Deutsche Telekom Ag · XETR:DTE

Deutsche Telekom — Merger or Acquisition (March 2011)

13 slides from Deutsche Telekom's merger presentation, March 2011

  1. Slide 1: Investor Presentation: Deutsche Telekom finds strategic solution for the US

    Investor Presentation Deutsche Telekom finds strategic solution for the US March 2011 1

  2. 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

  3. Slide 3: Transaction highlights

    Transaction highlights. ƒ US$39 billion ($25 billion in cash / $14 billion in stock) Compelling Value ƒ 7.1x 2010 Adjusted EBITDA ƒ Approx. 50% greater than sum-of-the-parts valuation Immediate ƒ Share buyback of €5 billion Shareholder ƒ Remuneration policy remains unchanged at €3.4 billion p.a. thr

  4. Slide 4: Transaction summary

    Transaction summary. Cash & Stock Acquisition Stock subject to 7.5% collar between signing and close Approvals required from DOJ and FCC $25 billion Cash Expected to close in H1 2012 $14 billion AT&T Stock One seat on AT&T Board 12 month lock-up on shares $39 billion Total Value No shareholder votes

  5. Slide 5: Compelling value benefits shareholders

    Compelling value benefits shareholders. Significant premium to peer group Significant premium vs. average analysts SOTP multiples (EV/EBITDA 2010) 30 28.3 Approx. 50% 9.4 S 4.8 Premium T 5.2 20 18.9 VZ 5.9 € billion 10 TM US1) 4.8 TM US2) 7.1 0 Transaction Value SOTP Value Value Creation 1) Multiple

  6. Slide 6: Immediate shareholder benefits: key ratios improved

    Immediate shareholder benefits: key ratios improved. Increase in Group Margin Increase in 2012 ROCE vs. consensus 2pp 33% 70bp 5.3% 31% 4.6% 2010 2010 pro 2012 2012 pro forma forma Increase in Equity Ratio Decrease in Tax Rate 5pp 39% 31% 5pp 34% 26% 2010 2010 pro 2010 2010 pro forma forma 6

  7. Slide 7: Immediate shareholder benefits: accretive to FCF and EPS

    Immediate shareholder benefits: accretive to FCF and EPS consensus estimates. 2012E 2012E FCF FCF // EPS EPS Accretion 1) Accretion 1) ƒ Free cash flow per share benefits 10% 9% ƒ Reduced interest expense 8% ƒ Reduction in shares outstanding 6% 6% ƒ AT&T dividend % Accretion / Dilution ƒ EPS benefit

  8. Slide 8: Immediate shareholder benefits: €5 billion share buyback

    Immediate shareholder benefits: €5 billion share buyback. No impact on shareholder remuneration policy through 2012 ƒ €3.4 billion annual remuneration to shareholders through 2012 maintained ƒ €5.0 billion incremental buyback1) No impact on guidance for 2011 ƒ Adj. EBITDA of around €19.1 billion2) ƒ

  9. Slide 9: Deal de-risks Deutsche Telekom and creates strategic headroom

    Deal de-risks Deutsche Telekom and creates strategic headroom. Significant de-leveraging of Deutsche Telekom De-risking transaction elements Net debt (€ billion) Net debt to adj. EBITDA ƒ Repatriate €18.1 billion of cash -€13.1 -0.3x 42.3 2.2x 1.9x ƒ Remove investment overhang in the US 29.2 ƒ Natur

  10. Slide 10: Compelling benefits for US stakeholders

    Compelling benefits for US stakeholders. Dramatically improves customer experience via improved services and network quality including access to low band spectrum Facilitates robust voice and data services to rural America Expanding LTE to 95% of the population Creates greater capacity to meet growi

  11. Slide 11: Deutsche Telekom key ratios on a pro forma 2010 basis

    Deutsche Telekom key ratios on a pro forma 2010 basis. Pro forma figures based on 2010 reported (in € billion) 2010 Decon- Interest Dividend 2010 reported solidation savings received pro forma Net revenues 62.4 (16.0) 46.4 EBITDA 19.5 (4.2) 15.3 Profit from operations 5.5 (2.1) 3.4 Profit before inc

  12. Slide 12: Key message: management continues to execute on fix – transform – innovate

    Key message: Deutsche Telekom’s management continues to execute on “fix – transform – innovate”. EQUITY FIX – TRANSFORM – INNOVATE DEBT ƒ Strategic solution for US Improve Leverage Build networks Connected ƒ De-risk Deutsche Connected Life performance of One Company and processes Work with business

  13. Slide 13: Thank you for your attention!

    For further questions please contact the IR department: Investor Investor Relations, Relations, Bonn Bonn office office Investor Relations, Investor Relations, New New York York office office Phone Phone +49 +49 228 228 181 181 -- 88 88 88 80 80 Phone Phone +1 212 +1 212 424 424 2959 2959 Fax Fax +4

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