UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 2004
DEUTSCHE TELEKOM AG
(Translation of registrant’s name into English)
Friedrich-Ebert-Allee
140
53113 Bonn
Germany
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ý Form 40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by
Regulation S-T Rule 101 (b)(1): o
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by
Regulation S-T Rule 101 (b)(7): o
Indicate by check mark whether the registrant by furnishing the information contained in this form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes o No ý
This report is deemed submitted and not filed pursuant to the rules and regulations of the Securities and Exchange Commission.
Group Report
January 1 to September 30, 2004
Deutsche Telekom
|
Deutsche Telekom at a glance. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) For detailed information and calculations, please refer to “Reconciliation of pro forma figures,” page 43 et seq. |
|
At a glance
|
|
|
Third quarter of 2004 |
|
First three quarters of 2004 |
|
||||||||||
|
|
|
Q3 |
|
Q3 |
|
Change |
|
Q1 – Q3 |
|
Q1 – Q3 |
|
Change |
|
2003 |
|
|
|
|
millions |
|
millions |
|
% |
|
millions |
|
millions |
|
% |
|
millions |
|
|
Net revenue |
|
14,524 |
|
14,077 |
|
3.2 |
|
42,922 |
|
41,288 |
|
4.0 |
|
55,838 |
|
|
Domestic |
|
8,535 |
|
8,553 |
|
(0.2 |
) |
25,560 |
|
25,689 |
|
(0.5 |
) |
34,691 |
|
|
International |
|
5,989 |
|
5,524 |
|
8.4 |
|
17,362 |
|
15,599 |
|
11.3 |
|
21,147 |
|
|
Results from ordinary business activities |
|
1,974 |
|
691 |
|
n.a. |
|
4,726 |
|
1,783 |
|
n.a. |
|
1,398 |
|
|
Financial expense, net |
|
(793 |
) |
(789 |
) |
(0.5 |
) |
(2,584 |
) |
(2,734 |
) |
5.5 |
|
(4,031 |
) |
|
Depreciation and amortization |
|
(2,991 |
) |
(3,165 |
) |
5.5 |
|
(9,022 |
) |
(9,646 |
) |
6.5 |
|
(12,884 |
) |
|
of property, plant and equipment |
|
(1,863 |
) |
(1,996 |
) |
6.7 |
|
(5,642 |
) |
(6,129 |
) |
7.9 |
|
(8,206 |
) |
|
of intangible assets |
|
(1,128 |
) |
(1,169 |
) |
3.5 |
|
(3,380 |
) |
(3,517 |
) |
3.9 |
|
(4,678 |
) |
|
Other taxes |
|
(47 |
) |
(38 |
) |
(23.7 |
) |
(144 |
) |
(134 |
) |
(7.5 |
) |
(162 |
) |
|
EBITDA(a) |
|
5,805 |
|
4,683 |
|
24.0 |
|
16,476 |
|
14,297 |
|
15.2 |
|
18,475 |
|
|
Special factors affecting EBITDA(a), (b) |
|
541 |
|
(28 |
) |
n.a. |
|
1,844 |
|
512 |
|
n.a. |
|
187 |
|
|
Adjusted EBITDA(a), (b) |
|
5,264 |
|
4,711 |
|
11.7 |
|
14,632 |
|
13,785 |
|
6.1 |
|
18,288 |
|
|
Adjusted EBITDA margin(a), (b)(%) |
|
36.2 |
|
33.5 |
|
|
|
34.1 |
|
33.4 |
|
|
|
32.8 |
|
|
Net income |
|
1,387 |
|
508 |
|
n.a. |
|
3,211 |
|
1,617 |
|
98.6 |
|
1,253 |
|
|
Special factors(b) |
|
398 |
|
45 |
|
n.a. |
|
1,267 |
|
879 |
|
44.1 |
|
1,031 |
|
|
Adjusted net income(b) |
|
989 |
|
463 |
|
n.a. |
|
1,944 |
|
738 |
|
n.a. |
|
222 |
|
|
Earnings per share(c) (€)/ADS(d) (German GAAP) |
|
0.33 |
|
0.12 |
|
n.a. |
|
0.77 |
|
0.39 |
|
n.a. |
|
0.30 |
|
|
Investments in property, plant and equipment and intangible assets (excluding goodwill) |
|
(1,275 |
) |
(1,431 |
) |
10.9 |
|
(3,811 |
) |
(3,536 |
) |
(7.8 |
) |
(6,234 |
) |
|
Net cash provided by operating activities |
|
3,680 |
|
4,784 |
|
(23.1 |
) |
10,808 |
|
11,044 |
|
(2.1 |
) |
14,316 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity ratio (%) |
|
— |
|
— |
|
|
|
34.0 |
|
29.0 |
|
|
|
29.1 |
|
|
Net debt(e) |
|
— |
|
— |
|
|
|
40,779 |
|
49,156 |
|
(17.0 |
) |
46,576 |
|
Number of employees at balance sheet date
Number of fixed-network and mobile customers
|
|
|
Sept. 30, |
|
June 30, |
|
Change |
|
Dec. 31, |
|
Change |
|
Sept. 30, |
|
Change |
|
|
|
|
|
|
|
|
% |
|
|
|
% |
|
|
|
% |
|
|
Deutsche Telekom Group |
|
247,891 |
|
247,830 |
|
0.02 |
|
248,519 |
|
(0.3 |
) |
249,974 |
|
(0.8 |
) |
|
Non-civil servants |
|
200,120 |
|
199,866 |
|
0.1 |
|
198,726 |
|
0.7 |
|
200,199 |
|
(0.04 |
) |
|
Civil servants |
|
47,771 |
|
47,964 |
|
(0.4 |
) |
49,793 |
|
(4.1 |
) |
49,775 |
|
(4.0 |
) |
|
Telephone lines(f)(millions) |
|
57.4 |
|
57.7 |
|
(0.5 |
) |
57.9 |
|
(0.9 |
) |
58.0 |
|
(1.0 |
) |
|
Broadband lines (in operation)(millions) |
|
5.4 |
|
4.9 |
|
10.2 |
|
4.1 |
|
31.7 |
|
3.8 |
|
42.1 |
|
|
Mobile subscribers(g)(millions) |
|
73.4 |
|
71.6 |
|
2.5 |
|
66.7 |
|
10.0 |
|
63.1 |
|
16.3 |
|
(a) Deutsche Telekom defines EBITDA as the results from ordinary business activities excluding other taxes, net financial income/expense, amortization and depreciation.
(b) A detailed explanation of special factors and special factors affecting EBITDA, adjusted EBITDA, and the adjusted net income can be found under “Reconciliation of pro forma figures,” page 43 et seq.
(c) Earnings per share (according to German GAAP) for each period are calculated by dividing net income/loss by the weighted average number of outstanding shares.
(d) One ADS (American Depositary Share) corresponds in economic terms to one share of common stock of Deutsche Telekom AG.
(e) Bonds, liabilities to banks, liabilities to non-banks from loan notes, and other liabilities after deduction of liquid assets, including marketable securities, other investments in noncurrent securities, other assets, and loan discounts. For detailed information, please refer to “Reconciliation of pro forma figures,” page 43 et seq.
(f) Telephone lines of the Group (including ISDN channels), including for internal use.
(g) Number of subscribers of T-Mobile’s fully consolidated mobile communications companies, plus the majority shareholdings of MATÁV and Hrvatske telekomunikacije. Mobimak subscribers included for the first time as of March 31, 2004. The figures for the previous year have been adjusted accordingly.
Agenda 2004.
Agenda 2004 supports Deutsche Telekom’s goal of profitable growth. This Group-wide program encompasses six initiatives. The focus and contents of Agenda 2004 were seminal to the realignment of Deutsche Telekom to the strategic growth areas of broadband/fixed network, business customers and mobile communications.
Broadband
Broadband is a key issue for the future of Deutsche Telekom. In September 2004, four years after T-DSL was launched on the market, the five-millionth line went “online” in Germany. The target is for this figure to reach 10 million DSL lines by 2007. The success achieved up to now has also been the result of joint marketing activities by T-Com and T-Online. In order to offer customers an integrated product bundle and fulfill the stated objectives, the Board of Management and Supervisory Board of Deutsche Telekom have decided to merge T-Online AG into Deutsche Telekom AG.
Business customers
Deutsche Telekom’s selling power has been further increased in the segment of small and medium-sized enterprises by pooling the strengths of T-Com and T-Systems. The portfolio of attractive, advanced solutions for small and medium-sized enterprises has been expanded as a result of the coordination of sales activities and the optimization of processes. The success of the business customer initiative can be seen in revenue growth in these product areas.
Quality
The objective of the quality campaign is to improve the quality of products and services from the customer perspective. Employees from all business areas are working on a large number of projects to implement this quality drive, which aims to further improve customer satisfaction.
Innovation
The sustained, profitable growth of Deutsche Telekom will be ensured through the development of new products and services. As part of the “Partners for Innovation” initiative launched in January 2004 by the German Chancellor Gerhard Schröder in cooperation with the worlds of politics, business and science, Deutsche Telekom has taken over management of the “Networked Worlds” ‘(vernetzte Welten)’ project. Since October 2004, it has been possible to experience the innovation potential of Deutsche Telekom first hand in the T-Gallery at Group Headquarters.
Efficiency
The efficiency campaign also continues to successfully support the strategy of profitable growth by increasing productivity and constantly improving efficiency. The measures that contribute toward sustained profitability growth are cost reductions and restrictions on investment, process optimization, synergies from the Group-wide use of technical platforms, reduction of the commitment of capital, coordination of procurement processes and optimization of the employment of capital through the disposal of noncurrent assets no longer needed for operations.
Human resources
The core issues of the human resources initiative are the employment alliance, Vivento, and the motivation and qualification campaign. The employment alliance has been implemented as planned following the passing of the amendment to the Act Concerning the Legal Provisions for the Former Deutsche Bundespost Staff ‘(Postpersonalrechtsgesetz - PostPersRG)’ by the German national parliament, the Bundestag, and the chamber representing the regions, the Bundesrat. The PostPersRG ensures funding for the reduction in weekly working hours for civil servants of Deutsche Telekom AG, thereby also ensuring the planned cost reduction. Vivento continues to develop promisingly. Of the more than 19,000 employees assigned to Vivento, more than two thirds were in active positions as of September. The 2004/2005 collective bargaining negotiations at T-Systems have been successfully completed.
