Telefonica

Market report: Deutsche Telekom

The $DTE (-2,85%) remains a dominant player in the German telecommunications market, supported by strong financial results and ambitious projects. In 2024, the Group achieved strong revenue growth, particularly through fiber and mobile projects, and exceeded forecasts in several segments .

Current projects and developments

1.Fiber optic expansion:

- Deutsche Telekom plans to connect around 2.5 million new households to the fiber-optic network (FTTH) every year until 2027. The total number of households that can be connected is set to rise to 17.5 million, with a target take-up rate of 20% .

- A record 131,000 new fiber optic tariffs were already achieved in the third quarter of 2024 .

2.5G network and digitalization:

- The expansion of the 5G network is being systematically driven forward, with a target network coverage of 95% in Europe by 2027. The company is also investing in campus solutions and network slicing.

- Customer care processes and self-service offerings are increasingly being optimized using artificial intelligence to increase efficiency.

3.Business customers and B2B:

- Global business with business customers, particularly via the subsidiary T-Systems, is to be accelerated through cloud-based platforms and ICT solutions. Revenue growth in the billions is expected .

4.Sustainability and financial flexibility:

- In addition to record dividends (90 cents per share), Telekom is planning share buybacks worth up to 2 billion euros .

Competitive situation

Deutsche Telekom faces intense competition from other major providers such as $VOD (+1,13%) , $TEF (+0,84%) (O2) and regional players such as 1&1. While Vodafone and Telefónica are also investing in fiber projects and 5G, Deutsche Telekom stands out due to its dominant market position and global commitment.

Competitors:

-Vodafone: Strong focus on IoT and 5G technologies.

-Telefónica Germany (O2): Aggressive expansion of low-cost offers and regional partnerships.

-Freenet and 1&1: Increasing focus on innovative tariff models and attractive price points .

Prospects and possible new projects

Deutsche Telekom plans to further expand its digital offering, with a focus on payment services, AI-supported solutions for end customers and sustainable infrastructures. In addition, future investments in cloud-based services and partnerships could further increase revenue in the B2B area. Expansion in Europe remains a key area, while growth via T-Mobile US continues to be a key driver in the USA.

Overall, Deutsche Telekom is demonstrating a strong strategic focus on both sustainable infrastructure and digital innovation. It is expected to maintain and further expand its leading position in the German market.

https://www.telekom.com/de/medien/medieninformationen/detail/zwischenbericht-drittes-quartal-2024-1083042

https://www.mordorintelligence.com/de/industry-reports/germany-telecom-market

https://www.telekom.com/de/medien/medieninformationen/detail/deutsche-telekom-will-wachstum-beschleunigen-1080408

Telefonica Q3 2024 $TEF (+0,84%)

Financial performance:

• Revenue: Telefónica recorded revenue of 10.023 billion euros in the third quarter of 2024, a decrease of 2.9% compared to the previous year. The decrease is mainly due to currency fluctuations, which had a negative impact of 4.2 percentage points.
• EBITDA: Adjusted EBITDA amounted to EUR 3.260 billion, a decrease of 2.5% year-on-year, albeit with a slight margin improvement of 0.1 percentage points to 32.5%.
• Net income: Net income attributable to shareholders amounted to just EUR 10 million in the third quarter of 2024, which was heavily influenced by non-ordinary expenses.

Balance sheet overview:

• Total assets: Total assets amounted to EUR 100.484 billion as at September 2024, a decrease of 3.7% compared to December 2023.
• Equity: Equity attributable to shareholders fell by 5.9% to 20.562 billion euros.

Income structure:

• Operating expenses: Operating expenses fell by 3.8% year-on-year to EUR 7.084 billion in the third quarter of 2024.
• Impairments: Included a non-cash impairment of goodwill and other intangible assets in Peru amounting to 314 million euros.

Cash flow overview:

• Free cash flow (FCF): FCF increased by 89.5% year-on-year in the third quarter of 2024, supported by a strong operating performance and natural hedging effects.
• Investing activities: Net capital expenditure increased by 51.3% year-on-year to EUR 4.76 billion in the first nine months of 2024.

