit
FCF AL and net profit free cash flow driven by lower US capex and EBITDA growth Free Cash Flow AL1 Adj. net profit Recurring adjusted EPS € mn € mn growth in H1 9% (from €0.70 to €0.77) +27.7% -22.8% 3,522 -484 562 602 685 -975 2,759 2,445 146 -7 -323 1,887 Impacted by TM US phasing and GD Tower sal
Slide 23: Net debt leverage ex leases at 2.40x
Net debt leverage ex leases at 2.40x Net debt excl. leases (AL) Following upgrade by Leverage ratios € bn S&P all 3 rating agencies back to BBB+ and stable outlook Incl. Leases +4.1 Excl. Leases 97.2 93.0 0.7 -3.5 3.6 3.3 3.06 3.07 2.94 2.70 2.58 2.40 Q1/23 FCF AL Dividends SBB TM US F/X and others
Slide 24: H1 2023 results Main takeaways
H1 2023 results Main takeaways
Slide 25: H1 2023 Key messages delivering reliable and consistent growth
H1 2023 Key messages delivering reliable and consistent growth • Commercial performance continues unabated in all 2022 results/CMD targets 20241 Recurring EPS markets Adj. EPS in €/share 1.83 • Germany on 27, EU on 22 successive quarters of organic 0.32 >1.60 >1.75 EBITDA AL growth despite significa
Slide 26: Q2 2023 results Appendix
Q2 20235 results Appendix
Slide 27: Organic growth rates
Organic growth rates In % Q2/23 over Q2/22 H1/23 over H1/22 Group revenues -0.4 -0.4 Group service revenue +3.2 +2.9 Service revenue excl. US +2.6 +2.4 Group Adj. EBITDA AL +3.8 +2.4 Adj. EBITDA AL excl. US +1.6 +1.1 Group adj. Core EBITDA AL1 +7.1 +5.8 1 adj. EBITDA AL excl. TM US handset leases In
Slide 28: TM US: EBITDA reconciliation
TM US: EBITDA reconciliation H1/23 Q2/23 US$ mn US$ mn +10.0% yoy +4.7% yoy +3.5% yoy 14,388 14,604 14,156 +10.8% yoy +5.7% yoy +5.8% yoy 216 -448 7,336 7,405 7,142 69 -263 Adj. Core Leasing Adj. EBITDA Bridge Adj. EBITDA Adj. Core Leasing Adj. EBITDA Bridge Adj. EBITDA EBITDA Revenues (US GAAP) AL
Slide 29: FCF AL excl. US
FCF AL excl. US adj. EBITDA AL due to de-consolidation of the Dutch business and GD Towers. € bn Organic growth rate of +1.1% H1 2022 H1 2023 Adj. EBITDA AL 7.3 6.9 Cash Capex -3.2 -3.8 Proceeds from sale of fixed assets +0.1 +0.0 Special Factors Cash -0.6 -0.5 Interest ex leasing -0.4 -0.5 Capex fr
Slide 30: Financials well balanced maturity profile with strong liquidity reserve
Financials well balanced maturity profile with strong liquidity reserve Ex US bonds maturing Ex US liquidity position Credit lines € bn € bn Liquid assets 14.7 2.6 2.6 12.0 Ø 1.90 1.4 2.6 0.4 4.1 1.0 1.0 2.7 2023 2024 2025 2026 Liquidity Maturities Maturities Maturities Total maturities reserve 2023
Slide 31: Balance sheet deleveraging as promised
Balance sheet deleveraging as promised € bn 30/06/2022 30/09/2022 31/12/2022 31/03/2023 30/06/2023 Balance sheet total 301.7 321.4 298.6 303.8 299.7 Shareholders’ equity 88.5 94.5 87.3 98.7 94.4 Net debt excl. leases (AL) 106.3 109.5 103.7 93.0 97.2 Net debt excl. leases (AL)/adj. EBITDA AL1 2.77 2.
Slide 32: Guidance 2023 compared to consensus
Guidance 2023 compared to consensus € bn Guidance 2023 in € Guidance 2023 in € Consensus in € @ 1.05 @ 1.09 @ 1.09 ex US includes one month of GD Towers in 2023. Guidance is Adj. EBITDA AL Group ~41.0 ~40.0 40.4 without GD. thereof ex US 14.0 14.0 14.1 thereof TM US ~27.1 ~26.1 26.3 Consensus uses €
Slide 33: Outlook 2022/23 as per annual report 2022 (1/2)
Outlook 2022/23 as per annual report 2022 (1/2)1 € bn 2022 pro forma 2023e 2024e Revenue Group 113.7 Slight increase Slight Increase Germany 24.7 Slight increase Increase US (in US$) 79.3 Slight increase Slight increase Europe 11.2 Increase Slight increase Systems Solutions 3.7 Stable Slight increas
Slide 34: Outlook 2022/23 as per annual report 2022 (2/2)
Outlook 2022/23 as per annual report 2022 (2/2)1 € bn 2022 pro forma 2023e 2024e Cash Capex Group 20.7 16.8 Stable Germany 4.4 Slight increase Slight increase US (in US$) 14.0 Strong decrease Stable Europe 1.8 Stable Stable Systems Solutions 0.2 Stable Stable FCF AL Group 11.2 >16 Strong increase Ad
Slide 35: Investor + Analyst Webcast with Q&A session
Investor + Analyst Webcast with Q&A session The conference call will be held on August 10 at 14:00 CEST, 13:00 BST, 08:00 EDT, 05:00 PDT, 21:00 JST DT Participants: Tim Höttges (CEO), Christian Illek (CFO), Hannes Wittig (Head of IR) • Detailed time stamps in video description for slides + Q&A: • Li
Slide 36: 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 w