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DEUTSCHE TELEKOM AG

(DTE)
  Report
Delayed Quote. Delayed Xetra - 10/21 11:39:12 am
16.51 EUR   -0.12%
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Deutsche Telekom : 2020 Financial report

02/26/2021 | 01:11am EDT
  • Increase in revenue of 25.4 percent to 101.0 billion euros
  • Adjusted EBITDA AL increased by 41.6 percent to 35.0 billion euros
  • Free cash flow AL of 6.3 billion euros in 2020 - guidance exceeded
  • Adjusted net profit up by 15.5 percent to 5.7 billion euros
  • 388,000 broadband customer additions in Germany
  • Larger T-Mobile US records 5.5 million postpaid customer additions
  • Guidance for 2021: adjusted EBITDA AL of around 37 billion euros and free cash flow AL of around 8.0 billion euros

Triple digits! Deutsche Telekom broke new ground in the 2020 financial year. Net revenue increased by 25.4 percent to 101.0 billion euros. This significant growth was mainly driven by the takeover of the competitor Sprint in the United States. But even in organic terms, i.e., excluding the change in the composition of the Group and exchange rate effects, revenue grew by 3.0 percent in the year just ended compared to 2019.

Adjusted EBITDA AL saw an even more pronounced increase, rising by 41.6 percent to 35.0 billion euros, and by 7.9 percent in organic terms. Free cash flow AL amounted to 6.3 billion euros. Deutsche Telekom thereby exceeded its guidance for the year, which had just been raised in November. The Group achieved this despite the negative effects of the coronavirus pandemic, which included lower roaming revenues due to travel restrictions, shop closures, and impeded business with corporate customers.

'We made history in 2020. We added a substantial and important chapter to Deutsche Telekom's story,' said CEO Tim Höttges. 'We closed a groundbreaking deal in the United States, improved our market position in Europe and at the same time made an important contribution to managing the impact of the coronavirus pandemic with our stable networks.'

With almost 17 billion euros, Deutsche Telekom invested nearly 30 percent more in terms of cash capex than in the prior year, with most of it going into networks on both sides of the Atlantic. T-Mobile US achieved the highest population coverage in the country with its 5G network. In Germany too, Deutsche Telekom is well ahead of the competition in terms of the availability of its 5G network.

Adjusted net profit increased 15.5 percent year-on-year to 5.7 billion euros, whereas unadjusted net profit was up 7.5 percent to 4.2 billion euros.

The Group expects adjusted EBITDA AL of around 37 billion euros for 2021. Free cash flow AL is expected to total some 8.0 billion euros.

Germany - lead in broadband

Telekom closed 2020 with another very strong quarter in the broadband business. Between October and December, the Company won 121,000 new broadband customers, the highest figure recorded for many years. At the end of the year, Telekom reported 14.1 million broadband customers, 388,000 more than a year earlier.

MagentaEINS, the product package combining fixed-network and mobile communications, passed the 5 million customer mark in the fourth quarter. The product has proven to be successful in terms of both revenue development and reducing churn.

Mobile service revenues were again impacted by the pandemic-induced travel restrictions in the fourth quarter of 2020. Decreases in roaming and visitor revenues resulted in a 1.7 percent decline in service revenues compared with the prior year. Adjusted for the coronavirus effect, there was an increase of 1.1 percent. Telekom recorded 206,000 in branded customer additions. That was more than twice as many as in the fourth quarter of 2019, when there was growth of 97,000.

Adjusted EBITDA AL in the Germany segment increased by 1.6 percent year-on-year in the full year 2020 to 9.2 billion euros. At 23.8 billion euros, revenue was up 0.2 percent against 2019.

United States - synergies ahead of plan

T-Mobile US recorded 1.7 million net customer additions in the fourth quarter. Of these, 824,000 were attributable to the lucrative postpaid phone customer segment. As of the year-end, the customer base totaled 102 million. This was up 50 percent against the end of 2019, driven primarily by the takeover of Sprint as of April 1, 2020.

The Sprint transaction also had an impact on the financial figures. In 2020, total revenue increased by 55 percent to 70.1 billion U.S. dollars. Adjusted EBITDA AL recorded an even greater increase of 92.8 percent to 24.0 billion U.S. dollars.

Already in 2020, T-Mobile realized synergies of 1.3 billion U.S. dollars from the takeover of Sprint. A quarter of the voice and data traffic of former Sprint postpaid customers has already been moved to the T-Mobile network.

Europe - growth despite pandemic

The year just ended was dominated by the coronavirus pandemic for many European national companies. Business was impeded by shop closures and travel restrictions. Despite this headwind, earnings still increased. Adjusted EBITDA AL grew in 2020 by 2.1 percent in organic terms to 3.9 billion euros. Revenue in the Europe operating segment remained stable in organic terms at 11.3 billion euros.

