Transcription
KEY MESSAGES &MID-TERM AMBITION LEVELSCOMPILATION OF ALL SESSIONS
One Team.2
GROUP: Accelerating our path to value creationORGANIC GROWTH Our flywheel works Proven executionCAPITAL ALLOCATION/PORTFOLIOInvest in “leading” Fiber &5G networks and monetize 18 bn2020–2024e /shareFocus on structurallyhealthy markets only 1.10Secure US majority( 50%)2021e 6.5%Deleverage & return tocorridor in 20241–2%Revenue adj. EBITDACAGRAL CAGRAdj. EPS 1.75DT group ambitions3–5%SHAREHOLDER VALUEFCF ALROCEStrategic reviewsfor TMNL & Towers2024eDividends40–60%of adj. EPS, withminimum of 60 c2024e3
GROUP: Key messages01Delivery02Growth03Network leadershipWe have delivered on our promises fromlast CMD & will do so againWe will continue growing all relevant financials(Revenue, adj. EBITDA AL, FCF AL, ROCE, adj. EPS) at low risk (execution strength, AAA markets)We remain dedicated network investors &will efficiently underpin our leading 5G & Fiberposition our investments are self-funded04US majority05Efficiency06ShareholdersWe will take the path to US majority at attractive conditions & leveraging TMUSshareholder returnsWe digitalize the full stack end-to-end to supportbottom-line growth via higher efficiency & toenable future-proof operationsWe guarantee attractive shareholder returns withdividends being 40–60% of adj. EPS, our dividendfloor remains at 60 c minimum4
2030 paradigm shifts drive our strategy evolutionWhat is right, stays rightParadigm shifts ahead – telco vision 2030A strategy is a strategy is a strategy!GrowLEAD INCUSTOMERLeadinEXPERIENCEinLEAD INLeadTECHNOLOGYtechnologybusiness productivityONE CONNECTIVITY& PERFECT SERVICEINTEGRATEDGIGABIT NETWORKSSECURE ICT SOLUTIONS& BIG IOTcustomer experienceLEADLeadINinBIZPRODUCTIVITYFuture growth levers: 2021–202401 B2CFrom connectivity to customerexperienceGrow by turning customersinto fans02 B2BFrom dedicated to software-drivenenterprise solutionsBecome digital enablerPeople, society From ESG as hygiene factor03 & environment to ESG as differentiator#GreenMagenta,#GoodMagentaSave for growth investmentsSimplify, digitalize, accelerate & act responsibly04 NetworksFrom monolithic incumbentto network orchestratorBuild, orchestrate &differentiate05 DigitalizationFrom vertical silos to Telco-as-aplatform – cloud-native, API-basedDigitalize, digitalize, digitalize the full stack 5
GROUP: Our core beliefs will guide us!We grow by turning customers into fans and strive for creating the leading global telco brand “Always best connected with Telekom” – branded, ubiquitous connectivity is our differentiating coreOur “tadelloser” (flawless) service and omnichannel sales combine best digital with personal customer interactionWe provide a best selection of digital services – local, playing on our strengths, with partnersWe value loyalty and have the best offerings – personalized, context aware with the consent of our customersWe enable enterprise digitalization with best-fit connectivity, digital solutions, and cloud services – global, secure and self-administrated We enable digitalization of our B2B customers with best-fit, global, E2E-secure Telekom connectivity solutionsWe provide the best digital & sovereign cloud solutions for enterprises ranging from branded, own products to wholesale models and partner solutionsWe make connectivity “programmable”: Self-administrated and tailored to all future work and production environmentsWe build, orchestrate and differentiate through our network of networks We lead with our own fixed & mobile infrastructure – striving for best utilization and ownership economicsWe provide seamless E2E-orchestration of own and 3rd party