Deutsche Telekom Ag · XETR:DTE
Deutsche Telekom — Q2 2017 Earnings Presentation
33 slides from Deutsche Telekom's earnings presentation, Aug 3, 2017
Slide 1: Deutsche Telekom Q2/2017 Results
Deutsche Telekom Q2/2017 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 H1/17
REVIEW H1/17
Slide 4: H1/2017 Highlights: investments, customers and results
H1/2017 Highlights: investments, customers and results Investments and innovations Customers Financial results Acquisition of substantial 600 MHz frequencies and Demand for fiber in Germany unabated Strong growth continues completion of 700 MHz roll-out 8.2 million German homes with fiber (+
Slide 5: Customers: Strong momentum
customers: Strong momentum MagentaEINS (Germany + EU)1 US Mobile mn mn +6.52 +1.6 5.2 69.6 3.6 67.4 Q2/16 Q2/17 Q2/16 Q2/17 Fiber in Germany Cloud revenue mn € bn +11% +2.6 8.2 0.7 0.8 5.6 Q2/16 Q2/17 H1/16 H1/17 1) FMC RGUs may also appear under other brand name outside of Germany 2) Adj. for 4,368
Slide 6: Innovations: Focus on customer experience
Innovations: Focus on customer experience Hybrid Access1 Innovation/Network Service App subs +45% transactions +18% Pioneer in LTE U Cloud based 339k and LAA Office365 product 360k 233k 304k Q2/16 Q2/17 Q2/16 Q2/17 Smart Home2 IT-Support3 subs +111% subs +6% Smart home HD Voice Plus 184k interface i
Slide 7: Financials and Guidance 2017: Adjusted EBITDA Guidance increased
Financials and GUIDANCE 2017: Adjusted EBITDA Guidance increased following improved outlook TMUS € bn Revenue Adj. EBITDA FCF 2014 – 2018 CAGR1 +1 – 2% +2 – 4% ≈+10% OLD 2017 Guidance ($/€: 1.11) Increase Around 22.2 bn2 Around 5.5 bn NEW 2017 Guidance ($/€: 1.11) Increase Around 22.3 bn2 Around 5.5
Slide 8: Review Q2/17
REVIEW Q2/17
Slide 9: Q2/2017: Financial Highlights
Q2/2017: Financial Highlights € mn Q2 HY 2016 2017 Change 2016 2017 Change Revenue 17,817 18,890 +6.0% 35,447 37,537 +5.9% Adj. EBITDA 5,457 5,944 +8.9% 10,620 11,495 +8.2% Adj. Net profit 1,054 1,199 +13.8% 2,101 2,138 +1.8% Net profit 621 874 +40.7% 3,746 1,621 -56.7% Adj. EPS (in €) 0.23 0.26 +13
Slide 10: Germany: growing revenue and adjusted EBITDA
GERMANY: growing Revenue and adjusted ebitda Revenue reported Adj. EBITDA and margin (in %) € mn Retail fixed1 Mobile Service Others € mn 38.9 38.2 38.4 39.1 36.2 Wholesale services Mobile handsets & other +1.1% +0.6% 2,078 2,095 2,013 2,070 2,100 5,338 5,485 5,565 5,397 5,371 Q2/16 Q3/16 Q4/16 Q1/1
Slide 11: Germany: underlying total service revenue stable
germany: underlying total service revenue stable Mobile service revenue Fixed line service revenue1 Total service revenue1 Q2/16 -0.8% 0.4%2 0.0%2 Q3/16 0.2% -1.4%3 -0.8%3 Q4/16 -0.3% -0.3% -0.3% Q1/17 -0.8% -0.6% -0.7% Q2/17 0.8% -1.2%4 -0.6%4 1) Total service revenue is a sum of fixed line and mob
Slide 12: Germany mobile: steady commercial momentum
GERMANY mobile: steady commercial momentum German mobile market service revenue1 Contract net adds2 € mn Telefonica Vodafone Telekom 000 609 514 Service providers/ 464 MVNOs 156 334 515 151 5 145 180 228 Own branded -1.0% 89 -39 -414 4,525 4,636 4,532 4,479 4,426 -186 1,358 1,394 1,349 1,292 1,318 Q
Slide 13: Germany: good progress with convergence and data
Germany: good progress with convergence and data Mobile contract customers in MagentaEINS bundles1 Average Consumer Data Usage3 Q2/16 MB Growth 61% 81% 87% 82% 61% yoy % 38% Q2/17 1,360 1,200 1,244 28% 1,000 846 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Households in MagentaEINS bundles2 Average LTE usage uplif
Slide 14: Germany Fixed: Strong growth in fiber customers
GERMANY Fixed: Strong Growth in fiber customers German broadband market1 Entertain customers mn +64k +65k +87k +67k +46k Cable 000 +41 +41 +61 +76 +69 31.6 31.9 32.2 32.6 32.8 Telco Competitors 2,777 2,818 2,879 2,955 3,024 7.0 7.1 7.3 7.4 7.6 DT 11.9 12.0 12.0 12.1 12.2 DT net adds 12.8 12.8 12.9 1
Slide 15: Germany fixed: fixed retail impacted by promotions and hard migration
GERMANY fixed: fixed retail impacted by promotions and “hard migration” Fixed network revenue retail Broadband revenue € mn Broadband revenues Single play revenues Other revenues € mn +0.8% Broadband 3P 1,303 1,306 1,310 1,314 1,313 Broadband 2P -1.4% 308 312 317 328 334 2,420 2,394 2,434 2,392 2,38
Slide 16: Germany: network transformation on track
germany: network transformation on track INS – Status LTE rollout INS – Status fiber rollout2 POP +2pp Coverage in % and 67% 57% Coverage in %1 millions of households 91% 93% +18% 24.1 28.4 Q2/16 Q2/17 Q2/16 Q2/17 Status IP accesses (retail & wholesale) Status IP accesses (retail & wholesale) mn +3.