The national companies recorded steady growth in all customer categories. In the fourth quarter alone, the number of mobile contract customers increased by 219,000 and the number of broadband customers by 87,000. The number of users of converged fixed-mobile product packages increased by 248,000. At year-end, the customer base was 19.5 percent larger than a year earlier.

Systems Solutions - big deals only at year-end

At the end of an otherwise difficult year, major corporate customers like Shell, Deutsche Post DHL, and Heineken extended their long-term contracts with T Systems. Thanks to this year-end spurt, order entry was down only slightly by 3.2 percent to 4.6 billion euros in 2020.

For the rest of the financial figures, the impact of the pandemic and the resulting general investment restraint among corporate customers were clearly in evidence. Total revenue at T-Systems fell by 5.6 percent in 2020 to 4.2 billion euros. Adjusted EBITDA AL decreased 6.0 percent to 235 million euros.

Group Development - top in the Netherlands

T-Mobile Netherlands is now the largest mobile operator in the Netherlands in terms of customer numbers. With the takeover of Simpel, which was completed in December, the company now has 6.8 million mobile customers. In organic terms, T-Mobile Netherlands won 200,000 mobile contract net additions in the past year. Total revenue was up 1.9 percent year-on-year to 1.9 billion euros. Adjusted EBITDA AL increased by 10.4 percent to 554 million euros.

The number of sites in the cell tower business increased by 4.0 percent in the past year to 35,700. Revenue increased 4.7 percent to 1.0 billion euros. Adjusted EBITDA AL in the cell tower business amounted to 587 million euros in 2020. 4.3 percent more than in the previous year.

The Deutsche Telekom Group at a glance

Q4

2020

millions of

Q4

2019

millions of

Change

%

FY
2020

millions of

FY
2019

millions of

Change

%

Net revenue

27,622

21,361

29.3

100,999

80,531

25.4

Proportion generated internationally

%

76.1

69.8

6.3p

75.5

69.5

6.0p

EBITDA

11,053

6,643

66.4

38,633

27,120

42.5

Adjusted EBITDA

10,438

7,054

48.0

40,374

28,708

40.6

Adjusted EBITDA AL

8,952

6,030

48.5

35,017

24,731

41.6

Net profit (after non-controlling interests)

1,671

654

n.a.

4,158

3,867

7.5

Adjusted net profit (after non-controlling interests)

1,643

1,016

61.7

5,715

4,948

15.5

Free cash flowa

1,889

2,537

-25.5

10,756

10,133

6.1

Free cash flow ALa

942

1,763

-46.6

6,288

7,013

-10.3

Cash capexb

5,814

3,150

84.6

18,694

14,357

30.2

Cash capexb

(before spectrum)

5,468

3,075

77.8

16,980

13,118

29.4

Net debt

120,227

76,031

58.1

Number of employeesc

226,291

210,533

7.5

Comments on the table:
Sprint has been included in Deutsche Telekom's consolidated financial statements as a fully consolidated subsidiary since April 1, 2020. As a result of the change in the composition of the Group during the course of the year, the remeasured assets and liabilities were recognized as of this date, and all income and expenses generated from the date of first-time consolidation are included in Deutsche Telekom's consolidated income statement. This affects the comparability of the figures for the current reporting period with the prior-year figures.
a Before dividend payments and spectrum investment, before interest payments for zero-coupon bonds, and before repayment of forward-payer swaps at T-Mobile US.
b Cash outflows for investments in property, plant and equipment, and intangible assets (excluding goodwill).
c At the reporting date.

Operating segments: development of operations

Q4

2020

millions of

Q4

2019

millions of

Change

%

FY
2020

millions of

FY
2019

millions of

Change

%

Germany

Total revenue

6,260

6,223

0.6

23,779

23,730

0.2

EBITDA

2,129

2,238

-4.9

8,525

8,668

-1.6

Adjusted EBITDA

2,346

2,316

1.3

9,276

9,121

1.7

Adjusted EBITDA AL

2,333

2,308

1.1

9,231

9,083

1.6

Number of employeesa

66,051

69,117

-4.4

United Statesb

Total revenue

17,184

10,791

59.2

61,208

40,420

51.4

US-$

20,505

11,950

71.6

70,117

45,236

55.0

EBITDA

7,787

3,300

n.a.

24,852

13,265

87.4

Adjusted EBITDA

6,724

3,403

97.6

25,122

13,809

81.9

Adjusted EBITDA AL

5,539

2,710

n.a.

20,997

11,134

88.6

US-$

6,604

3,001

n.a.

