Deutsche Telekom exceeds its guidance in the 2021 financial year and plans further growth
- Revenue up by 7.7 percent to 108.8 billion euros
- Adjusted EBITDA AL up by 6.6 percent to 37.3 billion euros
- Free cash flow AL up by 40.1 percent to 8.8 billion euros
- Guidance for 2021 exceeded based on constant exchange rates
- Adjusted net profit of 5.9 billion euros: plus 2.6 percent, adjusted earnings per share of 1.22 euros
- Guidance for 2022: free cash flow AL of around 10 billion euros, adjusted EBITDA AL of around 36.5 billion euros, adjusted core EBITDA AL to rise by around 5 percent
- Strong customer growth in Germany
- T-Mobile US: strong increase in synergies from merger with Sprint
- Adjusted EBITDA AL of more than 4 billion euros for the first time in the Europe segment
Expectations exceeded. Deutsche Telekom increased its financial figures in 2021. The Group’s total revenue grew by 7.7 percent in the 2021 financial year to 108.8 billion euros, with service revenues increasing by 6.5 percent to 84.1 billion euros. Adjusted EBITDA AL rose by 6.6 percent year-on-year to 37.3 billion euros. Based on constant exchange rates, i.e., those used for the 2021 guidance, the Group reached 38.2 billion euros, exceeding its forecast for adjusted EBITDA AL, which had just been raised in November. Free cash flow AL totaled 8.8 billion euros. That is an increase of around 40.1 percent compared with 2020. The dividend proposed to the shareholders’ meeting on April 7 is 0.64 euros per share.
“We won’t let up,” said Tim Höttges, CEO of Deutsche Telekom. “Profits are growing in all areas. The Group’s successful course continues.”
In 2021, Deutsche Telekom invested 18.0 billion euros worldwide, excluding expenses for mobile spectrum. 5.9 percent more than in the previous year. Adjusted net profit increased by 2.6 percent to 5.9 billion euros; on an unadjusted basis, it increased by 0.4 percent to 4.2 billion euros.
For the current financial year, the Group expects free cash flow AL of around 10 billion euros. Adjusted EBITDA AL is expected to reach 36.5 billion euros. The comparison with 2021 must take into account changes in the composition of the Group, primarily the deconsolidation of T-Mobile Netherlands, and effects from the reduction of the terminal equipment lease business in the United States. The figure adjusted for these lease effects – adjusted core EBITDA AL – is expected to increase by around 5 percent in 2022 on a like-for-like basis. Adjusted earnings per share are expected to reach more than 1.25 euros, compared to 1.22 euros in 2021. Deutsche Telekom also confirmed its target of at least 1.75 euros for 2024.
Germany: Growth trajectory continues
In its home market, Deutsche Telekom can look back on a year of substantial growth in customer numbers and of strong earnings. In the broadband business, the Company recorded 360,000 customer additions, thus significantly increasing its market share in 2021. At year-end, 17.2 million (retail and wholesale) customers were using a fiber-optic based line (FTTH, VDSL/vectoring), 1.2 million more than a year earlier.
In mobile communications, Telekom recorded growth in branded contract customers of 666,000 for the full year. The clear market leadership in terms of mobile service revenues was reinforced. In the fourth quarter, this figure was up 2.3 percent against the prior-year period.
The Germany operating segment increased total revenue by 1.6 percent year-on-year in the 2021 financial year to 24.2 billion euros. Growth in adjusted EBITDA AL was even stronger: up 3.6 percent to 9.5 billion euros.
United States: Positive outlook
T-Mobile US ended the year with 108.7 million customers, an increase of 6.7 million within 12 months. More than 2.9 million of these additions related to the particularly profitable postpaid phone segment.
Total revenue increased by 15.2 percent to 80.8 billion U.S. dollars. At the same time, adjusted EBITDA AL increased by 11.8 percent to 26.9 billion U.S. dollars. The business combination with Sprint is paying off. Last year, synergies leveraged in shared functions, sales, and networks amounted to 3.8 billion U.S. dollars. In 2022, this figure is expected to rise to between 5.0 and 5.3 billion U.S. dollars, thereby exceeding the integration costs of the merger on a full-year basis for the first time since the business combination with Sprint as of April 1, 2020.
