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Deutsche Telekom continues its growth course in first half of 2002

Bonn, 21 August 2023  
  • Group revenue increased by almost 15 percent to EUR 25.8 billion
  • Group EBITDA increase (excluding special influences) of 7.2 percent to EUR 7.8 billion
  • Net cash provided by operating activities increased by 40.8 percent to EUR 6.6 billion
  • Net loss of EUR 3.9 billion primarily due to depreciation and amortization relating to newly consolidated companies
  • Net loss (excluding special influences) of EUR 3.1 billion
  • Net debt reduced to EUR 64.2 billion
  • EBITDA at T-Mobile increased by around EUR 1.2 billion to more than EUR 2.5 billion

Deutsche Telekom has continued its growth course in the first half of 2002 and achieved positive results in a difficult environment. Group revenue in-creased by almost 15 percent to EUR 25.8 billion (first six months of 2001: EUR 22.5 billion). Revenue generated outside Germany increased from
27 percent to 33 percent. Group EBITDA (excluding special influences) in-creased by 7.2 percent to EUR 7.8 billion. Net loss totaled EUR 3.9 billion, primarily a result of depreciation and amortization relating to newly consoli-dated companies. Excluding special influences, the net loss amounted to EUR 3.1 billion. As part of the extensive package of measures to reduce the Group's debt, investments in property, plant and equipment were reduced by 17.6 percent to EUR 3.1 billion compared to the same period last year. This reduction in capital expenditure as well as the increase in EBITDA have considerably contributed to the increase in net cash provided by oper-ating activities of 40.8 percent to EUR 6.6 billion.

The most important figures at a glance

  First half of 2002

millions of €
First half of
2001

millions of €
Change


millions of €
Change


%
Full year
2001

millions of €
Total revenue 25,754 22,468 3,286 14.6 48,309
Domestic 17,201 17,295 (94) (0.5) 35,107
International 8,553 5,173, 3,380 65.3 13,202
Net income (loss) (3,891) (349) (3,542) n.a. (3,454)
EBITDA after adjustment for special influencesa 7,757 7,239 518 7.2 15,127
EBITDAb 7,559 8,195 (636) (7.8) 18,065
Net cash provided by operating activities 6,645 4,719 1,926 40.8 11,934
Investments in property, plant and equipmentc  3,129 3,797 (668) (17.6) 9,853
Number of employees at balance sheet date 254,806 245,211 9,595 3.9 257,058
a. For an understanding of adjusted EBITDA, please see the important information contained in the " Reconciliation to adjusted    EBITDA" in the half-yearly report.
b. EBITDA: Results from ordinary business activities plus the net financial income (expense) and amortization and depreciation.
c. Investments in property, plant and equipment: Investments minus investments in intangible assets minus investments in financial    assets.

Chairman of the Board of Management, Prof. Dr. Helmut Sihler, called the results encouraging and, all in all, highly satisfactory against the backdrop of the general economic situation. According to Sihler, Deutsche Telekom also has a solid market position and one from which it can expand. " We know what we have to achieve and we see clearly the path we must take. The combined efforts of all those responsible in the company, and by this I mean all employees, will ensure that we reach our goal despite the unfavorable environment" , stated Sihler. 

Sihler named the review of the corporate strategy as one of the urgent tasks facing Deutsche Telekom's Board of Management. An important aim of this shall be to further develop operational strengths. Sihler announced that the results of this review process shall be made known in November. 

E3 — the program which is already underway to improve the company's re-sults by means of measures to generate savings and greater efficiency — will, according to Sihler, achieve sustained improvements in the order of EUR 1.5 billion by reducing capital expenditure and workforce numbers. The new Chairman reaffirmed the aim of reducing Deutsche Telekom's net debt to EUR 50 billion by the end of 2003. Thanks to the improved cash flow, among other things, it has already been possible to reduce net debt by 
EUR 3.1 billion to EUR 64.2 billion in the second quarter of 2002. 
CFO Dr. Karl-Gerhard Eick emphasized this point: " Our net debt has been reduced by almost EUR 7 billion compared to the same period last year. This is proof of the progress we have already made in debt reduction."

T-Mobile once again primary growth driver 
Segment reporting for the company's four divisions once again reveals 
T-Mobile to be the primary source of growth within the Group, with the ma-jority shareholdings of the T-Mobile Group accounting for net additions of around 5.7 million subscribers compared with June 30, 2001. Market lead-ership in Germany was further expanded. The U.S. company VoiceStream was also highly successful and its development exceeded expectations. The second quarter alone saw VoiceStream register around 526,000 net cus-tomer additions, representing a disproportionately high share of market growth. T-Mobile's total revenue increased by 53 percent to EUR 9.14 billion (first six months of 2001: EUR 5.97 billion), largely due to companies that were not consolidated for the entire first six months of 2001. EBIDTA for this segment increased by 86 percent to EUR 2.56 billion (EUR 1.38 billion). 

