Deutsche Telekom Ag · XETR:DTE
Deutsche Telekom — FY 2022 Earnings Presentation
50 slides from Deutsche Telekom's earnings presentation, Feb 23, 2023
Slide 1: Deutsche Telekom FY 2022 results and CMD 2021 progress update
Deutsche Telekom FY 2022 results and CMD 2021 progress update
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 2022 results: Group
FY 2022 results Group
Slide 4: 2022 results and CMD update: consistent growth
2022 results and CMD update consistent growth 2022 Highlights CMD Update • Outstanding growth in all financial and • Well on track for financial mid-term customer metrics, on both sides of the ambitions Atlantic • Clear network leadership on both sides of the • €11.5 bn FCF AL, €1.83 adj. EPS, stron
Slide 5: Financials 2022 reported: strong reported growth
Financials 2022 reported strong reported growth € mn Q4 FY 2021 2022 Change 2021 2022 Change Revenue 28,647 29,800 +4.0% 107,811 114,413 +6.1% Adj. EBITDA AL 9,007 9,964 +10.6% 37,330 40,208 +7,7% Adj. EBITDA AL (excl. US)1 3,524 3,548 +0.7% 14,633 14,594 -0.3% Adj. Net profit 1,234 1,987 +61.0% 5,8
Slide 6: Financials 2022 organic: strong organic growth
Financials 2022 organic strong organic growth 2022 Adj. EBITDA AL 2022 Adj. EBITDA AL2 2022 Key Financials 2pp from lower growth yoy, organic € mn % growth yoy, organic TM US handset lease revenues TMUS Adj. Core EBITDA AL 0.1% Group revenues 0.0% +€19 mn growth of 8.0%1 GER 9,837 3.2% Group service
Slide 7: FCF AL and net profit: strong growth
FCF AL and net profit strong growth Free Cash Flow AL1 Adj. net profit € mn € mn +30.2% +54.9% 1,752 -3,041 1,067 -1,278 11,470 300 1,345 -1,150 9,081 3,648 8,810 3,236 5,862 FY/21 Net CF gen. Leasing Capex (excl. Others FY/22 FY/21 Adj. EBITDA D&A Financial Taxes Minorities FY/22 from ops. payments
Slide 8: Net debt: leverage ex leases at 2.58x
Net debt leverage ex leases at 2.58x Net debt excl. leases (AL) 2022 peak year post Leverage ratios € bn Sprint merger, as expected Leverage including leases down 0.3x in Q4 +3.1 100.6 103.7 Incl. Leases Excl. Leases 6.8 -11.5 2.2 3.0 3.4 3.2 -4.0 3.06 3.07 2.78 2.70 2.58 2.39 FY/21 FCF AL Sale TM N
Slide 9: Review guidance 2022: overdelivered
Review guidance 2022 overdelivered Adj. EBITDA AL TM US DT Ex US FCF AL TM US DT Ex US € bn € bn 37.1 40.2 ~36.5 10.6 11.5 ~10 22.3 22.8 25.6 6.2 6.7 7.5 14.2 14.3 14.6 3.7 3.8 3.9 Orig. Guidance Result 2022 Actual Orig. Guidance Result 2022 Actual 2022 like for like result 2022 2022 like for like r
Slide 10: Guidance 2023: continued growth
Guidance 2023 continued growth Adj. EBITDA AL1 TM US DT Ex US FCF AL1 TM US DT Ex US € bn € bn 40.2 39.3 ~40.8 >16 25.6 ~27.0 11.5 11.2 25.6 +4% >+40% ~12.7 7.5 7.6 14.6 13.7 13.9 3.9 3.6 ~3.54 FY 2022 as FY 2022 Guidance 2023 FY 2022 as FY 2022 Guidance reported pro forma reported pro forma 2023 Co
Slide 11: FY 2022 results: CMD review
FY 2022 results CMD review
Slide 12: 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 5G1 % of POPs mn mn POPs 13.5 265 91 95 10.4 210 67 7.8 8.1 7.0 106 5.6 3.4 5.4 2.2 YE/20 YE/21 YE/22 YE/20 YE/21 YE/22 YE/20 YE/21 YE/22 2022 targets reached and on track for On track for
Slide 13: Customers: strong growth in every year
