Deutsche Telekom Ag · XETR:DTE
Deutsche Telekom — FY2015 Earnings Presentation
33 slides from Deutsche Telekom's earnings presentation, Feb 25, 2016
Slide 1: Deutsche Telekom FY/2015 Results
Deutsche Telekom FY/2015 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, de
Slide 3: Review FY/15
REVIEW FY/15
Slide 4: Our strategy: execution delivered in all focus areas
OUR strategy: execution delivered in all focus areas LEADING EUROPEAN TELCO BEST INTEGRATED WIN WITH LEAD IN CUSTOMER IP NETWORKS PARTNERS BUSINESS EXPERIENCE TRANSFORM PORTFOLIO EVOLVE FINANCIAL TARGETS & EFFICIENCY ENCOURAGE LEADERSHIP & PERFORMANCE DEVELOPMENT 4
Slide 5: Leading European Telco: Double digit momentum
LEADING European TELCO: Double digit Momentum Customers Investments and innovation Financial results Strong demand for fiber and converged products Record investments (€ 14.6 bn) in network, Double digit growth in all major financial metrics Growth in the US continues with 8.3 million net ad
Slide 6: Customers: Strong momentum with customers
customers: Strong momentum with customers Magenta Eins (Germany + EU)1 US Mobile mn mn +1.7 +8.3 2.9 63.3 1.2 55.0 2014 2015 2014 2015 Fiber in Germany Cloud revenues mn € bn +30% +1.9 4.4 1.4 2.5 1.0 2014 2015 2014 2015 1) FMC RGUs may also appear under other brand name outside of Germany 6
Slide 7: Networks: Committed to network excellence
Networks: Committed to network excellence Fiber homes passed1 All-IP homes US LTE coverage mn +24% EU mn +46% EU mn POPs +15% 26.7 GER 13.6 GER 304 21.6 3.7 9.3 4.1 2.9 265 23.0 3.5 18.7 5.8 9.5 2014 2015 2014 2015 2014 2015 55% of all German homes passed at YE 2015 40% of DT lines in Germany on
Slide 8: Investments: strong investment momentum
Investments: strong investment momentum Cash Capex (excl. spectrum) 2016 Investment highlights € bn +13.5% Subscriber and usage growth Extended broadband roll-out 9.5 10.8 Deployment of newly acquired LTE spectrum Network transformation/Cloud 2014 2015 Spectrum investments (cash) 2016 Spectr
Slide 9: Cost Efficiency: delivering as promised
Cost Efficiency: delivering as promised Indirect costs (excl. US)1 2 Headcount (excl. US)3 2015 Cost reduction measures € bn 000 -7.1 Reduced headquarter and steering -0.4 19.3 18.9 188.1 functions 181.0 Optimization of shared service centers IT efficiency gains e-transformation 2014 2015 20
Slide 10: Innovation: Best network and seamless connectivity
innovation: Best network and seamless connectivity MagentaEins platform Innovative TM US video New tariffs include EU roaming proposition ‘Binge On’ and WiFi Highly popular with customers Convergent devices, including Entertain- Sharing Puls and Hybrid ment Direct Air to Ground partnersh
Slide 11: Portfolio: another year of strong results
portfolio: another year of strong results EE/BT Slovak Telecom minorities Guiding principles Exchange of 50% of EE into 12% of the 49% acquired for 0.9 billion Committed to A- to BBB rating leading converged player in the UK Quality asset fully converged In Europe preference for integrated
Slide 12: Financial performance: Double digit growth
financial performance: Double digit growth Revenue Adj. EBITDA DIVIDEND Following FCF growth € bn +11% € bn +13% POLICY Floor at € 0.50 62.7 69.2 17.6 19.9 1-2% 2-4% Proposed dividend per share2 14 - 18 2014 2015 14 - 18 2014 2015 € +10% CAGR 1 CAGR 1 FCF growth rate Adj. EPS 0.50 0.55 € bn +10% € +
