Deutsche Telekom AG · XETR:DTE
Deutsche Telekom — Q1 2005 Earnings Presentation
20 slides from Deutsche Telekom's earnings presentation, May 12, 2005
Slide 1: Q1 2005 Conference call
Q1 2005 Conference call. Deutsche Telekom. May 12, 2005.
Slide 2: Disclaimer
Disclaimer. This release contains forward-looking statements that reflect the current views of the Deutsche Telekom management with respect to future events. Forward-looking statements are based on current plans, estimates and projections, and therefore too much reliance should not be placed on them
Slide 3: Q1 2005 Highlights
Q1 2005. Highlights. Kai-Uwe Ricke CEO
Slide 4: Q1 2005 Profitable growth
Q1 2005. Profitable growth. EBT (reported) (€ bn) EBT (adjusted) (€ bn) 1.6 1.6 +35.8% +28.3% 1.2 1.3 Net income (reported) (€ bn) Net income (adjusted) (€ bn) +59.8% 1.0 +45.0% 1.0 0.6 0.7 Percentages calculated on the basis of exact figures. Q1 2004 Q1 2005 Q1 2005 Conference Call Investor Relatio
Slide 5: Q1 2005 Strong growth drivers
Q1 2005. Strong growth drivers. Revenues increased by 3.5% to € 14.4 billion Adj. EBITDA of € 4.9 billion – increase of 5.2% Strong DSL growth – 581,000 domestic DSL net adds Continued strong momentum in the U.S. – 957,000 net adds at T-Mobile USA Business customers: order entry up 5.2% to
Slide 6: Strategic development: Excellence – to become the leading service company
Strategic development. Excellence – to become the leading service company. Excellence Program 1 2 consists of: Customer & Brand Product & 1 Profitable growth initiatives: Innovation T-Com – Re-Invent Save for Focus on T-Mobile – Save for Growth Re-Invent Operational T-Systems – Focus on Growth Growt
Slide 7: Broadband/fixed network: Continued DSL momentum
Broadband/fixed network. Continued DSL momentum – 581,000 domestic net adds in Q1. Domestic DSL lines in operation (million) 6.7 million DSL lines in operation on group level at Q1/05 – up 49% y-o-y CEE increased broadband base 6.4 significantly by 200% y-o-y to 305,000 5.8 0.5 (40,000 net adds
Slide 8: Mobile: T-Mobile USA 957,000 net adds in Q1
Mobile. T-Mobile USA: 957,000 net adds in Q1. Net revenue and EBITDA ($ million)1 Customer base at 18.3 million +32.7% Stable ARPU 3.407 Postpaid churn at 2.3% – down from 2.6% in Q4/04 and Q1/04 2.568 More than 500,000 BlackBerry +71.0% customers 790 462 Net revenue EBITDA Q1 2004 Q1 2005 1
Slide 9: Mobile: T-Mobile Europe – focused execution of strategy
Mobile. T-Mobile Europe – focused execution of strategy. Focus on contract customers (in Q1/05): 87,000 contract net adds in Germany 81,000 contract net adds in UK Focus on margin: 39.8% adj. EBITDA margin in Germany (up from 37.9% in Q1/04) 35.0% adj. EBITDA margin in Europe (up from 33
Slide 10: Business customers: Promising order entry
Business customers. Promising order entry - strong growth in Enterprise Services. Business customers order entry (€ billion) Computing and desktop services increased by 9.6% to € 1.16 billion 3.1 Systems integration increased by 2.9 4.6% to € 0.39 billion +5.2% Telecommunications increased by
Slide 11: Q1 2005 Financials
