Financial Results

Pictures results Deutsche Telekom AG

Financial results second quarter 2022

On August 11, 2022 the Deutsche Telekom published its results for the second quarter 2022.

Sector leading growth continues - on both sides of the Atlantic

  • Guidance for 2022: ↗ raised for the 2nd time
    EBITDA AL (adjusted): ≈37 bn € (increased by 0.4 bn €), Free cash flow AL: >10 bn €
  • Strategic agenda: Deutsche Telekom continues to execute
  • Net revenue: ↗ +5.9% to 28.2 bn €
  • EBITDA AL (adjusted): ↗ +5.0% to 9.9 bn €
  • Free cash flow AL: 2.8 bn€
  • Net profit (adjusted): ↗ +15.7% to 2.4 bn €
  • Networks: leading with 5G, FTTH rollout well on track
  • ESG: on top of our agenda
  • Germany: ↗ strong financial figures
  • T-Mobile US: ↗ record customer growth
  • Europe: ↗ growth continues unabated
  • GD Towers: Partnership deal agreed

Conference Call

Webcast-YT-q1

Quicklinks to chapters in the Conference Call

👉 Click on the blue timestamps below to get to the respective part of the video on YouTube.
In YouTube, you can find those chapter-links in the description of the video.

The subtitles of the video have been reviewed and optimized. (ongoing)
The full transcript (20 pages, PDF) can be downloaded here (pdf, 188.8 KB)

📣 Tim Höttges (CEO): Overview
00:00:59 Welcome
00:01:08 Results H1 2022: sector leading growth (p#3)
00:02:45 Financials H1 2022 organic: strong growth (p#4)
00:04:32 Networks: leading with 5G, FTTH well on track (p#5)
00:06:26 Customers: growing strongly (p#6)
00:06:54 ESG: on top of our agenda (p#7)
00:08:59 Guidance 2022: raised on both sides of the Atlantic (p#8)
00:10:47 Strategic agenda: Deutsche Telekom continues to execute (p#9)

📣 Christian Illek (CFO): Operations Review Q2-2022
00:12:47 Welcome
00:13:08 US: strong financial growth (p#11)
00:13:37 US: best ever Q2 postpaid growth (p#12)
00:14:46 DE: 23rd consecutive quarter of EBITDA growth (p#13)
00:15:02 DE: service revenues: growing across the board (p#14)
00:15:50 DE: fixed: lower net adds, strong upselling (p#15)
00:17:25 DE: retail and wholesale fixed: improved trends (p#16)
00:18:00 DE: mobile: healthy customer intake (p#17)
00:18:25 EU: 18th consecutive quarter of organic EBITDA growth (p#18)
00:19:25 EU: strong commercial performance (p#19)
00:19:37 Towers: strong growth (p#20)
00:20:07 Systems Solutions: steady recovery (p#21)

📣 Christian Illek (CFO): Financials Q2-2022
00:20:34 Overview: strong financial growth (p#23)
00:21:33 Net Income: strong growth (p#24)
00:22:41 Net debt (financial): up on dividend, stake increase TM US, and F/X (p#25)

📣 Tim Höttges (CEO): Wrap-up
00:25:57 Main takeaways (p#27)

👉 Click on the blue timestamps below to get to the respective part of the video on YouTube.
In YouTube, you can find those chapter-links in the description of the video.

The subtitles of the video have been reviewed and optimized. (ongoing)
The full transcript (20 pages, PDF) can be downloaded here (pdf, 188.8 KB).

Questions are answered by Tim Höttges (CEO), Christian Illek (CFO) and Hannes Wittig (Head of IR).

00:28:17 Intro to Q&A

🙋‍♂️ 1. 00:28:42 Andrew J. Lee (Goldman Sachs)
-Macro sensitivity in B2B segment: now vs the fincancial crisis? What are leading indicators?