Slide 13: Guidance 2016
GUIDANCE 2016 € bn Guidance 2015 Results 2015 Guidance 2016 ($/€: 1.11) ($/€: 1.11) ($/€: 1.11) Revenue Increase +10.5% Increase Adj. EBITDA around 19.41 19.9 around 21.2 Of which handset lease + 0.16 0.7 data stash in US$ bn FCF2 around 4.3 4.5 around 4.9 1) Original guidance was “around 18.3” resp
Slide 14: Review Q4/15
REVIEW Q4/15
Slide 15: 2015: Financial Highlights
2015: Financial Highlights € mn Q4 FY 2014 2015 Change 2014 2015 Change Revenue 17,002 17,859 +5.0% 62,658 69,228 +10.5% Adj. EBITDA 4,444 5,143 +15.7% 17,569 19,908 +13.3% Adj. Net profit 399 959 +140.4% 2,422 4,113 +69.8% Net profit -110 946 n.a. 2,924 3,254 +11.3% Adj. EPS (in €) 0.09 0.21 +133.3
Slide 16: Germany: stable adj. EBITDA in 2015
GERMANY: stable adj. ebitda in 2015 Revenue reported1 Adj. EBITDA and margin (in %) € mn Mobile Core fixed Wholesale services Others € mn 39.6 39.9 40.8 36.9 34.9 +4.3% -1.1% 2,000 2,211 2,224 2,269 2,086 5,723 5,589 5,580 5,593 5,659 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 2,098 2,061 2,047 2,056 2,072 -1.2%
Slide 17: Germany mobile: Healthy momentum continues
GERMANY mobile: Healthy momentum continues German mobile market service revenue1 Contract Net adds2 € mn Telefonica Vodafone Telekom 000 408 363 Own branded 289 172 144 362 Service providers/ 483 78 MVNOs -1.0% 277 236 220 284 -801 -195 4,614 4,532 4,566 4,636 4,567 -524 1,391 1,354 1,381 1,419 1,37
Slide 18: German mobile service revenues: underlying positive
german mobile service revenues: underlying positive Reported mobile service revenues Impact of convergence products1 Underlying growth Q4/14 +1.8% Q4/14 0.2% Q4/14 2.0% Q1/15 +2.8% Q1/15 0.7% Q1/15 3.5% Q2/15 +0.1% Q2/15 1.0% Q2/15 1.1% Q3/15 -0.4% Q3/15 1.4% Q3/15 1.0% Q4/15 -0.4% Q4/15 1.4% Q4/15
Slide 19: Germany Fixed: strong fiber growth
GERMANY Fixed: strong fiber growth German broadband market1 Entertain customers mn +20k +76k +81k +78k +48k Cable 000 +9.9% 29.7 30.0 30.3 30.6 30.9 Telco Competitors 6.1 6.3 6.5 6.7 2,442 2,516 2,578 2,632 2,683 5.9 DT 11.4 11.5 11.5 11.5 11.6 DT net adds +66 +74 +62 +54 +51 12.4 12.4 12.5 12.6 12.
Slide 20: Germany fixed: broadband growth accelerating
GERMANY fixed: broadband growth accelerating Fixed network revenues (core fixed)1 Broadband revenues2 € mn Broadband revenues Single play revenues Other revenues € mn +1.3% Broadband 3P 1,273 1,273 1,280 1,285 1,289 Broadband 2P 270 277 285 291 296 -1.6% 1,003 996 995 994 993 2,503 2,452 2,439 2,449
Slide 21: German total service revenues: we are on track
german Total service revenues: we are on track Growth rates YOY Mobile service revs Wholesale revs2 Broadband revs2 Total service revs Q4/14 +1.8% -1.7% -0.2% -0.9% Q1/15 +2.8% -1.9% 0.0% -0.6% Q2/15 +0.1% 0.0% 0.2% -1.3% Q3/15 -0.4% 3.0%3 0.9% -0.6%3 Q4/15 -0.4% -0.6% 1.3% -1.1% Medium term guidanc
Slide 22: Germany: rapid network roll-out and transformation
germany: rapid network roll-out and transformation INS – Status LTE rollout INS – Status fiber rollout2 POP +10pp Coverage in % and 55% 44% Coverage in %1 millions of households 90% +23% 80% 18.7 23.0 Q4/14 Q4/15 Q4/14 Q4/15 Status IP accesses (retail & wholesale) Status IP accesses (retail & wholes
Slide 23: TMUS: strong growth in all key metrics
