Deutsche Telekom Ag · XETR:DTE
Deutsche Telekom — Q2 2022 Earnings Presentation
37 slides from Deutsche Telekom's earnings presentation, Aug 11, 2022
Slide 1: Deutsche Telekom Q2 2022 results
Deutsche Telekom Q2 2022 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, dep
Slide 3: H1 2022 results sector leading growth
H1 2022 results sector leading growth T-Mobile US • Service revenues up 6.2%, adj. Core EBITDA +7.9%, organically • FCF at € 3,2 bn • Strong customer intake: 2,974k postpaid net adds, 898k HSI net adds • Sprint network being de-commissioned 1 year ahead of time Ex US • Service revenues +1.8% organic
Slide 4: Financials H1 2022 organic strong growth
Financials H1 2022 organic strong growth H1/22 Adj. EBITDA AL H1/22 Adj. EBITDA AL2 H1/22 Key Financials growth yoy, organic € mn % growth yoy, organic TMUS Adj. Core EBITDA -1.3% Revenue +0.8% -€163 mn growth of 7.9%1 Service Revenues +4.5% GER 4,815 3.3% Service Revenues +€155 mn +1.8% (excl. US)
Slide 5: 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 5G2 % of POPs +2pp 8.7% mn mn POPs +11.9% 11.3 91 93 10.4 210 235 7.0 7.4 3.4 3.9 YE/21 H1/22 YE/21 H1/22 YE/21 H1/22 On track for 2022 and CMD targets Targeting 260m YE 2022 and 300mn in 2
Slide 6: Customers growing strongly
Customers growing strongly Mobile net adds Fixed line net adds2 000 000 2,974 US (postpaid) 2,486 Broadband Best Q2 ever for 367 postpaid and account Clear leader in 240 growth net-add market share H1/21 H1/22 H1/21 H1/22 Ex US (contract)1 781 TV 607 YoY growth driven by both Europe and 166 Continue
Slide 7: ESG on top of our agenda
ESG on top of our agenda ENVIRONMENT SOCIAL GOVERNANCE • Climate Targets: • DT as supporter in the crisis: (strong • Move of Group Corporate Responsibility • Net zero (Scope 1&2 emissions) until 2025 supporter of Ukraine refugees across the department to CEO successfully footprint) implemented • Net
Slide 8: Guidance 2022 raised on both sides of the Atlantic
Guidance 2022 raised on both sides of the Atlantic Core EBITDA AL Adj. TM US DT Ex US Adj. EBITDA AL TM US DT Ex US € bn € bn ~36.5 >36.6 ~37.0 ~35.5 >35.6 ~35.9 22.3 >22.4 ~22.7 21.3 >21.4 ~21.6 14.2 14.2 14.3 14.2 14.2 14.3 • Guidance raised for T-Mobile US and Orig. Guidance Guidance New Guidance
Slide 9: Deutsche Telekom continues to execute on its strategic agenda
Deutsche Telekom continues to execute on its strategic agenda Organic growth Capital allocation/portfolio Shareholder value Adj. EPS >1.75 Strategic review of GD Towers €/share – completed On track 1.22 • Our flywheel works • Proven execution Invest in “leading” fiber & 5G networks… On track and mon
Slide 10: Operations Review Q2/2022
Operations Review Q2/2022
Slide 11: T-Mobile US strong financial growth
T-Mobile US strong financial growth Revenues (IFRS) Adj. EBITDA AL (IFRS) US$ bn US$ bn -1.1% -2.4% 20.1 19.8 Yoy decline in handset 6.9 6.7 Yoy decline in handset Other revenues 5.4 4.4 leasing revenues leasing revenues by US$0.5 bn1 by US$0.5 bn1 Service revenues 14.7 15.5 Q2/21 Q2/22 Q2/21 Q2/22
Slide 12: T-Mobile US best ever Q2 postpaid growth
T-Mobile US best ever Q2 postpaid growth 5G EXTENDED RANGE 5G ULTRA CAPACITY Total postpaid net additions Best ever account Postpaid phone net additions mn additions with 380k mn 1.8 0.8 1.7 0.7 0.7 1.3 1.3 1.3 0.6 0.6 Q2/21 Q3/211 Q4/21 Q1/22 Q2/22 Q2/21 Q3/211 Q4/21 Q1/22 Q2/22 High Speed Internet
Slide 13: Germany 23rd consecutive quarter of EBITDA growth