• In the first nine months, net revenue increased 4.0 percent year-on-year from EUR 41.3 billion to approximately EUR 42.9 billion; organic(1) net revenue growth of 6.3 percent.
• Group EBITDA(2) increased by 15.2 percent year-on-year from EUR 14.3 billion to EUR 16.5 billion; adjusted EBITDA up by 6.1 percent to EUR 14.6 billion. Organic growth in adjusted Group EBITDA of 7.6 percent.
• Turnaround achieved at T-Mobile Deutschland; adjusted EBITDA margin up from 38.5 percent at June 30, 2004 to 41.2 percent.
• Results from ordinary business activities increased by EUR 2.9 billion year-on-year from EUR 1.8 billion to EUR 4.7 billion.
• Net income doubled from EUR 1.6 billion to EUR 3.2 billion; adjusted for special factors, it almost tripled from EUR 0.7 billion to EUR 1.9 billion.
• Net cash provided by operating activities of EUR 10.8
billion at prior-year level.
Free cash flow(3) before dividend payments decreased
from EUR 7.4 billion in the first nine months of the previous year to
EUR 6.6 billion as a result of higher capital expenditure.
• Net debt(4) reduced by EUR 5.8 billion to EUR 40.8 billion compared with EUR 46.6 billion at December 31, 2003.
Strong subscriber growth in the third quarter of 2004.
• 1.6 million new mobile communications subscribers, of which more than half at T-Mobile USA.
• Another 0.5 million new broadband lines in Germany and abroad; 5.4 million DSL customers in total.
Financial flexibility restored.
• Investors can expect a dividend payment of between EUR 0.56 and EUR 0.62 from Deutsche Telekom for the 2004 financial year, depending on the development of results in the fourth quarter.
• Moody’s upgrades Deutsche Telekom’s rating to “Baa1”; Deutsche Telekom’s rating with all agencies is now within target range.
(1) Organic growth is adjusted for the effects of exchange rate fluctuations and changes to the composition of the Deutsche Telekom Group.
(2) Deutsche Telekom defines EBITDA as the results from ordinary business activities excluding other taxes, net financial income/expense, amortization and depreciation. A detailed explanation of the special factors affecting EBITDA, adjusted
4
EBITDA, and the adjusted EBITDA margin can be found under “Reconciliation of pro forma figures,” page 43 et seq.
(3) Deutsche Telekom defines free cash flow as cash generated from operations minus interest payments and cash outflows for investments in property, plant and equipment, and intangible assets (excluding goodwill). For the calculation of free cash flow please refer to “Reconciliation of pro forma figures,” page 47.
(4) For detailed information and calculations, please refer to “Reconciliation of pro forma figures,” page 48.
5
Deutsche Telekom steps up efforts to implement new strategic focus.
• The strategic realignment announced by the Group is taking shape. The new rules of procedure and schedule of responsibilities for the Group Board of Management came into force on October 1, 2004. The three strategic business areas (SBAs) – Broadband/Fixed Network, Business Customers, and Mobile Communications – will be official reporting bodies with effect from January 1, 2005. T-Systems Business Services, the new business unit to be created as part of the Business Customers SBA that will support the Group’s medium-sized and large corporate customers, will be officially launched on January 1, 2005. This first major step in the strategic realignment is the logical consequence of a stronger focus on customers and their specific needs.
Walter Raizner appointed Member of the Board of Management for the Broadband/Fixed Network business area.
• The Supervisory Board of Deutsche Telekom AG has appointed Walter Raizner to the Group Board of Management effective November 1, 2004. Walter Raizner is the Board member responsible for the newly created Broadband/Fixed Network Board department, which combines the two divisions active in the consumer market, T-Com and T-Online, at Board level. Walter Raizner also heads the T-Com Board of Management.
Deutsche Telekom launches integration of T-Online.
• The Board of Management and Supervisory Board of Deutsche Telekom AG have decided to integrate T-Online into Deutsche Telekom by way of a statutory merger of T-Online International AG into Deutsche Telekom AG. Deutsche Telekom has started negotiations for this purpose with the Board of Management of T-Online. As part of this merger, T-Online shareholders will be granted shares in Deutsche Telekom in exchange for their T-Online shares. The ratio for this share exchange will be determined on the basis of valuations of Deutsche Telekom and T-Online and will be reviewed by an independent auditor. Deutsche Telekom also intends to repurchase own shares to the extent required to prevent any increase in the total number of Deutsche Telekom shares outstanding as a result of the merger. In the context of the merger transaction, Deutsche Telekom will make a voluntary tender offer to T-Online shareholders to buy back T-Online stock at a cash price of EUR 8.99 per share in order to provide liquidity and a price guarantee to all T-Online shareholders who wish to sell their shares rather than wait for the completion of the merger.
Framework Agreement in principle on T-Online merger.
• Deutsche Telekom AG and T-Online International AG have signed a framework agreement in which the parties have expressed their intention to pursue a statutory merger and have agreed details of the intended future integration of T-Online into Deutsche Telekom as well as on procedural matters regarding the implementation of the proposed merger.
6
Group
Act Concerning Legal Provisions for Former Deutsche Bundespost Staff approved by the German Bundesrat.
• After the German Bundestag passed the amendment to the Act Concerning the Legal Provisions for the Former Deutsche Bundespost Staff ‘(Postpersonalrechtsgesetz - PostPersRG)’ in September 2004, the Bundesrat also approved it in October 2004.
This means that the last hurdle toward implementation of the employment alliance has now been cleared, because the removal of the year-end bonus so far guaranteed in the PostPersRG will fund the planned reduction in weekly working hours for civil servants. The amended Act will come into effect in November 2004.
Toll Collect arbitration proceedings.
• Deutsche Telekom AG and DaimlerChrysler Services, as members of the Toll Collect consortium, as well as the consortium itself received written notification of the institution of arbitration proceedings from the Federal Republic of Germany. Under the terms of the agreement between the members of the consortium and the Federal Republic of Germany, any disputes relating to the toll collection system shall be settled by an arbitrational court. In this notification, the Federal Republic of Germany asserts its claim for damages of EUR 3.56 billion plus interest for lost toll revenues resulting from the delays in toll collection. In addition, the Federal Republic of Germany is asserting a claim for contractual penalties in the amount of EUR 1.03 billion plus interest for alleged violations of the agreement for the period up to July 31, 2004. The amount of EUR 1.03 billion may rise, because the Federal Republic is also claiming time-related contractual penalties. Deutsche Telekom believes the claims are unsustainable and will defend itself against them.
Slovak Telecom intends to acquire all shares in EuroTel Bratislava.
• Slovak Telecom (ST), Deutsche Telekom’s majority-owned subsidiary in Slovakia, plans to acquire the remaining 49-percent stake in its mobile communications arm EuroTel Bratislava. An agreement to this effect was concluded on September 27, 2004 with the Atlantic West B.V. (Verizon Communications and AT&T Wireless) consortium. ST’s acquisition of the remaining 49-percent stake in EuroTel is a major prerequisite for extending the successful cooperation between EuroTel and T-Mobile International. This transaction will turn ST into an integrated telecommunications provider in the Slovak market. EuroTel Bratislava is one of Slovakia’s two mobile communications providers. It has a market share of around 44 percent. Its full acquisition by ST is still subject to approval by the European Commission.
7
Regulatory Authority lowers charges for T-DSL ZISP.
• In the broadband area, T-Com offers Internet service providers (ISPs) T-DSL ZISP Basic as a wholesale product. T-DSL ZISP Basic allows ISPs to offer their end users broadband data connections over their own platform or a leased Internet platform without having to use T-Com’s IP network. In rate approval proceedings concluded on September 29, 2004, the German Regulatory Authority for Telecommunications and Posts specified a much lower usage-sensitive charge than that previously approved. The impact on results will be in the low, single-digit millions of euros. In most cases, no charges were approved for the provision of the IP network, but in some cases the monthly rates were increased slightly compared with those last approved.
Reciprocity.
• As in December 2003, the Regulatory Authority once again stipulated higher interconnection rates for non-dominant carriers on September 21, 2004 . The rates were, however, reduced substantially compared with those resolved in December last year. Instead of the original mark-up of EUR 0.005/minute, the Regulatory Authority now stipulates a mark-up of just EUR 0.0017/minute on rates applicable to T-Com. The higher termination rates for alternative carriers are valid for the period from October 15, 2004 to May 31, 2006. As a consequence of the resolution by the Regulatory Authority, T-Com intends to pass on the additional costs to its customers from May 2005 onwards.
T-Mobile USA receives highest honors for excellent customer care performance.
• In an independent market study conducted by J.D. Power and Associates,
T-Mobile USA received by far the top ranking among national mobile carriers for
its customer service (J.D.Power study, July 8, 2004).
According to another J.D. Power study (August 19, 2004), T-Mobile USA was also
the best provider in two regions in terms of call quality and among the best in
all other regions.
In a third study, T-Mobile USA was also the leader in all six regions in terms
of customer satisfaction (J.D.Power study, September 9, 2004).
Toll Collect starts trial operation.
• The Toll Collect consortium, in which Deutsche Telekom AG has a 45-percent stake, started its trial operation for the electronic toll system. This was preceded by the successful completion of function checks in the whole system. The trial operation is being monitored by an independent expert. In mid-December 2004, the Federal Office for Freight Transportation will decide whether to grant a provisional operating license on the basis of this expert’s evaluations. The Federal Ministry of Transport considers the progress of the project to date to be positive and is confident that toll collection will start on schedule on January 1, 2005.
8
T-Systems wins major outsourcing projects.