networksWe aim for a cloud-based, automated production, leveraging APIs and microservices for digital offeringsSuperior portfolio – best assets, best markets and disciplined value creation We consequently pick the right assets and teams in structurally healthy markets – we don’t make bad deals!Our transatlantic presence in Triple A markets makes our portfolio resilientWe venture into new, entrepreneurial setups for building digital servicesOur global weight & know how enables scale & synergies along the entire value chainBest team in industry – acting responsibly We empower our frontline people locally – always putting the customer firstwe inspire and develop our people to act like entrepreneursWe want to make DT a great place to work for digital natives, network engineers and service creatorsOur actions are geared towards protecting the environment & enabling a digital society based on democratic values6
GROUP: Midterm ambition levelMidterm ambition level1YearRevenues Group: CAGR 1–2% 2020–2024eTotal service revenues Group: CAGR 3–4% 2020–2024eAdj. EBITDA AL Group: CAGR 3–5% 2020–2024e Ex US: CAGR 2–3% 2020–2024eAdj. Core EBITDA AL Group: CAGR 5–6% 2020–2024eFCF AL Group: 18 bn 2024e Ex US: 4 bn 2024eAdj. EPS 1.75 2024eROCE 6.5% 2024eCash Capex Ex US: 8.2 bn 2024eAdj. indirect cost AL Ex US: - 1.2 bn (net savings) 2020–2024eShareholder remuneration policy2 Adj. EPS payout ratio 40–60%, Floor 60 c 2021–2024e1 Based onconstant exchange rates (average exchange rate 2020 of 1 US 1.14) and no further changes in the scope of consolidation2 Subject tonecessary AGM approval and Board resolution7
GROUP: We have a plan!Drive FMC growth (FMC customers 2024e: 4.1 mn in GER, 4.0 mn in EU)Monetize network leadership & become #1 in US ( 90 mn branded postpaid customers)B2CFoster “Perfect Service” (maintain all-time-high in customer satisfaction)AmbitionsSmooth, profit-friendly shift towards competitive SDx portfolio (2024e: 10 bn B2B rev.)Lev. best NW to grow beyond connectivity (IoT revenue 2024e: x2 in GER & EU)B2BGroup Revenues:CAGR 1-2%(2020-2024e)Group Adj. EBITDA AL:CAGR 3-5%(2020-2024e)Group FCF AL: 18 bn(2024e)Group ROCE: 6.5%(2024e)Group Cash Capex:Ex US: 8.2 bn(2024e)Adj. indirect cost AL:Ex US: - 1.2 bn net savings(2020-2024e)Shareholder Remun.:Adj. EPS payout ratio 40-60%, Floor 60c(2020-2024e)Accelerate TSI trafo towards growth (e.g. Public Cloud rev. 2024e: 50%) & profitabilityDrive B2B market share (B2B market share 2024e: x2 in US)100% energy from renewables in 2021 for DT Group; energy demand midterm reducedScope 1 2: Net Zero own emissions 2025, Scope 3: Net Zero emissions value chain 2040People, Society& EnvironmentMaintain all time-high in employee satisfactionScale STIs with ESG criteria beyond C-LevelRamp up fiber rollout (2024e: up to 2.5 mn HH p.a. in GER, up to 1.1 mn HH p.a. in EU)NetworksDefend 5G leadership (PoP Coverage 2024e : 99% GER, 75% EU, 97% US)Monetize Fiber & 5G (Campus Networks, Mobile Edge Computing, etc.)Extend & monetize digital reach (2024e eSales: GER 30%, EU 25%)DigitalizationPush agile maturity (T2M 2024e: 2 months in GER, 1 month in EU)Continue executing synergy delivery, secure US majority & drive SBB (up to 60 bn)Improve cashflow generation (esp. GER & EU) & deleverage to better investment gradeCapitalAllocationExplore opportunities to monetize assets (TMNL, Towers)8
GROUP: Watch all presentations and Q&A sessions on YouTubePresentation (incl. Q&A)Final Q&A sessionWrap-upYouTube DTCMD21 watchlist with all sessions9