Europe: Milestone reached
The Europe operating segment generated adjusted EBITDA AL of more than 4.0 billion euros within a year for the first time. In organic terms, i.e., adjusted for exchange rate effects and changes in the composition of the Group, this was 5.4 percent more than in the prior year. This indicator for earnings performance had increased organically year-on-year in every quarter of the last four years. Service revenues grew by 2.0 percent in organic terms in 2021 to 9.6 billion euros.
Customer numbers increased in all areas in 2021. The European national companies won 770,000 new mobile contract customers in total. The number of broadband customers went up by 350,000. The number of users of convergent fixed-mobile product bundles increased by 842,000.
Systems Solutions: Delivered in terms of earnings
T-Systems has achieved the most important financial target for 2021. The corporate customer segment generated adjusted EBITDA AL of 286 million euros, primarily thanks to strict cost discipline. That is 2.5 percent more than in the previous year.
Revenue declined by 3.4 percent in the year just ended to 4.0 billion euros. Order entry was 8.5 percent down year-on-year at 4.2 billion euros.
Group Development: Cell tower business continues to grow
The cell tower business in the Group Development segment performed very well in the year just ended. In organic terms, revenue increased in 2021 by 5.4 percent year-on-year to 1.1 billion euros. At the same time, adjusted EBITDA AL grew 6.3 percent in organic terms to 0.6 billion euros. The comparison on an organic basis is adjusted for the sale of the Dutch cell towers. The number of cell sites grew by 1,100 in organic terms in the past 12 months to 40,600.
The sale of T-Mobile Netherlands (TMNL), announced in September, is not yet complete. As such, the TMNL figures are included in full in the consolidated data for 2021. In the past year, the Dutch business recorded 192,000 mobile contract additions. Total revenue amounted to 2.1 billion euros, adjusted EBITDA AL to 0.7 billion euros.
The Deutsche Telekom Group at a glance
|
Q4 2021 millions of € |
Q4 2020 millions of € |
Change % |
FY 2021 millions of € |
FY 2020 millions of € |
Change % |
|
|
Net revenue |
28,934 |
27,622 |
4.7 |
108,794 |
100,999 |
7.7 |
|
Proportion generated internationally % |
77.4 |
76.1 |
1.3p |
77.0 |
75.5 |
1.5p |
|
Service revenue |
21,950 |
20,634 |
6.4 |
84,057 |
78,893 |
6.5 |
|
Adjusted EBITDA |
10,461 |
10,438 |
0.2 |
43,175 |
40,374 |
6.9 |
|
Adjusted EBITDA AL |
9,007 |
8,952 |
0.6 |
37,330 |
35,017 |
6.6 |
|
Net profit |
471 |
1,671 |
-71.8 |
4,176 |
4,158 |
0.4 |
|
Adjusted net profit (after non-controlling interests) |
1,234 |
1,643 |
-24.9 |
5,862 |
5,715 |
2.6 |
|
Free cash flow ALa |
520 |
942 |
-44.8 |
8,810 |
6,288 |
40.1 |
|
Cash capexb |
5,106 |
5,814 |
-12.2 |
26,366 |
18,694 |
41.0 |
|
Cash capexb (before spectrum) |
5,046 |
5,468 |
-7.7 |
17,978 |
16,980 |
5.9 |
|
Net debt |
132,142 |
120,227 |
9.9 |
|||
|
Number of employeesc |
216,528 |
226,291 |
-4.3 |
|||
|
Of which in Germanyc |
85,160 |
89,032 |
-4.3 |
Comments on the table:
Sprint has been included in Deutsche Telekom’s consolidated financial statements as a fully consolidated subsidiary since April 1, 2020. Sprint is included in the figures for the fourth quarter of 2021, i.e., the reporting quarter, and for the prior-year quarter for the full three months in both cases. In the cumulative figures, Sprint is included for 12 months in the full year 2021 and for just nine months (April to December) in the full year 2020.
a Before dividend payments and spectrum investment, before interest payments for zero-coupon bonds in the first quarter of 2020, and before repayment of forward-payer swaps at T-Mobile US.
b Cash outflows for investments in property, plant and equipment, and intangible assets (excluding goodwill).
c At the reporting date.