🙋‍♂️ 2. 00:33:00 Polo Tang (UBS)
-Share buyback of DT shares: what to expect in the midterm?
-DE mobile pricing: Market impact from O2D's intention to increase prices? Scope that DT will follow?

🙋‍♂️ 3. 00:37:56 Emmet Kelly (Morgan Stanley)
-Energy costs: Outlook + impact on EBITDA over the next 2-3 years?

🙋‍♂️ 4. 00:41:34 David Wright (Bank of America)
-Net debt leverage: potential to relax the targets?
-TMUS stake: intention to increase to above 50% ahead of the TMUS share-buyback?

🙋‍♂️ 5. 00:44:55 Adam M. Fox-Rumley (HSBC)
-DE FTTH rollout: plans for H2 2022?
-Telco tax in Hungary: any visibility if other countries will follow?

🙋‍♂️ 6. 00:49:14 Jakob Bluestone (Crédit Suisse)
-DE Broadband net-adds: should we expect a further slowdown or a rebound? Pressure from fixed wireless access?
-DE mobile net-adds: Can you comment on the performance on the Magenta brand?

🙋‍♂️ 7. 00:54:40 Robert Grindle (Deutsche Bank)
-M&A in Europe: What is your current thinking?
-Net debt and ex-US leverage: can you start talking about it to bring focus to the undervaluation and dividend cover of the ex-US part of DT?

🙋‍♂️ 8. 01:00:40 Georgios Ierodiaconou (Citi)
-TMUS stake: how do you go about a possible share issuance (true-up) to Softbank
-Leverage: timing of returning into corridor?
-CEO succession: how about press speculations?

🙋‍♂️ 9. 01:08:10 Joshua Mills (Exane)
-DE broadband market: momentum of alternative operators?
-US Spectrum acquisition: plans to acquire further spectrum?

🙋‍♂️ 10. 01:12:40 Stephen Malcolm (Redburn)
-TMUS accounting: differences between US-GAAP and IFRS in EBITDA?
-Energy costs: impact on consumer behaviour/spending?
-Energy shortages: perparation for possible blackouts in the winter?

🙋‍♂️ 11. 01:19:44 Ottavio Adorisio - (Societe Generale)
-DE broadband fiber wholesale: what is the reason for decline in net-adds?
-DE FTTH rollout: any stats from JVs (capex and number of households passed)?
-DE housing associations: update on DT activities and market feedback?
-DE new mobile tariffs by DT (family plans): why has this not been introduced earlier?

🙋‍♂️ 12. 01:26:26 James Ratzer (New Street Research)
-Dividend for fiscal year 2022 (timing of announcement): prior to Q3 results in November?
-Dividend for fiscal year 2022 (payout ratio): Variables?

🙋‍♂️ 13. 01:28:53 Usman Ghazi (Berenberg)
-Free cash-flow for ex-US: how you're thinking about the headroom that you've created?

🙋‍♂️ 14. 01:30:43 Simon Coles (Barclays)
-DE broadband pricing by DT: perspective of price increases?

Presentation slides

Quicklinks to chapters in the Interim Report H1-2022

▪ Highlights H1:
         ▪ Guidance raised for the 2022 financial year
         ▪ Corporate transactions: Sale of T-Mobile NL | Joint venture with IFM for FTTH rollout
         ▪ Investment in networks
         ▪ Cooperations, partnerships, and major deals
         ▪ Products, rate plans, and services
         ▪ Awards

▪ Significant events and transactions (H1 2022)
         ▪ Accounting policies
         ▪ War in Ukraine
         ▪ Coronavirus pandemic
         ▪ Changes in the composition of the Group
         ▪ Other transactions that had no effect on the composition of the Group

▪ Events after the reporting period (July 1 until Aug 11, 2022)
         ▪ Agreement with DigitalBridge and Brookfield on the Group’s cell tower business in Germany and Austria
         ▪ Proceedings against T Mobile US in consequence of the cyberattack on T Mobile US
         ▪ New limited partners admitted to infrastructure fund (DIV II)
         ▪ Agreements on the acquisition of spectrum licenses in the United States