Customers strong growth in every year Mobile net adds Fixed line net adds '000 US (postpaid) '000 Broadband 6,419 655 704 5,486 5,495 595 545 4,459 4,515 419 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Ex US (contract)1 TV 351 358 339 1,590 1,720 306 1,425 1,323 1,436 234 2018 2019 2020 2021 2
Slide 14: Society and Environment: strong ESG performance
Society and Environment strong ESG performance; ex US energy consumption reduced Societal agenda Environmental agenda Customer satisfaction* Environment Energy consumption Tri*M mn MWh • Climate targets are well on track 72.7 73.4 76.0 12,8 13,3 13,3 • TMUS first US telco to announce SBTI-based 2040
Slide 15: Indirect costs: progress required for CMD ambition
Indirect costs progress required for CMD ambition Organic net savings (ex US) CMD target Current Status € bn Germany/GHS Way to go ≈-€0.7 bn • On track 2020–2022 2022–2024 CMD Target Europe 0.41 ≈-€0.3 bn • Significant cost inflation 0.8 3% average organic Systems Solutions annual headcount 1.2 redu
Slide 16: Group Financials 2018–2022: multi-year growth
Group Financials 2018–2022 multi-year growth in key financials Service revenues Adj. EBITDA AL FCF AL % growth yoy, organic % growth yoy, organic € bn +€5.2 bn +7.3% CAGR +3.6% CAGR 7.9% 7.8%1 11.5 7.2% 6.8%1 8.8 3.7% 3.5% 3.7% 7.0 4.2% 6.3 6.3 2.6% 1.6% 1.9% 1.7% 2018 2019 2020 2021 2022 2018 2019
Slide 17: Ex US Financials 2018–2022: multi-year growth
Ex US Financials 2018–2022 multi-year growth in key financials Service revenues Adj. EBITDA AL FCF AL % growth yoy, organic % growth yoy, organic € bn 4.8% CAGR +€0.6 bn +1.9% CAGR 4.8% 4.8% 3.9 3.9 3.7% 3.7% 2.0% 3.1 3.3 1.8% 2.9 2.4% 1.0% 0.2% -0.4% 2018 2019 2020 2021 2022 2018 2019 2020 2021 202
Slide 18: Capital allocation/portfolio delivering on CMD priorities
Capital allocation/portfolio delivering on CMD capital allocation priorities Achievements 2020–2022 Outlook 2024 High investments in 2022 TM US Stake 49 % 47 CMD ambition: Capex: €21.0 bn TMUS ownership 43 >50% Spectrum: €3.1 bn Merger costs (US): US$5.0 bn Post close 2021 2022 Major portf
Slide 19: CMD review: well on track for mid-term financial ambitions
CMD review well on track for mid-term financial ambitions 2020–2024 midterm ambition level1 Achievements 2020–2022 Outlook 2024 Revenues Group: CAGR +1–2% +2.2% Total service revenues Group: CAGR +3–4% +3.6% Adj. EBITDA AL Group: CAGR +3–5% +1.8% Ex US: CAGR +2–3% +4.8% Adj. Core EBITDA AL Group: CA
Slide 20: FY 2022 results: Review segments
FY 2022 results Review segments
Slide 21: T-Mobile US: strong financial growth
T-Mobile US strong financial growth Revenues (IFRS) Adj. EBITDA AL (IFRS)2 US$ bn US$ bn -3.3% +4.3% 20.9 20.2 Mainly explained by 6.5 yoy decline in handset Other revenues 6.2 4.7 6.3 lower handset leasing leasing revenues revenues US$0.4 bn1 Service revenues 14.6 15.5 Q4/21 Q4/22 Q4/21 Q4/22 Servi
Slide 22: T-Mobile US: highest postpaid phone growth since merger
T-Mobile US highest postpaid phone growth since merger Total postpaid net additions1 5G EXTENDED RANGE 5G ULTRA CAPACITY Postpaid phone net additions1 mn Industry leading mn Highest since merger 1.8 1.7 1.8 0.8 0.9 0.9 1.6 1.3 0.7 0.6 Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 High