Slide 17: TMUS: continued industry leading growth
TMUS: continued industry leading growth Revenue and service revenue Net adds US-$ bn +8.5% 000 Total revenue Total net adds 1,881 1,970 2,101 1,333 +9.7% Service revenue 1,142 9.3 6.8 9.2 7.0 10.2 7.1 9.6 7.2 10.2 7.3 Branded: Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Postpaid 890 969 1,197 914 817 Prepay 4
Slide 18: TMUS: executing on key drivers
TMUS: executing on key drivers Branded postpaid phone churn Bad debt expenses & losses from sale of receivables % in % of total revenue 1.9 2.0 1.8 1.9 1.6 1.32 1.27 1.10 Q2/15 Q2/16 Q2/17 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Branded postpaid phone churn on record-low Ongoing focus on managing customer
Slide 19: Europe: positive commercial momentum
europe: positive commercial momentum Contract Net Adds BB Net Adds 000 000 +207% +21% 372 692 81 310 2251 67 54 56 121 165 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 FMC Net Adds TV Net Adds 000 +11% 000 +44% 180 175 612 56 157 144 1303 49 51 39 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q2/16 Q
Slide 20: Europe: financials on track
EUROPE: financials on track Revenue Organic revenue development € mn € mn +1.5% +2.4% 2,860 2,794 2,817 2,794 2,900 2,996 2,781 2,860 23 107 0 -62 -2 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q2/16 Cons./ FX Trad. Telco Mobile Growth Q2/17 Decons. & Other regulation areas1 Adj. EBITDA Organic adj. EBITDA develo
Slide 21: Europe: ongoing investments in network leadership
EUROPE: ongoing investments in network leadership IP migration LTE rollout IP share of fixed network access lines LTE outdoor pop coverage 102 81 % +12pp mn and % 52 64 72% 91% Q2/16 Q2/17 Q2/16 Q2/17 Customer base1 Fiber rollout1 mn +4.3% TV Fiber household coverage +6pp +4.3% Broadband % 27 +4.9%
Slide 22: Systems Solutions: adj. EBITDA benefits from volatility
SYSTEMS SOLUTIONS: adj. EBITDA benefits from volatility T-Systems financials Revenue € mn € mn -1.8% Total revenue Adj. EBITDA 1,719 1,674 1,741 1,704 1,688 +22.5% -1.8% 1,719 1,688 136 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 111 Adj. EBIT and margin in % € mn 2.4 0.9 2.2 -1.5 -0.1 37 41 15 Q2/16 Q2/17 Q2/16
Slide 23: Segment Group development: well on track
Segment Group development: well on track Revenue Mobile service revenue trend yoy (NL) € mn NL +3.7% % Towers 0.9 542 557 579 564 562 Other1 -1.3 -0.9 319 332 356 341 345 -9.7 220 3 221 4 218 5 217 6 213 4 -11.4 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Adj. EBITDA Contract net add
Slide 24: Financials: FCF, Net debt and net income
FINANCIALs: FCF, Net debt and net income Free cash flow1 Adj. net income € mn € mn +13.8% -1.4% 1,320 -330 1,301 231 -3 -329 1,199 442 -131 1,054 487 -242 Q2/16 Cash gen. from Capex (excl. Interest Q2/17 Q2/16 Adj. Financial D&A Taxes Minorities Q2/17 operations spectrum) & Other EBITDA result Net d
Slide 25: Financials: balance sheet ratios in target corridor
FINANCIALS: balance sheet ratios in target corridor € bn 30/06/2016 30/09/2016 31/12/2016 31/03/2017 30/06/2017 Balance sheet total 143.5 143.1 148.5 148.6 141.5 Shareholders’ equity 37.0 37.6 38.8 39.8 38.6 Net debt 48.7 48.5 50.0 50.0 55.2 Net debt/adj. EBITDA1 2.3 2.3 2.3 2.3 2.5 Equity ratio 25.
Slide 26: 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 transform towards a lean and h
Slide 27: Conference call with Q&A Session
Conference call with q&a Session The conference call will be held on August 3 at 2:00 PM CET, 1:00 PM GMT, 8 AM ET. DT Participants: 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 69447490# before
Slide 28: 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
Slide 29: Appendix
Appendix
Slide 30: 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 30
Slide 31: Germany mobile: service revenue
germany mobile: service revenue Reported mobile service revenue Impact of mobile regulation1 Impact of convergent offers2 Q2/16 -0.8% 1.0% 1.1% Q3/16 0.2% 2.3% 1.0% Q4/16 -0.3% 1.9% 0.9% Q1/17 -0.8% 2.2% 0.8% Q2/17 0.8% 1.7% 0.8% Medium term guidance (2014 – 2018 CAGR): Re-iterated ≈ +1% (without EU
Slide 32: German Fixed: service revenue
german Fixed: service revenue Growth rates YOY Wholesale revenue Broadband revenue Fixed line service revenue1 Q2/16 3.4%2 1.8% 0.4%2 Q3/16 0.5%3 1.7% -1.4%3 Q4/16 2.3% 1.6% -0.3% Q1/17 0.0% 1.4% -0.6% Q2/17 -0.4%4 0.8% -1.2%4 Medium term guidance (2014 – 2018 CAGR): Re-iterated +0.0% +2.0% 1) Fixed
Slide 33: Thank you!
THANK YOU!