Deutsche Telekom Ag · XETR:DTE
Deutsche Telekom — Q3 2022 Earnings Presentation
38 slides from Deutsche Telekom's earnings presentation, Nov 10, 2022
Slide 1: Deutsche Telekom Q3 2022 results
Deutsche Telekom Q3 2022 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: 9M 2022 results sector leading growth
9M 2022 results sector leading growth Group • Strong organic service revenue growth +4.0% and adj. Core EBITDA AL growth of +5.9% • FCF AL up +13.9% and adj. EPS growth of +47.4% • Guidance raised for the 3rd time this year • Dividend proposal of 0.70€ per share1 T-Mobile US • Service revenues up 5.
Slide 4: Financials 9M 2022 organic strong growth
Financials 9M 2022 organic strong growth 9M/22 Adj. EBITDA AL 9M/22 Adj. EBITDA AL2 9M/22 Key Financials growth yoy, organic € mn % growth yoy, organic TMUS Adj. Core EBITDA AL -1.2% Group revenues 0.6% -€226 mn growth of 7.0%1 GER 7,358 3.2% Group service revenues 4.0% +€229 mn EU ex US Service rev
Slide 5: Networks leading with 5G, FTTH well on track
Networks leading with 5G, FTTH well on track FTTH (1 Gbps) 5G TM US 5G Germany Homes passed Ultra capacity 5G2 % of POPs +3pp 17.3% mn mn POPs +19.0% 12.2 91 94 10.4 250 7.7 210 7.0 3.4 4.5 YE/21 9M/22 YE/21 9M/22 YE/21 9M/22 On track for 2022 and CMD targets Targeting 260m YE 2022 6,000 anten
Slide 6: Customers growing strongly
Customers growing strongly Mobile net adds Fixed line net adds2 000 000 4,601 US (postpaid) 3,745 Broadband 533 Sequential Best in industry 378 improvement in GER and EU 9M/21 9M/22 9M/21 9M/22 Ex US (contract)1 1,401 TV YoY growth driven by 1,063 247 Sequential both Europe and improvement in GER Ge
Slide 7: ESG taking tangible steps towards ambitions
ESG taking tangible steps towards ambitions ENVIRONMENT SOCIAL GOVERNANCE • Emissions: Net zero (Scope 1&2) until 2025, • Diversity1: Increase share of female • Move of Group Corporate Responsibility Net neutrality (Scope 1-3) until 2040 latest, executives to 30% by 2030 (vs 22% in 2022) department
Slide 8: Guidance 2022 raised for the third time
Guidance 2022 raised for the third time Adj. Core EBITDA AL (organic) TM US Adj. EBITDA AL (organic) TM US € bn DT Ex US DT Ex US € bn ~36.5 ~37.0 >37.0 ~35.5 ~35.9 >35.9 21.3 ~21.6 ~21.7 22.3 ~22.7 ~22.8 14.2 14.3 14.3 14.2 14.3 14.3 • Guidance raised for T-Mobile US and Orig. Guidance Guidance New
Slide 9: Operations Review Q3/2022
Operations Review Q3/2022
Slide 10: T-Mobile US strong financial growth
T-Mobile US strong financial growth Revenues (IFRS) Adj. EBITDA AL (IFRS)2 US$ bn US$ bn -1.0% -0.9% 19.6 19.4 yoy decline in handset 6.8 6.7 yoy decline in handset Other revenues 4.9 4.1 leasing revenues leasing revenues US$0.5 bn1 US$0.5 bn1 Service revenues 14.7 15.3 Q3/21 Q3/22 Q3/21 Q3/22 Servi
Slide 11: T-Mobile US highest postpaid phone growth since merger
T-Mobile US highest postpaid phone growth since merger Total postpaid net additions1 5G EXTENDED RANGEMore than 5G ULTRA CAPACITY AT&T and Postpaid phone net additions1 mn Verizon combined mn Highest since merger 1.8 1.7 0.8 0.9 1.6 1.3 1.3 0.7 0.7 0.6 Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 Q3/21 Q4/21 Q1/22
Slide 12: Germany 24th consecutive quarter of EBITDA growth
Germany 24th consecutive quarter of EBITDA growth Revenues (as reported) Adj. EBITDA AL (as reported) € mn € mn +2.8% +3.0% 5,974 6,144 2,462 2,535 Q3/21 Q3/22 Q3/21 Q3/22 Revenue growth (organic) Adj. EBITDA AL (organic) % yoy % yoy 3.4% 3.8% 3.6% 3.7% 2.7% 2.7% 3.0% 3.0% 2.1% 0.8% Q3/21 Q4/21 Q1/2
Slide 13: 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) Impacted by Lebara % yoy % yoy contract termination 2.7% 2.3% 2.5% 2.1% 2.0% 2.0% 1.8% 1.6% 1.2% 0.6% Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 Revenue
Slide 14: Germany fixed: net adds improved, strong upselling continues