• Deutsche Post AG and T-Systems revised the IT cooperation agreement signed in 2000 and extended the duration of the modified agreement. T-Systems will continue to provide Deutsche Post with desktop, computing, and corporate network services, including the integrated user helpdesk. As part of its managed desktop services, T-Systems will operate around 55,000 workstations for Deutsche Post. The services include infrastructure services for approximately 2,000 locations, software distribution for all workstations, and a centralized user help desk. Since T-Systems has not committed itself to specific providers in the area of computing services, it can offer optimum technical and financial conditions to run the 270 or so applications. In addition, the network infrastructure of Deutsche Post will be merged and entrusted to T-Systems together with corporate network services on the basis of the new MPLS (Multi Protocol Label Switching) technology. These networks interlink Deutsche Post sites, as well as around 55,000 PCs and computing centers. What is more, T-Systems also integrates customers of Deutsche Post into the corporate network.
• Swiss Federal Railways (SBB) and T-Systems successfully completed one of Europe’s largest server-based computing projects. Over a period of seven months, around 10,000 workstations were replaced as part of the OPUS innovation project, which standardized the office platform throughout the company. Thanks to this concept and the implementation of server-based computing with Citrix MetaFrame, SBB set a new milestone in the ICT market. SBB now has a uniform, state-of-the-art, standardized IT platform that enabled it to lower its operating expenses and enhance data security at the same time. T-Systems was also put in charge of the day-to-day operation of the new IT platform.
• Sanlam, one of South Africa’s largest insurance groups, extended its major outsourcing agreement with T-Systems for a further three years. The contract covers the provision of both information and communication technology (ICT) services from the areas of networks, support of workstations, mainframe computers, and open systems services. The outsourcing will substantially increase Sanlam’s flexibility and provide the group with ICT infrastructure services that are tailored to its requirements. The contract, which has a volume of ZAR 500 million (EUR 62 million), is a mega-deal in the South African market.
Stiftung Warentest puts Internet providers to the test - T-Online in the lead.
• Tests of Internet service providers by ‘Stiftung Warentest’ (Germany’s leading consumer protection agency) showed T-Online to be among the best of the ten providers tested. In its “test” magazine (issue no. 10, October 2004), this independent agency rated the quality of T-Online as “good” in both the ISDN/narrowband and DSL/broadband categories. T-Online was awarded an overall score of 1.9 in the important broadband growth area. ‘Stiftung Warentest’ gave T-Online’s narrowband access an overall score of 1.6.
T-Online’s music portal.
• Musicload, T-Online’s music portal, is one of Germany’s most successful providers in the Top 20 download charts. According to Media Control, Musicload had a 55-percent share in this business segment in September 2004. With over 350,000 titles and an average of 5,500 downloads per day in the third quarter of 2004, the portal is now one of the leading providers of legal music downloads in Germany. T-Online’s platform cooperates with all major record companies, but also with independent labels.
9
Business
developments.
Overview.
Net revenue
In the first nine months of the current financial year, Deutsche Telekom’s revenue continued to develop positively: Net revenue amounted to approximately EUR 42.9 billion, about EUR 1.6 billion more than in the same period last year. This represents a year-on-year increase of four percent. Year-on-year, revenue rose by around EUR 0.4 billion, or 3.2 percent, to over EUR 14.5 billion in the third quarter of 2004. Revenue was reduced throughout the reporting period by exchange rate effects amounting to EUR 0.6 billion, in particular relating to the translation of U.S. dollars (USD). In addition, there were consolidation effects totaling EUR 0.3 billion that relate, for example, to the deconsolidation of T-Com’s cable companies, as well as to deconsolidation measures at T-Systems. Adjusted for these effects, organic revenue growth for the Deutsche Telekom Group amounted to 6.3 percent.
This continued strong revenue growth was driven in particular by positive business developments at T-Mobile. The main driver behind this growth was the further increase in customer numbers, particularly at T-Mobile USA. In a year-on-year comparison of the first nine months, T-Mobile recorded a revenue increase of 11.2 percent; in a comparison of the third quarters, revenue was 9.4 percent higher than in 2003. Revenue growth was slowed during the first nine months of 2004 by exchange rate effects from the translation of U.S. dollars amounting to EUR 0.7 billion, as well as by the effect of the deconsolidation of the retail business Niedermeyer at T-Mobile Austria. Adjusted for these effects, organic growth at T-Mobile amounted to 15.6 percent.
T-Online also made a positive contribution towards the Group’s revenue growth. The continuation of the broadband strategy resulted in a further increase in customer numbers and revenue for the division.
T-Com’s revenue continued to fall in the third quarter of 2004; the trend was slower, however, than in the first six months of the year. Compared with the prior-year quarter, revenue decreased by 4.2 percent, and compared with the first nine months of the previous year, revenue was five percent lower. After deducting the revenue of the remaining cable companies that were sold as of March 1, 2003, revenue decreased year-on-year in the first nine months by 4.3 percent. The access business again made a positive contribution to the revenue of the division, due to price adjustments for analog lines and continued strong growth in the number of DSL lines. Regulatory decisions, on the other hand, had a negative effect. The introduction of call-by-call and carrier preselection resulted in losses of market share for call minutes. The continuing trend of direct network interconnection between other carriers, the reduction in interconnection charges, declining revenue from the sale of terminal equipment, and the deconsolidation of the cable companies also contributed to the decline in revenue.
For both the third quarter of 2004 and the first nine months of the financial year, T-Systems kept its revenue at a constant level compared with the respective prior-year periods, and increased revenue adjusted for deconsolidation effects. This was mainly attributable to the positive revenue trend in the IT unit, which benefited in particular from revenue growth in Computing Services and Desktop Services. The decline in revenue at the Telecommunications unit, caused by strong price and competitive pressure, was therefore almost fully offset by the good positioning of the IT unit.
10
|
|
|
|
|
|
|
Third quarter of 2004 |
|
First three quarters of 2004 |
|
||||||||||
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q3 |
|
Change |
|
Q1 – Q3 |
|
Q1 – Q3 |
|
Change |
|
2003 |
|
|
|
|
millions |
|
millions |
|
millions |
|
millions |
|
% |
|
millions |
|
millions |
|
% |
|
millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
|
13,986 |
|
14,412 |
|
14,524 |
|
14,077 |
|
3.2 |
|
42,922 |
|
41,288 |
|
4.0 |
|
55,838 |
|
|
T-Com(a) |
|
6,975 |
|
6,882 |
|
6,806 |
|
7,104 |
|
(4.2 |
) |
20,663 |
|
21,747 |
|
(5.0 |
) |
29,206 |
|
|
T-Mobile(a) |
|
5,944 |
|
6,237 |
|
6,479 |
|
5,920 |
|
9.4 |
|
18,660 |
|
16,787 |
|
11.2 |
|
22,778 |
|
|
T-Systems(a) |
|
2,475 |
|
2,625 |
|
2,564 |
|
2,617 |
|
(2.0 |
) |
7,664 |
|
7,744 |
|
(1.0 |
) |
10,614 |
|
|
T-Online(a), (b) |
|
493 |
|
500 |
|
464 |
|
453 |
|
2.4 |
|
1,457 |
|
1,347 |
|
8.2 |
|
1,851 |
|
|
Group Headquarters & Shared Services(a) |
|
1,090 |
|
1,154 |
|
1,164 |
|
1,056 |
|
10.2 |
|
3,408 |
|
3,220 |
|
5.8 |
|
4,268 |
|
|
Intersegment revenue(c) |
|
(2,991 |
) |
(2,986 |
) |
(2,953 |
) |
(3,073 |
) |
3.9 |
|
(8,930 |
) |
(9,557 |
) |
6.6 |
|
(12,879 |
) |
(a) Total revenue (including revenue between divisions).
(b) Amounts are calculated in accordance with German GAAP as specified in the German Commercial Code (HGB), as applied throughout the Deutsche Telekom Group, and differ from those published in the separate reports of T-Online International AG, which are calculated in accordance with International Financial Reporting Standards (IFRS).
(c) Elimination of revenue between divisions.
Contribution of the divisions to net revenue (after consolidation of revenue between the divisions)
|
|
|
Q1-Q3 |
|
Proportion |
|
Q1-Q3 |
|
Proportion |
|
Change |
|
Change |
|
2003 |
|
|
|
|
millions |
|
% |
|
millions |
|
% |
|
millions |
|
% |
|
millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
42,922 |
|
100.0 |
|
41,288 |
|
100.0 |
|
1,634 |
|
4.0 |
|
55,838 |
|
|
T-Com |
|
18,114 |
|
42.2 |
|
18,716 |
|
45.3 |
|
(602 |
) |
(3.2 |
) |
25,116 |
|
|
T-Mobile |
|
17,956 |
|
41.8 |
|
15,871 |
|
38.5 |
|
2,085 |
|
13.1 |
|
21,572 |
|
|
T-Systems |
|
5,282 |
|
12.3 |
|
5,267 |
|
12.8 |
|
15 |
|
0.3 |
|
7,184 |
|
|
T-Online(a) |
|
1,328 |
|
3.1 |
|
1,209 |
|
2.9 |
|
119 |
|
9.8 |
|
1,662 |
|
|
Group Headquarters & Shared Services |
|
242 |
|
0.6 |
|
225 |
|
0.5 |
|
17 |
|
7.6 |
|
304 |
|
(a) Amounts are calculated in accordance with German GAAP as specified in the German Commercial Code (HGB), as applied throughout the Deutsche Telekom Group, and differ from those published in the separate reports of T-Online International AG, which are calculated in accordance with IFRS.
The T-Com and T-Mobile divisions continued to make the largest contribution to the Group’s net revenue, jointly generating over 80 percent of net revenue in virtually equal shares.
Revenue generated outside Germany
Year-on-year, the proportion of international revenue increased in both the third quarter and the first nine months of 2004. Revenue generated outside Germany accounted for 39.2 percent of total revenue in the third quarter of 2003; this figure increased to 41.2 percent in the same quarter of 2004. A year-on-year comparison of the first nine months saw the proportion of international revenue rise from 37.8 percent to 40.5 percent. The key factor behind this increase is the sustained positive development of revenue at T-Mobile USA. Negative exchange rate effects prevented the proportion of revenue generated outside Germany from being even higher. Revenue in Germany was on a par with prior-year levels, both for the third quarter and the first nine months.
