Deutsche Telekom Ag · XETR:DTE
Deutsche Telekom — FY 2020 Earnings Presentation
42 slides from Deutsche Telekom's earnings presentation, Feb 26, 2021
Slide 1: Deutsche Telekom FY 2020 results
Deutsche Telekom FY 2020 results
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 2020 results: sector leading growth
FY 2020 results sector leading growth T-Mobile • Accelerated progress with 5G/integration • 106m pops passed with 5G in 2.5GHz • Customer and EBITDA growth – ahead of expectations Ex US • GER: 17 consecutive quarters of EBITDA growth; EU: 12 quarters • Guidance raised in Q3 • Strong customer growth;
Slide 4: FY 2020 adj. EBITDA AL up 8% organic
FY 2020 adj. EBITDA AL up 8% organic Adj. EBITDA AL (Organic growth) Adj. EBITDA AL1 FY 2020 Reported growth € mn Revenue +25.4% TMUS 10.8% +€ 2,051mn Adj. EBITDA AL +41.6% GER 9,231 Adj. EBITDA AL 1.5% +3.1% +€ 138mn (excl. US) Adj. Net profit +15.5% EU 2.1% +€ 79mn Net profit +7.5% 20,997 3,910 GD
Slide 5: Portfolio: focus on execution
Portfolio focus on execution T-Mobile US Ex US • Sprint merger • EU • Approved and closed • Exit from Romanian fixed line • Synergies ahead of plan • FTTH JV with Cetin in Czech Republic • Funding secured • Netherlands • Related transactions • Tower merger with Cellnex • Agreements with Softbank (re
Slide 6: Customers growing strongly
Customers growing strongly Mobile net adds Fixed line net adds2 000 5,486 000 716 4,515 506 US (postpaid) Broadband 2019 2020 2019 2020 1,690 343 366 1,523 246 Ex US (contract)1 TV 2019 2020 2019 2020 1) GER + EU + NL. GER: own brand only 2) GER + EU + NL 6
Slide 7: Society and Environment: progress with ESG agenda
Society and Environment progress with ESG agenda Societal agenda #GreenMagenta #GoodMagenta Environmental agenda Customer satisfaction Energy consumption1 Tri*M 72 in mn MWh 67 3.6 3.4 3.3 2019 2020 2018 2019 2020 Ongoing success in ESG Ratings CO2e emissions (scope 1+2)1 Employee satisfaction in mn
Slide 8: Networks: progress with 5G
Networks progress with 5G T-Mobile US 5G coverage Ex US mn POPs Germany 280 • 67% coverage at YE 2020 • Targeting >80% YE 2021 200 EU • Austria: 40% coverage at YE 2020 106 • Greece: 40% coverage at YE 2020 • Poland: launched in June 2020, 15% coverage YE 20 YE 20 YE 21 Netherlands 600 MHz • Nationw
Slide 9: Networks: FTTH acceleration underway
Networks FTTH acceleration underway Fiber networks FTTH (1Gbps) +2.3 +1.6 Fiber homes1 Fiber homes mn 47.7 mn 10.1 45.3 8.6 EU 10.4 11.8 GER 7.9 7.0 34.9 35.9 1.6 2.2 2019 2020 2019 2020 • 82.5% of German homes provided • Combined 2020 run rate of 1.6mn • Build-out largely completed • Up from c1mn a
Slide 10: FTTH Germany: further accelerating our FTTH build
FTTH Germany further accelerating our FTTH build Fiber homes passed m ~10m • 100% of Germany to be covered with FTTH by 2030, by DT and others • DT is uniquely positioned to lead 3.4m • We have a predictable investment framework 2.2m • FTTH will extend our proven upsell and grow ARPAs in retail and
Slide 11: FTTH Germany: DT uniquely positioned to lead
FTTH Germany DT uniquely positioned to lead Infra leadership Customer base Predictable framework • 82.5% of homes passed with dense FTTC • 14m retail broadband subs, de-risking • Established M4M wholesale & retail pricing connectivity utilization framework • 13,000 employees in highly digital & scal
