Deutsche Telekom Ag · XETR:DTE
Deutsche Telekom — FY 2023 Earnings Presentation
41 slides from Deutsche Telekom's earnings presentation, Feb 23, 2024
Slide 1: Deutsche Telekom FY 2023 results
Deutsche Telekom FY 2023 results February 23, 2024 Connecting your world
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: FY 2023 results Group
FY 2023 results Group
Slide 4: FY/2023 Highlights
FY/2023 Highlights the flywheel is working LEADING mn DT shares BBB+ with all 17 European homes passed with FTTH 5G NETWORKS in US and ex US DT launches with 20% TSR 3 rating agencies 2bn in 2023 First ORAN sites €173bn invested in last 10 years s h a r e buyback 16.1bn FCF AL live adj. EPS MAGENTA
Slide 5: FY/2023 results continued growth
FY/2023 results continued growth 2023 Financial highlights • Organic Growth: Group service revenues up 3.6%, Group adj. core EBITDA AL up 6.9%, all segments contributing. FCF AL up 40.7%1 • US/GER/EU: Strong customer momentum continues unabated • GER with 29th, EU with 24th consecutive quarter of or
Slide 6: Financials 2023 organic strong organic growth
Financials 2023 organic strong organic growth FY/23 Adj. EBITDA AL Adj. Core EBITDA AL FY/23 Adj. EBITDA AL2 FY/23 Key Financials growth yoy, organic growth of 9.8%1 € mn % growth yoy, organic TMUS 5.2% Group revenues 0.6% +€1,305 mn 10,238 Group service revenues 3.6% GER 3.0% +€302 mn ex US Service
Slide 7: 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 +3.5 mn POPs +35 % of POPs +1 17.0 >300 95 96 13.5 265 9.1 EU 8.1 GER 5.4 7.9 FY/22 FY/23 FY/22 FY/23 FY/22 FY/23 GER Network Leader GER • 1 mn homes passed added in Q4. FY roll- • Clean
Slide 8: Customers strong growth throughout the years
Customers strong growth throughout the years Mobile net adds Fixed line net adds US (postpaid) Broadband '000 '000 6,419 5,486 5,495 5,650 4,515 655 704 611 419 545 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Ex US (contract)1 TV 1,978 1,590 1,720 1,323 1,436 306 358 339 356 234 2019 2020 2021
Slide 9: Society and Environment strong ESG performance
Society and Environment strong ESG performance; energy consumption reduced again Societal agenda Environment Environmental agenda Customer satisfaction1 • Climate targets are well on track and new targets now also Energy consumption Tri*M SBTi approved (same at TMUS and Hungary) mn MWh 72.6 75.0 76.
Slide 10: Guidance 2023 guidance achieved
Guidance 2023 guidance achieved Adj. EBITDA AL TM US DT Ex US FCF AL TM US DT Ex US € bn € bn ~41.1 41.1 40.5 >16.1 16.6 16.1 ~27.2 27.2 26.4 ~12.9 13.1 12.8 14.0 14.0 14.1 3.51 3.51 3.51 Guidance 2023 Results 2023 Actual result 2023 Guidance 2023 Results 2023 Actual result 2023 as of Q3/23 like for
Slide 11: Guidance 2024 on track for CMD 2021 ambition
Guidance 2024 on track for CMD 2021 ambition Adj. EBITDA AL1 TM US DT Ex US FCF AL1 TM US DT Ex US € bn € bn 40.5 40.6 ~42.9 ~18.9 16.1 16.2 26.4 26.6 ~28.5 ~+6% 12.8 12.9 ~15.4 ~+16% 14.1 14.0 14.4 3.52 3.52 3.52 FY 2023 FY 2023 Guidance 2024 FY 2023 FY 2023 Guidance Results pro forma Results pro f
Slide 12: Q4 2023 results Review of segments and financials
Q4 2023 results Review of segments and financials
Slide 13: T-Mobile US strong financial growth
T-Mobile US strong financial growth Revenues (IFRS) Adj. EBITDA AL (IFRS)2 US$ bn US$ bn +1.1% +7.3% yoy decline in handset 20.2 20.4 Lower lease and lower 7.0 leasing revenues Other revenues 4.7 4.3 postpaid upgrades driven 6.5 US$0.2 bn1 by longer device lifecycles Service revenues 15.5 16.2 Q4/22