11
|
|
|
|
|
|
|
Third quarter of 2004 |
|
First three quarters of 2004 |
|
||||||||||
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q3 |
|
Change |
|
Q1 – Q3 |
|
Q1 – Q3 |
|
Change |
|
2003 |
|
|
|
|
millions |
|
millions |
|
millions |
|
millions |
|
% |
|
millions |
|
millions |
|
% |
|
millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
13,986 |
|
14,412 |
|
14,524 |
|
14,077 |
|
3.2 |
|
42,922 |
|
41,288 |
|
4.0 |
|
55,838 |
|
|
Domestic |
|
8,444 |
|
8,581 |
|
8,535 |
|
8,553 |
|
(0.2 |
) |
25,560 |
|
25,689 |
|
(0.5 |
) |
34,691 |
|
|
International |
|
5,542 |
|
5,831 |
|
5,989 |
|
5,524 |
|
8.4 |
|
17,362 |
|
15,599 |
|
11.3 |
|
21,147 |
|
|
Proportion international (%) |
|
39.6 |
|
40.5 |
|
41.2 |
|
39.2 |
|
|
|
40.5 |
|
37.8 |
|
|
|
37.9 |
|
|
of which: Europe (excluding Germany) |
|
3,320 |
|
3,381 |
|
3,344 |
|
3,336 |
|
0.2 |
|
10,045 |
|
9,680 |
|
3.8 |
|
13,080 |
|
|
of which: North America |
|
2,117 |
|
2,337 |
|
2,518 |
|
2,050 |
|
22.8 |
|
6,972 |
|
5,580 |
|
24.9 |
|
7,610 |
|
|
of which: Other |
|
105 |
|
113 |
|
127 |
|
138 |
|
(8.0 |
) |
345 |
|
339 |
|
1.8 |
|
457 |
|
Net income
Net income doubled in the first nine months of the 2004 financial year, compared with the same period last year, to EUR 3.2 billion, a year-on-year increase of approximately EUR 1.6 billion. This increase in net income was mainly driven both by the positive development of operations and by special factors. Income tax effects, on the other hand, had a negative impact on net income: Whereas the Group had tax income of around EUR 0.1 billion in the first nine months of 2003, income tax expenses of around EUR 1.2 billion were recorded in the reporting period.
Adjusted for special factors, in particular income relating to the winding up of the mobile communications joint venture in the United States, net income almost tripled year-on-year from approximately EUR 0.7 billion to around EUR 1.9 billion in the first three quarters of 2004.
12
Results from ordinary business activities
|
|
|
|
|
|
|
Third quarter of 2004 |
|
First three quarters of 2004 |
|
||||||||||
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q3 |
|
Change |
|
Q1 – Q3 |
|
Q1 – Q3 |
|
Change |
|
2003 |
|
|
|
|
millions |
|
millions |
|
millions |
|
millions |
|
% |
|
millions |
|
millions |
|
% |
|
millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Results from ordinary business activities (Group) |
|
346 |
|
2,406 |
|
1,974 |
|
691 |
|
n.a. |
|
4,726 |
|
1,783 |
|
n.a. |
|
1,398 |
|
|
T-Com(a),(b) |
|
1,399 |
|
1,405 |
|
1,455 |
|
1,255 |
|
15.9 |
|
4,259 |
|
3,569 |
|
19.3 |
|
4,690 |
|
|
T-Mobile(b) |
|
156 |
|
1,846 |
|
1,287 |
|
239 |
|
n.a. |
|
3,289 |
|
637 |
|
n.a. |
|
831 |
|
|
T-Systems(a),(b) |
|
(190 |
) |
(38 |
) |
39 |
|
(34 |
) |
n.a. |
|
(189 |
) |
(160 |
) |
(18.1 |
) |
(581 |
) |
|
T-Online(b),(c) |
|
37 |
|
45 |
|
24 |
|
103 |
|
(76.7 |
) |
106 |
|
126 |
|
(15.9 |
) |
104 |
|
|
Group Headquarters & Shared Services(b) |
|
(1,156 |
) |
(839 |
) |
(799 |
) |
(878 |
) |
9.0 |
|
(2,794 |
) |
(2,330 |
) |
(19.9 |
) |
(4,071 |
) |
|
Reconciliation |
|
100 |
|
(13 |
) |
(32 |
) |
6 |
|
n.a. |
|
55 |
|
(59 |
) |
n.a. |
|
425 |
|
(a) In contrast to previous reporting, T-Systems, rather than T-Com, has been responsible for Toll Collect since April 1, 2004. Prior-period comparatives have been restated accordingly.
(b) Results from ordinary business activities at division level.
(c) Amounts are calculated in accordance with German GAAP as specified in the German Commercial Code (HGB), as applied throughout the Deutsche Telekom Group, and differ from those published in the separate reports of T-Online International AG, which are calculated in accordance with IFRS.
Results from ordinary business activities developed positively, both in the third quarter of 2004, with a year-on-year increase of around EUR 1.3 billion, and during the first nine months of 2004, when they rose by around EUR 2.9 billion compared with the same period in 2003. In addition to the sustained growth in revenue, this significant jump is due to improved cost structures and the write-up of U.S. mobile communications licenses (FCC licenses), which had a positive effect on other operating income. Lower net interest expense included in net financial expense also contributed to an increase in results from ordinary business activities. By contrast, other operating expenses rose, particularly due to additions to accruals relating to the winding up of the U.S. mobile communications joint venture.
EBITDA
Group EBITDA amounted to approximately EUR 5.8 billion in the third quarter of 2004 – up EUR 1.1 billion or 24.0 percent year-on-year. All divisions, as well as Group Headquarters & Shared Services, contributed to this increase.
EBITDA for the first nine months of 2004 amounted to EUR 16.5 billion, representing an increase of EUR 2.2 billion or 15.2 percent on the first nine months of 2003. EBITDA of the T-Com, T-Mobile, and T-Online divisions was higher in the first nine months of 2004 than in the same period last year, whereas T-Systems’ EBITDA was on a par with the previous year. The EBITDA figure for Group Headquarters & Shared Services declined over the same period.
13
Special factors
Special factors with a net total of approximately EUR 1.8 billion had a positive effect on EBITDA in the first nine months of 2004. In the first quarter of 2004, Deutsche Telekom recorded negative special factors from expenses for voluntary redundancy programs amounting to EUR 0.1 billion, which contrasted with positive special factors in the previous year – in particular from the sale of financial assets. The second quarter of 2004 saw positive special factors amounting to EUR 2.0 billion from income relating to the write-up of U.S. mobile communications licenses (EUR 1.8 billion), and the sale of SES and Virgin Mobile shares (each around EUR 0.1 billion). However, EBITDA was impacted by special factors from the recognition of accruals relating to the winding up of the U.S. mobile communications joint venture totaling EUR 0.6 billion. In the same period last year, positive special factors amounted to EUR 0.1 billion. At the time, gains on the sale of financial assets (primarily from the sale of shares in MTS) contrasted with expenses from the addition to pension accruals caused by changes in discount rates. In the third quarter of 2004 there were again positive special factors from the write-up of U.S. mobile communications licenses totaling around EUR 0.6 billion, which contrasted with expenses, for items such as voluntary redundancy payments and restructurings, of EUR 0.1 billion. The third quarter of 2003 saw negative special factors amounting to EUR 28 million: Positive factors from the sale of the remaining cable companies were offset by negative factors, in particular from accruals for staff reduction measures (Vivento).
Adjusted EBITDA
Adjusted for the above-mentioned special factors, Group EBITDA amounted to EUR 5.3 billion in the third quarter of 2004. Year-on-year, this represents an increase of around EUR 0.6 billion, with T-Mobile again making the largest contribution to the increase, due to sustained growth in subscriber numbers and improved efficiency. T-Com also recorded a slight increase in adjusted EBITDA, in spite of a decrease in revenue. This improvement was attributable to rigorous and comprehensive cost management. At T-Systems, optimized cost structures and improvements in efficiency have also benefited the Group’s increase in EBITDA. T-Online contributed to the increase in EBITDA in particular as a result of a higher gross margin and cost efficiency. The Group’s adjusted EBITDA margin increased by 2.7 percentage points to 36.2 percent.
Adjusted EBITDA for the first nine months of 2004 was around EUR 14.6 billion, up approximately EUR 0.8 billion year-on-year. The adjusted EBITDA margin increased by 0.7 percentage points to 34.1 percent. In organic terms, adjusted Group EBITDA increased by 7.6 percent.
14
|
|
|
|
|
|
|
Third quarter of 2004 |
|
First three quarters of 2004 |
|
||||||||||
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q3 |
|
Change |
|
Q1 – Q3 |
|
Q1 – Q3 |
|
Change |
|
2003(a) |
|
|
|
|
millions |
|
millions |
|
millions |
|
millions |
|
% |
|
millions |
|
millions |
|
% |
|
millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA(b) |
|
4,585 |
|
4,783 |
|
5,264 |
|
4,711 |
|
11.7 |
|
14,632 |
|
13,785 |
|
6.1 |
|
18,288 |
|
|
T-Com |
|
2,641 |
|
2,592 |
|
2,593 |
|
2,549 |
|
1.7 |
|
7,826 |
|
7,777 |
|
0.6 |
|
10,356 |
|
|
T-Mobile |
|
1,677 |
|
1,930 |
|
2,162 |
|
1,748 |
|
23.7 |
|
5,769 |
|
5,005 |
|
15.3 |
|
6,671 |
|
|
T-Systems |
|
301 |
|
361 |
|
397 |
|
393 |
|
1.0 |
|
1,059 |
|
1,016 |
|
4.2 |
|
1,415 |
|
|
T-Online(c) |
|
119 |
|
128 |
|
111 |
|
84 |
|
32.1 |
|
358 |
|
235 |
|
52.3 |
|
310 |
|
|
Group Headquarters & Shared Services |
|
(130 |
) |
(216 |
) |
48 |
|
15 |
|
n.a. |
|
(298 |
) |
(5 |
) |
n.a. |
|
(316 |
) |
|
Reconciliation |
|
(23 |
) |
(12 |
) |
(47 |
) |
(78 |
) |
39.7 |
|
(82 |
) |
(243 |
) |
66.3 |
|
(148 |
) |
(a) For detailed information and calculations of the figures for 2003, please refer to Deutsche Telekom’s 2003 Annual Report, “Reconciliation of pro forma figures,” page 96 et seq.