Slide 23: Germany: 25th consecutive quarter of EBITDA growth
Germany 25th consecutive quarter of EBITDA growth Revenues (as reported) Adj. EBITDA AL (as reported) € mn € mn +1.2% +2.9% 6,287 6,361 2,408 2,479 Q4/21 Q4/22 Q4/21 Q4/22 Revenue growth (organic) Slowdown explained by Adj. EBITDA AL (organic) % yoy lower equipment revenues % yoy 2.7% 2.7% 3.6% 3.7%
Slide 24: 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) CMD ambition: % yoy % yoy +1–2% CAGR Lebara loss offset by positive one-offs; in addition, c1 pp from higher roaming 2.1% 3.5% 1.8% 1.7% 2.7% 2.3% 2.5% 1.2% 2.0% 0.6% Q4
Slide 25: Germany fixed KPIs: net adds improved
Germany fixed KPIs: net adds improved, strong upselling continues Broadband net adds impact of TKG TV net adds impact of TKG 000 000 84 74 34 55 63 45 51 21 32 17 Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 Retail customers with ≥100Mbit/s tariff Fiber net adds Retail Wholesale mn/%
Slide 26: Germany fixed revenues: strong broadband growth
Germany fixed revenues: strong broadband growth Retail fixed revenues (as reported) Broadband revenue growth (organic)2 CMD ambition: € mn % yoy ~4% CAGR +2.9% 3,172 3,265 6.0% Broadband revenues 4.7% 4.7% 5.0% 1,629 1,758 +7.9% 4.4% Single play and other revenues 1,543 1,507 -2.3% Q4/21 Q4/22 Q4/21
Slide 27: Germany mobile KPIs: strong customer intake
Germany mobile KPIs: strong customer intake Branded contract net adds1 Data usage2 000 GB per month 368 10.2 7.7 202 225 193 194 +32% yoy Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 Q4/21 Q4/22 Churn2 Higher churn reflects Magenta EINS share (mobile)3 % % impact of TKG 63% 63% 1.1% 0.9% Q4/21 Q4/22 Q4/21 Q4/22 1
Slide 28: Germany FTTH: on track with buildout and monetization
Germany FTTH: on track with buildout and monetization Progress with FTTH buildout Progress with monetization Homes passed, mn Share of ≥ 100 Mbps contracts Retail broadband ARPA2 % of broadband base €/month 40 33.3 34.2 35.1 Collaborations 33 25 >8.0 5.4 Own 3.4 10.0 buildout1 (CMD ambition) 2020 20
Slide 29: Germany 2018–2022 financials: consistent multi-year growth
Germany 2018–2022 financials: consistent multi-year growth Total service revenue CMD ambition: Adj. EBITDA AL CMD ambition: % growth yoy, organic >= 1% CAGR % growth yoy, organic +2.5 – 3.0% CAGR 3.4% CAGR 1.6% CAGR 3.7 3.2 1.8 2.4 1.3 1.7 1.5 0.8 0.7 0.6 2018 2019 2020 2021 2022 2018 2019 2020 2021
Slide 30: Europe: 20th consecutive quarter of organic EBITDA growth
Europe 20th consecutive quarter of organic EBITDA growth Revenues (as reported) Adj. EBITDA AL (as reported) € mn € mn +0.3% -0.6% 2,891 2,899 962 956 Q4/21 Q4/22 Q4/21 Q4/22 Revenues (organic) Adj. EBITDA AL (organic) Q4 Headwinds: % growth yoy % growth yoy HU special tax ~150bps 6.9% 7.0% Energy c
Slide 31: Europe: strong commercial performance
Europe strong commercial performance Mobile contract net adds Broadband net adds 000 251 000 243 171 179 150 92 87 70 70 76 Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 Q4/211 Q1/22 Q2/22 Q3/22 Q4/22 FMC net adds2 TV net adds 000 000 224 196 186 185 173 58 31 32 32 17 Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 Q4/211 Q1/22 Q2/
Slide 32: Europe: CMD review