TMUS: strong growth in all key metrics Revenue and service revenue Net adds US-$ bn +12.9% in 000 Total revenue Total net adds 2,128 1,818 2,072 2,312 2,062 +1.2% Service revenue 8.1 7.8 5.7 8.2 6.0 7.8 6.2 8.2 6.4 Branded: Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 5.7 Postpaid 1,276 1,125 1,008 1,085 1,292
Slide 24: Focus on TMUS: Important drivers keep trending well
Focus on TMUS: Important drivers keep trending well Branded postpaid phone churn Bad debt expenses & losses from sales of receivables % -27bps in % of total revenues +92bps 1.73 1.30 1.32 1.46 1.46 2.54 2.76 1.84 2.17 1.91 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Positive portin
Slide 25: Europe: improved performance in 2015
EUROPE: improved performance in 2015 Revenue as reported Organic revenue development € mn € mn -2.6% -2.6% 3,367 3,364 0 -3 3,278 3,367 3,106 3,136 3,198 3,278 -50 -16 110 -130 Q4/14 Cons./ FX Trad. Discont. Mobile Growth Q4/15 Decons. Telco business1 regulation areas2 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15
Slide 26: Europe: IP migration continues apace
EUROPE: IP migration continues apace IP migration LTE rollout IP share of fixed network access lines LTE outdoor pop coverage 91.8 61.4 +8pp mn and % 39% 47% 71% 47% Q4/14 Q4/15 Q4/14 Q4/15 Customer base1 Fiber rollout2 +2.1% mn +4.1% TV Fiber household coverage +4pp +5.1% Broadband 19% Mobile Contr
Slide 27: Systems Solutions: improved performance in 2015
SYSTEMS SOLUTIONS: improved performance in 2015 T-Systems financials Revenue Market Unit € mn € mn +1.5% Total revenue Adj. OPEX1 Adj. EBITDA 1,843 1,695 1,734 1,755 1,871 Tel-IT MU +0.7% +1.2% +8.0% Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 2,294 2,310 2,122 2,147 212 229 451 439 365 310 34 Adj. EBIT and margi
Slide 28: Financials: FCF, net income, and ROCE growth
FINANCIALs: FCF, net income, and ROCE growth Free cash flow Q4/151 Adj. net income Q4/15 € mn € mn +1.5% +140.4% 983 228 -235 998 402 -363 22 -146 959 699 -32 399 Q4/14 Cash gen. from Capex (excl. Interest & Other Q4/15 Q4/14 adj. Financial D&A Taxes Minorities Q4/15 operations spectrum) EBITDA resu
Slide 29: Financials: comfortably within our commitments
FINANCIALS: comfortably within our commitments € bn 31/12/2014 31/03/2015 30/06/2015 30/09/2015 31/12/20155 Balance sheet total 129.4 137.5 135.0 135.2 143.9 Shareholders’ equity 34.1 37.0 36.0 36.5 38.2 Net debt 42.5 46.3 48.8 47.9 47.6 Net debt/adj. Ebitda1 2.4 2.6 2.6 2.5 2.4 Equity ratio 26.3% 2
Slide 30: Executing our strategy
Executing our strategy 1 Leading European Telco: Integrated market leader with superior margins and returns. 2 We strengthen our differentiation by best customer experience and by continuously investing into leading access networks and our transformation programs. 3 We are transforming towards a lea
Slide 31: Conference call with Q&A session
Conference call with q&a Session The conference call will be held on February 25 at 2:00 PM CET, 1:00 PM GMT, 8 AM ET. DT Participants: Tim Höttges (CEO), Thomas Dannenfeldt (CFO), Hannes Wittig (Head of IR) Webcast Dial-in The link to the webcast will be provided here 20 minutes DE 0800 9656288 +
Slide 32: 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 +1 212 301 - 6114 IR representatives: www.telekom.com/ircontacts IR webpage IR twitter account IR youtube playlist www.teleko
Slide 33: Thank you!
THANK YOU!