Germany fixed: net adds improved, strong upselling continues Broadband net adds impact of TKG TV net adds impact of TKG 000 000 90 84 33 34 55 63 45 32 17 21 Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 Retail customers with ≥100Mbit/s tariff Fiber net adds Retail Wholesale Boosted by
Slide 15: Germany retail and wholesale fixed: steady growth
Germany retail and wholesale fixed: steady growth Retail fixed revenues (reported) Broadband revenue growth (organic)2 € mn % yoy +2.3% 3,038 3,107 5.5% 6.0% 4.4% 4.7% 4.7% Broadband revenues +7.5% 1,608 1,728 Single play and other revenues 1,430 1,379 -3.6% Q3/21 Q3/22 Q3/21 Q4/21 Q1/22 Q2/22 Q3/22
Slide 16: Germany mobile: record customer intake
Germany mobile: record customer intake Branded contract net adds3 Data usage2 000 GB per month 368 9.2 6.8 182 202 193 194 +35% yoy Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 Q3/21 Q3/22 Churn2 Q3/22 impact of TKG Magenta EINS share (mobile)1 % % 1.0% 63% 63% 0.8% Q3/21 Q3/22 Q3/21 Q3/22 1 B2C T-branded contract
Slide 17: Europe 19th consecutive quarter of organic EBITDA growth
Europe 19th consecutive quarter of organic EBITDA growth Revenues (as reported) Adj. EBITDA AL (as reported) € mn € mn -1.1% -5,3% 2,880 2,848 1.105 1.046 decline driven by sale decline driven by sale of Romania fixed of Romania fixed and Hungarian special tax Q3/21 Q3/22 Q3/21 Q3/22 Revenues (organ
Slide 18: Europe strong commercial performance
Europe strong commercial performance1 Mobile contract net adds Broadband net adds 000 274 000 243 251 171 150 87 76 70 70 76 Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 Q3/21 Q4/212 Q1/22 Q2/22 Q3/22 FMC net adds3 TV net adds 000 000 226 224 196 186 173 58 48 31 32 17 Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 Q3/21 Q4/213 Q1
Slide 19: GD/Towers strong growth
GD/Towers strong growth Total sites Austria Recurring rental revenues 000 +0.9k € mn DFMG 40.1 41.0 7.0 7.1 +6.7% 245 261 33.0 33.91 1.2k new build Q3/21 Q3/22 Q3/21 Q3/22 Opex AL per site Adj. EBITDA € 000 € mn +9.1% 2.9 2.9 220 240 EBITDA AL: +40.2% (+9.7% w/o 50mn 230 benefit from 164 discontinue
Slide 20: Systems Solutions steady recovery
Systems Solutions steady recovery Order entry Revenues Adj. EBITDA AL € bn € mn € mn +6.5% +1.9% +12.2% 2.6 2.8 910 927 83 74 9M/2021 9M/2022 Q3/21 Q3/22 Q3/21 Q3/22 Revenues (organic) Adj. EBITDA AL (organic) % growth yoy % growth yoy 16.5% 16.4% • Revenues stabilizing, helped by growth 14.1% busin
Slide 21: Financials Q3 2022
Financials O35 2022
Slide 22: Financials Q3 2022 reported strong growth
Financials Q3 2022 reported strong growth € mn Q3 9M 2021 2022 Change 2021 2022 Change Revenue 26,641 28,979 +8.8% 79,164 84,613 +6.9% Adj. EBITDA AL 9,661 10,481 +8.5% 28,323 30,244 +6.8% Adj. EBITDA AL (excl. US)2 3,890 3,791 -2.5% 11,108 11,046 -0.6% Adj. Net profit 1,313 2,411 +83.6% 4,627 7,094
Slide 23: Financials Q3 2022 strong growth in net income
Financials Q3 2022 strong growth in net income Free Cash Flow AL1 9M/22 FCF AL of €9.4 bn Adj. net profit 9M/22 adj. EPS of €1.43 € mn € mn -1.2% +83.6% 960 -313 -1,220 452 2,940 2,904 -371 90 2,411 134 466 864 1,313 Q3/21 Net CF gen. Leasing Capex (excl. Others Q3/22 Q3/21 Adj. EBITDA D&A Financial
Slide 24: Financials Q3 2022 net debt up on share buyback TM US, and F/X
Financials Q3 2022 net debt up on share buyback TM US, and F/X Net debt excl. leases (AL) (Q3/22 over Q2/22) Leverage ratios € bn • CMD target: back in 2.25 – 2.75x IFRS16 range YE24 109.5 0.2 3.34x 2.79x 106.3 4.8 -2.9 0.6 0.1 0.4 Net Debt FCF AL Dividends Spectrum SBB F/X Effect1 Derivatives Net D
Slide 25: Inflation exposure multiple safeguards in place
