Deutsche Telekom Ag · XETR:DTE
Deutsche Telekom — Q3 2023 Earnings Presentation
37 slides from Deutsche Telekom's earnings presentation, Nov 9, 2023
Slide 1: Deutsche Telekom Q3 2023 results
Deutsche Telekom Q3 2023 results November 9, 2023 #DT23Q3
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: 9M 2023 results Group
9M 2023 results Group
Slide 4: 9M/2023 results continued growth
9M/2023 results continued growth 9M/2023 Highlights • Organic Growth: Group service revenues up 3.3%, Group adj. core EBITDA AL up 6.8% (+8.9% in Q3), all segments contributing. FCF AL up 27.6% • US/GER/EU: Strong customer momentum. GER: First quarter without line losses since liberalization • GER w
Slide 5: Financials 9M/2023 organic: strong organic growth
Financials 9M/2023 organic strong organic growth 9M/23 Adj. EBITDA AL Adj. Core EBITDA AL 9M/23 Adj. EBITDA AL2 9M/23 Key Financials Impacted by growth yoy, organic growth of 9.9%1 € mn % growth yoy, organic lower equipment revenues TMUS 4.9% Group revenues -0.1% +€929 mn 7,655 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 +1 15.6 300 94 95 12.2 250 8.7 EU 7.7 GER 4.5 6.9 9M/22 9M/23 9M/22 9M/23 9M/22 9M/23 GER Network Leader GER • On track for >2.5 mn new HHs in 2023 • Clean swe
Slide 7: Customers growing strongly
Customers growing strongly Mobile net adds Fixed line net adds2 000 4,601 000 4,080 Postpaid other Broadband 468 2,435 1,932 Postpaid phone 379 2,166 2,148 9M/22 9M/23 9M/22 9M/23 1,400 1,444 Ex US (contract)1 TV 252 150 9M/22 9M/23 9M/22 9M/23 1 GER + EU. GER: own brand only 2 GER + EU 7
Slide 8: DT climate targets
DT climate targets continued decline in energy consumption 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% sin
Slide 9: Updated Guidance 2023 continued growth – 3rd upgrade
Updated Guidance 2023 continued growth – 3rd upgrade Adj. EBITDA AL1 TM US DT Ex US FCF AL1 TM US DT Ex US € bn € bn 39.3 ~40.8 ~41.1 New: >16 >16.1 New: Raised 11.2 Raised 25.6 ~27.0 ~27.2 by 0.1 bn +4% >+40% ~12.7 ~12.9 by 0.1 bn 7.6 13.7 13.9 14.0 3.6 ~3.54 ~3.54 FY 2022 Guidance 2023 Guidance FY
Slide 10: Q3 2023 results Review of segments and financials
Q3 2023 results Review of 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 -1.3% Lower lease revenues and +9.5% yoy decline in handset 19.4 19.2 lower postpaid upgrades 7.4 leasing revenues Other revenues 4.1 3.3 6.7 incl. from Sprint US$0.3 bn1 customers vs. prior year Service revenue
Slide 12: T-Mobile US consistent growth in all customer categories
T-Mobile US consistent growth in all customer categories 5G EXTENDED RANGE 5G ULTRA CAPACITY Total postpaid net additions Industry leading, FY Postpaid phone net additions Industry leading. FY mn guidance raised 000 guidance raised 1.8 854 927 850 1.6 1.6 760 1.3 1.2 538 Q3/22 Q4/22 Q1/23 Q2/23 Q3/2
Slide 13: Germany 28th consecutive quarter of EBITDA growth
Germany 28th consecutive quarter of EBITDA growth Revenues (as reported) Adj. EBITDA AL (as reported) € mn € mn +2.7% +4.1% 6,144 6,308 2,535 2,638 Q3/22 Q3/23 Q3/22 Q3/23 Revenue growth (organic) Adj. EBITDA AL (organic) % yoy % yoy 2.7% 3.0% 3.0% 3.1% 3.0% 3.1% 2.3% 2.1% 1.1% 1.1% Q3/22 Q4/22 Q1/2