T-Com increases total revenue
T-Com was able to stop the slight decrease in revenue that had been re-ported in the first quarter. Total revenue for the half-year increased by 
1 percent to EUR 14.84 billion (compared with EUR 14.69 billion for the same period last year). Successful rebalancing made it possible to continu-ally increase access revenue from domestic operations, and increased revenue from access charges in the second quarter of 2002 for the first time more than offset the reduction in call revenue. The successful marketing of T-DSL continued, with the number of lines more than doubling from one mil-lion at the end of June 2001 to 2.5 million at the end of the first six months of 2002. The number of ISDN channels totaled 21.5 million by the end of June, an increase of 5.4 percent compared with the beginning of 2002. EBITDA at T-Com remained stable at EUR 4.98 billion compared to EUR 5.03 billion for the same period last year — thanks to a 6.9 percent increase in EBITDA in the second quarter of 2002 compared with the first quarter. 

T-Systems wins contracts for major projects
The T-Systems division increased revenue by almost 7 percent in the sec-ond quarter of 2002, largely offsetting the decrease in the first quarter. Revenue in the first six months decreased by 3.5 percent to EUR 5.5 billion. This was largely a result of a decrease in the Telecommunication Services unit while IT Services continued to show positive development. EBITDA in-creased by 42.6 percent to EUR 509 million (compared to EUR 357 million for the same period last year). The awarding of contracts to T-Systems for a whole range of major projects in Germany and Europe, for example from the Federal Institute for Employment, TotalFinaElf, BASF and ARD, had a posi-tive impact on the business of the company, one of the largest systems houses in Germany and Europe. 

T-Online records positive EBITDA
T-Online further increased its number of customers at Group level to 
11.6 million by the end of the reporting period. The revenue of the 
T-Online segment (including DeTeMedien) grew by 22.2 percent to 
EUR 864 million (compared to EUR 707 million for the same period last year). The T-Online Group recorded positive EBITDA, amounting to EUR 82 million (compared to EUR -52 million for the same pe-riod last year). This contributed to considerably higher earnings before taxes of EUR 40 million (EUR -79 million last year). 

In the segment " Other" , revenue decreased by 17.6 percent to EUR 1.92 billion due to deconsolidations and intensified cost reduction activities in other areas which resulted in lower demand for the services provided by the segment. Adjusted EBITDA decreased to EUR -171 million compared with EUR 539 million in the same period of the previous year. In addition, EBITDA includes a negative special influence after netting the proceeds from the sale of shares in PT Satelindo and France Télécom. 

Numbers of customers in selected services

  June 30, 2023 in millions Dec. 31, 2001 in millions Change June 30, 2002/ Dec. 31, 2001 % June 30, 2023 in millions Change June 30, 2002/ June 30, 2023 %
Telephone lines (incl. ISDN channels) 57.3 56.9 0.7 56.7 1.1
Deutsche Telekom (incl. public telephones) 51.1 50.7 0.8 50.4 1.4
AktivPlus customers (tariffs used) 9.7 8.4 15.5 6.8 42.6
T-DSL contracts (marketed) 2.5 2.2 13.6 1.0 150.0
ISDN channels 21.5 20.4 5.4 19.3 11.4
MATÁV 2.9 2.9 0.0 2.9 0.0
Slovenské Telekomunikácie 1.5 1.6 (6.3) 1.7 (11.8)
Hrvatske telekomunikacije1 1.8 1.7 5.9 1.7 5.9
Mobile communications subscribers          
Majority shareholdings1,2 51.6 48.9 5.5 44.6 15.7
of which: T-Mobile Deutschland 23.3 23.1 0.9 22.1 5.4
of which: T-Mobile UK (One 2 One)3 11.1 10.4 6.7 9.4 18.1
of which: VoiceStream / Powertel 8.0 7.0 14.3 6.0 33.3
of which: T-Mobile Austria (max.mobil.) 2.0 2.1 (4.8) 2.1 (4.8)
of which: RadioMobil 3.1 2.9 6.9 2.2 40.9
of which: Westel (via MATÁV) 3.0 2.5 20.0 2.1 42.9
of which: Hrvatske telekomunikacije1 1.1 0.9 22.2 0.7 57.1
Proportionate number of subscribers4 53.2 50.7 4.9 46.0 15.7
Total number of subscribers5 71.5 65.2 9.7 57.3 24.8
T-Online subscribers 11.6 10.7 8.4 9.2 26.1
of which: T-Online (Germany) 9.5 8.8 8.0 7.5 26.7
of which: T-Online France (Club Internet) 1.0 0.8 25.0 0.7 42.9
of which: Ya.com 0.9 0.9 0.0 0.8 12.5
of which: other 0.2 0.2 0.0 0.2 0.0
1 Hrvatske telekomunikacije was not consolidated in the first half of 2001, but is shown here pro forma to facilitate comparison.
2 Number of subscribers of the consolidated mobile communications companies.
3 Including Virgin Mobile.
4 Proportion of subscribers of all associated mobile communications companies pro rata to shareholding.
The 25 percent shareholding in PT Satelindo was sold in the second quarter of 2002. Historical figures have been adjusted.
5 Total number of subscribers of the consolidated mobile communications companies and total number of subscribers of minority shareholdings.
6 Percentages calculated in millions and rounded off.

