DEUTSCHE TELEKOM Link to FY 2019 RESULTS & CMD 2018 Webcast PROGRESS UPDATE
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, depreciation and amortization, cash flows and personnel-related measures. You should consider them with caution. Such statements are subject to risks and uncertainties, most of which are difficult to predict and are generally beyond Deutsche Telekom’s control. Among the factors that might influence our ability to achieve our objectives are the progress of our workforce reduction initiative and other cost-saving measures, and the impact of other significant strategic, labor or business initiatives, including acquisitions, dispositions and business combinations, and our network upgrade and expansion initiatives. In addition, stronger than expected competition, technological change, legal proceedings and regulatory developments, among other factors, may have a material adverse effect on our costs and revenue development. Further, the economic downturn in our markets, and changes in interest and currency exchange rates, may also have an impact on our business development and the availability of financing on favorable conditions. Changes to our expectations concerning future cash flows may lead to impairment write downs of assets carried at historical cost, which may materially affect our results at the group and operating segment levels. If these or other risks and uncertainties materialize, or if the assumptions underlying any of these statements prove incorrect, our actual performance may materially differ from the performance expressed or implied by forward-looking statements. We can offer no assurance that our estimates or expectations will be achieved. Without prejudice to existing obligations under capital market law, we do not assume any obligation to update forward-looking statements to take new information or future events into account or otherwise. In addition to figures prepared in accordance with IFRS, Deutsche Telekom also presents alternative performance measures, including, among others, EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA after leases, adjusted EBITDA margin, adjusted EBIT, adjusted net income, free cash flow, free cash flow after leases, gross debt, net debt after leases and net debt. These alternative performance measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with IFRS. Alternative performance measures are not subject to IFRS or any other generally accepted accounting principles. Other companies may define these terms in different ways.
2019 RESULTS AND CMD UPDATE: WE ARE DELIVERING US Deal: Positive ruling by New York District Court Two major multi-year German investment programs completed (B2C All-IP, FTTC) Accelerated 5G rollout in U.S. and Germany Substantial progress with efficiency and digitization Ongoing strong customer growth in all geographies Financials tracking above 2018 CMD guidance DT ex US in second year of EBITDA growth. All segments contribute. YE 2019 debt ratios back in stated comfort zone 3
US DEAL: LEADING ON BOTH SIDES OF THE ATLANTIC Creating value for customers & shareholders Strong presence in US and Europe Sprint merger Next Uncarrier 2.0 2013 - Big investments New T-Mobile* DT ex US 2019 Big growth 140 mn 127.5 mn 54 US$ 77 bn 2012 - Creation of Uncarrier 1.0 98.0 32 € 40.1 bn 2013 AT&T spectrum, PCS merger 86 45 21.0 8.6 Customer Revenues Customer Revenues Pre 2012 Shrinking business Sprint TMUS Mobile Broadband TV * Pro forma LTM 4
2019 FINANCIALS: STRONG GROWTH ACROSS THE BOARD Adj. EBITDA AL (organic growth) FY growth ADJ. EBITDA AL € mn TMUS Revenue +6.4% 4.7% Adj. EBITDA AL +7.2% GER Adj. EBITDA AL +4.7% 2.4% (excl. US) 8,720 11,134 Adj. Net profit +8.9% EU 3.1% Net profit +78.5% Adj. EPS (in €) +8.3% 519 GD 4,005 10.9% 1,033 Free cash flow AL +15.9% SYS Cash capex +7.3% 16.8% Net debt AL +6.4% 5
INVESTMENTS: BIG MILESTONES ACHIEVED Fiber coverage LTE outdoor pop coverage HH mn % GER: Committed FTTC GER: 1,400 additional sites +1.8m +2.8m +0.5pp +1.1pp build done GER/EU: Network 35 GER: Supervectoring 28mn 98.1% 97.6% leadership in footprint lines 1 with up to 250Mbps 10 EU: Full fiber 3.3mn HH GER EU GER EU All-IP Innovations lines German B2C rollout 5G +13pp +9pp GER: 450 5G antennas completed Launch Cloud Gaming/Campus Solutions 99% German B2B on track for 91% US: Launch nationwide low-band YE2020 Digitization across the value chain EU: 6 Countries fully migrated Launch smart speaker GER EU 1) Households and business locations 6
