Download - Annual Report 2013

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Deutsche Telekom at a glance.
In 2013, we were once again in line with all of our key financial targets, with adjusted EBITDA at EUR 17.4 billion and free cash flow
even slightly over target at EUR 4.6 billion. Net revenue increased by
3.4 percent to EUR 60.1 billion, largely due to encouragingly strong
revenue growth in the United States. While revenue in Germany decreased only slightly, the sustained difficult economic environment,
intense competition, and massive regulatory intervention had a negative impact on revenue at our European subsidiaries. As expected,
adjusted EBITDA declined by 3.1 percent. Although we recorded
slight growth in adjusted EBITDA in the United States and only a
moderate decline in Germany, cost-cutting measures only partially
offset the decline in revenues in the Europe operating segment.
Following the net loss of EUR 5.4 billion we recorded in 2012 due
mainly to the impairment loss recognized in our United States
operating­ segment, we generated net profit of EUR 0.9 billion in the
reporting year. Net profit adjusted for special factors also increased
from EUR 2.5 billion to EUR 2.8 billion as a result of lower depreciation, amortization and impairment losses, which more than offset the
decline in adjusted EBITDA.
G XX
G XX
Net revenue.
The business combination of T-Mobile USA and ­MetroPCS in
May 2013 had a lasting impact on the development of earnings,
contri­buting as much as EUR 2.5 billion to the Group’s net revenue
in the reporting year. By contrast, sales of companies such as Globul
Adjusted EBITDA.a
billions of €
billions of €
70
60
58.7
58.2
60.1
50
40
30
20
18.7
18.0
17.4
2011
2012
2013
10
0
2011
2012
2013
a The prior-year comparatives were adjusted retrospectively due to the application of IAS 19
(amended) as of January 1, 2013. ROCE was only adjusted for 2012.
Deutsche Telekom. The 2013 financial year.
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and Germanos in Bulgaria and Hellas Sat in Greece had a negative
effect­ of around EUR 0.25 billion on the development of revenue. The
impact of these transactions on net profit was only minor, however.
Net debt increased over the course of the year from EUR 36.9 billion­ to EUR 39.1 billion. Free cash flow (EUR 4.6 billion), proceeds from
the sale of stakes (EUR 0.9 billion), and the capital increase at
­T-Mobile US (EUR 1.3 billion) in particular had a positive impact.
This was offset primarily by an effect of EUR 3.4 billion from the firsttime inclusion of ­MetroPCS, the payment of dividends, including to
non-controlling interests, totaling EUR 2.2 billion, and the acquisition
of mobile spectrum for a total amount of EUR 2.2 billion, mainly in
the Netherlands (EUR 0.9 billion), Austria (EUR 0.7 billion) and the
United States (EUR 0.3 billion).
G XX
Free cash flow (before dividend payments, spectrum investment).b
Cash capex (before spectrum investments) totaled EUR 8.9 billion
in the reporting year and mainly related to further rolling out broadband and expanding capacities in existing networks. In mobile communications, we invested in LTE, increased network coverage, and
upgraded capacity to meet increasing demand for data volumes. In
the fixed-network area, priority was given to expanding the fiber-optic
infrastructure, to IPTV, and to the continued migration of the existing
telephone network to an IP-based network. Investments in our home
market in Germany remained at a consistently high level. In the United
States operating segment, our investment activities continued to focus
on modernizing the mobile communications network, and capital
expenditure increased overall as a result of acquiring ­MetroPCS in
2013. Cash capex in our Europe operating segment increased slightly
as a result of the intensified LTE roll-out. Capital expenditure in our
Systems Solutions operating segment focused on the Group’s internal
IT systems as well as on investments in connection with customer
orders and the continued roll-out of new multi-purpose platforms,
e.g., for cloud services, De-Mail, and intelligent networks.
billions of €
6.4
6.2
4.6
2011
2012
2013
At 3.8 percent, our key performance indicator “return on capital employed” (ROCE) substantially recovered in 2013 from the negative
value in the prior year. The improvement in the operating result after
depreciation, amortization and impairment losses and tax (net operating profit after taxes, or NOPAT) and the reduction in the average
value of assets tied up in the course of the year (net operating assets,
or NOA) contributed to this development. Examples of measures we
have implemented to date to improve our ROCE include network
partnerships, our “contingent” model, joint ventures we have entered
into, the changes we have made to our portfolio, cell tower sales in
the United States, and the realignment of our central management
and service functions.
2013 was also a good year for our shareholders: They benefited not
only from the dividend of EUR 0.70 per share paid out for the 2012
­financial year, but also from an increase of 42 percent in our share
price.
b And before AT&T transaction and compensation payments for ­MetroPCS employees.
Deutsche Telekom. The 2013 financial year.