Deutsche Telekom Ag · XETR:DTE
Deutsche Telekom — Q2 2024 Earnings Presentation
36 slides from Deutsche Telekom's earnings presentation, Aug 8, 2024
Slide 1: Deutsche Telekom Q2 2024 results
Deutsche Telekom Q2 2024 results August 8, 2024 Connecting your world
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 2024 results Group
H1 2024 results Group
Slide 4: H1/2024 Highlights: consistent reliable growth
H1/24 consistent reliable growth H1/2024 Highlights LS INVE ▪ Organic Growth: Group service revenues up 4.1%, Group adj. EBITDA AL up 6.2%, all CIA S segments contributing. FCF AL up 25.9%, adj. EPS up 23.0%1 AN TM US/GER/EU: Strong customer momentum continues. TMUS passes 100mn FIN ENT ▪ postpaid s
Slide 5: Financials H1/24 organic: strong organic growth
Financials H1/24 organic strong organic growth H1/24 Adj. EBITDA AL Adj. Core EBITDA AL H1/24 Adj. EBITDA AL by segment2 H1/24 Key Financials growth yoy, organic growth of 8.5%1 € mn % growth yoy, organic TMUS 7.4% Group revenues 2.5% +€971 mn 5,129 Group service revenues 4.1% GER 2.0% +€100 mn ex U
Slide 6: Networks: leading with 5G, FTTH on track
Networks leading with 5G, FTTH on track FTTH (1 Gbps) 5G TMUS 5G ex US Fiber homes passed Ultra capacity 5G1 Germany mn +3.6 mn POPs % of POPs +2pp 18.3 285 >300 95 97 14.7 9.5 EU 8.5 GER 6.2 8.8 Q2/23 Q2/24 Q2/23 Q2/24 Q2/23 Q2/24 GER Network Leader GER • Fiber: On track for >10mn HHs by YE • Swept
Slide 7: Customers growing strongly
Customers growing strongly Mobile net adds Fixed line net adds2 000 2,854 000 2,558 Postpaid customer US (postpaid) Broadband 241 base surpasses 100mn 190 H1/23 H1/24 H1/23 H1/24 959 Ex US (contract)1 870 TV 238 149 H1/23 H1/24 H1/23 H1/24 1 GER + EU. GER: own brand only. 2 GER + EU 7
Slide 8: Society and Environment: energy consumption reduced again
Society and Environment energy consumption reduced again Societal agenda Environment Environmental agenda Customer satisfaction1 Energy consumption Tri*M • NEW Group energy consumption -2.5% yoy in H1/24 mn MWh 75.0 76.2 and CO2 emissions (Scope 1&2) -1.5% 13.3 13.3 72.6 12.2 US 8.0 8.5 7.7 Society
Slide 9: Guidance 2024: free cash flow outlook raised
Guidance 2024 free cash flow outlook raised for TMUS and the group Adj. EBITDA AL1 TMUS DT Ex US FCF AL1 TM US DT Ex US ~+6% € bn € bn ~+17% 40.6 ~42.9 ~42.9 ~18.9 ~19.0 16.2 26.6 ~28.5 ~28.6 12.9 ~15.4 ~15.6 14.0 14.4 14.4 3.52 3.52 3.52 FY 2023 Guidance 2024 Guidance FY 2023 Guidance 2024 Guidance
Slide 10: Q2 2024 results: Review of segments and financials
Q2 2024 results Review of segments and financials
Slide 11: T-Mobile US: strong financial growth
T-Mobile US strong financial growth – handset lease unwind coming to an end Revenues (IFRS) Adj. EBITDA AL (IFRS)2 yoy decline in handset US$ bn US$ bn leasing revenues down +2.9% +9.1% to US$39 mn1 19.1 19.7 Other revenues 3.4 3.3 7.1 7.8 Service revenues 15.7 16.4 Q2/23 Q2/24 Q2/23 Q2/24 Service r
Slide 12: T-Mobile US: industry leading customer growth
T-Mobile US industry leading customer growth 5G EXTENDED RANGE Total postpaid net additions Industry leading Postpaid phone net additions Industry leading mn 000 1.6 1.6 850 934 1.2 1.2 1.3 760 777 532 Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 High Speed Internet net additions1 Tot
Slide 13: Germany: 31st consecutive quarter of EBITDA growth
Germany 31st consecutive quarter of EBITDA growth Revenues (reported) Adj. EBITDA AL (reported) Impacted by one off € mn € mn payment from wage +3.6% +1.0% agreement. €70mn 6,150 6,369 2,528 2,553 (gross)2 Q2/23 Q2/24 Q2/23 Q2/24 Revenue growth (organic) Adj. EBITDA AL (organic) % yoy 3.6% % yoy 3.0
Slide 14: Germany service revenues: accelerated growth