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 2.4% 3.5% 1.7% 1.6% 1.6% 2.9% 1.2% 2.0% 1.7% 2.1% Q3/22 Q4/22 Q1/23 Q2/23 Q3/23 Q3/22 Q4/22 Q1/23 Q2/23 Q3/23 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)1 Broadband revenue growth (organic) € mn % yoy +3.6% 3,107 3,218 4.7% 5.0% 4.7% 5.0% Broadband revenues 4.0% 1,729 1,815 +5.0% Single play and other revenues 1,378 1,403 +1.8% Q3/22 Q3/23 Q3/22 Q4/22 Q1/23 Q2/23 Q3/2
Slide 16: Germany fixed KPIs: strong net adds despite price increases
Germany fixed KPIs: strong net adds despite price increases Broadband net adds impact of TKG TV net adds impact of TKG First quarter since liberalization 000 of fixed network market 000 without line losses (+20 k) 96 63 74 74 67 51 50 51 32 36 Q3/22 Q4/22 Q1/23 Q2/23 Q3/23 Q3/22 Q4/22 Q1/23 Q2/23 Q3
Slide 17: Germany mobile KPIs: strong customer intake continues
Germany mobile KPIs: strong customer intake continues Branded contract net adds1 Data usage2 000 368 GB per month 350 12.1 319 274 9.2 225 +32% yoy Q3/22 Q4/22 Q1/23 Q2/23 Q3/23 Q3/22 Q3/23 Churn2 Magenta EINS share (mobile)3 % % 1.0% 63% 64% 0.9% Q3/22 Q3/23 Q3/22 Q3/23 1 Own branded retail custome
Slide 18: Europe 23rd consecutive quarter of organic EBITDA growth
Europe 23rd consecutive quarter of organic EBITDA growth Revenues (as reported) Adj. EBITDA AL (as reported) € mn € mn +5.2% +4.7% 2,848 2,995 1,046 1,095 Q3/22 Q3/23 Q3/22 Q3/23 Revenues (organic) Adj. EBITDA AL (organic) % growth yoy % growth yoy 5.5% 5.1% 4.9% 3.3% 3.7% 2.6% 2.2% 0.9% 1.2% 0.5% Q
Slide 19: Europe strong commercial performance
Europe Number one in customer satisfaction (TRI*M) in all strong commercial performance markets (except RO) Mobile contract net adds Broadband net adds 000 251 000 223 179 173 92 83 104 76 72 76 Q3/22 Q4/22 Q1/231 Q2/23 Q3/23 Q3/22 Q4/22 Q1/23 Q2/23 Q3/23 FMC net adds2 TV net adds 000 000 191 184 15
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 +3.6% +3.6% -15.4% 4.0 927 960 83 86 3.4 Q3/22 Q3/23 Q3/22 Q3/23 Q3/22 Q3/23 • Order entry impacted by phasing Revenues (organic) Adj. EBITDA AL (organic) • Revenues dri
Slide 21: FCF AL and net profit
FCF AL and net profit free cash flow driven by better operations and lower US capex Free Cash Flow AL1 Adj. net profit Recurring adjusted EPS € mn € mn growth 9M +8% (from €1.13 to €1.22) +61.4% -5.9% 4,688 -133 386 -442 2,411 1,520 71 2,268 -201 44 2,904 28 369 Lower disposals Primarily driven by t
Slide 22: Financials 9M/2023 reported
Financials 9M/2023 reported reported financials impacted by f/x and tower sale Impacted by currency and € mn Q3 9M lower device revenues Service revenues growing 2022 2023 Change 2022 2023 Change 3.3% organically Revenue 28,979 27,556 -4.9% 84,613 82,616 -2.4% Adj. EBITDA organic Adj. EBITDA AL 10,4
Slide 23: Net debt leverage ex leases at 2.40x
Net debt leverage ex leases at 2.40x Net debt excl. leases (AL) Leverage ratios € bn Incl. Leases -0.3 Excl. Leases 97.2 96.9 -4.7 0.2 2.5 1.7 3.06 3.07 2.94 2.70 2.58 2.40 Q2/23 FCF AL Spectrum SBB TM US F/X and others Q3/23 2021 2022 9M/23 23
Slide 24: Net debt and interest deep dive solid financing framework
Net debt and interest deep dive All 3 rating agencies at BBB+ with stable outlook solid financing framework Q3 net debt ex US TM US Q3 average interest rate Q3 fixed vs. floating rate ratio € bn 137.1 in % in % 31.5 floating 96.9 -12.3 bn 4.4 100.0 100.0 fixed -14.8 bn 23.7 3.8 yoy 8.0 yoy 105.6 Was