Slide 12: FTTH Germany: FTTH extends our proven upsell and growth
FTTH Germany FTTH extends our proven upsell and growth Share of ≥ 100Mbps contracts Retail ARPA1,2 BB revenue growth % of base €/month €bn +7.8% 25% €32.0 €33.5 €5.7 €6.1 Retail 9% 2018 2020 FTTH 2018 2020 FTTH 2018 2020 FTTH • Low churn and strong customer growth WS tariffs WS ARPA2 WS access reven
Slide 13: FTTH Germany: creating value from fiber
FTTH Germany creating value from fiber German FTTH leadership Upselling opportunities • Superior, future-proof infrastructure • Established M4M framework • 10m homes passed in 2024 • Long term commercial wholesale contracts Revenues • IRR > WACC • Growth • Revenues (FTTH) cost transformation Cost be
Slide 14: Ex US FCF: FCF in Europe is growing
Ex US FCF despite FTTH acceleration, FCF in Europe is growing DT ex US Capex outlook DT ex US FCF € bn ~4.0 3.3 ~3.5 • 2021 ex US capex stable vs. 2020 (€ 7.7bn) • 2024 ex US capex around € 0.5bn higher vs. 2021 • Gradual increase from 2021 to 2024 2020 2021 2024 • Capex envelope driven by • Ex US F
Slide 15: Guidance 2021: we grow on both sides of the Atlantic
Guidance 2021 we grow on both sides of the Atlantic ADJ. EBITDA AL € bn -0.8 ≈ 37 2.4 35.0 Based on 1 € = US$ 1.14 0.3 22.7 21.0 TM US EBITDA included at TM US midpoint of US GAAP 2021 14.3 guidance of US$ 26.5bn to 14.0 Ex US 27.0bn, adjusted for estimated FY 2020 Ex US TM US US GAAP IFRS Bridge FY
Slide 16: Review Q4 2020
Review Q4 2020
Slide 17: Financials: strong growth
Financials strong growth € mn Q4 FY 2019 2020 Change 2019 2020 Change Revenue 21,361 27,622 +29.3% 80,531 100,999 +25.4% Adj. EBITDA AL 6,030 8,952 +48.5% 24,731 35,017 +41.6% Adj. EBITDA AL (excl. US) 3,320 3,413 +2.8% 13,597 14,020 +3.1% Adj. Net profit 1,016 1,643 +61.7% 4,948 5,715 +15.5% Net pr
Slide 18: EBITDA AL growth on both sides of the Atlantic
EBITDA AL growth on both sides of the Atlantic Ex US growth (IFRS organic) TMUS growth (IFRS organic)1 % yoy % yoy 14.5% 14.6% 12.6% 8.8% 4.2% 4.1% 4.5% 3.2% 3.5% 3.7% Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 1) Sprint included since Q2/20 18
Slide 19: Covid-19 impacts: expected headwinds
Covid-19 impacts expected headwinds Maximum possible exposure (ex US) Q4 2020 estimated impact Outlook 2021 Retail roaming revenue EU/NL ~€ 0.35bn € 60mn Modest improvement DE Mobile handset revenue EU/NL DE ~€ 3.5bn Limited impact Limited impact DE EU/NL ICT revenue ~€ 9bn1 ~€ 100mn Ongoing headwin
Slide 20: Germany: 17th consecutive quarter of EBITDA growth
Germany 17th consecutive quarter of EBITDA growth Revenues Adj. EBITDA AL € mn € mn +0.6% +1.1% • Covid-19 related 6,223 6,260 2,308 2,333 >1pp Q4/19 Q4/20 Q4/19 Q4/20 Total service revenue growth1 Adj. EBITDA AL growth (organic)1 % yoy % yoy 1.0% 1.0% 1.0% 0.9% 2.4% 2.2% 2.0% 1.3% 1.1% -0.1% Q4/19
Slide 21: Germany: service revenues impacted by Covid-19 headwinds
Germany service revenues impacted by Covid-19 headwinds Mobile service revenue growth1 Fixed service revenue growth1 % yoy % yoy • Covid-19 related headwind on roaming and on visitor revenues • Strong broadband growth diluted by volatility in newly integrated (2.8pp after 2.3pp in Q3). Ex Covid-19 g