Germany service revenues: accelerated growth Total service revenue growth (organic) Mobile service revenue growth (organic) % yoy % yoy 3.7% 3.2% 3.4% 2.9% 2.4% 2.2% 2.1% 1.6% 1.8% 1.8% Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 Revenue growth (reported) Fixed service revenue growth
Slide 15: Germany fixed revenues: improvement in retail and wholesale access
Germany fixed revenues: improvement in retail and wholesale access Retail fixed revenues (reported) Broadband revenue growth (organic) € mn % yoy +2.2% 5.0% 3,191 3,260 4.0% 4.0% 4.2% 4.0% Broadband revenues +4.0% 1,790 1,861 Single play and other revenues 1,401 1,399 -0.1% Q2/23 Q2/24 Q2/23 Q3/23 Q
Slide 16: Germany fixed KPIs: broadband growth steady, TV and FTTH faster
Germany fixed KPIs: broadband growth steady, TV and FTTH faster Broadband net adds TV net adds (ex OTT) “Nebenkostenprivileg” and 000 000 European Championship support TV net adds 96 67 66 114 39 41 68 73 51 36 Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 Retail customers with ≥100 Mb
Slide 17: Germany mobile KPIs: strong customer intake
Germany mobile KPIs: strong customer intake in a competitive market Branded contract net adds1 Data usage2 000 350 GB per month 319 311 289 281 14.7 12.0 +22% yoy Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 Q2/23 Q2/24 Churn2 Magenta EINS share (mobile)3 % % 0.8% 0.8% 65% 64% Q2/23 Q2/24 Q2/23 Q2/24 1 Own branded
Slide 18: Europe: 26th consecutive quarter of organic EBITDA growth
Europe 26th consecutive quarter of organic EBITDA growth Revenues (reported) Adj. EBITDA AL (reported) EBITDA growth € mn +6.0% € mn positively impact +8.2% by lower energy 2,899 3,073 costs (~1.7pp) 1,024 1,108 Q2/23 Q2/24 Q2/23 Q2/24 Revenues (organic) Adj. EBITDA AL (organic) % growth yoy % growt
Slide 19: Europe: strong commercial performance continues
Europe strong commercial performance continues Mobile contract net adds Broadband net adds 000 246 000 223 173 184 183 72 76 76 57 53 Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 FMC net adds1 TV net adds 000 000 195 167 152 152 52 34 37 28 23 36 Q2/23 Q3/23 Q4/23 Q1/242 Q2/24 Q2/23 Q
Slide 20: Systems Solutions: steady trends, order book improved
Systems Solutions steady trends, order book improved Order entry (LTM) Revenues (reported) Adj. EBITDA AL (reported) € bn € mn € mn +10.1% +2.3% 3.9 959 981 +3.9% 3.5 84 87 Q2/23 Q2/24 Q2/23 Q2/24 Q2/23 Q2/24 • Order entry growth mainly driven by cloud Revenues (organic) Adj. EBITDA AL (organic) bus
Slide 21: Financials Q2/24 reported: strong set of results
Financials Q2/24 reported strong set of results across the board € mn Q2 H1 2023 2024 Change 2023 2024 Change H1/23 benefitted from Revenue 27,221 28,394 +4.3% 55,060 56,337 +2.3% gains in asset sales e.g. Service revenues 22,952 24,088 +4.9% 45,767 47,573 +3.9% Towers Adj. EBITDA AL 10,038 10,819 +
Slide 22: FCF AL and adj. net profit
FCF AL and adj. net profit FCF reflecting growth in EBITDA and lower capex Free Cash Flow AL1 Adj. net profit Adj. EPS of €0.95 in H1/24 € mn € mn includes 4 cents of non- recurring EPS. (3 cents in Q2) +48.5% +31.3% 5,229 -6 -132 738 -104 287 2,477 -251 0 975 790 3,522 1,887 Lower capex post merger
Slide 23: Net debt: leverage ratios improved year on year
Net debt leverage ratios improved year on year Net debt excl. leases (AL) Leverage ratios € bn X +2.6 Incl. Leases 97.1 Excl. Leases 0.5 1.4 94.5 -1.8 1.0 3.07 2.2 2.94 2.82 2.81 -5.2 4.3 2.58 2.40 2.31 2.32 0.2 Q1/24 FCF AL Spectrum Dividends SBB TM US DT SBB TM US M&A1 F/X and Q2/24 2022 H1/23 202
Slide 24: Q2 2024 results: Main takeaways
Q2 2024 results Main takeaways
Slide 25: H1/24 Key messages: consistent reliable growth