Inflation exposure multiple safeguards in place, challenges being actively addressed € bn in 2021 Group as % of Rev. Mitigations • US: 2/3 secured via PPAs • GER: Comprehensive multi-year hedging and removal of renewable energy Energy costs 1.5 1.4% surcharge create stable outlook for costs • Scope
Slide 26: Main takeaways
: Main takeaways #
Slide 27: 9M 2022 main takeaways
9M 2022 main takeaways • TM US: strong merger execution, adj. core EBITDA up 7%, industry-leading CMD targets 2024 customer growth, guidance raised for the 3rd time this year Adj. EPS in €/share • DT ex US: 4.3% organic adj. EBITDA AL growth; Germany 24 and EU 19 successive quarters of organic EBITD
Slide 28: Appendix
Appendix
Slide 29: Organic growth rates
Organic growth rates In % Q3/22 over Q3/21 9M/22 over 9M/21 Group revenue +0.5 +0.6 Group service revenue +3.4 +4.0 Service revenue excl. US +2.0 +1.8 Group Adj. EBITDA AL +0.7 +0.7 Adj. EBITDA AL excl. US +3.9 +4.3 Group adj. Core EBITDA AL1 +4.8 +5.9 1 adj. EBITDA AL excl. TM US handset leases In
Slide 30: TM US: EBITDA reconciliation
TM US: EBITDA reconciliation 9M/22 +1.8% Q3/22 US$ mn yoy -0.9% US$ mn +10.7% 20,993 yoy +11.4% +3.3% -0.9% yoy yoy yoy yoy -576 20,417 1,184 7,039 19,809 6,728 6,742 311 -297 Adj. Core Leasing Adj. EBITDA Bridge Adj. EBITDA Adj. Core Leasing Adj. EBITDA Bridge Adj. EBITDA EBITDA Revenues (US GAAP)
Slide 31: FCF AL excl. US
FCF AL excl. US € bn 9M 2022 9M 2021 Adj. EBITDA AL 11.0 11.1 Decline in adj. EBITDA AL due to de-consolidation of Cash Capex -5.2 -5.1 Romania fixed and the Dutch Proceeds from sale of fixed assets +0.1 +0.1 business. Organic growth rate of +4.3% in 9M. Special Factors Cash -0.9 -0.9 Interest ex le
Slide 32: Financials well balanced maturity profile with strong liquidity reserve
Financials well balanced maturity profile with strong liquidity reserve DT (ex US) bonds maturing Ex US liquidity position Credit lines € bn € bn Liquid assets 13.4 3.4 3.2 12.0 1.7 6.0 2.0 Ø 2.4 3.4 0.9 0.9 1.4 2022 2023 2024 2025 Liquidity Maturities Maturities Maturities Total maturities reserve
Slide 33: Balance sheet US$ strength boosts balance sheet
Balance sheet US$ strength boosts balance sheet € bn 30/09/2021 31/12/2021 31/03/2022 30/06/2022 30/09/2022 Balance sheet total 273.4 281.6 292.4 301.7 321.4 Shareholders’ equity 78.9 81.5 87.7 88.5 94.5 Net debt excl. leases (AL) 99.3 100.6 98.1 106.3 109.5 Net debt excl. leases (AL)/adj. EBITDA AL
Slide 34: Group Development ongoing strong underlying performance
Group Development ongoing strong underlying performance Revenues NL Adj. EBITDA AL NL -62.8% -35.0% € mn GD Towers € mn GD Towers 787 340 Others Others 221 515 179 0 293 0 230 289 164 270 2 4 -3 -9 Q3/21 Q3/22 Q3/21 Q3/22 Revenues Adj. EBITDA AL org. growth % growth yoy, organic % growth yoy, organi
Slide 35: Outlook 2022/23 as per annual report 2021 (1/2)
Outlook 2022/23 as per annual report 2021 (1/2)1 € bn 2021 pro forma 2022e 2023e Revenue Group 106.5 Stable Slight increase Germany 24.2 Slight increase Increase US (in US$) 81.0 Stable Slight increase Europe 11.0 Slight increase Stable Systems Solutions 4.0 Stable Slight increase Group Development
Slide 36: Outlook 2022/23 as per annual report 2021 (2/2)
Outlook 2022/23 as per annual report 2021 (2/2)1 € bn 2021 pro forma 2022e 2023e Cash Capex Group 17.7 19.3 Strong decrease Germany 4.1 Increase Increase US (in US$) 12.2 Strong increase Strong decrease Europe 1.7 Stable Stable Systems Solutions 0.2 Stable Stable Group Development 0.3 Strong increas
Slide 37: Conference call with Q&A session
Conference call with Q&A session The conference call will be held on November 10 at 14:00 CET, 13:00 GMT, 08:00 ET. DT Participants: Tim Höttges (CEO), Christian Illek (CFO), Hannes Wittig (Head of IR) Webcast via YouTube Dial-in • The conference call will be live-webcasted via YouTube: DE 0800 5889
Slide 38: 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