GERMANY: Key messages01Undisputed market leader02Accelerating infrastructure03Accelerating B2C growth1 CAGRWe have delivered, despite a tough IP migration andCovid-19 headwinds. The tailwinds we have createdwill contribute significantly to growth going forward.By 2024 we will have 10 mn fiber homes passedand 97% 5G coverage. We are quite progressed insourcing external funding to further enhance our build.Convergence and monetizing our base will driveconsumer loyalty and revenue growth.04Accelerating B2B growth05Accelerating digitalization06Accelerating EBITDA & ROCEA rapidly digitalizing economy and our uniqueposition in it will drive B2B revenue growth.Full stack digitalization will drive a step change incost efficiency.We will self-fund our investments throughaccelerating EBITDA growth to 2.5–3%1 and capexefficiency. ROCE will grow to significantly WACC.2020–2024e10
GERMANY: We will build a future-proof fiber networkOUR STRATEGYOur FTTH rollout in GermanyHomes passed, mn Ext. fundingOwn buildout 10Run rate2.220200.6 mn 3.52021e1.2 mn2024e 2.5 mn2030eGERMANYEUROPE Vectoring outperforming competition Focus on areas of greatest bandwidth needs Clear DT leadership in “terminal” yearExecution leadership Regional structure with 13,000 employees Building at a pace of 2.5 mn households p.a.Flexibility and agilityGermany covered with FTTH by 2030GROUP STRATEGYBuild speed consistent with pace of demand growthT-MOBILE US Self-funded rollout External funding in addition Restrict “cherrypicking”TECHNOLOGY & INNOVATIONSYSTEMS SOLUTIONSGROUP DEVELOPMENTFINANCE11
GERMANY: Midterm ambition levelMidterm ambition levelService revenueDriversFinancials1 Incl. MTR regulatoryeffectsYear Mobile service revenue: CAGR 1–2%1 2020–2024e Broadband revenue: CAGR 4% 2020–2024e Wholesale access revenue: stable 2020–2024e Total service revenue: CAGR 1% 2020–2024e FTTH homes passed: 10 mn 2024e 5G coverage: 97% 2024e Adj. indirect costs AL2: Reduction by 0.7 bn 2020–2024e Revenue: CAGR 1% 2020–2024e Adj. EBITDA AL: CAGR 2.5–3% 2020–2024e Cash Capex: 0.5 bn higher 2020–2024e2 Germany incl. GHS12
EUROPE: Key messages01Leading European and fastest growinglarge-scale telco02Accelerating with customercentricity & digital1 CAGREBITDA continuously growing 2%1 driven by increasing Servicerevenues & cost discipline, operating in attractive markets B2C: Best CX, further scaling FMC & increasing HH value B2B: Profitable growth by driving clients’ digitalization People & Society: Customer centric culture & organization,thriving for a positive impact on society Network: Super fast fiber & 5G rollout for best user experience Digital: Further scaling common digital solutions across Europe2017–2020 Adj. EBITDA (AL)2 CAGR03Stronger as a region04Significant contributorto DT’s equity valueLeveraging synergies and digitalization,scaling common products & best practicesacross EuropeContinue sustainable growth withEBITDA AL CAGR 1.5–2.5%2 &ROCE WACC2020–2024e Adj. EBITDA AL13
EUROPE: Strong contributor to DT’s equity valueGrowing adj. EBITDA AL (organic)Strong execution Customer growthCost reduction track recordHighly digital High cash generationAttractive portfolio 13 quarters in a row2020–2024e guidance 1.5–2.5% CAGR Service revenue growth fixed & mobileDiversification, offsetting country risks Cash conversion1 growing from 48% in 2020 to 57% in 2024eCash Capex stable 2020–2024eEarning cost of capitalWell invested ROCE WACCHigh & growing Gigabit coverage1 mn FTTH build per yearGood spectrum position/network leadershipWACC2021e1 [Adj.2024eEBITDA AL – Cash Capex – Special factors (Cash)] / Adj. EBITDA ALGROUP STRATEGYGERMANYEUROPET-MOBILE USTECHNOLOGY & INNOVATIONSYSTEMS SOLUTIONSGROUP DEVELOPMENTFINANCE14
