Deutsche Telekom Q3 2024 $DTE (+1.33%)
Financial performance:
- Revenue: Group revenue increased by 2.7% to EUR 84.8 billion, with service revenue rising by 3.9% to EUR 71.7 billion. Organic sales grew by 2.9%, while service sales increased by 4.0%.
- Adjusted EBITDA AL: Increase of 6.2% to 32.4 billion euros, with organic growth of 6.3%.
- Net profit: Decrease to €7.0 billion, mainly due to the gain on sale of GD Towers in the previous year.
Balance sheet overview:
- Total assets: Decreased by 1.7 billion euros to 288.6 billion euros.
- Shareholders' equity: Increased by €1.2 billion to €92.4 billion, resulting in an equity ratio of 32.0%.
- Net liabilities: Reduced by 3.6 billion euros to 128.7 billion euros.
Details of the income statement:
- EBIT: Decrease to 17.8 billion euros, mainly due to the previous year's profit from the GD Towers de-consolidation.
- Depreciation and amortization: Slight increase of 0.1 billion euros to 17.9 billion euros.
Cash flow overview:
- Free cash flow AL: Increased by 3.3 billion euros to 15.1 billion euros, driven by strong operating performance and lower cash investments.
- Cash Capex: Reduced by 1.3 billion euros to 11.9 billion euros.
Key figures and profitability metrics:
- Adjusted EPS: Increase from 1.23 euros to 1.43 euros.
- Adjusted EBITDA AL margin: Improvement from 36.9% to 38.2%.
Segment information:
- Germany: Adjusted EBITDA AL increased by 2.7 %.
- USA: Adjusted EBITDA AL increased by 7.7%.
- Europe: Adjusted EBITDA AL increased by 8.2 %.
Competitive position: Deutsche Telekom remains the market leader in Germany in terms of fixed-line and mobile revenues, which is attributable to high-performance networks and a broad product portfolio.
Outlook and management commentary: The forecast for adjusted EBITDA AL for 2024 has been raised to around EUR 43.0 billion. The company is pursuing strategic growth targets until 2027, with a focus on global scaling and the use of AI and data.
Risks and opportunities:
- Strategic risks: Reduced from "very high" to "high" due to agreements with the German government regarding 5G network components.
- Operational risks: Reduced from "high" to "medium" following renegotiations with the IFM Global Infrastructure Fund.
Summary of results:
Positive aspects:
- Sales growth: Group revenue increased by 2.7%, while service revenue increased by 3.9%.
- Adjusted EBITDA AL growth: Increase of 6.2%, demonstrating strong operational performance.
- Free Cash Flow AL: Significant increase of 3.3 billion euros to 15.1 billion euros.
- Improvement in equity ratio: Increase to 32.0%, reflecting a stronger financial position.
- Positive outlook: Raised EBITDA AL forecast and strategic growth plans until 2027.
Negative aspects:
- Decline in net profit: Significant decline to €7.0 billion due to absence of prior year profits.
- EBIT decline: Decrease to 17.8 billion euros, mainly due to the GD Towers sale in the previous year.
- Increased depreciation and amortization: Slight increase, affecting profitability.
- Operational risks: Although reduced, strategic and integration challenges remain.
- Market competition: Continued pressure in the fixed broadband market with numerous providers.