Europe CMD review FTTH (1 Gbps) CMD ambition: Total service revenue growth Digitization CMD ambition: mn HHs ~10 m HHs 2024 Organic, % truck rolls1 “truck rolls reduced by 15%” 2024 8.1 7.0 -200k 5.6 -168k -11% 3.0% -10% 1.8% 1.9% 2.0% 2020 2021 2022 0.7% HHs added +1.4m +1.1m 2021 2022 2018 2019 20
Slide 33: GD/Towers: strong growth
GD/Towers strong growth Total sites Austria Recurring rental revenues 000 +0.8k € mn DFMG 40.6 41,5 7.0 7.2 +5.7% 254 269 33.6 34.21 1.2k new build Q4/21 Q4/22 Q4/21 Q4/22 Opex AL per site Adj. EBITDA € 000 € mn +8.1% 2.9 3.1 223 241 EBITDA AL: +36.7% (+6.7% w/o 49 mn 227 benefit from 166 discontinu
Slide 34: Systems Solutions on track - Q4 EBITDA impacted by one-timers
Systems Solutions on track - Q4 EBITDA impacted by one-timers Order entry Revenues Adj. EBITDA AL Q4 EBITDA AL up, € bn € mn € mn excl. one-offs +2.0% +6.2% -21.7% 3.9 4.0 955 1,014 69 54 FY/21 FY/22 Q4/21 Q4/22 Q4/21 Q4/22 CMD review Revenues (organic) Adj. EBITDA AL (organic) Q4 org. EBITDA AL % g
Slide 35: FY 2022 results: Main takeaways
FY 2022 results Main takeaways
Slide 36: FY 2022 & CMD review: strong growth continues
FY 2022 & CMD review strong growth continues • TM US with strong Q4 customer and financial results 2022 results/CMD targets 20241 Recurring EPS Adj. EPS in €/share • DT ex US: 4.8% organic adj. EBITDA AL growth; Germany 1.83 >1.75 >1.60 25 and EU 20 successive 1.20 0.32 quarters of organic EBITDA AL
Slide 37: FY 2022 results: Appendix
FY 2022 results Appendix
Slide 38: Financials Q4 2022: net debt reduced by FCF and F/X
Financials Q4 2022 net debt reduced by FCF and F/X Net debt excl. leases (AL) (Q4/22 over Q3/22) Leverage ratios € bn CMD target: back in 2.25 – 2.75x IFRS16 range YE24 109.5 3.07x 2.4 -2.0 2.58x 0.1 -6.3 103.7 Net Debt FCF AL Spectrum SBB F/X & Net Debt Excl. Leases Incl. Leases AL Q3/22 TM US othe
Slide 39: Financials Q4 2022: strong growth in net income
Financials Q4 2022 strong growth in net income Free Cash Flow AL1 FY/22 FCF AL of €11.5 bn Adj. net profit FY/22 adj. EPS of €1.83 € mn € mn +289.2% 101 +61.0% 23 -749 2,026 359 -397 187 -267 1,987 1,966 1,034 1,234 520 Q4/21 Net CF gen. Leasing Capex (excl. Others Q4/22 Q4/21 Adj. EBITDA D&A Financ
Slide 40: Organic growth rates
Organic growth rates In % Q4/22 over Q4/21 FY/22 over FY/21 Group revenue -1.6 0.0 Group service revenue +2.9 +3.7 Service revenue excl. US +2.0 +1.8 Group Adj. EBITDA AL +4.9 +1.7 Adj. EBITDA AL excl. US +6.6 +4.8 Group adj. Core EBITDA AL1 +9.4 +6.8 1 adj. EBITDA AL excl. TM US handset leases In t
Slide 41: TM US: EBITDA reconciliation
TM US: EBITDA reconciliation FY/22 +3.3% Q4/22 US$ mn yoy +0.3% US$ mn +11.9% yoy +15.9% +8.3% +4.3% 27,821 yoy yoy yoy yoy -858 26,963 1,430 6,828 26,391 6,582 6,546 246 -282 Adj. Core Leasing Adj. EBITDA Bridge Adj. EBITDA Adj. Core Leasing Adj. EBITDA Bridge Adj. EBITDA EBITDA Revenues (US GAAP)
Slide 42: FCF AL excl. US
FCF AL excl. US Stable adj. EBITDA AL due to de- consolidation of Romania fixed and the Dutch business. € bn FY 2021 FY 2022 Organic growth rate of +4.8%. Adj. EBITDA AL 14.6 14.6 Cash Capex -7.7 -7.7 Proceeds from sale of fixed assets +0.1 +0.3 Special Factors Cash -1.1 -1.2 Interest ex leasing -0.