EUROPE: Midterm ambition levelMidterm ambition levelCustomercentricityFinancials1 AdjustedYear Customer satisfaction: #1 in TRI*M in all markets & brand preference market share in all countries 2024e Employer ranking: TOP 5–10 in employer ranking in all countries 2024e 5G coverage: 75% 2024e Fiber coverage: 40%, fiber connections: 3 mn 2024e Revenue growth: CAGR1 1% 2020–2024e Adj. EBITDA AL growth: CAGR 1.5–2.5% 2020–2024e Adj. indirect cost AL: Reduction by 0.3 bn 2020–2024e Cash Capex stable 2020–2024e ROCE further increasing, ROCE WACC 2021–2024efor MTR15
T-MOBILE US: Key messagesMission: Best in the world at connecting customers to their world. #1 in customer choice and customers’ hearts.01Product leadership02Value leadership03Experience leadershipExpand addressable markets and grow customerrelationshipsUnlock the value potential of synergies and scaleDeliver the best experience from the best team04Industry leading growth05Deliver substantial enterprise value06Position for longterm successExpand addressable markets and grow customerrelationshipsFaster and bigger synergies while transforming the businessSustain 5G leadership, strong brand, and best customerexperienceSee also the TMUS Analyst Day from March 11, 202116
T-MOBILE US: DELIVERING MORE THAN EXPECTED17
T-MOBILE US: Midterm ambition levelMidterm ambition levelCustomersNetworkFinancialsShareholer returnsYear Smaller markets and rural market share: nearly 20% 2026e B2B market share: nearly 20% 2026e Home Broadband: 7-8 million 2026e 5G population coverage: Extended range (mid-band spectrum): 97% 2022e Ultra capacity (mid-band mmWave spectrum): 250m 2022e Core adj. EBITDA: 31-32 bn 2024e Capex: 9-10 bn 2024e Free cash flow: 16-18 bn 2024e Leverage: mid-2x core adj. EBITDA Shareholder returns: 60 bn 2023-2025eSee also the TMUS Analyst Day from March 11, 202118
TECHNOLOGY & INNOVATIONS: Key MessagesReviewWe delivered our CMD 2018 promises including theDT ‘Superior Production Model’ (All IP Migration, Agile IT Transformation,Integrated Network Leadership).Going forward, we evolve to an experience-obsessed tech player:0102Automation, cloudification& disaggregationWe will move towards a high degree of automation.Hyperscaler-like, yet telco-grade.Digitalization &SW/data capabilitiesWe will continue digitalizing the full stack and continue toenhance the software/data capabilities of our employees.03Continued network leadership04Green – Energy Efficiency05Experience obsessionOur integrated network leadership will continue to deliverclear business benefits.To support DT’s ambitious climate targets, we will increaseenergy efficiency in network production by 50%.Experience-obsessed, focused innovation and new productswill leverage our superior networks.19
TECHNOLOGY & INNOVATIONS: We evolve towards anexperience-obsessed tech playerTO an experience-obsessed tech playerFROM a reliable network builder & operatorSuperior Production ModelAll IPMigrationTech playerAgile ITTransformation01 NetworkIntegratedNetworkLeadership02 All value-automation,cloudification &disaggregationchain digitalization & SW/data capabilities03 Continuedintegratednetworkleadership04 GreenCapabilities built so farPath to carbon neutrality1 – Energy efficientGlobal skill-based organization implementedDevOps in place in NT & IT05 Experience-obsessedFirst successes in radical automation, disaggregation& software integrationBest connectivityexperience1 CO neutral scope2Seamless interplayat homeBeyondthe core1&2 in 2025, scope 3 in 2040, addressed in RfPs with high priorityGROUP STRATEGYGERMANYEUROPET-MOBILE USTECHNOLOGY & INNOVATIONSYSTEMS SOLUTIONSGROUP DEVELOPMENTFINANCE20