H1/24 Key messages consistent reliable growth ▪ Commercial performance continues unabated in all markets 2024 guidance/CMD targets 20241 ▪ Continued sustainable growth with revenue, service revenue, Adj. EPS in €/share EBITDA AL, FCF AL and adj. EPS 1.60 >1.75 >1.75 ▪ Ex US Service revenues growing
Slide 26: Q2 2024 results: Appendix
Q2 2024 results Appendix
Slide 27: Organic growth rates
Organic growth rates In % Q2/24 over Q2/23 H1/24 over H1/23 Group revenues +3.4 +2.5 Group service revenue +4.0 +4.1 Service revenue excl. US +3.9 +3.7 Group Adj. EBITDA AL +6.6 +6.2 Adj. EBITDA AL excl. US +3.0 +4.0 Group adj. Core EBITDA AL1 +7.0 +7.0 1 adj. EBITDA AL excl. TMUS handset leases. In
Slide 28: TMUS EBITDA reconciliation
TMUS EBITDA reconciliation H1/24 Q2/24 US$ mn US$ mn +8.7% yoy +7.5% yoy +8.2% yoy 15,644 15,705 +9.4% yoy +8.6% yoy +9.1% yoy 15,317 61 -388 8,027 8,053 7,792 26 -261 Adj. Core Leasing Adj. EBITDA Bridge Adj. EBITDA Adj. Core Leasing Adj. EBITDA Bridge Adj. EBITDA EBITDA Revenues (US GAAP) AL (IFRS
Slide 29: FCF AL excl. US: full year 2024 guidance unchanged
FCF AL excl. US1 full year 2024 guidance of €3.5bn unchanged € bn H1 2023 H1 2024 Adj. EBITDA 7.6 7.9 FY Guidance €14.4 bn Leasing opex -0.7 -0.8 Adj. EBITDA AL 6.9 7.1 Capex frontloaded Cash Capex -3.8 -4.0 Proceeds from sale of fixed assets +0.0 +0.0 Special Factors Cash -0.5 -0.6 Interest ex leas
Slide 30: Financials: maturity profile covered by strong liquidity reserve
Financials maturity profile covered by strong liquidity reserve Ex US bonds maturing Ex US liquidity position Credit lines € bn € bn Liquid assets 14.5 3.6 12.0 2.2 Ø 2.15 1.5 4.3 1.3 1.5 1.5 1.3 2.5 2024 2025 2026 2027 Liquidity Maturities Maturities Maturities Total reserve H2 2024 2025 H1 2026 ma
Slide 31: Balance sheet deleveraging continues
Balance sheet deleveraging continues € bn 30/06/2023 30/09/2023 31/12/2023 31/03/2024 30/06/2024 Balance sheet total 299.7 302.5 290.3 295.2 296.0 Shareholders’ equity 94.4 96.6 91.2 93.2 92.4 Net debt excl. leases (AL) 97.2 96.9 93.7 94.5 97.1 Net debt excl. leases (AL)/adj. EBITDA AL1 2.40 2.40 2.
Slide 32: Guidance 2024 compared to consensus
Guidance 2024 compared to consensus € bn Guidance 2024 in € Guidance 2024 in € Consensus in € @ 1.08 @ 1.08 (Cons. f/x) @ 1.08 Adj. EBITDA AL Group ~42.9 ~42.9 43.0 thereof ex US 14.4 14.4 14.5 thereof TMUS ~28.6 ~28.6 28.5 FCF AL ~19.0 ~19.0 19.0 thereof ex US ~3.51 ~3.51 3.5 thereof TMUS ~15.6 ~15
Slide 33: Outlook 2024/25 as per annual report 2023 (1/2)
Outlook 2024/25 as per annual report 2023 (1/2)1 € bn 2023 pro forma 2024e 2025e Revenue Group 112.2 Increase Increase Germany 25.2 Slight increase Slight increase US (in US$) 78.6 Increase Increase Europe 11.8 Slight increase Slight increase Systems Solutions 3.9 Slight increase Stable Service Revs
Slide 34: Outlook 2024/25 as per annual report 2023 (2/2)
Outlook 2024/25 as per annual report 2023 (2/2)1 € bn 2023 pro forma 2024e 2025e Cash Capex Group 16.6 ~15.9 Stable Germany 4.6 Slight increase Slight increase US (in US$) 9.8 Decrease Stable Europe 1.8 Slight increase Slight increase Systems Solutions 0.2 Stable Stable FCF AL Group 16.2 ~18.9 Stron
Slide 35: Investor + Analyst Webcast with Q&A session
Investor + Analyst Webcast with Q&A session The conference call will be held on August 8 at 14:00 CET, 13:00 GMT, 08:00 EST, 05:00 PST, 22:00 JST DT Participants: Tim Höttges (CEO), Christian Illek (CFO), Hannes Wittig (Head of IR) • Detailed time stamps in video description for slides + Q&A: • Live
Slide 36: Further questions please contact the IR department
Further questions please contact the IR department Homepage: +49 228 181 – 8 88 80 Individual contact details for www.telekom.com/investors all IR representatives: investor.relations@telekom.de www.telekom.com/ircontacts Investor relations on social media – Follow us to stay up to date! linkedin.com