Q1 2005. Financials. Dr. Karl-Gerhard Eick CFO
Slide 12: Capex, FCF, and net debt
Capex, FCF, and net debt. Growth investments impact cash flow and net debt as expected. Cash Capex (€ billion) Free cash flow (€ billion) Net debt (€ billion) 3.1* 3.2 50 2.8 42.6 45 2.4 3.0 3.0 39.5 2.0 40 1.6 1.4 1.2 35 2.0 0.8 30 0.4 0.0 0.0 25 Q1 2004 Q1 2005 Dec-04 Mar-05 -0.9* Q1 2004 Q1 2005
Slide 13: Q1 2005 – Cash Flow
Q1 2005 – Cash Flow. Operating Cash Flow impacted by working capital and taxes. € billion Q1 2005 Q1 2004 Cash Flow 4.8 4.7 Change in working capital -1.9 - 0.8 Change in accruals 0.0 0.4 Taxes and dividends -0.4 0.5 Cash generated from operations 2.6 4.8 Net interest payment - 0.4 - 0.5 Net cash pr
Slide 14: Q1 2005 – Net income
Q1 2005 – Net income. Improved bottom line despite higher D&A and higher taxes. € billion Q1 2005 Q1 2004 Q1 2005 adj. Q1 2004 adj. EBITDA 4.9 4.6 4.9 4.7 Depreciation and amortization - 2.6 - 2.2 - 2.6 - 2.2 Net financial expense - 0.7 - 1.2 - 0.7 - 1.2 - of which net interest expense - 0.8 - 1.1 -
Slide 15: Q1 2005 – Balance sheet
Q1 2005 – Balance sheet. Equity ratio and gearing further improved. € billion Q1 2005 Q1 2004 Assets 132.6 140.2 Equity 47.0 45.7 Equity ratio1 35.5% 32.6% Net debt 42.6 48.7 Gearing2 0.9 x 1.1 x 1 Shareholders’ equity divided by balance sheet total. Calculated on exact figures. 2 Net debt divided b
Slide 16: Broadband/fixed network: Continued EBITDA margin expansion
Broadband/fixed network. Continued EBITDA margin expansion. Total revenue (€ million) Net revenue (€ million) 6,941 -4.4% 5,653 -2.2% 5,527 6,638 Adj. EBITDA margin (%) EBIT (€ million) +0.6 pp 37.9 +2.0% 1,477 1,506 37.3 Q1/04 Q1/05 Q1 2005 Conference Call Investor Relations May 12, 2005, Page 16
Slide 17: Broadband/fixed network domestic – new structure
Broadband/fixed network domestic – new structure. Growth driver broadband access. T-Com broadband access revenue (€ million) Access revenue increased by 7.5% driven by broadband +85% 362 Growth in broadband not entirely offsetting decrease in 196 calling revenues: - 1.9% in domestic core fixed-l
Slide 18: Mobile: Strong EBITDA performance
Mobile. Strong EBITDA performance. Adj. EBITDA (€ billion) Strong revenue growth of 7.6% vs. Q1/04 +15.6% 2,111 T-Mobile USA revenue growth of 1,826 26.5% vs. Q1/04 despite weak US$ T-Mobile Germany: ARPU revenues incl. visitors up 1.3% vs. Q1/04 T-Mobile UK materially affected by Q1 2004 Of
Slide 19: Business customers: Revenue growth – strong EBIT development
Business customers. Revenue growth – strong EBIT development. Gross revenues (€ million) EBIT (€ million) 3,075 3,124 180 159 +1.6% +13.2% Q1 2004 Q1 2005 Q1 2004 Q1 2005 External revenues (€ million) Internal revenues (€ million) 2,209 2,253 + 2.0% 866 871 +0.6% Q1 2004 Q1 2005 Q1 2004 Q1 2005 Q1 2
Slide 20: Outlook 2005
Outlook 2005. We reconfirm our guidance. At least one year for full benefits of restructuring into three strategic units Adj. EBITDA expected between € 20.7 and 21.0 billion under IFRS Capex at € 7.5 to 8 billion Free cash flow expected to be between € 7.5 - 8 billion Other planned cash ou