▪ Overview

▪ Results of operations of the Group
         ▪ Financials: Net revenue, service revenue; Adjusted EBITDA AL, EBITDA AL; EBIT;
            Profit before income taxes; Net profit, adjusted net profit; Earnings per share,
            adjusted earnings per share; Special factors
         ▪ Employees

▪ Financial position of the Group: Balance sheet, net debt, free cash flow

▪ Other information
         ▪ Group organization, strategy, and management
         ▪ Executive bodies: Board of management supervisory board
         ▪ Related party disclosure

▪ Germany
         ▪ Business: Mobile, Fixed, Wholesale
         ▪ Financials: Total-/service revenues, EBITDA, EBIT, Capex

▪ US
         ▪ Business: Customers (prepaid/contract)
         ▪ Financials: Total-/service revenues, EBITDA, EBIT, Capex

▪ Europe
        ▪ Business: Customers, Mobile communications, Fixed network, FMC
        ▪ Financials: Total-/service revenues, EBITDA, EBIT, Capex 

▪ Systems Solutions
        ▪ Business: Overview
         ▪ Financials: Total-/service revenues, EBITDA, EBIT, Capex

▪ Group Development
        ▪ Business: Customers in NL
        ▪ Financials: Total-/service revenues, EBITDA, EBIT, Capex

▪ Group Headquarters and Group Services
        ▪ Financials: Total-/service revenues, EBITDA, EBIT, Capex

▪ Segment reporting (Table)

▪ The economic environment
         ▪ Macroeconomic development
         ▪ Overall economic risks
         ▪ Regulation:
                   ▪ EU roaming regulation
                   ▪ Approval of rates for copper-based wholesale services in DE for 10 years
                   ▪ Awarding of spectrum

Forecast

▪ Risks and opportunities
         ▪ Risks arising from the macroeconomic environment
         ▪ Procurement and supply risks
         ▪ Litigation
         ▪ Anti-trust proceedings
         ▪ Assessment of the aggregate risk position

▪ Contingencies
         ▪ Claims relating to charges for the shared use of cable ducts
         ▪ Proceedings against T‑Mobile US in consequence of the cyberattack on T‑Mobile US
         ▪ Claims for damages against Slovak Telekom following a European
         ▪ Commission decision to impose fines
         ▪ Compensation in connection with the catastrophic flooding in July 2021

▪ Other financial obligations
          ▪ Disclosures on financial instruments
          ▪ Disclosure on fair value
          ▪ Disclosures on credit risk

Pictures results Deutsche Telekom AG

Financial results first quarter 2022

On May 13, 2022 the Deutsche Telekom published its results for the first quarter 2022. You find all information and documents here.

Webcast-YT-q1
  • Net revenue up 6.2 percent to 28 billion euros in the first quarter of 2022
  • Adjusted EBITDA AL up 6.8 percent to 9.9 billion euros
  • § Free cash flow AL up 46.3 percent to 3.8 billion euros
  • Net profit quadrupled following sale of T-Mobile Netherlands
  • Guidance for 2022 financial year raised: adjusted EBITDA AL of more than 36.6 billion euros, free cash flow AL of more than 10 billion euros planned
  • Positive development of mobile service revenues in Germany
  • Demand for fixed-network alternatives at T-Mobile US
  • Strong growth figures in the Europe segment


Documents

Disclaimer for analysts' estimates

The Consensus has been issued by Deutsche Telekom AG for information purposes only and is not intended to constitute investment advice. It is based on estimates and forecasts of various analysts regarding our revenues, earnings and business developments. Such estimates and forecasts cannot be independently verified by reason of the subjective character. Deutsche Telekom gives no guarantee, representation or warranty and is not responsible or liable as to its accuracy and completeness.

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