Slide 14: T-Mobile US consistent growth in all customer categories
T-Mobile US consistent growth in all customer categories 5G EXTENDED RANGE Total postpaid net additions Industry leading Postpaid phone net additions Industry leading mn 000 1.8 927 850 934 1.6 1.6 760 1.3 1.2 538 Q4/22 Q1/23 Q2/23 Q3/23 Q4/23 Q4/22 Q1/23 Q2/23 Q3/23 Q4/23 High Speed Internet net ad
Slide 15: Germany 29th consecutive quarter of EBITDA growth
Germany 29th consecutive quarter of EBITDA growth Revenues (as reported) Adj. EBITDA AL (as reported) € mn € mn +3.6% +4.2% 6,361 6,589 2,479 2,583 Q4/22 Q4/23 Q4/22 Q4/23 Revenue growth (organic) Adj. EBITDA AL (organic) % yoy % yoy 3.0% 3.0% 3.1% 3.0% 3.1% 3.0% 2.3% 2.1% 1.1% 1.1% Q4/22 Q1/23 Q2/2
Slide 16: 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 2.4% 1.8% 3.5% 3.2% 1.7% 1.6% 1.6% 2.9% 1.7% 2.1% Q4/22 Q1/23 Q2/23 Q3/23 Q4/23 Q4/22 Q1/23 Q2/23 Q3/23 Q4/23 Revenue growth (reported) Fixed service revenue
Slide 17: Germany fixed revenues: strong broadband growth
Germany fixed revenues: strong broadband growth Retail fixed revenues (as reported)1 Broadband revenue growth (organic) € mn % yoy +2.7% 3,265 3,354 5.0% 4.7% 5.0% Broadband revenues 4.0% 4.0% 1,758 1,828 +4.0% Single play and other revenues 1,507 1,526 +1.3% Q4/22 Q4/23 Q4/22 Q1/23 Q2/23 Q3/23 Q4/2
Slide 18: Germany fixed KPIs: almost 300k FTTH customers added
Germany fixed KPIs: almost 300k FTTH customers added in FY Broadband net adds impact of TKG TV net adds impact of TKG 000 000 96 74 74 67 66 51 51 68 50 36 Q4/22 Q1/23 Q2/23 Q3/23 Q4/23 Q4/22 Q1/23 Q2/23 Q3/23 Q4/23 Retail customers with ≥100 Mbit/s tariff FTTH Customers In addition: mn/% of custome
Slide 19: Germany mobile KPIs: strong customer intake
Germany mobile KPIs: strong customer intake in a competitive market Branded contract net adds1 Data usage2 000 350 GB per month 319 274 289 12.4 225 10.2 +22% yoy Q4/22 Q1/23 Q2/23 Q3/23 Q4/23 Q4/22 Q4/23 Churn2 Magenta EINS share (mobile)3 % % 1.1% 63% 64% 0.9% Q4/22 Q4/23 Q4/22 Q4/23 1 Own branded
Slide 20: Europe 24th consecutive quarter of organic EBITDA growth
Europe 24th consecutive quarter of organic EBITDA growth Revenues (as reported) Adj. EBITDA AL (as reported) € mn € mn +7.3% +5.8% 2,899 3,112 956 1,011 Q4/22 Q4/23 Q4/22 Q4/23 Revenues (organic) Adj. EBITDA AL (organic) % growth yoy % growth yoy 5.6% 4.9% 5.1% 4.1% 3.7% 3.3% 2.6% 2.2% 0.9% 1.2% Q4/
Slide 21: Europe strong commercial performance
Europe strong commercial performance Mobile contract net adds Broadband net adds 000 000 246 223 179 173 92 83 72 76 76 104 Q4/22 Q1/231 Q2/23 Q3/23 Q4/23 Q4/22 Q1/23 Q2/23 Q3/23 Q4/23 FMC net adds2 TV net adds 000 000 191 184 195 152 167 52 32 34 37 29 Q4/22 Q1/23 Q2/23 Q3/23 Q4/23 Q4/22 Q1/23 Q2/2
Slide 22: Systems Solutions positive cash contribution for FY 2023
Systems Solutions positive cash contribution for FY 2023 Order entry (LTM) Revenues (as reported) Adj. EBITDA AL (as reported) € bn € mn € mn -8.2% +1.7% 4.0 3.6 1,014 1,031 +40.7% 76 54 Q4/22 Q4/23 Q4/22 Q4/23 Q4/22 Q4/23 • Revenues driven by strong momentum in Revenues (organic) Adj. EBITDA AL (or
Slide 23: Financials FY/2023 reported
Financials FY/2023 reported reported financials impacted by f/x and tower sale € mn Q4 FY Impacted by currency and 2022 2023 Change 2022 2023 Change lower device revenues Revenue 29,800 29,369 -1.4% 114,413 111,985 -2.1% Service revenues growing Service revenues 23,732 23,894 +0.7% 91,988 92,919 +1.
