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Deutsche Telekom’s systems solutions business stays stable in 2013

  • Deconsolidations in Italy and France leave their mark.
  • The EBIT improves for the full year and the fourth quarter.
  • Telekom IT continues to decrease the group's IT costs.

At T-Systems, revenue generated by the Market Unit - primarily external business with Deutsche Telekom's corporate customers - grew organically by 0.7 percent in the 2013 financial year. The Market Unit's revenue reported for the full year decreased by 1.8 percent year-on-year to EUR 7.7 billion. The deconsolidation of T-Systems Italia and the sale of the Systems Integration business unit in France, along with currency effects, had a negative impact in this context. In the fourth quarter, the Market Unit recorded a slight revenue decline in organic terms of 0.6 percent, and reported a decrease of 3.8 percent. The Market Unit recorded a 23.9-percent increase in adjusted EBIT to EUR 83 million in the fourth quarter of 2013 compared with the prior-year period. In the full year, the adjusted EBIT margin rose 1.4 percentage points compared with 2012 to 2.8 percent. Despite this increase, there is still a gap in profitability compared with the industry. This gap is to be closed in the future. To this end, T-Systems submitted extensive plans to change the business model in January. Order entry decreased by 5.5 percent to EUR 8.3 billion in 2013 as a whole, primarily owing to the fact that the major contract with the oil company Shell in the fourth quarter of 2012 was not matched by any comparable deal in 2013. Telekom IT - the Group's internal IT business in Germany - is continuing with its mandate of continuously cutting Deutsche Telekom's IT costs. Revenue declined accordingly by 19.4 percent in the fourth quarter to EUR 566 million. For the full year, revenue declined by EUR 334 million.

Systems Solutions a :

 

Q4 2013

millions of EUR

Q4 2012

millions of EUR

Change

%

FY 2013

millions of EUR

FY 2012

millions of EUR

Change

%

Order entry

2,377

3,622

(34.4)

8,259

8,737

(5.5)

Total revenue

2,613

2,829

(7.6)

9,491

10,016

(5.2)

Of which Market Unit

2,047

2,127

(3.8)

7,697

7,839

(1.8)

Adjusted EBITDA margin (%)

1.3

2.4

(1.1p)

1.6

1.1

0.5p

Adj. EBIT margin, Market Unit (%)

4.1

3.2

0.9p

2.8

1.4

1.4p

EBITDA

89

66

34.8

390

342

14.0

Adjusted EBITDA

207

240

(13.8)

806

747

7.9

Comments on the table: a The operations of Regional Services and Solutions (RSS) have been managed by the Germany operating segment since January 1, 2013, and no longer by the Systems Solutions operating segment, to allow a more focused market approach.

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