Germany 23rd consecutive quarter of EBITDA growth Revenues (as reported) Adj. EBITDA AL (as reported) € mn € mn +2.7% +3.1% 5,903 6,064 2,354 2,426 Q2/21 Q2/22 Q2/21 Q2/22 Revenue growth (organic) Adj. EBITDA AL (organic) % yoy % yoy 3.4% 3.8% 3.8% 3.6% 3.6% 2.7% 3.0% 1.8% 2.1% 0.9% Q2/21 Q3/21 Q4/2
Slide 14: 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) % yoy % yoy 2.5% 2.6% 2.3% 2.1% 2.0% 2.0% 1.8% 1.6% 1.7% 0.6% Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Revenue growth (reported) Fixed service revenue
Slide 15: Germany fixed: lower net adds, strong upselling
Germany fixed: lower net adds, strong upselling Broadband net adds impact of TKG TV net adds impact of TKG 000 000 93 90 84 37 33 34 55 45 17 21 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Retail customers with ≥100Mbit/s tariff Fiber net adds Retail Wholesale mn/% of customer base 0
Slide 16: Germany retail and wholesale fixed: improved trends
Germany retail and wholesale fixed: improved trends Retail fixed revenues (reported) Broadband revenue growth (organic)2 € mn % yoy +2.2% 3,035 3,103 6.4% 6.0% 5.5% 5.0% 4.9% Broadband revenues +7.7% 1,614 1,739 Single play and other revenues 1,421 1,365 -4.0% Q2/21 Q2/22 Q2/21 Q3/21 Q4/21 Q1/22 Q2/
Slide 17: Germany mobile: healthy customer intake
Germany mobile: healthy customer intake Magenta EINS share (mobile)1 Data usage2 % GB per month 62% 63% 8.0 6.3 +27% yoy Q2/21 Q2/22 Q2/21 Q2/22 Churn2 Q2/22 impact of TKG Branded contract net adds3 % 000 1.0% 202 193 194 182 0.8% 135 Q2/21 Q2/22 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 1 B2C T-branded contrac
Slide 18: Europe 18th consecutive quarter of organic EBITDA growth
Europe 18th consecutive quarter of organic EBITDA growth Revenues (Reported) Adj. EBITDA AL (Reported) € mn € mn -2.7% -0.9% 2,823 2,747 994 986 decline driven by sale decline driven by sale of Romania fixed of Romania fixed and Hungarian special tax Q2/21 Q2/22 Q2/21 Q2/22 Revenues Adj. EBITDA AL w
Slide 19: Europe strong commercial performance
Europe strong commercial performance1 Mobile contract net adds Broadband net adds 000 274 000 243 176 171 150 83 87 76 70 70 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Q2/21 Q3/21 Q4/212 Q1/22 Q2/22 FMC net adds3 TV net adds 000 000 226 224 196 186 169 58 48 26 31 17 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Q2/21 Q3/21 Q4/
Slide 20: GD/Towers strong growth
GD/Towers strong growth Total sites Austria Recurring rental revenues 000 +0.9k € mn DFMG +4.5% 39.8 40.7 (organic +8.9%) 7.0 7.1 249 261 32.8 33.61 1.3k new build Q2/21 Q2/22 Q2/21 Q2/22 Opex AL per site Adj. EBITDA +2.7% € 000 € mn (organic +6.5%) 3.0 2.8 226 232 EBITDA AL: +2.4% (organic +7.2%) 1
Slide 21: Systems Solutions steady recovery
Systems Solutions steady recovery Order entry (LTM) Revenues Adj. EBITDA AL € bn € mn € mn -0.1% +13.9% -12.8% 4.8 1,006 1,005 82 4.2 72 Q2/21 Q2/22 Q2/21 Q2/22 Q2/21 Q2/22 Revenues Adj. EBITDA AL % growth yoy, organic % growth yoy, organic 16.5% 18.1% • Revenues stabilizing, helped by growth 13.6%
Slide 22: Financials Q2 2022
Financials Q?2 2022
Slide 23: Financials Q2 2022 reported strong growth
Financials Q2 2022 reported strong growth € mn Q2 H1 2021 2022 Change 2021 2022 Change Revenue 26,593 28,168 +5.9% 52,983 56,191 +6,1% Adj. EBITDA AL 9,418 9,891 +5.0% 18,662 19,763 +5,9% Adj. EBITDA AL (excl. US)2 3,680 3,554 -3.4% 7,219 7,255 +0.5% Adj. Net profit 2,113 2,445 +15.7% 3,315 4,683 +4
Slide 24: Financials Q2 2022 strong growth in net income