Slide 24: FCF AL and net profit
FCF AL and net profit FCF driven by lower US capex, net profit by other financial result Free Cash Flow AL1 Adj. net profit Recurring adjusted EPS € mn € mn growth in FY +6% (from €1.51 to €1.60) +114.8% -8.1% 4,352 -118 142 1,987 124 -295 -39 -93 1,826 2,446 2,026 270 -272 Impacted by the “other fi
Slide 25: Net debt ex leases reduced by ~10%
Net debt ex leases reduced by ~10% Net debt excl. leases (AL) Leverage ratios € bn Incl. Leases Excl. Leases -10.0 103.7 93.7 -16.1 -0.6 12.1 3.06 3.07 -10.7 4.0 1.3 2.82 2.70 2.58 2.31 Q4/22 FCF AL GD Tower sale Spectrum Dividends SBB TM US F/X and others Q4/23 2021 2022 2023 25
Slide 26: Ex US Financials 2019 – 2023
Ex US Financials 2019 – 2023 multi-year growth in key financials Service revenues Adj. EBITDA AL FCF AL % growth yoy, organic % growth yoy, organic € bn 3.8% CAGR Impacted by de-consolidations: T-Mobile NL +2.2% CAGR 4.8% 4.8% 3.9 3.9 3.7% 3.7% 3.5 2.8% 3.3 2.9 2.0% 1.8% 1.0% 1.9% -0.4% 2019 2020 20
Slide 27: Group Financials 2019 – 2023
Group Financials 2019 – 2023 multi-year growth in key financials Service revenues Adj. EBITDA AL FCF AL % growth yoy, organic % growth yoy, organic € bn +€7.3 bn +7.2% CAGR +3.6% CAGR 7.9% 7.8%1 16.1 6.8%1 6.9%1 11.5 3.7% 3.5% 3.7% 3.6% 4.2% 8.8 7.0 6.3 1.6% 4.0% 1.9% 1.7% 2019 2020 2021 2022 2023 2
Slide 28: FY 2023 results Main takeaways
FY 2023 results Main takeaways
Slide 29: FY 2023 Key messages reliable and consistent growth
FY 2023 Key messages reliable and consistent growth • Commercial performance continues unabated in all markets 2023 results/CMD targets 20241 Non-recurring EPS • Germany on 29, EU on 24 successive quarters of organic EBITDA Adj. EPS Recurring EPS in €/share AL growth 1.83 1.60 >1.75 0.32 • Raised FY
Slide 30: Q4 2023 results Appendix
Q4 2023 results Appendix
Slide 31: Organic growth rates
Organic growth rates In % Q4/23 over Q4/22 FY/23 over FY/22 Group revenues +2.6 +0.6 Group service revenue +4.6 +3.6 Service revenue excl. US +3.4 +2.8 Group Adj. EBITDA AL +5.1 +4.0 Adj. EBITDA AL excl. US +3.2 +1.9 Group adj. Core EBITDA AL1 +7.2 +6.9 1 adj. EBITDA AL excl. TM US handset leases. I
Slide 32: TM US EBITDA reconciliation
TM US EBITDA reconciliation FY/23 Q4/23 US$ mn US$ mn +5.8% yoy +10.3% yoy 29,428 +6.0% yoy +9.1% yoy +5.8% yoy +7.3% yoy 29,116 312 -861 28,567 7,181 7,224 7,027 43 -197 Adj. Core Leasing Adj. EBITDA Bridge Adj. EBITDA Adj. Core Leasing Adj. EBITDA Bridge Adj. EBITDA EBITDA Revenues (US GAAP) AL (I
Slide 33: FCF AL excl. US
FCF AL excl. US € bn FY 2022 FY 2023 adj. EBITDA AL due to de-consolidation Adj. EBITDA 15.5 15.5 of the Dutch business and GD Towers. Organic growth rate of +1.9% Leasing opex -0.9 -1.3 Adj. EBITDA AL 14.6 14.1 Cash Capex -7.7 -7.5 Proceeds from sale of fixed assets +0.3 +0.1 Special Factors Cash -