Slide 22: Germany: positive mobile KPIs
Germany positive mobile KPIs Magenta EINS share (mobile)1 Data usage3 % 62% GB 6.0 57% 4.0 +51% y/y Q4/19 Q4/20 Q4/19 Q4/20 Churn2 Branded contract net adds4 % 000 1.0% 192 206 0.9% 141 97 110 Q4/19 Q4/20 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 1) As % of B2C T-branded contract customers 2) contract excl. Leb
Slide 23: Germany: strong commercials in fixed
Germany strong commercials in fixed Broadband net adds TV net adds 000 000 121 74 77 97 60 64 83 87 45 47 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Line losses Line losses org. Fiber net adds Retail 000 Line losses triggered by IP-migration 000 Wholesale • 0.7mn super vectoring cus
Slide 24: Germany: growth in fixed
Germany growth in fixed Retail fixed revenues1 Broadband revenue growth1 € mn +0.7% % yoy 3,092 3,113 6.2% 6.4% 5.7% Broadband revenues 4.8% 4.4% 1,470 1,563 +6.4% Single play and other revenues 1,622 1,550 -4.4% Q4/19 Q4/20 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Retail fixed revenue growth1 Wholesale revenu
Slide 25: T-Mobile: excellent first year
T-Mobile excellent first year Revenues (IFRS) Adj. EBITDA AL (IFRS) US $ bn US $ bn +71.6% +120.1% 20.5 6.6 12.0 3.0 Service revenues Q4/19 Q4/20 Q4/19 Q4/20 Service revenue (IFRS)1 Adj. EBITDA AL growth (IFRS) organic US $ bn / % yoy US $ bn / % yoy 6.9 7.0 6.6 14.1 14.0 14.0 +4.5% +14.6% +12.6% 8.
Slide 26: T-Mobile: industry leading network and strong customer KPIs
T-Mobile industry leading network and strong customer KPIs Total postpaid net additions1 mn 2.0 1.6 1.3 1.1 0.8 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Postpaid phone churn1 % 1.0 1.0 0.9 0.9 0.8 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 1) Q4/19 and Q1/20 excluding Sprint 26
Slide 27: Europe: 12th consecutive quarter of organic EBITDA growth
Europe 12th consecutive quarter of organic EBITDA growth Revenues Adj. EBITDA AL € mn € mn -2.9% -0.4% 3,080 2,992 962 958 Q4/19 Q4/20 Q4/19 Q4/20 Revenue growth (organic)1 Adj. EBITDA AL growth (organic) 1 % yoy % yoy 5.7% 3.8% 2.1% 3.2% 0.2% 2.1% 1.9% -0.5% 1.1% -1.7% Q4/19 Q1/20 Q2/20 Q3/20 Q4/20
Slide 28: Europe: strong net adds in all categories
Europe strong net adds in all categories Mobile contract net adds1 Broadband net adds 000 000 222 219 88 174 171 73 69 60 110 50 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q4/19 Q1/203 Q2/20 Q3/20 Q4/20 FMC net adds2 TV net adds 000 000 299 71 258 248 234 197 26 20 26 -5 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q4/19 Q1/20
Slide 29: T-Systems: covid-19 weighs on transformation
T-Systems covid-19 weighs on transformation Order entry Revenues Adj. EBITDA AL € bn € mn € mn +42.5% -7.4% -16.2% 2.1 1,170 1,084 74 62 1.5 Q4/19 Q4/20 Q4/19 Q4/20 Q4/19 Q4/20 Revenue growth (organic)1 Adj. EBITDA AL growth (organic)1 • Order entry benefitted from significant % yoy % yoy renewals.
Slide 30: Group Development: ongoing strong performance
Group Development ongoing strong performance Revenues Adj. EBITDA AL € mn € mn +1.5% +2.7% 729 740 259 266 505 130 135 NL 513 NL 143 148 GD Towers 231 246 GD Towers -15 -11 -14 -17 Other Others Q4/19 Q4/20 Q4/19 Q4/20 Revenue growth (organic) Adj. EBITDA AL growth (organic) % yoy % yoy 4.8% 13.2% 3.