(b) Deutsche Telekom defines EBITDA as the results from ordinary business activities excluding other taxes, net financial income/expense, amortization and depreciation. A detailed explanation of the special factors affecting EBITDA, adjusted EBITDA, and the adjusted EBITDA margin can be found under “Reconciliation of pro forma figures,” page 43 et seq.
(c) Amounts are calculated in accordance with German GAAP as specified in the German Commercial Code (HGB), as applied throughout the Deutsche Telekom Group, and differ from those published in the separate reports of T-Online International AG, which are calculated in accordance with IFRS.
Free cash flow
Whereas free cash flow in the third quarter increased by EUR 1.1 billion quarter-on-quarter, it decreased by EUR 1.0 billion year-on-year. Year-on-year, the figure for the first nine months declined by EUR 0.8 billion, mainly as a result of a renewed increase in capital expenditure.
|
|
|
|
|
|
|
Third quarter of 2004 |
|
First three quarters of 2004 |
|
||||||||||
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q3 |
|
Change |
|
Q1 – Q3 |
|
Q1 – Q3 |
|
Change |
|
2003 |
|
|
|
|
millions of € |
|
millions of € |
|
millions of € |
|
millions of € |
|
% |
|
millions of € |
|
millions of € |
|
% |
|
millions of € |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations |
|
4,683 |
|
4,304 |
|
4,633 |
|
5,745 |
|
(19.4 |
) |
13,620 |
|
13,766 |
|
(1.1 |
) |
18,132 |
|
|
Interest paid |
|
(433 |
) |
(1,426 |
) |
(953 |
) |
(961 |
) |
0.8 |
|
(2,812 |
) |
(2,722 |
) |
(3.3 |
) |
(3,816 |
) |
|
Net cash provided by operating activities |
|
4,250 |
|
2,878 |
|
3,680 |
|
4,784 |
|
(23.1 |
) |
10,808 |
|
11,044 |
|
(2.1 |
) |
14,316 |
|
|
Cash outflows from investments in intangible assets (excluding goodwill), and property, plant and equipment |
|
(1,350 |
) |
(1,584 |
) |
(1,289 |
) |
(1,357 |
) |
5.0 |
|
(4,223 |
) |
(3,651 |
) |
(15.7 |
) |
(6,031 |
) |
|
Free cash flow before dividend payments(a) |
|
2,900 |
|
1,294 |
|
2,391 |
|
3,427 |
|
(30.2 |
) |
6,585 |
|
7,393 |
|
(10.9 |
) |
8,285 |
|
(a) For detailed information and calculations, please refer to “Reconciliation of pro forma figures,” page 47.
15
Net debt
The Deutsche Telekom Group reduced net debt at the end of the third quarter compared with December 31, 2003 by around EUR 5.8 billion to just under EUR 40.8 billion. At the end of the first six months of 2004, net debt had already been reduced by EUR 3.3 billion, and by the end of the third quarter of 2004 the Group achieved a further reduction by EUR 2.5 billion. In this period, the sustained positive free cash flow was the main contributor to the reduction in net debt. In the first half of 2004, the reduction was also due to income from the sale of shares in SES, in addition to the positive free cash flow. Negative effects on net debt in the first half of 2004 were mainly due to cash outflows for financial assets, including subsidiaries, such as amounts paid to acquire the Scout24 group.
Year-on-year, net debt declined by around EUR 8.4 billion.
|
|
|
Sept. 30, |
|
June 30, |
|
Change |
|
Mar. 31, |
|
Dec. 31, |
|
Change |
|
Sept. 30, |
|
|
|
|
millions |
|
millions |
|
% |
|
millions |
|
millions |
|
% |
|
millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds and debentures |
|
43,542 |
|
46,805 |
|
(7.0 |
) |
50,090 |
|
51,613 |
|
(15.6 |
) |
55,223 |
|
|
Liabilities to banks |
|
3,147 |
|
3,174 |
|
(0.9 |
) |
3,272 |
|
3,798 |
|
(17.1 |
) |
4,357 |
|
|
Debt (in accordance with consolidated balance sheet) |
|
46,689 |
|
49,979 |
|
(6.6 |
) |
53,362 |
|
55,411 |
|
(15.7 |
) |
59,580 |
|
|
Liabilities to non-banks from loan notes |
|
763 |
|
799 |
|
(4.5 |
) |
799 |
|
799 |
|
(4.5 |
) |
803 |
|
|
Miscellaneous other liabilities |
|
345 |
|
333 |
|
3.6 |
|
413 |
|
287 |
|
20.2 |
|
275 |
|
|
Gross debt(a) |
|
47,797 |
|
51,111 |
|
(6.5 |
) |
54,574 |
|
56,497 |
|
(15.4 |
) |
60,658 |
|
|
Liquid assets |
|
5,907 |
|
6,594 |
|
(10.4 |
) |
9,190 |
|
9,127 |
|
(35.3 |
) |
10,688 |
|
|
Other investments in marketable securities |
|
177 |
|
200 |
|
(11.5 |
) |
184 |
|
173 |
|
2.3 |
|
141 |
|
|
Other investments in noncurrent securities |
|
22 |
|
76 |
|
(71.1 |
) |
78 |
|
86 |
|
(74.4 |
) |
87 |
|
|
Other assets |
|
698 |
|
679 |
|
2.8 |
|
287 |
|
271 |
|
n.a. |
|
303 |
|
|
Discounts on loans (prepaid expenses and deferred charges) |
|
214 |
|
232 |
|
(7.8 |
) |
250 |
|
264 |
|
(18.9 |
) |
283 |
|
|
Net debt(a) |
|
40,779 |
|
43,330 |
|
(5.9 |
) |
44,585 |
|
46,576 |
|
(12.4 |
) |
49,156 |
|
(a) For detailed information and calculations, please refer to “Reconciliation of pro forma figures,” page 48.
16
Divisions.
The
T-Com division.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mar. 31, |
|
June 30, |
|
Sept. 30, |
|
Change |
|
Sept. 30, |
|
Change |
|
Dec. 31, |
|
|
|
|
millions |
|
millions |
|
millions |
|
% |
|
millions |
|
% |
|
millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadband lines(a),(b) |
|
4.5 |
|
4.9 |
|
5.4 |
|
10.2 |
|
3.8 |
|
42.1 |
|
4.1 |
|
|
T-DSL (Germany) |
|
4.4 |
|
4.7 |
|
5.2 |
|
10.6 |
|
3.7 |
|
40.5 |
|
4.0 |
|
|
DSL (Central and Eastern Europe) |
|
0.14 |
|
0.16 |
|
0.2 |
|
25.0 |
|
0.1 |
|
100.0 |
|
0.11 |
|
|
Narrowband lines, including ISDN channels |
|
55.5 |
|
55.2 |
|
54.9 |
|
(0.5 |
) |
55.6 |
|
(1.3 |
) |
55.5 |
|
|
Germany(c) |
|
48.7 |
|
48.4 |
|
48.2 |
|
(0.4 |
) |
48.8 |
|
(1.2 |
) |
48.7 |
|
|
Standard analog lines |
|
26.9 |
|
26.6 |
|
26.4 |
|
(0.8 |
) |
27.6 |
|
(4.3 |
) |
27.2 |
|
|
ISDN channels |
|
21.8 |
|
21.9 |
|
21.8 |
|
(0.5 |
) |
21.2 |
|
2.8 |
|
21.5 |
|
|
Central and Eastern Europe |
|
6.8 |
|
6.8 |
|
6.7 |
|
(1.5 |
) |
6.8 |
|
(1.5 |
) |
6.8 |
|
|
MATÁV(d) |
|
3.5 |
|
3.5 |
|
3.5 |
|
(0.0 |
) |
3.5 |
|
(0.0 |
) |
3.5 |
|
|
Slovak Telecom |
|
1.4 |
|
1.4 |
|
1.3 |
|
(7.1 |
) |
1.4 |
|
(7.1 |
) |
1.4 |
|
|
Hrvatske telekomunikacije(e) |
|
1.9 |
|
1.9 |
|
1.9 |
|
0.0 |
|
1.8 |
|
5.6 |
|
1.9 |
|
|
Mobile subscribers |
|
7.4 |
|
7.7 |
|
7.9 |
|
2.6 |
|
6.9 |
|
14.5 |
|
7.2 |
|
|
T-Mobile Hungary(f) |
|
3.8 |
|
3.9 |
|
4.0 |
|
2.6 |
|
3.6 |
|
11.1 |
|
3.8 |
|
|
T-Mobile Hrvatska(g) |
|
1.4 |
|
1.4 |
|
1.4 |
|
0.0 |
|
1.4 |
|
0.0 |
|
1.3 |
|
|
EuroTel(h) |
|
1.7 |
|
1.7 |
|
1.8 |
|
5.9 |
|
1.5 |
|
20.0 |
|
1.6 |
|
|
Mobimak(i) |
|
0.6 |
|
0.6 |
|
0.7 |
|
16.7 |
|
0.5 |
|
40.0 |
|
0.5 |
|
(a) The total was calculated on the basis of precise figures and rounded to millions. Percentages calculated on the basis of figures shown.
(b) Lines in operation.
(c) Telephone channels, including for internal use.
(d) Subscriber-line figures are recorded including MATÁV’s subsidiary Maktel.
(e) Rebranded as T-Hrvatski Telekom on October 1, 2004.
(f) Formerly Westel, rebranded as T-Mobile Hungary on May 3, 2004.
(g) Formerly HT mobile, rebranded as T-Mobile Hrvatska on October 1, 2004.
(h) Eurotel is consolidated at equity through Slovak Telecom.
(i) Mobile subscribers are posted as of the first quarter of 2004. Mobimak is fully consolidated through Maktel.