24,033

12,463

92.8

Europe

Total revenue

2,992

3,080

-2.9

11,335

11,587

-2.2

EBITDA

934

1,050

-11.0

4,153

4,223

-1.7

Adjusted EBITDA

1,062

1,084

-2.0

4,341

4,364

-0.5

Adjusted EBITDA AL

958

962

-0.4

3,910

3,910

0.0

Systems Solutions

Order entry

2,085

1,463

42.5

4,588

4,740

-3.2

Total revenue

1,084

1,170

-7.4

4,178

4,424

-5.6

Adj. EBIT margin (%)

1.8

-0.9

2.7p

-0.3

-2.0

1.7p

EBITDA

38

10

n.a.

140

54

n.a.

Adjusted EBITDA

91

101

-9.9

350

364

-3.8

Adjusted EBITDA AL

62

74

-16.2

235

250

-6.0

Group Development

Total revenue

740

729

1.5

2,883

2,797

3.1

EBITDA

349

322

8.4

1,343

1,427

-5.9

Adjusted EBITDA

337

335

0.6

1.386

1,330

4.2

Adjusted EBITDA AL

266

259

2.7

1,101

1,033

6.6

Comments on the table:
Consistent with efforts to implement the Group strategy pillar 'Lead in business productivity,' Deutsche Telekom combined its B2B telecommunications business within its Germany operating segment as of July 1, 2020. This transfer affected the Germany, Europe, Systems Solutions, and GHS operating segments. Prior-year comparatives for the development of operations, customer numbers, headcount, and order entry were adjusted retrospectively. This internal reorganization does not affect the Group's figures.
a At the reporting date.
b Sprint has been included in Deutsche Telekom's consolidated financial statements as a fully consolidated subsidiary since April 1, 2020. Comparative figures have not been adjusted.

Operating segments: development of customer numbers in the fourth quarter of 2020

Dec. 31, 2020

thousands

Sep. 30, 2020

thousands

Change

thousands

Change

%

Germany

Mobile customers

48,526

47,844

682

1.4

Of which contract customers

26,037

25,744

293

1.1

Fixed-network lines

17,590

17,602

-12

-0.1

Broadband lines

14,118

13,997

121

0.9

Of which optical fibera

9,515

9,246

269

2.9

Television (IPTV, satellite)

3,864

3,787

77

2.0

Unbundled local loop lines (ULLs)

4,101

4,235

-134

-3.2

United Statesb

Customersc, d

102,064

100,362

1,702

1.7

Of which postpaid customers

81,350

79,732

1,618

2.0

Of which prepaid customers

20,714

20,630

84

0.4

Europe

Mobile customers

45,619

45,743

-124

-0.3

Of which contract customersd

26,918

26,699

219

0.8

Fixed-network lines

9,084

9,062

22

0.2

Of which IP-basede

8,439

8,381

58

0.7

Broadband customers

6,953

6,866

87

1.3

Television (IPTV, satellite, cable)

5,057

4,986

71

1.4

Group Development

Netherlands

Mobile customers

6,803

5,761

1,042

18.1

Fixed-network lines

682

661

21

3.2

Broadband lines

668

647

21

3.2

Comments on the table:
Consistent with efforts to implement the Group strategy pillar 'Lead in business productivity,' Deutsche Telekom combined its B2B telecommunications business within its Germany operating segment as of July 1, 2020. This transfer affected the Germany, Europe, Systems Solutions, and GHS operating segments. Prior-year comparatives for the development of operations, customer numbers, headcount, and order entry were adjusted retrospectively. This internal reorganization does not affect the Group's figures.
a Sum of all FTTx access lines (e.g., FTTC/VDSL, vectoring, and FTTH/B).
b Sprint has been included in Deutsche Telekom's consolidated financial statements as a fully consolidated subsidiary since April 1, 2020. Comparative figures have not been adjusted.
c Starting in Q1 2020, T-Mobile US discontinued reporting of wholesale customers due to the expansion of M2M and Internet of Things (loT) products and instead will continue to focus on branded customer reporting.
d M2M cards (machine-to-machine) were reclassified Group-wide as of January 1, 2020 and assigned exclusively to the prepaid customer segment. The portion of M2M cards which had previously been recognized in the contract customer segment was reclassified accordingly. Comparative figures have been adjusted retrospectively.
e Prior-quarter comparative for IP-based-fixed network lines in the Czech Republic was adjusted as part of the standardization of the underlying customer definition.

