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T-Systems significantly increases order entry in the fourth quarter

  • Growing overall revenues and external business despite the global financial crisis.
  • Rising adjusted EBIT and adjusted EBIT margin.
  • Expanding number of cloud contracts.

In the 2012 financial year, T-Systems recorded order entry of EUR 8.7 billion, up some 18 percent year-on-year . This encouraging development was driven by major contracts in the fourth quarter with oil company Shell and the state of Lower Saxony. The extension of the contract with Shell for another five years in particular shows that T-Systems has further improved its position in the strategically important market for cloud services. Despite persistent price pressure, external revenue was up 0.6 percent year-on-year at EUR 6.6 billion. Total revenue also increased by 0.6 percent to EUR 10 billion. This increase is due to strong international revenue, which rose by some 6 percent compared with 2011 to EUR 3.2 billion. The company is successfully counteracting the ongoing price pressure in the industry with cost-cutting and efficiency measures and improved its adjusted EBIT margin steadily over the course of the year to 2.4 percent in the fourth quarter of 2012. T-Systems once again recorded significant successes in the area of intelligent networks in 2012, such as the major contract from Presbyterian, an operator of hospitals in the United States. In addition to IT services from the cloud, the contract covers the joint development of new e-health applications in the future. In the growth area of the connected car, automotive group Daimler is working with Deutsche Telekom to provide in-car online services. Deutsche Telekom developed the communications infrastructure for the multimedia system Command Online in Mercedes Benz vehicles. This will allow the driver and passengers to use applications via the Internet while in the vehicle, including real-time traffic information, mobility services, personal radio, and access to social networks. Systems Solutions operating segment*:

 

Q4 2012

millions of EUR

Q4 2011

millions of EUR

Change

%

FY 2012

millions of EUR

FY 2011

millions of EUR

Change

%

Total revenue

2,829

2,694

5.0

10,016

9,953

0.6

Net revenue

1,771

1,726

2.6

6,609

6,567

0.6

Order entry

3,622

1,928

87.9

8,737

7,396

18.1

EBIT

(60)

(62)

3.2

(299)

(290)

(3.1)

Adjusted EBIT

67

54

24.1

110

23

n.a.

Adjusted EBIT margin

2.4%

2.0%

0.4p

1.1%

0.2%

0.9p

EBITDA

125

114

9.6

350

379

(7.7)

Adjusted EBITDA

240

220

9.1

747

672

11.2

Adjusted EBITDA margin

8.5%

8.2%

(0.3p)

7.5%

6.8%

0.7p

Number of employees (average)

52,991

52,213

1.5

52,742

52,241

1.0

Comment on the table: As of July 1, 2012, Deutsche Telekom reorganized the Group's IT infrastructure and pooled the existing units from the Germany operating segment and Group Headquarters & Shared Services into the Systems Solution operating segment as the new Telekom IT unit. The prior-year figures have been adjusted for better comparabilit

This media release 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 non-GAAP financial performance measures, including, among others, EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted EBIT, adjusted net income, free cash flow, gross debt, and net debt. These non-GAAP measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with IFRS. Non-GAAP financial performance measures are not subject to IFRS or any other generally accepted accounting principles. Other companies may define these terms in different ways.

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