T-Com:
Customer development and selected KPIs
T-Com actively promotes broadband in the mass market, thereby playing a key role in increasing the use of high-speed Internet communication. In total, T-Com increased the number of DSL broadband lines in operation by 42.1 percent year-on-year to 5.4 million. With its active marketing of T-DSL lines, T-Com added 458,000 new broadband lines in Germany in the third quarter of this year, bringing the total to 5.2 million. This figure also includes 85,000 DSL lines T-Com sold to competitors under resale agreements. Following the rate adjustment and the optimization of transmission bandwidths as part of the 1-2-3 strategy in April 2004, T-DSL Business rates were adjusted at the beginning of June 2004.
17
In August and September 2004, T-Com and T-Online launched a very attractively priced broadband Internet starter offer for new T-DSL customers as part of their “three times zero” campaign. Under this plan, T-Online reimbursed the activation charge for the T-DSL line in the form of credit to the user’s account. In addition, customers received a DSL modem free of charge and the first monthly charge for the T-Online dsl 1500 MB service was waived.
In Central and Eastern Europe, the number of DSL lines in operation increased by 157 percent year-on-year to 195,000 at the end of the first nine months. The Hungarian carrier MATÁV recorded the strongest absolute growth, posting an increase of around 124 percent over the prior-year period, bringing the total number of DSL lines in operation to more than 162,000. Both Hrvatske telekomunikacije (HT) and Slovak Telekom (ST) also reported large gains in their broadband business.
An important element of T-Com’s broadband initiative is W-LAN, the wireless access technology that can be used at home and at an ever increasing number of locations. In the third quarter of 2004, T-Com marketed 572,000 W-LAN devices in Germany, an increase of 453,000 over the third quarter of 2003. By the end of September 2004, T-Com had signed around 4,000 contracts for HotSpots, public wireless local access networks, in Germany. Within the space of only one year, the division has installed more than 2,500 HotSpots.
Since August 2, 2004, competitors of T-Com in Germany have had the option of offering DSL products based on T-Com’s infrastructure under their own name and for their own account. Since then, a number of competing providers have signed contracts with T-Com for this purpose. T-Com is also making other upstream services available to its competitors, including subscriber line leasing and line sharing, enabling them to offer broadband access products to their customers. Effective July 1, 2004, the Regulatory Authority lowered the activation and cancellation charges for the subscriber line by an average ranging from 10.8 percent to 36.1 percent. The monthly line-sharing charge was lowered from EUR 4.77 to EUR 2.43 in July 2004 as required by the Regulatory Authority.
At 21.8 million, the number of T-ISDN channels was 0.5 percent lower than the prior-quarter figure. This is the first time the figure has fallen quarter-on-quarter. This development can be attributed largely to the discontinuation of the price bundling advantage from ordering T-DSL together with T-ISDN. The number of narrowband lines in operation was 1.3 percent lower than in the prior-year period, due to substitution by mobile communications and the migration of subscribers to competitors.
18
The loss of market share for call minutes, much of which is attributable to the regulatory situation, continued to slow to some extent in the third quarter. In the local network, competitors accounted for more than 25 percent of the market at the end of the third quarter. T-Com is offering attractive new rate plans to stabilize its market shares. With the new optional calling plan “enjoy” available since July, T-Com customers can call within the German fixed network for 12 cents(5) for each hour or part thereof per call. Since September 2004, T-Com has been offering a new rate plan to its customers, “CountrySelect,” which has been given provisional approval by the Regulatory Authority. Under this plan, subscribers can communicate with 221 foreign destinations at preferential rates.
To further increase customer satisfaction, T-Com pushed ahead with its “Perform+” quality campaign in the third quarter. Measures implemented in the consumer sector included steps to improve coordination between T-Com and T-Online to offer seamless support to subscribers of T-DSL lines. After a successful pilot project carried out in conjunction with Perform+, larger T-Punkt stores now have so-called Welcome Managers to receive customers and reduce waiting times. Perform+ projects aimed at improving service for business customers include measures to further build up the competence of sales support staff, speed up the billing process, and improve complaints management.
(5) Applicable for “City” and nationwide calls provided by T-Com (excluding mobile calls and online connections). “Enjoy” costs EUR 4.68 per month in addition to T-Net or T-ISDN (from EUR 15.66 and EUR 23.60 per month, respectively; plus a one-time activation charge of EUR 59.95).
19
T-Com:
Development of operations
|
|
|
|
|
|
|
Third quarter of 2004 |
|
First three quarters of 2004 |
|
||||||||||
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q3 |
|
Change |
|
Q1 – Q3 |
|
Q1 – Q3 |
|
Change |
|
2003 |
|
|
|
|
millions |
|
millions |
|
millions |
|
millions |
|
% |
|
millions |
|
millions |
|
% |
|
millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
|
6,975 |
|
6,882 |
|
6,806 |
|
7,104 |
|
(4.2 |
) |
20,663 |
|
21,747 |
|
(5.0 |
) |
29,206 |
|
|
Germany |
|
6,059 |
|
5,906 |
|
5,791 |
|
6,119 |
|
(5.4 |
) |
17,756 |
|
18,856 |
|
(5.8 |
) |
25,351 |
|
|
Central and Eastern Europe |
|
916 |
|
976 |
|
1,015 |
|
985 |
|
3.0 |
|
2,907 |
|
2,891 |
|
0.6 |
|
3,855 |
|
|
Results from ordinary business activities(a) |
|
1,399 |
|
1,405 |
|
1,455 |
|
1,255 |
|
15.9 |
|
4,259 |
|
3,569 |
|
19.3 |
|
4,690 |
|
|
Financial income (expense), net(a) |
|
(15 |
) |
28 |
|
45 |
|
(23 |
) |
n.a. |
|
58 |
|
(236 |
) |
n.a. |
|
(284 |
) |
|
Depreciation and amortization |
|
(1,184 |
) |
(1,204 |
) |
(1,158 |
) |
(1,265 |
) |
8.5 |
|
(3,546 |
) |
(3,865 |
) |
8.3 |
|
(5,169 |
) |
|
Other taxes |
|
(7 |
) |
(11 |
) |
(8 |
) |
(5 |
) |
(60.0 |
) |
(26 |
) |
(14 |
) |
(85.7 |
) |
(21 |
) |
|
EBITDA(b) |
|
2,605 |
|
2,592 |
|
2,576 |
|
2,548 |
|
1.1 |
|
7,773 |
|
7,684 |
|
1.2 |
|
10,164 |
|
|
Special factors affecting EBITDA(b) |
|
(36 |
) |
0 |
|
(17 |
) |
(1 |
) |
n.a. |
|
(53 |
) |
(93 |
) |
43.0 |
|
(192 |
) |
|
Adjusted EBITDA(b) |
|
2,641 |
|
2,592 |
|
2,593 |
|
2,549 |
|
1.7 |
|
7,826 |
|
7,777 |
|
0.6 |
|
10,356 |
|
|
Germany |
|
2,217 |
|
2,156 |
|
2,116 |
|
2,086 |
|
1.4 |
|
6,489 |
|
6,477 |
|
0.2 |
|
8,667 |
|
|
Central and Eastern Europe |
|
424 |
|
436 |
|
477 |
|
463 |
|
3.0 |
|
1,337 |
|
1,300 |
|
2.8 |
|
1,689 |
|
|
Adjusted EBITDA margin(b) (%) |
|
37.9 |
|
37.7 |
|
38.1 |
|
35.9 |
|
|
|
37.9 |
|
35.8 |
|
|
|
35.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in property, plant and equipment, and intangible assets(c) |
|
(384 |
) |
(521 |
) |
(518 |
) |
(517 |
) |
(0.2 |
) |
(1,423 |
) |
(1,285 |
) |
(10.7 |
) |
(2,129 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of employees(d) |
|
125,700 |
|
125,782 |
|
125,914 |
|
138,331 |
|
(9.0 |
) |
125,799 |
|
141,620 |
|
(11.2 |
) |
139,548 |
|
(a) In contrast to previous reporting, T-Systems, rather than T-Com, has been responsible for Toll Collect since April 1, 2004. Prior-period comparatives have been restated accordingly.
(b) Deutsche Telekom defines EBITDA as the results from ordinary business activities excluding other taxes, net financial income/expense, amortization and depreciation. A detailed explanation of the special factors affecting EBITDA, adjusted EBITDA, and the adjusted EBITDA margin can be found under “Reconciliation of pro forma figures,” page 43 et seq. For detailed information and calculations of the figures for 2003, please refer to Deutsche Telekom’s 2003 Annual Report, “Reconciliation of pro forma figures,” page 96 et seq.
(c) Excluding goodwill and certain intragroup transfers.
(d) Average number of employees.
20
T-Com:
Total revenue
With revenue of EUR 20.7 billion in the first nine months of 2004, T-Com was again the largest contributor to revenue in the Deutsche Telekom Group. After deducting the pro-rata revenue of the remaining cable companies that were sold as of March 1, 2003, revenue was 4.3 percent lower than in the prior-year period. The call-by-call and preselection plans offered by T-Com’s competitors continued to weigh on revenue performance in the German market. Domestic revenue was also impacted by the average 9.5 percent reduction in interconnection charges in December 2003 and the continued trend of direct interconnection between other carriers as well as, to a lesser extent, by the transfer of the communications networks unit from Network Projects & Services GmbH to the newly established company Vivento Technical Services GmbH & Co. KG.
T-Com’s revenue from access business increased compared with the first nine months of 2003. The key factors fueling this development included the rate adjustment for analog lines as part of the price cap measures taken as of September 1, 2003 and the continued strong growth in the number of T-DSL lines. In contrast to the growth in revenue from the access business, call revenue for the third quarter of 2004 was lower due to regulatory factors and market share losses. An additional reason for the revenue drop was the growing tendency of customers to make their calls within more attractively priced optional calling plans. The effects of the introduction of call-by-call in April 2003 and preselection in July 2003 have now been recorded for the full year for the first time.
Revenue generated from terminal equipment business also decreased. This decrease resulted in part from the reduced demand for leasing conventional corded telephones and communications systems for business customers. Revenue generated by data communications business was also slightly lower, due in part to weaker demand for the in-house networks that T-Com builds for its customers.