Operating segments: Development of operations
|
Q4 2021 millions of € |
Q4 2020 millions of € |
Change % |
FY 2021 millions of € |
FY 2020 millions of € |
Change % |
|
|
Germany |
||||||
|
Total revenue |
6,329 |
6,264 |
1.0 |
24,164 |
23,790 |
1.6 |
|
Adjusted EBITDA AL |
2,405 |
2,324 |
3.5 |
9,520 |
9,188 |
3.6 |
|
United Statesa |
||||||
|
Total revenue |
18,427 |
17,184 |
7.2 |
68,359 |
61,208 |
11.7 |
|
US-$ |
21,066 |
20,505 |
2.7 |
80,806 |
70,117 |
15.2 |
|
Adjusted EBITDA AL |
5,483 |
5,539 |
-1.0 |
22,697 |
20,997 |
8.1 |
|
US-$ |
6,275 |
6,604 |
-5.0 |
26,871 |
24,033 |
11.8 |
|
Europeb, c |
||||||
|
Total revenue |
2,928 |
2,992 |
-2.1 |
11,384 |
11,335 |
0.4 |
|
Adjusted EBITDA AL |
962 |
958 |
0.4 |
4,007 |
3,910 |
2.5 |
|
Systems Solutions |
||||||
|
Order entry |
1,354 |
2,079 |
-34.9 |
4,174 |
4,564 |
-8.5 |
|
Total revenue |
1,027 |
1,077 |
-4.6 |
4,019 |
4,159 |
-3.4 |
|
Adjusted EBITDA AL |
72 |
71 |
1.4 |
286 |
279 |
2.5 |
|
Group Developmentb, d, e |
||||||
|
Total revenue |
816 |
740 |
10.3 |
3,165 |
2,883 |
9.8 |
|
Adjusted EBITDA AL |
332 |
266 |
24.8 |
1,307 |
1,101 |
18.7 |
Comments on the table:
Reassignment between the operating segments.
Consistent with efforts to implement the Group strategy pillar “Lead in business productivity,” Deutsche Telekom combined its B2B telecommunications business within its Germany operating segment as of July 1, 2020. This transfer affected the Germany, Europe, Systems Solutions, and GHS operating segments.
Moreover, effective January 1, 2021, Deutsche Telekom reassigned the responsibility for business and profit and loss for Deutsche Telekom IoT GmbH from the Systems Solutions operating segment to the Germany operating segment. Prior-year comparatives for the development of operations, customer numbers, headcount, and order entry were adjusted retrospectively. This internal reorganization does not affect the figures at Group level.
a Sprint has been included in Deutsche Telekom’s consolidated financial statements as a fully consolidated subsidiary since April 1, 2020.
b As of January 1, 2021, the Austrian cell tower business was transferred from the Europe operating segment to the Group Development operating segment. Prior-year comparatives were not adjusted.
c Sale of Telekom Romania Communications as of September 30, 2021. The company that operates the Romanian fixed-network business is no longer included in the revenue and earnings figures for the fourth quarter of 2021.
d First-time consolidation of the Dutch MVNO and SIM provider Simpel as of December 1, 2020.
e As of June 1, 2021, the Dutch cell tower business was sold to DIV and subsequently contributed into Cellnex Netherlands.