Key figures and profitability metrics:

• Debt ratio: The ratio of net debt to EBITDAAL was 2.76x as at September 2024.
• EBITDA margin: Slight margin improvement of 0.1 percentage points to 32.5% in the third quarter of 2024.

Segment information:

• Spain: Sales growth of 1.0% compared to the previous year in the third quarter of 2024, as well as EBITDA growth of 1.0%.
• Brazil: Year-on-year sales growth of 7.1% in the third quarter of 2024.
• Germany: Decline in revenue of 1.6% in the third quarter of 2024, however EBITDA grew by 3.0%.

Competitive position:

Telefónica remains the leader in FTTH (fiber) and 5G, supported by significant investments in network expansion.

Forecasts and management comments:

The company reiterated its guidance for 2024, with expected revenue growth of 1% to 2% and EBITDAAL - CapEx growth of up to 13%.

Risks and opportunities:

• Risks: Exchange rate volatility, particularly from the Brazilian real, and competitive pressure in key markets.
• Opportunities: Expansion in FTTH and 5G as well as potential regulatory changes in Brazil and the EU.

Summary of results:

Positive aspects:

Strong free cash flow growth of 89.5% year-on-year in the third quarter of 2024, indicating solid operating results and effective financial management

Improvement in the EBITDA margin by 0.1 percentage points year-on-year, a sign of efficiency in cost control.

Further growth in Spain and Brazil despite challenging macroeconomic conditions.

Strategic focus on the expansion of FTTH and 5Gstrengthening the market position.

Effective hedging strategythat mitigates the negative impact of exchange rate fluctuations.

Negative aspects:

Decline in sales of 2.9% year-on-year in the third quarter of 2024, which has a negative impact on revenue.

Significant non-cash impairment in Peruaffecting the balance sheet and comprehensive income.

Decrease in net profit due to non-recurring expenses, which could make the company less attractive to investors.

Increased net expenditure on investments by 51.3 % compared compared to the previous year, which ties up capital and may limit short-term financial flexibility.

Competitive pressure in the core marketswhich could put pressure on margins in the long term.

Summary Earnings, 07.11.

$MUV2 (-0,54%)
| Munich Re Q3 24 Earnings

EPS EU7.02 (est EU6.67)

Sees FY Insurance Rev. About EU61B, Saw About EU59B

Sees FY Profit Above EU5B, Saw EU5B

$RHM (+0,16%) | Rheinmetall AG Q3 24 Earnings

Sales EU2.45B (est EU2.42B)

Still Sees FY Sales About EU10B (est EU9.99B)

Sees FY Operating Margin At Upper End Of Guidance

Nissan Motor Q2 2024 Earnings $7201 (+2,04%)

Q2 Operating Income 31.91B Yen (est 65.25B Yen)

Q2 Net Loss 9.34B Yen (est Profit 49.07B Yen)

Sees FY Oper Income 150.00B Yen, Saw 500.00B Yen

To Cut 9,000 Jobs Globally

To Reduce Global Production Capacity By 20%

To Sell Back Up To 10.02% Of Mitsubishi Motors Shares

Air France KLM Q3 24 Earnings $AF

EBITDA EU1.90B (est EU1.9B)

Rev EU8.98B (est EU8.88B)

Net Income EU780M (est EU874.3M)

Sees FY Capex EU3B, Saw Below EU3B

$TEF (+0,84%) | Telefonica Q3 24 Earnings

REV. EU10.02B (est EU10B)

Adj. EBITDA EU3.26B (est EU3.26B)

Net Income EU10M (est EU357M)

To Book €314 Million Non-Cash Impairment For Peru

ArcelorMittal Q3 24 Earnings: $MT (+0,74%)

- Sales $15.20B (est $15.23B)

- EBITDA $1.58B (est $1.47B)

- Still Sees FY CAPEX $4.5B To $5.0B

- Markets Conditions Are 'Unsustainable'