CUSTOMERS: GROWTH REMAINS STRONG Magenta EINS (GER + EU) Mobile customers (US) 1 +2.0 +6.4 mn mn +7.1 +1.8 9.6 86.0 79.7 72.6 7.6 5.8 2017 2018 2019 2017 2018 2019 Fiber (GER) Mobile contract customers (GER + EU + NL) 2 mn mn +2.2 +2.4 +1.0 +2.6 14.4 58.0 55.6 54.6 12.2 9.6 2017 2018 2019 2017 2018 2019 1) base adjustment branded prepaid customers in Q3/19 2) Change in base. Figures not adj. for acquisition or disposals. Germany: own branded contract customers excl. multi-brand 7
INDIRECT COSTS: ON TRACK FOR CMD TARGET Organic savings ex US 2017 – 2019 Organic savings ex US 2017 – 2021 € bn € bn 0.8bn GER 4% of indirect costs saved GHS -0.8 Savings driven by greater agility and digitization TSI -1.5bn Personnel 2017-19 2019-2021e CMD target productivity +6% EU GD By segment 8
DIGITAL : BECOMING PART OF THE DNA Marketing & Sales Customer Service Network & IT Steering & Support Push online channels & Drive customer self-service Increase bang for the buck Push employee self-service DT personalized offerings to (app, chat) & 360 ° customer w/ value-based network and automate repetitive Strategic drive X/upsell & reduce 3 rd view to reduce inbound calls planning & rollout; transform tasks (e.g. planning) for Direction & party costs & increase efficiency IT for lower time to market higher precision & lower cost Rationale ~ 30% MMA 2 penetration 2m customer interactions 75% planning time reduction 30k users of Employee Service w/digital service assistant per fiber HH w/FTTH factory App 6m transactions in Business (2020 est.) Proof Service Portal 2,800 bots live, € 90m net TMNL: 2,200 hours returned to IT trafo: ~ 150 HAL 3 APIs & ~ 50 savings p.a. business w/ RPA 5 Points 1 ~ 55% app penetration DPS 4 live HT: AI-based TWC 6 planning TSI: 1 customer interface TMNL: 34%/15% eSales w/ServiceNow TelIT: 65% agile delivery pilot share (B2C/ B2B) (2020 est.) 1) Actuals 2019 unless otherwise indicated 2) Mein Magenta App 3) Harmonized Application Layer 4) Digital Platform Service 5) Robotic Process Automation; 6) Total Workforce Cost 9
CAPITAL UTILIZATION: SHARING, SMARTLY Germany Europe White spot sharing of all German Long-standing network sharing in MNOs (c6,000 sites) most countries (e.g. CZ, PL, RO) Grey spot sharing with Vodafone Various tower sharing agreements Mobile (c4,000 sites) (e.g., Austria) Extensive tower sharing Market consolidation (2.3x co-location ratio) (e.g. NL) Collaborations (e.g., EWE – Tel) Multiple wholebuy/resale agreements (e.g., PL, CZ) Wholebuy/resale Fixed (e.g., Net Cologne, DGF) Market consolidation (e.g. Austria) 10
ESG: BEING SUSTAINABLE Energy intensity 1 DT’s climate strategy Share of renewable Energy kWh/TB % 100% renewables from 2021 142 194 84 64 90% less CO 2 e 2 by 2030 41 120 52 74 25% lower value chain emissions per customer by 2030 Targets certified by SBTi 3 GER GROUP GER GROUP More efficient technologies Significant EBITDA investment Further ESG measures (examples) >80% of procurement volume reviewed Energy consumption Success in ESG ratings according to ESG criteria mn MWh 3.8 8.9 9.3 Multiple initiatives on responsible 3.4 digitization, data privacy & security, digital literacy GER GROUP Benefits from All-IP migration in GER 1)Excluding international T-Systems units 2) Scope 1+2 3) Science Based Targets initiative 2017 2019 11
CMD TARGETS: FINANCIALS GROWING FASTER Revenue Adj. EBITDA AL FCF AL Adj. EPS Dividend € bn € bn € bn €/share €/share +0.08 CAGR CAGR CAGR +3% +6% +17% 80.5 24.7 7.0 1.04 0.70 75.7 23.1 74.9 0.96 0.65 22.2 0.92 1 6.1 0.60 5.5 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 CMD promises (2017 – 2021 CAGR) +1 – 2% +2 – 4% + ~ 10% ≈+€ 0.2 2018 – 2021 Follows EPS growth All CAGRs are organic CAGRs (mixed CAGRs); EBITDA/FCF pre IFRS 16 used for 2018 vs. 2017 1) Adjusted for € 0.36/share US tax gain. EBITDA and FCF for 2017 on pre FRS 16 basis 12
Recommend
More recommend