Operating segments: Development of customer numbers in the fourth quarter of 2021
|
Dec. 31, 2021 thousands |
Sep. 30, 2021 thousands |
Change thousands |
Change % |
|
|
Germany |
||||
|
Mobile customers |
53,211 |
52,184 |
1,027 |
2.0 |
|
Of which contract customers |
23,129 |
22,914 |
215 |
0.9 |
|
Fixed-network lines |
17,525 |
17,543 |
-18 |
-0.1 |
|
Broadband lines |
14,478 |
14,394 |
84 |
0.6 |
|
Of which optical fibera |
10,379 |
10,175 |
204 |
2.0 |
|
Television (IPTV, satellite) |
4,001 |
3,966 |
35 |
0.9 |
|
Unbundled local loop lines (ULLs) |
3,622 |
3,744 |
-122 |
-3.3 |
|
United States |
||||
|
Customersb |
108,719 |
106,920 |
1,799 |
1.7 |
|
Of which postpaid customersb |
87,663 |
85,913 |
1,750 |
2.0 |
|
Of which prepaid customersb |
21,056 |
21,007 |
49 |
0.2 |
|
Europec |
||||
|
Mobile customers |
45,816 |
46,391 |
-575 |
-1.2 |
|
Of which contract customers |
26,575 |
27,430 |
-855 |
-3.1 |
|
Fixed-network lines |
7,802 |
9,123 |
-1,321 |
-14.5 |
|
Broadband customers |
6,381 |
7,110 |
-729 |
-10.3 |
|
Television (IPTV, satellite, cable) |
4,019 |
5,132 |
-1,113 |
-21.7 |
|
Group Development |
||||
|
Netherlands |
||||
|
Mobile customers |
6,939 |
6,894 |
45 |
0.7 |
|
Fixed-network lines |
739 |
721 |
18 |
2.5 |
|
Broadband lines |
728 |
709 |
19 |
2.7 |
a Sum of all FTTx access lines (e.g., FTTC/VDSL, vectoring, and FTTH/B).
b As of July 1, 2021, T-Mobile US acquired 716,000 postpaid phone customers and 90,000 other postpaid customers through the acquisition of assets directly associated with the mobile operations of Shentel. Prior-year comparatives were not adjusted.
c Sale of Telekom Romania Communications as of September 30, 2021. The company that operates the Romanian fixed-network business is no longer included in the fixed-line and customer numbers as of December 31, 2021.
Operating segments: Development of customer numbers in year-on-year comparison
|
Dec. 31, 2021 |
Dec. 31, 2020 |
Change thousands |
Change % |
|
|
Germany |
||||
|
Mobile customersa |
53,211 |
48,213 |
4,998 |
10.4 |
|
Of which contract customersa |
23,129 |
25,975 |
-2,846 |
-11.0 |
|
Fixed-network lines |
17,525 |
17,590 |
-65 |
-0.4 |
|
Broadband lines |
14,478 |
14,118 |
360 |
2.5 |
|
Of which optical fiberb |
10,379 |
9,515 |
864 |
9.1 |
|
Television (IPTV, satellite) |
4,001 |
3,864 |
137 |
3.5 |
|
Unbundled local loop lines (ULLs) |
3,622 |
4,101 |
-479 |
-11.7 |
|
United States |
||||
|
Customersc |
108,719 |
102,064 |
6,655 |
6.5 |
|
Of which postpaid customersc |
87,663 |
81,350 |
6,313 |
7.8 |
|
Of which prepaid customersc |
21,056 |
20,714 |
342 |
1.7 |
|
Europed |
||||
|
Mobile customers |
45,816 |
45,619 |
197 |
0.4 |
|
Of which contract customers |
26,575 |
26,844 |
-269 |
-1.0 |
|
Fixed-network lines |
7,802 |
9,084 |
-1,282 |
-14.1 |
|
Broadband customers |
6,381 |
6,943 |
-562 |
-8.1 |
|
Television (IPTV, satellite, cable) |
4,019 |
5,046 |
-1,027 |
-20.4 |
|
Group Development |
||||
|
Netherlands |
||||
|
Mobile customers |
6,939 |
6,803 |
136 |
2.0 |
|
Fixed-network lines |
739 |
682 |
57 |
8.4 |
|
Broadband lines |
728 |
668 |
60 |
9.0 |
Comments on the table:
Reassignment between the operating segments.
