High nonscheduled write-downs decreased the net loss to EUR 24.5 billion in the first nine months of 2002 - net debt decreased to EUR 64 billion despite the acquisition in the Netherlands - Group revenue increased by approximately 12 percent to EUR 39.2 billion - Group EBITDA adjusted for special influences increased by 5.6 percent to EUR 12 billion - sale of VoiceStream to safeguard deleveraging targets not necessary - reduction of a total of 43,400 jobs net or 54,700 gross by 2005 planned - Supervisory Board and Board of Management recommend to the 2003 Shareholders Meeting to suspend the dividend - new Chairman of the Board of Management, Kai-Uwe Ricke, wants to considerably improve the individual divisions efficiency. Deutsche Telekom increased its revenue in the first nine months of 2002 by 12 percent from EUR 35 billion to EUR 39.2 billion compared to the same period last year. In the same period, Group EBITDA excluding special influences increased by 5.6 percent from EUR 11.3 billion to EUR 12 billion. In addition to a slight reduction in net debt to EUR 64 billion, this strong operational development is offset by a net loss of approximately EUR 24.5 billion - which was mainly due to nonscheduled write-downs.
Against this backdrop, the departing Chairman of Deutsche Telekom AG's Board of Management, Prof. Helmut Sihler, presented the results of the strategic review which are designed to strengthen the company's financial scope for action in the long term. "On the basis of the measures adopted, there will be a sustained improvement of Deutsche Telekom's situation", Mr. Sihler said with reference to the need to reorient the company.
"One thing is clear: The level of the Group's debt, the trends that we are seeing in the stock markets and the current valuation of the telecommunications sector at a time when the economic climate is deteriorating, all force us to take urgent action. Our future lies with debt reduction and growth. This is the only way for us to bring about a sustained improvement in our results", the newly elected Chairman of the Board of Management, Kai-Uwe Ricke, emphasized. "A properly-managed Deutsche Telekom should be a cash machine. This is an area where I see considerable room for improvement." According to Ricke, the four-pillar strategy remains the right approach for realizing growth potential. "At the same time, however, individual divisions must also become much more efficient." To achieve this goal, he will devolve even more responsibility to the divisions and give them greater authority to take their own decisions. At the same time, this ensures that Deutsche Telekom will stay as close as possible to its customers. And vice versa, this means that the strategic management holding will be clearly streamlined.
Results of the strategic review Deutsche Telekom is aiming to achieve a level of net debt by the end of 2003 which equates to roughly three times the EBITDA expected for the full 2003 financial year. Based on the forecast EBITDA of EUR 16.7 to EUR 17.7 billion, this generates a target corridor of EUR 49.5 to EUR 52.3 billion net debt. In order to achieve this target, Deutsche Telekom, among other things, will withdraw from non-strategic business areas such as real estate, the remainder of the cable business and other shareholdings and business units. These sales are to generate proceeds of EUR 6.2 to EUR 8.5 billion. In addition, Deutsche Telekom intends to reduce its capital expenditure in 2003 to between EUR 6.7 billion and EUR 7.7 billion.
Within the framework of the strategic review, Deutsche Telekom decided to take into account the changed economic environment and to test all assets for impairment. Consequently, the following valuation adjustments were necessary in the third quarter: