T-Systems reduced its costs substantially and increased efficiency in the first half of 2009

• T-Systems once again increases contribution to the group earnings; efficiency programs show effect

• Revenues with external customers are fairly robust despite a difficult market environment

• International business continues to grow

T-Systems reduced its costs substantially and increased efficiency in the first half of 2009. Adjusted for the one-time effect of the disposal of Media&Broadcast in the prior year, profit from operations (EBIT) increased to EUR 92 million. Thus, this figure for the first half of 2009 already exceeds the figure for the full 2008 financial year. The EBIT margin improved by around 2 percentage points compared with the prior-year period. EBITDA also benefited from measures to improve efficiency. Adjusted EBITDA recorded growth of 12.8 percent to EUR 442 million. The adjusted EBITDA margin rose from 8.8 percent in the first half of 2008 to 10.3 percent.

The general financial and economic crisis had different effects on revenue: In the first six months, total revenue stood at EUR 4.3 billion, down 3.7 percent year-on-year. At the same time, revenue generated from external customers remained virtually stable, despite the generally difficult market situation. International revenue rose by 3.5 percent to EUR 1.3 billion, continuing the positive trend of the prior quarters. In contrast, revenue in Germany declined 6.6 percent. This decrease in domestic revenue is chiefly attributable to the 8.7 percent decrease in the volume of internal business with Deutsche Telekom and underlines T-Systems’ contribution to cost-cutting in the Group.

The market for ICT systems solutions was dominated by fierce competition in the first half of 2009. In addition, the global financial and economic crisis impacted negatively on new orders at T-Systems. Despite numerous encouraging contracts concluded in the first half of 2009, the order level fell by 20.9 percent year-on-year. However, it should be noted that the prior-year figure included the major contract with Shell Holding.

Nevertheless, T-Systems managed to win major deals in the second quarter, such as the contract with MAN. On top of this, T-Systems concluded new agreements with the airline Deutsche Lufthansa and acquired international business with airport shop operator Nuance Group and chemical distributor Brenntag Asia Pacific. Deutsche Telekom’s Corporate Customers arm strengthened its market position on the Iberian Peninsula with the takeover of Spanish IT service provider Metrolico.

Systems Solutions at a glance*:

*Comments on the table:
Since January 1, 2009, around 160,000 business customers of the Systems Solutions operating segment (until December 31, 2008 called the Business Customers operating segment) have been included in the Broadband/Fixed Network operating segment. Prior-year figures have been adjusted.