Slide 43: 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 11.0 3.4 3.2 2.4 Ø 2.75 9.5 3.2 6.6 2.0 3.4 1.5 2023 2024 2025 2026 Liquidity Maturities Maturities Total maturities reserve 2023 2024 next
Slide 44: Balance sheet: US$ strength boosts balance sheet
Balance sheet US$ strength boosts balance sheet € bn 31/12/2021 31/03/2022 30/06/2022 30/09/2022 31/12/2022 Balance sheet total 281.6 292.4 301.7 321.4 298.6 Shareholders’ equity 81.5 87.7 88.5 94.5 87.3 Net debt excl. leases (AL) 100.6 98.1 106.3 109.5 103.7 Net debt excl. leases (AL)/adj. EBITDA A
Slide 45: Group Development: ongoing strong underlying performance
Group Development ongoing strong underlying performance Revenues (as reported) NL Adj. EBITDA AL (as reported) NL € mn -63.2% GD Towers € mn -32.5% GD Towers 816 Others 332 Others 224 183 537 0 300 0 227 166 277 296 2 4 -17 -3 Q4/21 Q4/22 Q4/21 Q4/22 Revenues Adj. EBITDA AL org. growth % growth yoy,
Slide 46: Guidance 2023 compared to consensus
Guidance 2023 compared to consensus € bn Guidance 2023 in € Guidance 2023 in € Consensus in € @ 1.05 @ 1.07 @ 1.07 Adj. EBITDA AL Group ~40.8 ~40.3 41.1 thereof ex US 13.9 13.9 13.8 thereof TM US ~27.0 ~26.5 27.3 Adj. Core EBITDA Group ~40.5 ~40.0 40.0 thereof ex US 13.9 13.9 13.9 thereof TM US ~26.
Slide 47: Outlook 2022/23 as per annual report 2022 (1/2)
Outlook 2022/23 as per annual report 2022 (1/2)1 € bn 2022 pro forma 2023e 2024e Revenue Group 113.7 Slight increase Slight Increase Germany 24.7 Slight increase Increase US (in US$) 79.3 Slight increase Slight increase Europe 11.2 Increase Slight increase Systems Solutions 3.7 Stable Slight increas
Slide 48: Outlook 2022/23 as per annual report 2022 (2/2)
Outlook 2022/23 as per annual report 2022 (2/2)1 € bn 2022 pro forma 2023e 2024e Cash Capex Group 20.7 16.8 Stable Germany 4.4 Slight increase Slight increase US (in US$) 14.0 Strong decrease Stable Europe 1.8 Stable Stable Systems Solutions 0.2 Stable Stable FCF AL Group 11.2 >16 Strong increase Ad
Slide 49: Conference call with Q&A session
Conference call with Q&A session The conference call will be held on February 23 at 2:00 PM CET, 1:00 PM GMT, 8 AM ET. DT Participants: Tim Höttges (CEO), Christian Illek (CFO), Hannes Wittig (Head of IR) Watch the conference call via our live-webcast on YouTube. https://www.youtube.com/watch?v=ODwy
Slide 50: 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