Consistent with efforts to implement the Group strategy pillar “Lead in business productivity,” Deutsche Telekom combined its B2B telecommunications business within its Germany operating segment as of July 1, 2020. This transfer affected the Germany, Europe, Systems Solutions, and GHS operating segments.
Moreover, effective January 1, 2021, Deutsche Telekom reassigned the responsibility for business and profit and loss for Deutsche Telekom IoT GmbH from the Systems Solutions operating segment to the Germany operating segment. Prior-year comparatives for the development of operations, customer numbers, headcount, and order entry were adjusted retrospectively. This internal reorganization does not affect the figures at Group level.
a From January 1, 2021, around 3.6 million SIM cards of a service provider that were previously reported under contract customers are now reported under prepaid customers. Prior-year comparatives were not adjusted.
b Sum of all FTTx access lines (e.g., FTTC/VDSL, vectoring, and FTTH/B).
c As of July 1, 2021, T-Mobile US acquired 716,000 postpaid phone customers and 90,000 other postpaid customers through the acquisition of assets directly associated with the mobile operations of Shentel. Prior-year comparatives were not adjusted.
d Sale of Telekom Romania Communications as of September 30, 2021. The company that operates the Romanian fixed-network business is no longer included in the fixed-line and customer numbers as of December 31, 2021.
This media information contains forward-looking statements that reflect the current views of Deutsche Telekom management with respect to future events. They are generally identified by the words “expect,” “anticipate,” “believe,” “intend,” “estimate,” “aim,” “goal,” “plan,” “will,” “seek,” “outlook,” or similar expressions and include generally any information that relates to expectations or targets for revenue, adjusted EBITDA AL, or other performance measures. Forward-looking statements are based on current plans, estimates, and projections, and should therefore be considered with caution. Such statements are subject to risks and uncertainties, most of which are difficult to predict and are generally beyond Deutsche Telekom’s control. They include, for instance, the progress of Deutsche Telekom’s staff-related restructuring measures and the impact of other significant strategic or business initiatives, including acquisitions, dispositions, and business combinations. In addition, movements in exchange rates and interest rates, regulatory rulings, stronger than expected competition, technological change, litigation and regulatory developments, among other factors, may have a material adverse effect on costs and revenue development. If these or other risks and uncertainties materialize, or if the assumptions underlying any of these statements prove incorrect, Deutsche Telekom’s actual results may be materially different from those expressed or implied by such statements. Deutsche Telekom can offer no assurance that its expectations or targets will be achieved. Without prejudice to existing obligations under capital market law, Deutsche Telekom does not assume any obligation to update forward-looking statements to account for new information or future events or anything else. In addition to figures prepared in accordance with IFRS, Deutsche Telekom presents alternative performance measures, e.g., EBITDA, EBITDA AL, adjusted EBITDA, adjusted EBITDA AL, adjusted EBITDA margin AL, Core EBITDA, adjusted EBIT, EBIT margin, adjusted net profit/loss, adjusted earnings per share, free cash flow, free cash flow AL, gross debt, and net debt. These measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with IFRS. Alternative performance measures are not subject to IFRS or any other generally accepted accounting principles. Other companies may define these terms in different ways.
About Deutsche Telekom: Deutsche Telekom at a glance
Disclaimer
Deutsche Telekom AG published this content on 24 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 February 2022 06:11:09 UTC.
Publicnow 2022
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Technical analysis trends DEUTSCHE TELEKOM AG
| Short Term | Mid-Term | Long Term | |
| Trends | Neutral | Neutral | Neutral |
Income Statement Evolution
|
Sell  Buy |
|
| Mean consensus | BUY |
| Number of Analysts | 23 |
| Last Close Price | 16,48 € |
| Average target price | 22,69 € |
| Spread / Average Target | 37,7% |