Slide 34: Financials maturity profile covered by strong liquidity reserve
Financials maturity profile covered by strong liquidity reserve Ex US bonds maturing Ex US liquidity position Credit lines € bn € bn Liquid assets 14.5 3.6 12.0 2.5 2.2 Ø 2.45 1.5 4.0 1.5 2.5 2.5 2024 2025 2026 2027 Liquidity Maturities Maturities Total maturities reserve 2024 2025 next 24 months Q4
Slide 35: Net debt leverage ex leases at 2.31x
Net debt leverage ex leases at 2.31x Net debt excl. leases (AL) Leverage ratios € bn Incl. Leases Excl. Leases -3.2 96.9 93.7 -4.4 0.8 2.0 -1.6 3.06 3.07 2.82 2.70 2.58 2.31 Q3/23 FCF AL Spectrum SBB TM US F/X and others Q4/23 2021 2022 2023 35
Slide 36: Balance sheet deleveraging as promised
Balance sheet deleveraging as promised € bn 31/12/2022 31/03/2023 30/06/2023 30/09/2023 31/12/2023 Balance sheet total 298.6 303.8 299.7 302.5 290.3 Shareholders’ equity 87.3 98.7 94.4 96.6 91.2 Net debt excl. leases (AL) 103.7 93.0 97.2 96.9 93.7 Net debt excl. leases (AL)/adj. EBITDA AL1 2.58 2.31
Slide 37: Guidance 2024 compared to consensus
Guidance 2024 compared to consensus € bn Guidance 2024 in € Guidance 2024 in € Consensus in € @ 1.08 @ 1.09 @ 1.09 Adj. EBITDA AL Group ~42.9 ~42.7 42.8 thereof ex US 14.4 14.4 14.4 thereof TM US ~28.5 ~28.3 28.4 Adj. Core EBITDA Group ~42.8 ~42.6 42.6 thereof ex US 14.4 14.4 14.4 thereof TM US ~28.
Slide 38: Outlook 2024/25 as per annual report 2023 (1/2)
Outlook 2024/25 as per annual report 2023 (1/2)1 € bn 2023 pro forma 2024e 2025e Revenue Group 112.2 Increase Increase Germany 25.2 Slight increase Slight increase US (in US$) 78.6 Increase Increase Europe 11.8 Slight increase Slight increase Systems Solutions 3.9 Slight increase Stable Service Revs
Slide 39: Outlook 2024/25 as per annual report 2023 (2/2)
Outlook 2024/25 as per annual report 2023 (2/2)1 € bn 2023 pro forma 2024e 2025e Cash Capex Group 16.6 ~15.9 Stable Germany 4.6 Slight increase Slight increase US (in US$) 9.8 Decrease Stable Europe 1.8 Slight increase Slight increase Systems Solutions 0.2 Stable Stable FCF AL Group 16.2 ~18.9 Stron
Slide 40: Investor + Analyst Webcast with Q&A session
Investor + Analyst Webcast with Q&A session The conference call will be held on February 23 at 14:00 CET, 13:00 GMT, 08:00 EST, 05:00 PST, 22:00 JST DT Participants: Tim Höttges (CEO), Christian Illek (CFO), Hannes Wittig (Head of IR) • Detailed time stamps in video description for slides + Q&A: • L
Slide 41: Further questions please contact the IR department
Further questions please contact the IR department +49 228 181 – 8 88 80 Individual contact details for Visit our IR homepage for all all IR representatives: documents, basics + details investor.relations@telekom.de www.telekom.com/ircontacts www.telekom.com/investors Investor relations on social me