Slide 25: 9M 2023 results Main takeaways
9M 2023 results Main takeaways
Slide 26: 9M 2023 Key messages delivering reliable and consistent growth
9M 2023 Key messages delivering reliable and consistent growth • Commercial performance continues unabated in all 2022 results/CMD targets 20241 Non-recurring EPS markets Adj. EPS in €/share Recurring EPS 1.83 >1.75 • Germany on 28, EU on 23 successive quarters of organic 0.32 >1.60 EBITDA AL growth
Slide 27: Q3 2023 results Appendix
Q3 2023 results Appendix
Slide 28: Organic growth rates
Organic growth rates In % Q3/23 over Q3/22 9M/23 over 9M/22 Group revenues +0.7 -0.1 Group service revenue +4.1 +3.3 Service revenue excl. US +3.1 +2.6 Group Adj. EBITDA AL +6.2 +3.7 Adj. EBITDA AL excl. US +2.2 +1.5 Group adj. Core EBITDA AL1 +8.9 +6.8 1 adj. EBITDA AL excl. TM US handset leases. I
Slide 29: TM US EBITDA reconciliation
TM US EBITDA reconciliation 9M/23 Q3/23 US$ mn US$ mn +5.8% yoy +10.8% yoy 22,204 +5.5% yoy +12.2% yoy +8.0% yoy +9.5% yoy 21,935 269 -664 21,540 7,547 7,600 7,384 53 -216 Adj. Core Leasing Adj. EBITDA Bridge Adj. EBITDA Adj. Core Leasing Adj. EBITDA Bridge Adj. EBITDA EBITDA Revenues (US GAAP) AL (
Slide 30: FCF AL excl. US
FCF AL excl. US € bn 9M 2022 9M 2023 adj. EBITDA AL due to de-consolidation Adj. EBITDA 11.8 11.7 of the Dutch business and GD Towers. Organic growth rate of +1.5% Leasing opex -0.8 -1.1 Adj. EBITDA AL 11.0 10.6 Cash Capex -5.2 -5.7 Proceeds from sale of fixed assets +0.1 +0.0 Special Factors Cash -
Slide 31: 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 14.7 2.5 2.2 12.0 1.5 Ø 1.60 0.6 3.3 2.5 0.2 2.7 0.2 2023 2026 Liquidity Remaining Maturities Maturities Total maturities remaining reserve Maturities 20
Slide 32: Balance sheet deleveraging as promised
Balance sheet deleveraging as promised € bn 30/09/2022 31/12/2022 31/03/2023 30/06/2023 30/09/2023 Balance sheet total 321.4 298.6 303.8 299.7 302.5 Shareholders’ equity 94.5 87.3 98.7 94.4 96.6 Net debt excl. leases (AL) 109.5 103.7 93.0 97.2 96.9 Net debt excl. leases (AL)/adj. EBITDA AL1 2.79 2.5
Slide 33: Guidance 2023 compared to consensus
Guidance 2023 compared to consensus € bn Guidance 2023 in € Guidance 2023 in € Consensus in € @ 1.05 @ 1.08 @ 1.08 ex US includes one month of GD Towers in 2023. Guidance is Adj. EBITDA AL Group ~41.1 ~40.4 40.6 without GD. thereof ex US 14.0 14.0 14.1 thereof TM US ~27.2 ~26.4 26.5 Consensus uses €
Slide 34: 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$) 79.3 Slight increase Slight increase Europe 11.2 Increase Slight increase Systems Solutions 3.7 Stable Slight increas
Slide 35: Outlook 2022/23 as per annual report 2022 (2/2)
Outlook 2022/23 as per annual report 2022 (2/2)1 € bn 2022 pro forma 2023e 2024e Cash Capex Group 20.7 16.8 Stable Germany 4.4 Slight increase Slight increase US (in US$) 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 36: Investor + Analyst Webcast with Q&A session
Investor + Analyst Webcast with Q&A session The conference call will be held on November 9 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: • Li
Slide 37: 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