Unlike many of its European competitors, Deutsche Telekom held its net revenue more or less steady, at EUR 58.2 billion. The organic decline in revenue - i.e., adjusted for exchange rate effects and changes in the composition of the Group - was reduced from from 3.6 percent in 2011 to 2.7 percent. The adjusted EBITDA margin for the full year stood at 30.9 percent, a decline of around 0.9 percentage points year-on-year, largely due to the increase in market investments in the German mobile communications market, especially in the fourth quarter of around 27 percent compared with the fourth quarter of 2011. With success: In these three months alone, sales of smartphones increased to a record high of around 1.5 million, and the number of new contract customers under the Deutsche Telekom and Congstar brands increased by 226,000. Ongoing competitive and price pressure and regulatory decisions also had a negative impact on the reduced EBITDA margin.
Adjusted net profit totaled EUR 2.5 billion, 11.3 percent less than in the prior year. As of year-end, the reported net loss stood at EUR 5.3 billion, EUR 0.8 billion down from the end of the third quarter of 2012. The loss is almost entirely attributable to the impairment loss recognized in the United States in the third quarter of 2012 of EUR 7.4 billion net. As already explained when the figures for the first nine months of 2012 were announced, this non-cash, purely accounting effect is a consequence of the planned business combination of T-Mobile USA and the competitor MetroPCS. The applicable accounting standards require this impairment loss to be recognized.
"This loss of billions is not what it appears to be: We are not lacking in funds to drive forward the development of the Group," emphasized René Obermann. "As we said in December, we want to massively step up investments in the future again, to almost EUR 30 billion for 2013 to 2015."
In light of these substantial increases in investments, Deutsche Telekom expects free cash flow of approximately EUR 5 billion for the current financial year, as already announced at its Capital Markets Day in December. In 2013, adjusted EBITDA is expected to amount to around EUR 17.4 billion. Assuming successful completion of the transaction with MetroPCS, the expected adjusted EBITDA would be around EUR 18.4 billion, extrapolated to include MetroPCS for the full year.
Some additional notes:
- The number of customers with the Internet-based television service Entertain went up by 27 percent year-on-year to 2.0 million.
- The number of high-speed optical fiber lines increased by as much as 49 percent year-on-year to 0.9 million. Some 300,000 customers opted for fiber optic products in the past financial year. At the same time, line losses in Deutsche Telekom's traditional fixed network decreased by almost 20 percent compared with the prior year.\
- Net debt was down EUR 3.3 billion to EUR 36.9 billion
- The mobile contract customer base in Germany grew by 1.3 million in the past year. 569,000 of these were new customers of the Deutsche Telekom and Congstar brands, while the rest of the additions were in the fast growing, but much lower revenue reseller segment (service providers).
- In Germany, the number of cell phones sold by the company in the full year increased to 5.6 million. The percentage of smartphones, including primarily Android-based devices and the Apple iPhone, increased by 11 percentage points against 2011 to 73 percent. Around 1.5 million smartphones were sold in the fourth quarter of 2012 alone, making it the strongest sales quarter to date.
- Customer numbers were up at T-Mobile USA for the first time since 2009. The company's customer base grew by around 200,000 new customers compared with the end of 2011 to 33.4 million. At the same time, monthly revenue in this customer group increased by 11.2 percent year-on-year in the fourth quarter to USD 27.7, which is half the revenue of a contract customer. The number of branded contract customers declined by around 2 million in the full year.