The continued trend of direct network interconnection between other carriers and the average 9.5 percent reduction of interconnection charges that took effect in December 2003 caused the revenue from Carrier Services to decline. The decrease was also due to price reductions for narrowband and broadband Internet Service Provider (ISP) services. This revenue decrease was partly offset by a low level of growth in the subscriber line sector.
It should be noted that a substantial proportion of the total revenue decrease of 5.0 percent in the first nine months of 2004 as compared with the prior-year period relates to services purchased by the other divisions. Net revenue(6) declined by only 3.2 percent year-on-year.
At EUR 1.0 billion, the total revenue generated by T-Com’s subsidiaries in Central and Eastern Europe in the third quarter of 2004 was three percent higher than the corresponding figure for the prior-year period. The revenue for the first three quarters of 2004 increased by 0.6 percent year-on-year to EUR 2.9 billion. While MATÁV and ST reported lower revenues, HT’s total revenue for the first nine months of the year was 6.0 percent higher than in the same period last year. Positive currency translation effects at ST and HT more than offset the negative currency translation effects at MATÁV. Due to continuing deregulation and tougher competition, the revenue generated by the Central and Eastern European subsidiaries in the conventional fixed network decreased, but this decline was more than offset by the growth in mobile communications and broadband business.
(6) For the presentation of net revenue, please refer to the chapter on “Segment reporting,” page 65 et seq.
21
T-Com:
Results from ordinary business activities
Despite the revenue decrease, the division managed to increase its results from ordinary business activities for the first nine months of 2004 by EUR 0.7 billion to EUR 4.3 billion, thanks to the successful implementation of efficiency enhancement measures. This figure contains special factors in the amount of EUR 53 million from the first and third quarters of 2004, consisting of expenses for voluntary redundancy payments and bridging allowances as part of staff reductions in Germany and Central and Eastern Europe. The results for the first three quarters of the preceding year were positively affected by the proceeds from the sale of the remaining cable companies and negatively impacted by charges, primarily relating to the adjustment of the discount rate applied to pension accruals, voluntary redundancy payments, and transfer payments to Vivento. These negative special factors totaled EUR 93 million for the first three quarters of 2003. The improvement in T-Com’s earnings performance in the first nine months of this year can be attributed primarily to the lower cost of sales, administrative expenses and selling costs. For the first nine months of 2004, T-Com contributed EUR 6.4 billion to net cash provided by operating activities in the Deutsche Telekom Group, this being the largest contribution of any division.
T-Com:
EBITDA, adjusted EBITDA
Thanks to rigorous, comprehensive cost management and staff reductions, T-Com achieved additional gains in its operational profitability in the first three quarters of 2004. Adjusted EBITDA for the first three quarters of the current year was EUR 7.8 billion, EUR 49 million higher than the corresponding prior-year figure. The adjusted EBITDA margin rose 2.1 percentage points over the prior-year level to 37.9 percent. On a like-for-like basis, i.e., after deduction of the pro-rata EBITDA for the cable companies that were sold as of March 1, 2003, adjusted EBITDA for the first nine months of 2004 increased by EUR 121 million (1.6 percent) year-on-year. This improvement was mainly due to the lower number of employees and the corresponding reduction in personnel-related operating costs. The EBITDA generated in Central and Eastern Europe was EUR 1.3 billion, an increase of 3.8 percent over the corresponding figure for the period from January to September 2003. The adjusted EBITDA margin in Central and Eastern Europe also improved to 46 percent, reflecting a gain of one percentage point over the prior-year period, due to cost reductions, especially from staff cuts.
22
T-Com:
Personnel
Compared with the corresponding prior-year period, the average number of employees at T-Com declined 11.2 percent to 125,799 in the first three quarters of 2004. This number includes 30,788 employees in Central and Eastern Europe. The workforce reduction was effected mainly by transferring employees to Vivento, voluntary redundancy programs, part-time work for employees approaching retirement age, natural fluctuation and terminations. More than 2,000 T-Com employees were transferred to Vivento in the first nine months of 2004. The increase in the average employee head count in the second and third quarters of 2004 was a result of the employment alliance and the organizational takeover of the Financial Statements and Accounting department from Group Headquarters. As a result of the workforce reduction program, T-Com’s personnel costs, adjusted for the special factors of voluntary redundancy payments (in 2003/2004) and the adjustment of the discount rate applied to pension accruals (in 2003), decreased by 9.8 percent.
T-Com:
Capital expenditure
T-Com’s capital expenditure in the first three quarters of 2004 was EUR 1.4 billion, 10.7 percent higher than the corresponding prior-year figure. In Germany, T-Com intensified its capital spending on transmission platforms, access networks and especially T-DSL technology. Investments in intangible assets and property, plant and equipment in the Central and Eastern European subsidiaries grew by a total of 7.3 percent over the prior-year period, due primarily to the accelerated roll-out of the next-generation network at Slovak Telecom. Capital spending at MATÁV also increased year-on-year, due to the substantial expansion of the DSL network.
23
The T-Mobile division
|
|
|
Mar. 31, |
|
June 30, |
|
Sept. 30, |
|
Change |
|
Sept. 30, |
|
Change |
|
Dec. 31, |
|
|
|
|
millions |
|
millions |
|
millions |
|
% |
|
millions |
|
% |
|
millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mobile subscribers |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total(a) |
|
63.4 |
|
65.7 |
|
67.2 |
|
2.3 |
|
57.7 |
|
16.5 |
|
61.1 |
|
|
of which: T-Mobile Deutschland |
|
26.7 |
|
27.1 |
|
27.4 |
|
1.1 |
|
25.6 |
|
7.0 |
|
26.3 |
|
|
of which: T-Mobile USA |
|
14.3 |
|
15.4 |
|
16.3 |
|
5.8 |
|
12.1 |
|
34.7 |
|
13.1 |
|
|
of which: T-Mobile UK(b) |
|
14.3 |
|
14.9 |
|
15.2 |
|
2.0 |
|
12.4 |
|
22.6 |
|
13.6 |
|
|
of which: T-Mobile Austria |
|
2.0 |
|
2.0 |
|
2.0 |
|
0.0 |
|
2.0 |
|
0.0 |
|
2.0 |
|
|
of which: T-Mobile CZ |
|
4.0 |
|
4.1 |
|
4.1 |
|
0.0 |
|
3.7 |
|
10.8 |
|
3.9 |
|
|
of which: T-Mobile Netherlands |
|
2.1 |
|
2.2 |
|
2.3 |
|
4.5 |
|
1.8 |
|
27.8 |
|
2.0 |
|
(a) The total was calculated on the basis of precise figures and rounded to millions. Percentages calculated on the basis of figures shown.
(b) Including Virgin Mobile.
T-Mobile:
Customer development and selected KPIs
In the third quarter of 2004, T-Mobile International continued its growth course and gained around 1.6 million new customers, including approximately 1.3 million subscribers with fixed-term contracts. Year-on-year, the number of customers increased by 9.6 million, an increase of over 16 percent. The number of net additions in the third quarter of 2004 was around 430,000 higher than in the same quarter of the previous year. Of particular note is that the proportion of fixed-term contract subscribers is now over 50 percent; thus T-Mobile International once again remained on target for increasing the proportion of fixed-term contract subscribers in the customer base.
In the third quarter of 2004, the most important growth driver in the T-Mobile group was once again the U.S. subsidiary T-Mobile USA which accounted for well over 50 percent of net additions. In absolute terms, this performance was again the second-best among the nationwide mobile communications providers in the United States. Some T-Mobile companies pursued a more focused subscriber acquisition strategy, which in some cases had a negative impact on the prepay customer base.
24
T-Mobile USA gained 901,000 customers in the third quarter of 2004. Monthly ARPU(7) remained constant compared with the previous quarter, at USD 52; in euros, however, it decreased slightly from EUR 43 to EUR 42 due to exchange rate fluctuations. The churn rate increased slightly compared with the second quarter of 2004 to three percent as a result of seasonal factors. The number of T-Mobile USA customers using BlackBerrys for mobile voice and data communications grew substantially to approximately 300,000 at the end of the third quarter of 2004. This equates to an increase of close to 70,000 quarter-on-quarter and almost 240,000 year-on-year.
T-Mobile Deutschland recorded net additions of almost 300,000 in the third quarter of this year. While the number of prepay customers decreased slightly, the number of fixed-term contract subscribers grew by 328,000. The churn rate increased slightly to 1.5 percent. ARPU increased by one euro to EUR 24. In the third quarter, T-Mobile Deutschland was highly successful in attracting customers for the Relax rates, for which marketing began in February 2004. For a monthly package price, these calling plans include a “bucket” of minutes for certain mobile calls; there is no additional basic monthly charge. 1.1 million customers had already opted for one of the Relax rates by the end of third quarter of 2004.
The number of T-Mobile UK subscribers grew by 308,000 in the third quarter of 2004. The churn rate increased to 2.5 percent. Growth in fixed-term contract subscribers was particularly encouraging, with the number increasing by 83,000 in the third quarter. Measured in local currency, ARPU dropped from GBP 21 to GBP 20, which translates to a decrease from EUR 31 to EUR 30.
T-Mobile Austria had over 2 million customers at the end of the third quarter of 2004, which represents a slight decrease. The proportion of fixed-term contract subscribers in the entire customer base increased in the reporting period, continuing the trend of the last few quarters. Against the background of a slight decrease in the churn rate, ARPU increased by one euro to EUR 31.
T-Mobile CZ acquired 55,000 new customers in the third quarter of 2004. Of these, 85 percent were fixed-term contract subscribers. Fixed-term contract subscribers accounted for 22 percent of T-Mobile CZ’s customer base at the end of the third quarter of 2003; this increased to one in four at the end of the third quarter of 2004. ARPU remained stable at EUR 15.
T-Mobile Netherlands increased its subscriber base by 29,000 in the third quarter. ARPU fell year-on-year by two euros to EUR 36. T-Mobile Netherlands nevertheless once again recorded the highest ARPU of the European T-Mobile companies.
(7) Average revenue per user (ARPU) is used to measure the monthly revenue from services per customer. ARPU is calculated as follows: revenue generated by customers for services (i.e., voice services, including incoming and outgoing calls, and data services) plus roaming revenue and monthly charges, divided by the average number of customers in the month. Revenue from services excludes the following: revenue from terminal equipment, customer activation, and visitor roaming, revenue from virtual network operators, and other revenue not generated directly by T-Mobile customers.