Financials Q2 2022 strong growth in net income Free Cash Flow AL1 H1/22 FCF AL of €6.5 bn Adj. net profit H1/22 adj. EPS of €0.94 € mn € mn -0.3% 173 +15.7% 541 -697 155 -164 2,766 2,759 -154 2,445 -24 -104 599 2,113 Q2/21 Net CF gen. Leasing Capex (excl. Others Q2/22 Q2/21 Adj. EBITDA D&A Financial
Slide 25: Financials Q2 2022 financial net debt up on dividend, stake increase, F/X
Financials Q2 2022 financial net debt up on dividend, stake increase TM US, and F/X Net debt excl. leases (AL) (Q2/22 over Q1/22) Leverage ratios € bn • CMD target: back in 2.25 – 2.75x IFRS16 range YE24. 106.3 0.9 • Tower deal with € 10.7 bn proceeds: lowers ex lease leverage by c0.2x, IFRS16 lever
Slide 26: Main takeaways
: Main takeaways #
Slide 27: H1 2022 main takeaways
H1 2022 main takeaways • TM US: strong merger execution, EBITDA up 10%, record customer growth, Adj. EPS (CMD target 2024) guidance raised for the 2nd time € /share >1.75 • Ex US: 4.4% organic EBITDA AL growth; Germany with 23 and EU with 18 successive quarters of organic EBITDA AL growth. Guidance
Slide 28: Appendix
Appendix
Slide 29: Group Development ongoing strong underlying performance
Group Development ongoing strong underlying performance Revenues -62.7% Adj. EBITDA AL € mn € mn 780 -48.4% 506 318 291 NL 164 155 0 GD Towers 0 NL 283 285 170 174 GD Towers Others -9 6 -7 -10 Others Q2/21 Q2/22 Q2/21 Q2/22 Revenues Adj. EBITDA AL org. growth excl HfS1 % growth yoy, organic % growth
Slide 30: FCF AL excl. US
FCF AL excl. US € bn H1 2022 H1 2021 Adj. EBITDA AL 7.3 7.2 Cash Capex -3.2 -3.3 Proceeds from sale of fixed assets +0.1 +0.1 Special Factors Cash -0.6 -0.7 Interest ex leasing -0.4 -0.4 Cash Taxes -0.2 -0.3 Other (working capital etc.) +0.3 +0.1 FCF AL 3.3 2.7 30
Slide 31: Outlook 2022/23 as per annual report 2021 (1/2)
Outlook 2022/23 as per annual report 2021 (1/2)1 € bn 2021 pro forma 2022e 2023e Revenue Group 106.5 Stable Slight increase Germany 24.2 Slight increase Increase US (in US$) 81.0 Stable Slight increase Europe 11.0 Slight increase Stable Systems Solutions 4.2 Stable Slight increase Group Development
Slide 32: Outlook 2022/23 as per annual report 2021 (2/2)
Outlook 2022/23 as per annual report 2021 (2/2)1 € bn 2021 pro forma 2022e 2023e Cash Capex Group 17.7 19.3 Strong decrease Germany 4.1 Increase Increase US (in US$) 12.2 Strong increase Strong decrease Europe 1.7 Stable Stable Systems Solutions 0.2 Stable Stable Group Development 0.3 Strong increas
Slide 33: Balance sheet rating outlook improved by S&P
Balance sheet rating outlook improved by S&P € bn 30/06/2021 30/09/2021 31/12/2021 31/03/2022 30/06/2022 Balance sheet total 270.5 273.4 281.6 292.4 301.7 Shareholders’ equity 77.0 78.9 81.5 87.7 88.5 Net debt excl. leases (AL) 96.8 99.3 100.6 98.1 106.3 Net debt excl. leases (AL)/adj. EBITDA AL1 2.
Slide 34: 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 15.0 3.4 3.2 3.1 Ø 2.9 1.7 8.1 2.0 12.8 3.4 3.1 2.2 2022 2023 2024 2025 Liquidity Maturities Maturities Maturities Total maturities reserve
Slide 35: Inflation exposure
Inflation exposure € bn in 2021 Group as % of Rev. Mitigations • US: 2/3 secured via PPAs • GER: Comprehensive multi-year hedging and removal of renewable energy Energy costs 1.5 1.4% surcharge create stable outlook for costs • Scope to reduce volumes, establish PPAs Personnel expenses (adj.) 17.6 1
Slide 36: Conference call with Q&A session
Conference call with Q&A session The conference call will be held on August 11 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) Webcast Dial-in • The link to the webcast will be provided 20 minutes before the DE 0800 5889185
Slide 37: 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