TECHNOLOGY & INNOVATIONS: Midterm ambition levelMidterm ambition levelTechnologyleadership Valuetransformation 1 AT, CZ,YearCommitment to fiber rollout GER: 10 mn HH passed EU: 10 mn HH passed5G Pop coverage & network leadership GER: 97% EU: 75%Further enhancing 5G innovation leadership & consumer experienceIT spend reduction: 0.2 bnTime-to-market: 2.0 monthsAgile share of development: 100%Increase degree of cloudified production NT: GER 67%; EU 42% IT: 80%Adj. indirect cost AL reduction (GER/GHS): 0.7 bnTechnology energy consumption (GER & EU): stableGR, HR, HU, ME, MK, SK (excl. RO & PL; FTTH/B & Docsis3.1)2 AT, 024e2024e2020–2024e2020–2024eCZ, GR, HR, HU, ME, MK, PL, SK (excl. RO)21
T-SYSTEMS: Key messages010203T-Systems’ transformation is progressing2018 transformation program has shown progress with EBITDAacceleration in 2019. Clean-up of portfolio resulted in T-Systemsas a focused IT services companyCovid-19 with severe impact onbusiness in 2020Covid-19 crisis impacted T-Systems’ core client base, as a resultdelayed our transformation. Nonetheless, we have managed thecrisis above industry average0405Accelerate profitabilityand competitivenessTransformation program re-energizedend of 2020, opportunity for valuecreation is clear going forwardFinancial outlookWe are confident growing adj. EBITDA ALby 5% CAGR 2020–2024e andgenerate positive Cash contribution inthe planning periodStrategy:Leading European IT service providerGoing forward we have a clear strategy. We focus on DACH andselected countries, leading with secure cloud and digital solutionsand stronger industry orientation22
T-SYSTEMS: Leading European vertical full-service playerWe will focus on select industries with vertical solution while providing compelling portfolio relevant to many industries#1 IT Service provider in DACH, plus selected countries ascore markets with ability to deliver globallyLead in 3–5 industries with focused vertical offerings –along with compelling horizontal portfolio for all lerPortfolioExpand into 1bn - 5bn revenue customer segment whilegrowing existing client baseAutoStrong “local” partner on eye-level for our clientson their digital transformation journeySecuritySovereignty and security at the core of our propositionGROUP STRATEGYGERMANYEUROPET-MOBILE USTECHNOLOGY & INNOVATIONSYSTEMS SOLUTIONSGROUP DEVELOPMENTFINANCE23
T-SYSTEMS: Midterm ambition levelMidterm ambition levelYearRevenue CAGR slight growth 2020–2024eAdj. EBITDA AL CAGR 5% 2020–2024eAdj. EBITDA AL margin 9% 2024eAdj. Indirect cost AL reduction 0.2 bn 2020–2024eCash Capex stable 2020–2024eCash contribution AL¹ Break-even 2023e1 Cashcontribution AL Adj. EBITDA AL – Cash Capex – Special factors (Cash)24
GROUP DEVELOPMENT: Key messages01Superior portfolio02Successful portfolio management03No dogmaLeading EU Telco plus best US MNOboosted by massive synergiesTrack Record: Strato, Scout, TMUS, TMNL, Towers,FMC104Long-term perspective05Strategic optionalityUS took 10 years, TMNL 5 years, said“no” to several tower deals below 20xStrategic review: Towers/TMNL,additional tower Carve-outs (CZ/SK)Focus on what drives value: TMUS, divest-to-invest,FMC1 deals1 Fixed-Mobile Convergence25
GROUP DEVELOPMENT: We strive to grow asset valuesACCUMULATEHOLDREVIEWREVIEWACCUMULATEGD TowersDeal closedDTCPFCF upgradeLong-term FTTPregulationBest network, #1 B2C,fastest B2B growthUnique portfolio, tier #1MNO anchorTop quartileperformanceNetwork leaderPricing rationalityFMC push, alternativeFTTH accessMarket-leadingfinancialsRaise external capitalto build scaleTele2/Simpel M&AM&A patience rewarded– value doubledSet up innovativeInfra-FundTowers divestiture 76 bn 13 bn 32 bnCMD2018TodayMidtermSource Capital IQ, May 14th, 20211 Managed 2.5 bn 1.9 bnCMD2018Today 2 bn MidtermCMD2018 6 bnToday 0.5 bn capital gainGrowth Fund – 400 mnNew Infra fund1 – 1 bn 6 bnMidtermCMD20183rdTodayMidtermby Digital Transformation Capital PartnersGROUP STRATEGYGERMANYEUROPET-MOBILE USTECHNOLOGY & INNOVATIONSYSTEMS SOLUTIONSGROUP DEVELOPMENTFINANCE26
