Deutsche Telekom AG · XETR:DTE
Deutsche Telekom — Q1 2006 Earnings Presentation
23 slides from Deutsche Telekom's earnings presentation, May 11, 2006
Slide 1: Q1 2006 Conference Call
Q1 2006 Conference Call. Deutsche Telekom. May 11, 2006. Kai-Uwe Ricke
Slide 2: Disclaimer
Disclaimer. This presentation contains forward-looking statements that reflect the current views of Deutsche Telekom management with respect to future events. They include statements as to market potential and the planned T-Online merger, and the “Targets 2006/2007” statements at the end of this pre
Slide 3: Q1 2006 Group Results
Q1 2006 Group Results. Good group results despite tough environment in Germany. Revenue (€ billion) Adj. EBITDA (€ billion) 14.8 5.0 14.3 4.8 +3.9% +2.7% EBT (€ billion) Net income (€ billion) 1.8 1.6 1.1 1.0 +11.3% +9.7% Q1 2005 Q1 2006 Q1 2006 Conferencecall Investor Relations May 11, 2006, Page 3
Slide 4: BBFN/Mobile/Group excellence program
Excellence program € 0.25bn out of €1.2bn invested in growth 1 Defense of fixed-network core business BBFN 2 “Conquer the home” Mobile 3 Expansion of mobile core business 4 Expansion of mobile data services 5 Strengthen telecommunications core business BC 6 Grow in ICT solutions Mobile BBFN/ 7 Conve
Slide 5: Defense of fixed-network core business: Strong DSL growth
Excellence program: Defense of fixed-network core business. Strong DSL growth. Domestic DSL Net adds1 660,000 643,000 581,000 525,000 367,000 Q1/2005 Q2/2005 Q3/2005 Q4/2005 Q1/2006 1 Resale plus retail. Q1 2006 Conferencecall Investor Relations May 11, 2006, Page 5
Slide 6: Defense of fixed-network core business, conquer the home and convergence
Defense of fixed-network core business, “conquer the home” and convergence. New initiatives on track. Calling minutes market share n Domestic minute market share on T-Com’s PSTN network increased fourth consecutive quarter n On track to stabilize minute market share ü Triple Play n A significant amo
Slide 7: Expansion of mobile core business: T-Mobile delivers on strategy
Excellence program: Expansion of mobile core business. T-Mobile delivers on strategy. n T-Mobile delivered on the strategy as presented in November 2005 n +12.3% revenue growth n +8.0% adj. EBITDA growth n 1.3 million contract net adds in Q1 n T-Mobile USA remains strongest growth driver for DT grou
Slide 8: T-Mobile USA: Continued superior execution
Excellence program: Expansion of mobile core business. T-Mobile USA – Continued superior execution. Net adds (‘000) n ARPU revenue (US$) growth +20.5% 1,035 n Stable contract ARPU at $54 957 n Contract churn at 2.1% from 2.3% +8.2% n 3,700 cell sites added over12 months n Most highly regarded servic
Slide 9: Germany: New measures to compensate for falling prices
Excellence program: Expansion of mobile core business. Germany – New measures to compensate for falling prices. Net adds (‘000) n -3.4% revenues: termination rate cuts and competition 284 n Save-for-Growth program supports strong EBITDA margin n Attractive tariffs launched in Q1 n 515k T-Mobile@home
Slide 10: UK: Strong market invest to build momentum
Excellence program: Expansion of mobile core business. UK - Strong market invest to build momentum. Contract net adds (‘000) n +4.5% total revenues, +7.4% ARPU revenues 266 n Market invest: -40.1% adj. EBITDA n Highest contract net adds ever n 257k new Flext customers in one 114 month 109 83 59 57 6
Slide 11: Expansion of mobile data services: Pushing mobile data
Excellence program: Expansion of mobile data services. Pushing mobile data. n +50% non-voice non-SMS revenue n Increase to € 317 million in Q1/06 from € 211 million in Q1/05 n 35% of FY05 revenue in Q1 alone n Web’n’walk: 381k data plans sold, of which 309k in Q1 n Attractive new tariffs introduced