- Positive On Medium/Long Term Outlook

Daimler Truck Holdings Q3 24 Earnings: $DTG (+2,36%)

- Rev EU13.14B (est EU12.98B)

- Adj EBIT EU1.19B (est EU1.13B)

- Still Sees FY Rev EU53B To EU55B (est EU53.45B)

Adyen disappoints with lower than expected sales growth and loses 13% on the stock market. $ADYEN (-0,53%)

Lanxess-shares rise by 4.4% to 26.80 euros after a positive quarterly report, having previously fallen by 13%. The operating margin exceeds expectations, although prices weaken. $LXS (+1,62%)

National Grid increased its adjusted operating profit by 14% to 2 billion pounds in the first half of the financial year and expects an increase of around 10% for the year as a whole. Higher fees in New York and higher revenues in the UK are supporting growth. $NG. (+0,4%)

AMS-Osram increased its profitability in the third quarter despite a decline in sales, but expects business development to be subdued in the fourth quarter and early 2025. To ensure profitability, the company plans further cost reductions of 225 million euros by the end of 2026. $AMS

Suess Microtec is more optimistic after a strong third quarter and now expects to achieve its annual targets in the upper half of the forecast range. Sales are expected to reach 380 to 410 million euros, with an EBIT margin of 14 to 16 percent. $SMHN (+2,26%)

The investment company Mutares slips into the red operationally in the third quarter with an adjusted EBITDA loss of EUR 16.5 million. However, sales increased by 14% to 3.9 billion euros. $MUX (+3,31%)

Delivery Hero expects a free cash flow of EUR 50 to 100 million for 2024 and anticipates GMV growth at the upper end of the forecast of 7 to 9 percent. However, the Group expects adjusted EBITDA to be at the lower end of the range of EUR 725 to 775 million. $DHE

Deutz recorded an 80% drop in profits to EUR 7.2 million in the third quarter and slipped into the red with a bottom line of EUR 2 million. Turnover falls by 14.9% to 430.4 million euros due to a slump in demand. $DEZ (+1,02%)

Compugroup Medical records a decline in EBITDA in the third quarter

EBITDA fell by 12% to 54.9 million euros in the third quarter, but slightly exceeded

analysts' expectations slightly. Turnover falls by 1% to 283.4 million euros

euros, and the company confirms its reduced forecast for 2024. $COP (+0,54%)

Alzchem reports a jump in profits for the first nine months with

a 36% increase in EBITDA to EUR 76.8 million and increases the EBITDA margin to

EBITDA margin to 18.5 %. The Group is sticking to its profit target for 2024

but is aiming for the lower end of the sales forecast due to the discontinuation of low-margin

the lower end of the sales forecast. $ACT (+0,1%)

Nordex is raising its forecast for the EBITDA margin for 2024 and

now expects it to be closer to the upper end of the range of three to four

percent. In the first nine months of the year, the company recorded

an increase in revenue of 14 percent to EUR 5.1 billion and an improved

improved EBITDA margin of 3.7 percent. $NDX1 (+0,35%)

Nemetschek recorded an increase in revenue in the third quarter thanks to the

thanks to the GoCanvas acquisition, Nemetschek recorded a 15.1% increase in revenues to 253 million euros,

however, earnings remained slightly below expectations. The

The operating costs of the acquisition put pressure on profits, so that EBITDA

increases by 6.7 %. $NEM (+2,54%)

Rational increases earnings before interest and taxes in the third quarter

taxes by 18% to just under 78 million euros, exceeding analysts'

analysts' expectations, while sales revenues grew by 8% to 294 million

euros. The company confirms its forecast for the year. $RAA (+0,17%)

It was the time when shares went up for a long time. Fortunately, I sold several shares. Now I'm starting to fear a sell-off. Will it continue to go down? I will soon be focusing more on cryptocurrencies.

Sold:

$IHG (+0,54%)
$1810 (-2,12%)
$PHIA (+1,54%)
$TEF (+0,84%)
$TTE (+0,95%)
$SHEL (+1,27%)

Transfer Scalable

EXCHANGE

Share savings plan executed