GROUP DEVELOPMENT: Midterm ambition levelMidterm ambition levelTMNLGD TowersFinancials1 Revenue w/oregulatory impactsYear # Consumer fixed households: 0.9 mn 2024e FMC penetration of branded T-Mobile customer base: 40% 2024e Digital channel share of customer transactions: 50% 2024e # New sites: number of new builds: 6k Cum 2021–2024e # Extensions: amount of site extensions: 15k Cum 2021–2024e Growth in rec. 3rd party business – DT external revenue: CAGR 3% 2020–2024e Site based Opex AL/site efficiency: Decrease vs. 2020 2024e Revenue: CAGR 2%1 2020–2024e Adj. EBITDA AL: CAGR 4% 2020–2024e Cash contribution AL2: CAGR 6% 2020–2024e2 Cashcontribution AL Adj. EBITDA AL – Cash Capex – Special factors (Cash)27
FINANCE: Key messages01Delivery02Growth03CostsWe delivered on what we promised at the lastCMD, and will do so againWe will deliver strong growth in all keymetrics (Revenue, adj. EBITDA AL, FCF AL, adj.EPS, ROCE)Our earnings growth is supported by 1.2 bn adj. indirect cost AL savings(ex US) and merger benefits (US)04Leverage05Shareholders06BondholdersWe will be back in our comfort zone of2.25x–2.75x by end of 2024 60 c delivered through peak investment period.Going forward, we are moving to 40–60% payoutratio of adj. EPS while retaining 60 c minimumWe are very well funded, and remain committedto unrestricted access to credit markets28
FINANCE: We will strongly grow the bottom lineFCF AL1Adj. EPSROCE bn2 /share2%2CAGR 30%CAGR 10% 186.3 2021e1.20 1.120202021e2024e GERMANY2024eSteady growth from 2021 onwardsinvest, in 2020 also before Payer Swap & Zero BondGROUP STRATEGY4.6%4.0%20202021eex USUS merger integration as main driver1 Before dividend payments and spectrum 6.5% 1.75 84.02020CAGR 9%EUROPE2 Based on 2024eROCE growth on both sides of theAtlanticconstant exchange rates (average exchange rate 2020 of 1 US 1.14)T-MOBILE USTECHNOLOGY & INNOVATIONSYSTEMS SOLUTIONSGROUP DEVELOPMENTFINANCE29
FINANCE: Midterm ambition levelMidterm ambition level1YearRevenues Group: CAGR 1–2% 2020–2024eTotal service revenues Group: CAGR 3–4% 2020–2024eAdj. EBITDA AL Group: CAGR 3–5% 2020–2024e Ex US: CAGR 2–3% 2020–2024eAdj. Core EBITDA AL Group: CAGR 5–6% 2020–2024eFCF AL Group: 18 bn 2024e Ex US: 4 bn 2024eAdj. EPS 1.75 2024eROCE 6.5% 2024eCash Capex Ex US: 8.2 bn 2024eAdj. indirect cost AL Ex US: - 1.2 bn (net savings) 2020–2024eShareholder remuneration policy2 Adj. EPS payout ratio 40–60%, Floor 60 c 2021e–2024e1 Based onconstant exchange rates (average exchange rate 2020 of 1 US 1.14) and no further changes in the scope of consolidation2 Subject to necessary AGMapproval and Board resolution30
CAPITAL MARKETS DAY 2021 (May 20/21, 2021)Visit www.telekom.com/cmd21 All presentations in separate and as all-in-oneLinks to all recordings & the playlistTranscript for all sessionsThis document and the agenda of the two daysProfiles of the presentersLinks to previous Capital Markets DaysContact the Investor Relations TeamFeel free to contact us in case of any questions! [email protected] 49 228 181 88880Visit www.telekom.com/ir-contacts for individualcontacts31
We enable digitalization of our B2B customers with best-fit, global, E2E-secure Telekom connectivity solutions . Based on constant exchange rates (average exchange rate 2020 of 1 US 1.14) and no further changes in the scope of consolidation . 2. Subject to necessary AGM approval and Board resolution. 7.
