Deutsche Telekom Ag · XETR:DTE
Deutsche Telekom — Q1 2016 Earnings Presentation
28 slides from Deutsche Telekom's earnings presentation, May 4, 2016
Slide 1: Deutsche Telekom Q1/2016 Results
Deutsche Telekom Q1/2016 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 Q1/16
REVIEW Q1/16
Slide 4: Our strategy
OUR strategy 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: Ongoing execution – guidance re-iterated
LEADING European TELCO: Ongoing execution – guidance Re-iterated Customers Investments and innovation Financial results Record demand for Fiber Further strengthening of spectrum position in Strong growth continues 5 million German homes on fiber the US and Europe Revenue up 4.7% yoy 660k
Slide 6: Customers: Strong momentum with customers
customers: Strong momentum with customers Magenta Eins (Germany + EU)1 US Mobile mn mn +1.7 +8.7 3.3 65.5 1.6 56.8 Q1/15 Q1/16 Q1/15 Q1/16 Fiber in Germany Cloud revenues mn € bn +31% +2.0 5.0 0.4 0.3 3.0 Q1/15 Q1/16 Q1/15 Q1/16 1) FMC RGUs may also appear under other brand name outside of Germany 6
Slide 7: Q1 2016: Highlights
Q1 2016: Highlights Innovation/Best networks Investments (€ bn) Cash Capex (excl. Spectrum) Spectrum spend Germany: New Entertain TMUS: Growing list of US GER Europe Other TV-Platform launched ‘Binge On’ participants +11.9% A-block extension 0.6 2.5 2.8 EU: Strong performance Launch of Open Telekom
Slide 8: Financials and Guidance 2016: Strong momentum continues, guidance re-iterated
Financials and GUIDANCE 2016: Strong momentum continues, Guidance re-iterated € bn Revenue Adj. EBITDA FCF 2016 Guidance ($/€: 1.11) Increase Around 21.2 bn2 Around 4.9 bn 14-18 CAGR1 +1-2% +2-4% ≈+10% Q1 2016 performance +4.7% +12.9% (6.5%)³ -5.0% (+10.6%)3 1) 14-18 CAGRs as per CMD 2015 guidance 2
Slide 9: Review Q1/16
REVIEW Q1/16
Slide 10: Q1/2016: Financial Highlights
Q1/2016: Financial Highlights € mn Q1 FY 2015 2016 Change 2014 2015 Change Revenue 16,842 17,630 +4.7% 62,658 69,228 +10.5% Adj. EBITDA 4,574 5,163 +12.9% 17,569 19,908 +13.3% Adj. Net profit 1,036 1,047 +1.1% 2,422 4,113 +69.8% Net profit 787 3,125 +297.1% 2,924 3,254 +11.3% Adj. EPS (in €) 0.23 0.
Slide 11: Germany: revenues impacted by lower handset sales, EBITDA on track
GERMANY: revenues impacted by lower handset sales. EBITDA on track Revenue reported Adj. EBITDA and margin (in %) € mn Mobile Core fixed Wholesale services1 Others1 € mn 39.6 39.9 40.8 36.9 40.0 -1.4% -2.5% 2,211 2,224 2,269 2,086 2,180 5,589 5,580 5,593 5,659 5,452 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 2,0
Slide 12: Germany mobile: Steady momentum with customers
GERMANY mobile: Steady momentum with customers German mobile market service revenue1 Contract Net adds2 € mn Telefonica Vodafone Telekom 000 289 Own branded 408 363 362 Service providers/ 4,636 172 144 78 231 MVNOs 4,532 4,567 4,567 4.5bn 4833 236 220 284 137 93 1,354 1,382 1,419 1,378 1,336 -1.3% -
Slide 13: German mobile service revenues: a tough comp but no fundamental change
german mobile service revenues: a tough comp but no fundamental change Reported mobile service revenues Impact of convergence products1 Underlying growth Q4/14 +1.8% 0.2% 2.0% Q1/15 +2.8% 0.7% 3.5% Q2/15 +0.1% 1.0% 1.1% Q3/15 -0.4% 1.4% 1.0% Q4/15 -0.4% 1.4% 1.0% Q1/16 -1.7% 1.1% -0.6% Medium term g
Slide 14: Germany Fixed: Investments in infrastructure drive fiber growth
GERMANY Fixed: Investments in infrastructure drive fiber growth German broadband market1 Entertain customers mn +76k +81k +78k +48k +62k Cable 000 +8.7% 30.0 30.3 30.6 30.9 31.3 Telco Competitors 6.3 6.5 6.7 6.8 2,516 2,578 2,632 2,683 2,736 6.1 DT 11.5 11.5 11.5 11.6 11.8 DT net adds +74 +62 +54 +5
Slide 15: Germany fixed: our upsell strategy is working