Slide 12: Growth in ICT solutions: Strong IT revenue growth
Excellence program: Growth in ICT solutions. Strong IT revenue growth in business services. IT revenues of SE/ME/LE1 (€ million) n Accelerated growth: increase of 67% compared to Q1 2005 n First quarter “new” IT revenues 135 fully compensate for decrease in 127 traditional voice and legacy data reve
Slide 13: Operational excellence: Efficiency initiatives implemented
Excellence program: Operational excellence. Efficiency initiatives implemented. n Personnel restructuring well underway: n Decision for a legal provision for civil servants expected at the end of Q2 n Gross headcount reduction in Germany at 1,500 as of March 31 n As of April 3,500 agreements for sev
Slide 14: Q1 2006 Conference Call
Q1 2006 Conference Call. Deutsche Telekom. May 11, 2006. Dr. Karl-Gerhard Eick
Slide 15: Broadband/Fixed Network: Development in Q1 2006
Broadband/Fixed Network. Development in Q1 2006. Total revenue BBFN (€ billion) Total revenue T-Com (€ billion) 6.6 6.2 6.2 5.9 -6.1% -5.8% Adj. EBITDA BBFN (€ billion) Adj. EBITDA T-Com (€ billion) 2.4 2.3 2.4 2.3 -6.8% -3.8% Margin 37.3% 37.0% 38.0% 38.8% Q1 2005 Q1 2006 Q1 2006 Conferencecall Inv
Slide 16: Revenue of T-Com Germany driven by lower calling revenues
Broadband/Fixed network. Revenue of T-Com Germany driven by lower calling revenues. € million Q1 2006 Q1 2005 Delta Total 5,241 5,606 -365 Network communications 2,886 3,164 -278 thereof narrowband access 1,950 1,981 -31 thereof calling revenues 935 1,182 -247 Value added services 234 273 -39 Termin
Slide 17: Mobile: Strong growth
Mobile. Strong growth. Customers (million) Total revenue (€ billion) 87.7 7.6 79.0 6.7 +10. 9%1 +12.3% Adj. EBITDA (€ billion) Adj. EBITDA margin (in %) 2.3 31.3% 30.1% 2.1 + 8.0% -1.2pp Q1 2005 Q1 2006 1 Organic customer growth, historical Q1 2006 Conferencecall number adjusted (inclusion of Monet
Slide 18: Business Customers: Gedas consolidation to help revenues
Business Customers. Gedas consolidation to help revenues. Business Customers – Total revenue (€ bn) Business Customers – adj. EBITDA (€ mn) 3.1 392 3.0 341 -3.1% -13.0% Top 60+ customers1 – Total revenue (€ bn) SE/ME/LE2 – Total revenue (€ bn) 2.0 1.9 1.1 1.1 -4.8% +0.2% 1 Enterprise Services 2 Busi
Slide 19: Q1 2006 Free Cash Flow
Q1 2006 – Free Cash Flow. Cash flow supported by working capital improvements. € billion Q1 2006 Q1 2005 Cash Flow 4.7 4.7 Change in working capital and accruals - 1.2 - 1.7 Taxes and dividends - 0.2 - 0.4 Cash generated from operations 3.3 2.6 Net interest payment - 0.5 - 0.4 Net cash provided by o
Slide 20: Net income: 9.7% increase in reported net income
FY 2005 – Net income. 9.7% increase in reported net income. € billion Q1 2006 Q1 2005 Q1 2006 adj. Q1 2005 adj. EBITDA 4.9 4.8 5.0 4.8 Depreciation and amortization - 2.6 - 2.5 - 2.6 - 2.5 Net financial expense - 0.6 - 0.7 - 0.8 - 0.7 - of which net interest expense - 0.7 - 0.7 - 0.7 - 0.7 EBT 1.8 1
Slide 21: Balance sheet in excellent shape
Balance sheet. Balance sheet in excellent shape. € billion 31.03.2006 31.12.2005 Balance sheet total 130.3 127.9 Equity 50.1 49.6 Net debt 37.8 38.6 Net debt/adj. EBITDA n/a 1.9x Gearing 0.75x 0.78x Equity ratio 38.5% 38.8% Q1 2006 Conferencecall Investor Relations May 11, 2006, Page 21
Slide 22: Q1 2006 Conference Call
Q1 2006 Conference Call. Deutsche Telekom. May 11, 2006. Kai-Uwe Ricke
Slide 23: Targets 2006: Group guidance confirmed
Targets 2006. Group guidance confirmed. Revenue Adj. EBITDA 2006 (€ bn) 2006 (€ bn) BBFN Nov 2005 25.4 – 25.8 New 24.8 – 25.2 9.4 – 9.6 Mobile Nov 2005 30.9 – 31.3 New1 31.9 – 32.3 10.0 – 10.2 Business Customers 13.4 – 13.6 1.5 – 1.6 Group 62.1 – 62.7 20.2 – 20.7 1 Also incl. tele.ring. Q1 2006 Conf