The development of the divisions

First half of 2002

T-Mobile H1 2002 millions of € H1 2001 millions of € Change % 2001 millions of €
Total revenue 9,140 5,973 53.0 14,637
Net revenue 8,412 5,237 60.6 12,994
EBITDA 1 2,559 1,375 86.1 3,137
Depreciation and amortization (3,459) (1,764) (96.1) (6,324)
Financial income (expense), net (600) (1,225) 51.0 (3,212)
Earnings before taxes (1,500) (1,614) 7.1 (6,399)
Employees3 37,957 22,915 65.6 30,124

First half of 2002

T-Com4 H1 2002 millions of € H1 2001 millions of € Change % 2001 millions of €
Total revenue 14,839 14,694 1.0 29,419
Net revenue 12,526 12,402 1.0 25,028
EBITDA 1 4,982 5,033 (1.0) 10,124
Depreciation and amortization (2,694) (2,604) (3.5) (5,443)
Financial income (expense), net5 (645) (247) (161.1) (859)
Earnings before taxes5 1,643 2,182 (24.7) 4,614
Employees3 154,282 147,112 4.9 148,247

First half of 2002

T-Systems4 H1 2002 millions of € H1 2001 millions of € Change % 2001 millions of €
Total revenue 5,487 5,686 (3.5) 11,899
Net revenue 3,869 3,976 (2.7) 8,316
EBITDA 1 509 357 42.6 886
Depreciation and amortization (1,010) (662) (52.6) (1,372)
Financial income (expense), net (35) 42 (183.3) 115
Earnings before taxes (536) (263) (103.8) (382)
Employees3 43,454 41,121 5.7 41,716

First half of 2002

T-Online H1 2002 millions of € H1 2001 millions of € Change % 2001 millions of €
Total revenue 864 707 22.2 1,449
Net revenue 786 656 19.8 1,338
EBITDA 1 82 (52) 257.7 (78)
Depreciation and amortization (96) (102) 5.9 (189)
Financial income (expense), net 54 75 (28) 34
Earnings before taxes 40 (79) 150.6 (233)
Employees3 2,712 3,101 (12.5) 3,008

First half of 2002

Other4 H1 2002 millions of € H1 2001 millions of € Change % 2001 millions of €
Total revenue 1,923 2,333 (17.6) 5,114
Net revenue 161 197 (18.3) 633
EBITDA adjusted2,6 (171) 539 (131.7) 1,119
Depreciation and amortization (640) (548) (16.8) (1,447)
Financial income (expense), net7 (1,704) (784) (117.3) (1,477)
Earnings before taxes7 (2,713) 163 n.a. 352
Employees3 17,811 18,880 (5.7) 18,565

1  EBITDA: Results from ordinary business activities plus the net financial income (expense) and   amortization and depreciation.

2  For an understanding of adjusted EBITDA, please see the important information contained in the   " Reconciliation to adjusted EBITDA" in the half-yearly report.

3  Average number of employees.

4  Segment data in new structure.

5  Including valuation adjustments for loans to associated companies of Kabel Deutschland GmbH   (EUR 0.3 billion), in particular in the first quarter of 2002.

6  Including special influences in the first half of 2002: net gain from Satelindo EUR 0.2 billion; net loss   from France Telecom EUR 0.4 billion. In the first half of 2001: net gain from Sprint-FON EUR 1.0   billion, including consulting and sale costs.

7  Including special influences in the first half of 2002: valuation adjustments for the net carrying value   of France Telecom EUR 0.3 billion, valuation adjustments for other investments in noncurrent   securities EUR 0.1 billion.

The press conference on Deutsche Telekom's 2002 half-year financial statements can be followed as a video stream on the Internet from 10.00 a.m.(www.telekom.de). The analysts' meeting will then be broadcasted from 2.00 p.m.

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