Deutsche Telekom's revenue increased 2.3 percent year-on-year to 19.9 billion euros in the first quarter. Adjusted EBITDA AL rose by 10.2 percent, reaching 6.5 billion euros.
“Deutsche Telekom is an anchor of stability in a global crisis,” said CEO Tim Höttges. “Our networks are working reliably as digital lifelines for society.”
The company said its expects the pandemic to have limited impact on revenue, due to, for example, the closure of shops, lower roaming revenues, and companies postponing or canceling IT projects. On the other hand, voice telephony revenue is increasing, for instance, and the mobile churn rate is falling.
"Taking the offsetting effects and measures into account, the impact on adjusted EBITDA AL is likely to be comparatively low. As such, taking into account all foreseeable consequences of the pandemic, the Group confirms its guidance for the current financial year."
Free cash flow AL decreased by around 0.7 billion euros due to the reduction in factoring. This decision accounted for the decline to 1.3 billion euros. Adjusted net profit increased by 8.5 percent to 1.3 billion euros, unadjusted it increased by 1.8 percent to 916 million euros.
Some highlights
Germany – strong performance in fixed-line and mobile communications
- 83,000 new broadband customers - the best result in two years in Germany.
- The number of TV customers increased significantly, with 60,000 new users of MagentaTV.
- The number of fiber-optic lines (VDSL/vectoring, FTTH) grew by 389,000 between January and March, bringing the total to around 14.8 million at the end of the first quarter, 1.9 million more than a year earlier.
- Mobile service revenues increased 1.7 percent YoY.
- Mobile branded contract customer additions amounted to 141,000 in the first quarter.
- The Germany segment also posted positive trends in its financials.
United States – continued growth in financial figures
- T-Mobile US completed its business combination with Sprint on April 1, 2020.
- Adjusted EBITDA AL grew by 14.5 percent to 3.5 billion U.S. dollars, while revenue grew 0.7 percent against the prior-year level to 11.2 billion U.S. dollars, with mobile service revenues increasing by 5.5 percent.
- The number of branded postpaid customers increased by 777,000 in the first three months to 47.8 million. T-Mobile US now has a total of 68.5 million branded customers. In line with other companies in the industry in the United States, the company no longer reports any wholesale customers as of this quarter.
Europe – still on course
- Driven primarily by growing fixed-network and mobile service revenues, revenue in the Europe operating segment grew by 2.0 percent in organic terms year-on-year in the first quarter to 2.9 billion euros.
- Adjusted EBITDA AL rose by 3.4 percent in organic terms to 1.0 billion euros.
- Between January and March, the European national companies acquired 110,000 new mobile contract customers, 65,000 new broadband customers, and 238,000 new users of product packages combining fixed network and mobile communications. More than half of all broadband households now use these convergent offers.
Systems Solutions – earnings up thanks to growth areas
- T-Systems managed to offset the expected fall in revenue from traditional IT business with gains in growth areas.
- The areas of public cloud and security performed particularly well.
- At 1.6 billion euros, revenue across the whole segment remained at the prior-year level.
- The positive trend in the growth areas and the ongoing transformation strengthened profitability.
- Adjusted EBITDA AL increased by 8.7 percent compared with the first quarter of 2019 to 100 million euros. Order entry declined by 13.4 percent against the strong prior-year quarter to 1.4 billion euros.
