Wednesday, August 5, 2009

Deutsche Telekom On-Target with Q2, Stable Trends

Deutsche Telekom reported Q2 revenue of EUR 16.2 billion, up 7.4 percent, and EBITDA adjusted for special factors by up 8.4 percent to EUR 5.3 billion. Adjusted net profit grew by 19.4 percent year-on-year in Q2 to EUR 0.8 billion. The Greek company OTE contributed EUR 1.5 billion to net revenue and EUR 0.5 billion to adjusted EBITDA of the Group in the second quarter of 2009.

The company cited its cost cutting measures for the stable performance in difficult economic conditions. As of June 30, the cost basis fell by EUR 4.9 billion compared with 2005.

"We took resolute action at the right time in a difficult environment. The figures for the second quarter make us confident for the full year. Hence, we confirm our forecast for 2009," said Chairman of the Board of Management René Obermann.

As of June 30, 2009, Deutsche Telekom served some 150 million mobile customers worldwide, up by 8 million on a like-for-like basis compared to a year earlier. In the fixed network, the number of retail broadband customers in Germany and abroad grew by 16.7 percent in the same period from 12.4 million to 14.5 million.

Some highlights for the quarter:

Mobile Communications

  • Driven by the inclusion of OTE's mobile subsidiary COSMOTE, the European mobile communications companies recorded year-on-year revenue growth of 6.0 percent. Adjusted EBITDA rose by 5.3 percent. Compared with the first half of 2008, revenue increased by 3.9 percent and EBITDA fell by 1.4 percent.

  • Measured in euros, T-Mobile USA recorded a revenue rise of 15.7 percent and an increase in EBITDA of 12.1 percent year-on-year in the first half of the year. However, these increases are primarily attributable to exchange rate effects. In US dollar terms, revenue increased by 0.8 percent and EBITDA declined by 2.3 percent.

  • Revenue at T-Mobile Deutschland was down 2.2 percent on the prior-year period in the first six months of the year and stood at EUR 3.8 billion.

  • Data revenues at the Western and Central European mobile communications companies increased by 30 percent year-on-year in the second quarter to EUR 455 million. Growth in the United States was even more pronounced, with data revenues increasing by 42 percent year-on-year to USD 526 million

  • T-Mobile USA added 325,000 net new customers in Q2, down from 415,000 in the first quarter of 2009 and 668,000 in the second quarter of 2008. Contract customer churn of 2.2% in the second quarter, down from 2.3% in Q12009, but up from 1.9% in Q2 2008. Data ARPU growth accelerated to 15% year-on-year from 11% year-on-year in the first quarter of 2009. Blended Average Revenue Per User was $48 in Q2 2009, in line with Q1 2009 but down from $52 in Q2 2008. Contract ARPU was $52 in Q2 2009, in line with Q1 2009, but down from $55 in the second quarter of 2008.

Broadband/Fixed Network

  • In Germany, revenue decreased by 5.4 percent year-on-year in the first half of 2009 to EUR 9.6 billion. This decline is again primarily attributable to the continuing line losses resulting from increased competition driven by regulation, the popularity of complete packages with a flat-rate component, and falling usage-related charges. In the second quarter of 2009, revenue decreased 5.1 percent to EUR 4.7 billion compared with the same period in 2008.

  • T-Home Deutschland recorded adjusted EBITDA of EUR 3.2 billion in the first six months of 2009 and improved the EBITDA margin compared with the prior-year period to 33.4 percent.

  • T-Home posted a market share of 59 percent of new DSL customers in the second quarter. For the third quarter, Deutsche Telekom anticipates a much smaller share of the new DSL customer market in light of the expiration of a large number of agreements for the highly successful complete packages sold in 2007 and the resulting increase in cancellation figures. The target for the full year 2009 remains unchanged at a market share of more than 45 percent of new additions.

  • As of the end of the first half of 2009, 721,000 Entertain (IPTV) lines had been sold. This represents a year-on-year increase of 188 percent and an important step on the road to establishing Entertain, the television service of the future, as a mass market product.

  • The number of fixed-network lines in Germany and abroad decreased by 7.4 percent year-on-year in the first half of 2009 to 39.6 million. Line losses in the German fixed network stood at 473,000 in the second quarter of 2009, some 175,000 down from the prior-year quarter. This is the lowest level since the end of 2005. Around 40 percent of the line losses resulted not from competition, but rather from a purely technical switch of DSL resale customers to the all-IP platform.

  • Figures for international business were substantially influenced in the first half of the year by the first-time inclusion of OTE in February 2009. Compared with the prior year, international revenue in the fixed-network business increased by EUR 1.3 billion to EUR 2.4 billion in the first half of the year. In Eastern Europe, revenue fell by 8.7 percent compared with the first half of 2008 to EUR 1.0 billion. This was due to exchange rate effects primarily in Hungary, as well as to competition in the traditional fixed network, and fixed-mobile substitution.

  • Internationally, too, the broadband market grew considerably in the first half of the year. With a total of 3.6 million broadband lines as of June 30, 2009, a year-on-year increase of 637,000 lines was achieved.

Systems Solutions

  • T-Systems reduced its costs substantially and increased efficiency in the first half of 2009. Adjusted for the one-time effect of the disposal of Media&Broadcast in the prior year, profit from operations (EBIT) increased to EUR 92 million. Thus, this figure for the first half of 2009 already exceeds the figure for the full 2008 financial year. The EBIT margin improved by around 2 percentage points compared with the prior-year period. EBITDA also benefited from measures to improve efficiency. Adjusted EBITDA recorded growth of 12.8 percent to EUR 442 million. The adjusted EBITDA margin rose from 8.8 percent in the first half of 2008 to 10.3 percent.

See also