Group revenue increases in first quarter by 16 percent to EUR 12.9 billion -T-Mobile increases revenue by 66 percent to almost EUR 4.5 billion -EBITDA of the mobile communications group doubles to EUR 1.2 billion -VoiceStream contributes positive EBITDA for the first time - Revenue increase of 10 percent expected for the entire 2002 financial year - EBITDA growth will accelerate considerably in the course of 2002 In the first quarter of 2002, Deutsche Telekom continued its positive operational development of the previous year. Group revenue is expected to increase in the first three months of 2002 by around 16 percent over the first quarter of 2001 to approximately EUR 12.9 billion. This increase is attributable in particular to the consolidation of VoiceStream from June 1, 2001. "The adjusted EBITDA increased by a one-digit percentage point in the first quarter of 2002. We are thus well within expectations and anticipate seeing EBITDA growth accelerate in the course of the current year. The main driver will be VoiceStream, whose EBITDA is now positive following the negative influences in the second half of 2001", said Dr. Ron Sommer, Chairman of Deutsche Telekom AG, on Tuesday in Bonn at the Press Conference on Deutsche Telekom AG's Financial Statements.
T-Mobile International was the strongest growth driver. The Group's revenue increased more than 66 percent to almost EUR 4.5 billion over the same period of the previous year. At almost EUR 1.4 billion, VoiceStream thus already accounts for more than 30 percent of the Group's revenue. Subscriber growth also continued. In the majority shareholdings, growth increased 45 percent over the first quarter of 2001, and in the minority shareholdings, 51 percent. VoiceStream acquired almost half a million new customers in the first three months. EBITDA in the T-Mobile group has doubled compared to the first quarter of 2001 and now amounts to EUR 1.2 billion. For the first time, VoiceStream was able to contribute to this with a positive EBITDA amounting to EUR 106 million shown in accordance with German GAAP. In the fourth quarter, VoiceStream's EBITDA was still negative (- EUR 71 million).
Whereas a positive trend in the central cash indicator " the adjusted EBITDA " was evident at T-Mobile , T-Online and T-Systems , T-Com has made its mark in intense competition. The number of call minutes increased by over 10 percent to 245 billion. Revenue and EBITDA decreased slightly, however, as a result of earlier price reductions, in particular in the form tariff options, and regulatory and competitive circumstances. This development must be seen in the light of an overall market in which, for example, the tariffs for the most important international routes decreased again by up to 26 percent between January 2001 to January 2002. T-Com , on the other hand, is expecting a positive effect in the course of the year from the increase of EUR 0.65 in the monthly rental charges for analog and digital lines from May 1. Deutsche Telekom will publish detailed figures on the first quarter on May 22.
Accelerated EBITDA growth in the 2002 financial year Deutsche Telekom's net revenue in the current year is expected to be considerably higher than in 2001. The Group expects an increase of around 10 percent. In order to increase the Group's profitability, a group-wide value enhancement program was launched in 2001, the core measures of which will form the basis for us to achieve our objectives in terms of growth and income in 2002. "We share the analysts- current estimate for the Group EBITDA in 2002. The latest range is between EUR 15.9 billion and EUR 16.9 billion", underlined Chief Financial Officer Dr. Karl-Gerhard Eick. Group EBITDA is expected to accelerate from single-digit to double-digit percentage growth in the second half of the year.
Investments in property, plant and equipment are expected to decrease in 2002 by around EUR 1 billion to EUR 9 billion compared with actual figures for 2001. Due to the strong momentum in EBITDA, lower investment in property, plant and equipment and the reduced dividend, Deutsche Telekom expects a positive free cash flow this year amounting to between EUR 0.5 billion and EUR 1.5 billion. Looking further ahead up to 2004, the company continues to anticipate double-digit average growth of revenue and EBITDA.
The Group's four divisions are clearly positioned for the current financial year. T-Mobile is aiming to increase the net revenue of all its companies further. The goal in the USA is to further expand the market share and thus ensure that the results continue to generate positive EBITDA. The developments in the first three months are pointing in this direction. Entry into the California and Nevada markets, scheduled for July this year, and the resulting enhanced reach, will provide additional impetus for growth.
T-Online is pushing ahead with its aim to become a leading Internet media network. Pay content is expected to make an ever increasing contribution to higher profitability. In its national operations, T-Online has already achieved a positive EBITDA. This goal is expected to be achieved throughout the Group in the course of this financial year.
T-Systems has an outstanding position in its market environment - no other provider offers a comparable range of services. As one of the driving forces for growth within the Deutsche Telekom Group, this division should experience additional revenue growth despite moderate market growth.
T-Com remains the strong backbone of the Group. Some 50 percent of our operational earnings continue to be generated in the fixed network.
This year, the marketing efforts - especially in the area of T-DSL - are to continue. With 2.4 million customers, Deutsche Telekom is already the market leader among European and American providers. The goal now is to expand this position: T-DSL 1500 (1.5 Mbit/s downstream) is scheduled for launch in May this year, initially in the metropolitan areas of Berlin, Munich, Hamburg and Stuttgart.
Positive operational development in the 2001 financial year Deutsche Telekom recorded a continued positive development of its operational business in the 2001 financial year, although the company posted a net loss. This is mainly attributable to investments in the future, the effects of which are considerable amortization of goodwill and licenses, but which have no influence on the company's financial strength. "Currently, the major growth companies in our industry around the world are experiencing such linkage between net losses and positive development of operations", underlined Dr. Sommer. The Group's net revenue increased by 18 percent compared with 2000, from EUR 40.9 billion to EUR 48.3 billion. The most important factor driving the growth of net revenue was mobile communications, followed by the systems solutions business. Internet operations also developed positively.
Deutsche Telekom's companies outside Germany made a disproportionately large contribution to the development of net revenue. International revenue increased more than 70 percent over the previous year " from EUR billion 7.8 to EUR 13.2 billion. As a result, the international proportion of the Group's revenue increased from 19 percent to some 27 percent. Deutsche Telekom also continued its growth course on the German market, where net revenue increased by 5.8 percent. With this figure, Deutsche Telekom grew faster than the market, which grew by a total of only 4.7 percent in 2001.
Reduction of debt has top priority After the phase of strong growth through acquisitions, Deutsche Telekom's highest priority is now the reduction of our net debt, which increased to EUR 67.2 billion in the first quarter of 2002 as expected as a result of the acquisition of the remaining shares in debis Systemhaus. Since the Federal Cartel Office has prohibited the sale of the cable network to Liberty Media, and since any T-Mobile IPO will depend on improvement of the situation on the stock markets, Deutsche Telekom has, as announced, presented an additional package of measures for debt reduction. A dividend of EUR 0.37 per share is to be proposed to the Shareholders' Meeting. The reduction compared with the dividend paid in the previous year will allow Deutsche Telekom to reduce its payments by EUR 1 billion. In addition, investments in property, plant and equipment and costs are to be cut. The reduction in investments in property, plant and equipment alone will amount to approximately EUR 1 billion per year. Furthermore, Deutsche Telekom will push ahead with sales of assets that are not essential to operations - such as real estate and cable companies.