Slide 31: GD/TMNL: EBITDA growth continues
GD/TMNL EBITDA growth continues Contract net adds Mobile service revenue growth (organic) 000 % yoy 83 5.5% 67 62 50 2.8% 2.3% 22 0.4% -0.9% Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Broadband net adds Adj. EBITDA AL growth (organic) 000 % yoy 22.2% 21 18 17 14 13.0% 11 10.6% 6.8%
Slide 32: GD Towers: ongoing expansion
GD Towers ongoing expansion Total sites Recurring rental revenues 000 € mn 34.3 35.7 +4.4% 3.1 3.2 NL towers 222 213 31.2 32.5 Q4/19 Q4/20 Q4/19 Q4/20 Opex AL per site Adj. EBITDA 000 € € mn +2.1% 3.1 3.0 194 198 143 148 EBITDA AL +3.5% Q4/19 Q4/20 Q4/19 Q4/20 32
Slide 33: Financials: FCF delivered, above H1/20 guidance
Financials FCF delivered, above H1/20 guidance Free Cash Flow AL1 Adj. net income € mn € mn -46.6% +61.7% -173 -2,368 1,754 3,384 1,763 -2,393 1,643 -221 100 -268 942 1,016 -9 Q4/19 CF gen. Leasing Capex (excl. Others Q4/20 Q4/19 Adj. EBITDA D&A Financial Taxes Minorities Q4/20 from ops. repayments
Slide 34: Net debt analysis: financial leverage down to 2.4 times
Net debt analysis financial leverage down to 2.4 times Q4/20 net debt w/o leases1 Q4/20 net debt incl. leases Leverage ratios2 € bn € bn 2.78x 92.7 124.5 2.4x -0.9 -1.9 -2.2 -2.4 89.6 120.2 Q3/20 FCF AL Other Q4/20 Q3/20 FCF IFRS 16 Other Q4/20 IFRS 16 Excl. leases incl. leases (AL) Other includes c
Slide 35: Balance sheet: net debt ratio marginally outside of comfort zone
Balance sheet net debt ratio marginally outside of IFRS 16 comfort zone € bn 31/12/2019 31/03/2020 30/06/2020 30/09/2020 31/12/2020 Balance sheet total 170.7 173.6 270.0 265.3 264.9 Shareholders’ equity 46.2 45.9 73.5 72.0 72.6 Net debt 76.0 77.4 120.9 124.5 120.2 Net debt/Adj. EBITDA1 2.65 2.64 2.9
Slide 36: Appendix
Appendix
Slide 37: FCF AL excl. US
FCF AL excl. US € bn FY 2019 FY 2020 Adj. EBITDA AL 13.6 14.0 Cash Capex -7.8 -7.7 Proceeds from sale of fixed assets +0.2 +0.2 Special Factors Cash -1.3 -1.4 Interest ex leasing -0.4 -0.6 Cash Taxes -0.7 -0.6 Other (working capital etc.) -0.7 -0.4 FCF AL 2.9 3.3 37
Slide 38: Outlook 2021/22 as per annual report 2020 (1/2)
Outlook 2021/22 as per annual report 2020 (1/2)1 € bn 2020 pro forma 2021e 2022e Revenue Group 106.7 Slight increase Stable Germany 23.6 Slight increase Slight increase US (in USD) 76.4 Slight increase Stable Europe 11.3 Stable Stable Systems Solutions 4.2 Slight decrease Stable Group Development 3.
Slide 39: Outlook 2021/22 as per annual report 2020 (2/2)
Outlook 2021/22 as per annual report 2020 (2/2)1 € bn 2020 pro forma 2021e 2022e Cash Capex Group 17.8 18.4 Stable Germany 4.2 Stable Increase US (in USD) 11.7 Increase Stable Europe 1.8 Slight decrease Stable Systems Solutions 0.2 Stable Stable Group Development 0.5 Strong increase Increase FCF AL
Slide 40: German market overview
German market overview German mobile market service revenue German broadband market1 € mn mn 35.1 Telefonica 1.341 1.359 Cable 8.6 Telco Competitors 12.8 Vodafone 1.273 1.279 Telekom 1.553 1.526 DT 13.7 14.0 Q4/19 Q4/20 Q4/19 Q4/20 1) Based on management estimations 40
Slide 41: Conference call with Q&A session
Conference call with Q&A session The conference call will be held on February 26 at 2:00 PM CET, 1:00 PM GMT, 8 AM ET. DT Participants: Tim Hoettges (CEO), Srini Gopalan (CEO Germany), Christian Illek (CFO), Hannes Wittig (Head of IR) Webcast Dial-in • The link to the webcast will be provided 20 min
Slide 42: 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 www