25
T-Mobile:
Development of operations
|
|
|
|
|
|
|
Third quarter of 2004 |
|
First three quarters of 2004 |
|
||||||||||
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q3 |
|
Change |
|
Q1 – Q3 |
|
Q1 – Q3 |
|
Change |
|
2003 |
|
|
|
|
millions |
|
millions |
|
millions |
|
millions |
|
% |
|
millions |
|
millions |
|
% |
|
millions |
|
|
Total revenue(a) |
|
5,944 |
|
6,237 |
|
6,479 |
|
5,920 |
|
9.4 |
|
18,660 |
|
16,787 |
|
11.2 |
|
22,778 |
|
|
of which: T-Mobile Deutschland |
|
2,121 |
|
2,161 |
|
2,238 |
|
2,208 |
|
1.4 |
|
6,520 |
|
6,297 |
|
3.5 |
|
8,479 |
|
|
of which: T-Mobile USA |
|
2,070 |
|
2,320 |
|
2,477 |
|
1,974 |
|
25.5 |
|
6,867 |
|
5,423 |
|
26.6 |
|
7,416 |
|
|
of which: T-Mobile UK |
|
1,133 |
|
1,108 |
|
1,106 |
|
1,090 |
|
1.5 |
|
3,347 |
|
3,186 |
|
5.1 |
|
4,303 |
|
|
of which: T-Mobile Austria |
|
236 |
|
210 |
|
222 |
|
277 |
|
(19.9 |
) |
668 |
|
809 |
|
(17.4 |
) |
1,098 |
|
|
of which: T-Mobile CZ |
|
186 |
|
204 |
|
213 |
|
195 |
|
9.2 |
|
603 |
|
564 |
|
6.9 |
|
768 |
|
|
of which: T-Mobile Netherlands |
|
250 |
|
267 |
|
270 |
|
225 |
|
20.0 |
|
787 |
|
626 |
|
25.7 |
|
861 |
|
|
Results from ordinary business activities |
|
156 |
|
1,846 |
|
1,287 |
|
239 |
|
n.a. |
|
3,289 |
|
637 |
|
n.a. |
|
831 |
|
|
Financial expense, net |
|
(265 |
) |
(65 |
) |
(203 |
) |
(189 |
) |
(7.4 |
) |
(533 |
) |
(781 |
) |
31.8 |
|
(895 |
) |
|
Depreciation and amortization |
|
(1,234 |
) |
(1,270 |
) |
(1,282 |
) |
(1,298 |
) |
1.2 |
|
(3,786 |
) |
(3,857 |
) |
1.8 |
|
(5,196 |
) |
|
Other taxes |
|
(22 |
) |
(29 |
) |
(26 |
) |
(22 |
) |
(18.2 |
) |
(77 |
) |
(75 |
) |
(2.7 |
) |
(94 |
) |
|
EBITDA(b) |
|
1,677 |
|
3,210 |
|
2,798 |
|
1,748 |
|
60.1 |
|
7,685 |
|
5,350 |
|
43.6 |
|
7,016 |
|
|
Special factors affecting EBITDA(b) |
|
0 |
|
1,280 |
(d) |
636 |
(e) |
0 |
|
n.a. |
|
1,916 |
(d),(e) |
345 |
(f) |
n.a. |
|
345 |
(f) |
|
Adjusted EBITDA(b) |
|
1,677 |
|
1,930 |
|
2,162 |
|
1,748 |
|
23.7 |
|
5,769 |
|
5,005 |
|
15.3 |
|
6,671 |
|
|
Adjusted EBITDA margin(b) (%) |
|
28.2 |
|
30.9 |
|
33.4 |
|
29.5 |
|
|
|
30.9 |
|
29.8 |
|
|
|
29.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in property, plant and equipment and intangible assets (excluding goodwill) |
|
(452 |
) |
(644 |
) |
(471 |
) |
(658 |
) |
28.4 |
|
(1,567 |
) |
(1,648 |
) |
4.9 |
|
(3,012 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of employees(c) |
|
43,152 |
|
44,215 |
|
44,920 |
|
41,708 |
|
7.7 |
|
44,096 |
|
41,440 |
|
6.4 |
|
41,767 |
|
The T-Mobile division combines all the activities of T-Mobile International Holding GmbH: primarily T-Mobile Deutschland GmbH, T-Mobile (UK) Ltd., T-Mobile USA Inc., T-Mobile Czech Republic a.s., T-Mobile Austria GmbH, and T-Mobile Netherlands B.V., as well as minority shareholdings in Russia (MTS) and Poland (PTC).
(a) These amounts relate to the companies’ respective single-entity financial statements (adjusted for uniform group accounting policies and reporting currency) without taking into consideration consolidation effects at division level.
(b) Deutsche Telekom defines EBITDA as the results from ordinary business activities excluding other taxes, net financial income/expense, amortization and depreciation. A detailed explanation of the special factors affecting EBITDA, adjusted EBITDA and the adjusted EBITDA margin can be found under “Reconciliation of pro forma figures,” page 43 et seq. For detailed information and calculations of the figures for 2003, please refer to Deutsche Telekom’s 2003 Annual Report, “Reconciliation of pro forma figures,” page 96 et seq.
(c) Average number of employees.
(d) Write-up of FCC licenses (EUR 1,807 million), accruals for contingent losses attributable to the dissolution of the U.S. mobile communications joint venture (EUR 602 million), subsequent proceeds from sale of Virgin Mobile (EUR 75 million).
(e) Write-up of FCC licenses (EUR 641 million), cost of Vivento for T-Mobile Deutschland (EUR 5 million).
(f) Sale of MTS shares (EUR 352 million) and adjustment of the discount rate applied to pension accruals (EUR - 7 million); for detailed information and calculation of the discount rate, please refer to Deutsche Telekom’s 2003 Annual Report, “Reconciliation of pro forma figures,” page 96 et seq.
26
T-Mobile:
Total revenue
In the third quarter of 2004, almost all T-Mobile companies recorded quarter-on-quarter revenue growth. Revenue rose by over 11 percent in the first nine months of 2004, mainly as a result of the strong growth of the customer base. T-Mobile USA recorded the strongest revenue growth of 26 percent due to the considerable increase in its customer numbers. In Europe, only T-Mobile Austria recorded a decrease in revenue, mainly due to the deconsolidation of Niedermeyer. The T-Mobile companies in Germany, the United Kingdom, the Czech Republic and the Netherlands increased revenue as a result of continued customer growth.
T-Mobile:
Results from ordinary business activities
The results from ordinary business activities in the third quarter of 2004 amounted to EUR 1.3 billion. This figure was once again substantially affected by special factors, which boosted EBITDA by EUR 0.6 billion. Adjusted for these special factors, the results from ordinary business activities more than doubled compared with the third quarter of 2003 to around EUR 651 million. This growth was driven by a below-average increase in cost of sales, as well as economies of scale and efficiency gains.
T-Mobile:
EBITDA, adjusted EBITDA
EBITDA of the T-Mobile division for the third quarter of 2004 was EUR 2.8 billion. EBITDA adjusted to exclude special factors amounted to EUR 2.2 billion. There were several special factors in the third quarter: a further write-up of U.S. mobile communications licenses by EUR 641 million due to changes in fair value measurements and a charge of EUR 5 million at T-Mobile Deutschland for the transfer of employees to Vivento. This put the adjusted EBITDA margin at 33.4 percent, a year-on-year increase of almost four percentage points. This substantial improvement in EBITDA is primarily attributable to selective customer acquisition, which led to a reduction in subscriber acquisition costs. But improvements in efficiency also contributed to the increase in EBITDA. T-Mobile Deutschland once again made the biggest contribution to adjusted EBITDA with EUR 921 million. The adjusted EBITDA margin was 41.2 percent in the German T-Mobile subsidiary, which was 2.7 percentage points up on the previous quarter. T-Mobile USA increased its adjusted EBITDA to EUR 657 million, achieving an adjusted EBITDA margin of 26.5 percent. T-Mobile UK also increased its adjusted EBITDA margin compared with the previous quarter to 34.7 percent based on EBITDA of EUR 384 million. The subsidiaries in the Czech Republic, Austria and the Netherlands contributed EUR 105 million, EUR 66 million and EUR 55 million, respectively, to the division’s EBITDA. Thus all companies in the T-Mobile group improved their margins compared with the previous quarter.
T-Mobile:
Personnel
Personnel costs at T-Mobile International continued to increase at a slower rate than revenue. The number of employees in the United States increased again compared with the first six months. In Europe the figure remained virtually constant.
27
The T-Systems division
|
|
|
Mar. 31, |
|
June 30, |
|
Sept. 30, |
|
Change |
|
Sept. 30, |
|
Change |
|
Dec. 31, |
|
|
|
|
|
|
|
|
|
|
% |
|
|
|
% |
|
|
|
|
Systems Integration |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hours billed(millions) |
|
2.9 |
|
5.7 |
|
8.7 |
|
|
|
8.5 |
|
2.2 |
|
11.2 |
|
|
Utilization rate(b) (%) |
|
73.5 |
|
76.1 |
|
77.1 |
|
|
|
74.2 |
|
|
|
74.0 |
|
|
Computing Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Processor capacity(MIPS)(c) |
|
116,956 |
|
121,831 |
|
124,448 |
|
2.1 |
|
107,064 |
|
16.2 |
|
113,723 |
|
|
Number of servers managed and service(d) |
|
31,365 |
|
34,160 |
|
34,360 |
|
0.6 |
|
28,304 |
|
21.4 |
|
28,399 |
|
|
Mainframe utilization (%) |
|
95.0 |
|
95.0 |
|
95.0 |
|
|
|
95.0 |
|
|
|
95.0 |
|
|
Desktop Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of workstations managed and serviced (millions) |
|
1.2 |
|
1.2 |
|
1.3 |
|
2.7 |
|
1.3 |
|
(0.6 |
) |
1.2 |
|
|
Proportion of support activities, Germany (%) |
|
59.8 |
|