GERMANY fixed: our upsell strategy is working Fixed network revenues (core fixed) Broadband revenues € mn € mn +1.8% Broadband revenues Single play revenues Other revenues Broadband 3P 1,273 1,280 1,285 1,289 1,296 Broadband 2P -1.7% 277 285 291 296 303 2,462 996 995 994 993 993 2,452 2,439 2,449 2,
Slide 16: German total service revenues: we are fundamentally on track
german Total service revenues: we are fundamentally 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% Q1/16
Slide 17: Germany: network roll-out and transformation continue
germany: network roll-out and transformation continue INS – Status LTE rollout INS – Status fiber rollout2 POP +9pp Coverage in % and 56% 46% Coverage in %1 millions of households 91% +22% 82% 19.4 23.7 Q1/15 Q1/16 Q1/15 Q1/16 Status IP accesses (retail & wholesale) Status IP accesses (retail & whol
Slide 18: TMUS: strong growth in all key metrics
TMUS: strong growth in all key metrics Revenue and service revenue Net adds US-$ bn +14.2% Total revenue in 000 Total net adds 1,818 2,072 2,312 2,062 2,221 +10.9% Service revenue 7.8 5.7 8.2 6.0 7.8 6.2 8.2 6.4 8.6 6.5 Branded: Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Postpaid 1,125 1,008 1,085 1,292 1,041
Slide 19: 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 sale of receivables % in % of total revenues 1.47 1.30 1.33 2.5 2.8 2.2 1.9 2.0 Q1/14 Q1/15 Q1/16 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Churn remains on low level, despite more intense competit
Slide 20: Europe: Trend towards stabilization continues
EUROPE: Trend towards stabilization continues Revenue as reported in € mn and organic change yoy in %1,2 Organic revenue development -0.4 € mn -2.9 -2.7 -2.6 3,157 -0.4% -3.7 -54 3,091 3,080 3,157 3,209 3,261 3,397 3,080 -12 -61 62 -12 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q1/15 Cons./ FX Trad. Telco Mobile
Slide 21: Europe: IP migration and LTE leadership
EUROPE: IP migration and lte leadership IP migration LTE rollout IP share of fixed network access lines LTE outdoor pop coverage 94.1 69.1 +9pp mn and % 40% 49% 72% 53% Q1/15 Q1/16 Q1/15 Q1/16 Customer base1 Fiber rollout1 mn +2.3% TV Fiber household coverage +4pp +4.1% Broadband 20% +4.8% Mobile Co
Slide 22: Systems Solutions: transformation making progress
SYSTEMS SOLUTIONS: transformation making progress T-Systems Financials1 Revenue Market Unit in € million and change yoy in %3 € mn +4.6 +6.6 +3.6 +1.0 +1.5 Total revenue Adj. OPEX2 Adj. EBITDA 1,621 1,641 1,671 1,724 1,728 Tel-IT MU +6.1% +2.4% 42.1% Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 2,045 1,824 1,868 2
Slide 23: Financials: FCF, net debt and net income
FINANCIALs: FCF, Net debt AND net income Free cash flow Q1/161 Adj. net income Q1/16 € mn € mn -5.0% +1.1% 865 209 -301 822 227 -459 49 1,036 589 -216 1,047 -130 Q1/15 Cash gen. from Capex (excl. Interest & Other Q1/16 Q1/15 adj. Financial D&A Taxes Minorities Q1/16 operations spectrum) EBITDA resul
Slide 24: Financials: balance sheet ratios in target corridor
FINANCIALS: balance sheet ratios in target corridor € bn 31/03/2015 30/06/2015 30/09/2015 31/12/2015 31/03/20165 Balance sheet total 137.5 135.0 135.2 143.9 143.6 Shareholders’ equity 37.0 36.0 36.5 38.2 38.4 Net debt 46.3 48.8 47.9 47.6 47.6 Net debt/adj. EBITDA1 2.6 2.6 2.5 2.4 2.3 Equity ratio 26
Slide 25: 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 26: Conference call with Q&A session
Conference call with q&a Session The conference call will be held on May 4 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 + code
Slide 27: 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 playlist www.telekom.com/investors ww
Slide 28: Thank you!
THANK YOU!