Operating segments: development of customer numbers in year-on-year comparison

Dec. 31, 2020
thousands

Dec. 31, 2019
thousands

Change

thousands

Change

%

Germany

Mobile customers

48,526

46,189

2,337

5.1

Of which contract customers

26,037

25,291

746

2.9

Fixed-network lines

17,590

17,824

-234

-1.3

Broadband lines

14,118

13,730

388

2.8

Of which optical fibera

9,515

8,529

986

11.6

Television (IPTV, satellite)

3,864

3,618

246

6.8

Unbundled local loop lines (ULLs)

4,101

4,638

-537

-11.6

United Statesb

Customersc, d

102,064

67,895

34,169

50.3

Of which postpaid customers

81,350

47,034

34,316

73.0

Of which prepaid customers

20,714

20,860

-146

-0.7

Europe

Mobile customers

45,619

46,165

-546

-1.2

Of which contract customersd

26,918

26,245

673

2.6

Fixed-network lines

9,084

9,105

-21

-0.2

Of which IP-basede

8,439

8,311

128

1.5

Broadband customers

6,953

6,672

281

4.2

Television (IPTV, satellite, cable)

5,057

4,945

112

2.3

Group Development

Netherlands

Mobile customers

6,803

5,610

1,193

21.3

Fixed-network lines

682

619

63

10.2

Broadband lines

668

605

63

10.4

Comments on the table:
Consistent with efforts to implement the Group strategy pillar 'Lead in business productivity,' Deutsche Telekom combined its B2B telecommunications business within its Germany operating segment as of July 1, 2020. This transfer affected the Germany, Europe, Systems Solutions, and GHS operating segments. Prior-year comparatives for the development of operations, customer numbers, headcount, and order entry were adjusted retrospectively. This internal reorganization does not affect the Group's figures.
a Sum of all FTTx access lines (e.g., FTTC/VDSL, vectoring, and FTTH/B).
b Sprint has been included in Deutsche Telekom's consolidated financial statements as a fully consolidated subsidiary since April 1, 2020. Comparative figures have not been adjusted.
c Starting in Q1 2020, T-Mobile US discontinued reporting of wholesale customers due to the expansion of M2M and Internet of Things (loT) products and instead will continue to focus on branded customer reporting.
d M2M cards (machine-to-machine) were reclassified Group-wide as of January 1, 2020 and assigned exclusively to the prepaid customer segment. The portion of M2M cards which had previously been recognized in the contract customer segment was reclassified accordingly. Comparative figures have been adjusted retrospectively.
e The prior-quarter comparative for IP-based-fixed network lines in the Czech Republic was adjusted as part of the standardization of the underlying customer definition.

This media information contains forward-looking statements that reflect the current views of Deutsche Telekom management with respect to future events. They are generally identified by the words 'expect,' 'anticipate,' 'believe,' 'intend,' 'estimate,' 'aim,' 'goal,' 'plan,' 'will,' 'seek,' 'outlook,' or similar expressions and include generally any information that relates to expectations or targets for revenue, adjusted EBITDA, or other performance measures. Forward-looking statements are based on current plans, estimates, and projections, and should therefore be considered 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. They include, for instance, the progress of Deutsche Telekom's staff-related restructuring measures and the impact of other significant strategic or business initiatives, including acquisitions, dispositions, and business combinations. In addition, movements in exchange rates and interest rates, regulatory rulings, stronger than expected competition, technological change, litigation and regulatory developments, among other factors, may have a material adverse effect on costs and revenue development. If these or other risks and uncertainties materialize, or if the assumptions underlying any of these statements prove incorrect, Deutsche Telekom's actual results may be materially different from those expressed or implied by such statements. Deutsche Telekom can offer no assurance that its expectations or targets will be achieved. Without prejudice to existing obligations under capital market law, Deutsche Telekom does not assume any obligation to update forward-looking statements to account for new information or future events or anything else. In addition to figures prepared in accordance with IFRS, Deutsche Telekom presents alternative performance measures, e.g., EBITDA, EBITDA AL, adjusted EBITDA, adjusted EBITDA AL, adjusted EBITDA margin, adjusted EBIT, EBIT margin, adjusted net profit/loss, adjusted earnings per share, free cash flow, free cash flow AL, gross debt, and net debt. These measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with IFRS. Alternative performance measures are not subject to IFRS or any other generally accepted accounting principles. Other companies may define these terms in different ways.

​​​About Deutsche Telekom: Company profile

Disclaimer

Deutsche Telekom AG published this content on 26 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 February 2021 06:10:07 UTC.


© Publicnow 2021
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Financials
Sales 2021 107 B 125 B 125 B
Net income 2021 4 410 M 5 127 M 5 127 M
Net Debt 2021 128 B 148 B 148 B
P/E ratio 2021 17,2x
Yield 2021 3,68%
Capitalization 78 314 M 91 191 M 91 056 M
EV / Sales 2021 1,92x
EV / Sales 2022 1,87x
Nbr of Employees 221 909
Free-Float 81,3%
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Number of Analysts 24
Last Close Price 16,51 €
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Managers and Directors
Timotheus Höttges Chairman-Management Board & CEO
Christian P. Illek Chief Financial Officer
Ulrich Lehner Chairman-Supervisory Board
Claudia Nemat Chief Technology & Innovation Officer
Lothar Schröder Vice Chairman-Supervisory Board
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