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Q3 financial results

Bonn, 15 November 2023  
  • T-Mobile continues trend of " growth with sustained value"  
  • At EUR 5 billion, adjusted EBITDA already at the same level as in the full 2002 financial year 
  • T-Mobile USA triples EBITDA margin compared with the same quarter last year 
  • Substantial increase in subscriber numbers in Germany despite reduced subscriber acquisition costs (SAC) 
  • T-Mobile UK: 20 percent increase in contract customers compared with the same quarter last year 

T-Mobile International again recorded a strong jump in earnings in the third quarter of 2003. The number of subscribers increased by 13 percent in the last 12 months. Expressed in actual figures, the number of customers at T-Mobile International's majority-owned companies rose to 57.7 million, or by 6.5 million compared with September 30, 2002. Excluding T-Mobile Netherlands, which was fully consolidated for the first time in the fourth quarter of 2002, the number of customers increased by 6.1 million. 

Year-on-year, development of revenue was also very positive, with net revenue climbing by 18 percent to EUR 16.8 billion. Excluding consolidation effects, revenue growth would have been over 13 percent in this period. Revenue growth in Europe was 15 percent (excluding consolidation effects, just below 9 percent), and in the USA, revenue increased by almost 50 percent year-on-year expressed in US dollars. As a result of exchange rate effects, this represents an increase in euros of 24 percent. 

Earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for special factors, rose by 30 percent year-on-year to EUR 5 billion. The EBITDA margin was around 30 percent. The results from ordinary business activities amounted to EUR 637 million. Results from ordinary business activities of EUR 239 million were recorded in the third quarter alone. 

René Obermann, CEO of T-Mobile International: " In the third quarter, we continued the trend of growth with sustained value." According to Obermann, the EBITDA margin in the USA tripled in the third quarter year-on-year. He added that this " also clearly proves the case for commitment in the USA."  

Mr. Obermann is also pleased with the development in the key German market, where the number of contract customers increased substantially in the last quarter, while the acquisition costs per new subscriber decreased. Even in the highly competitive UK market, positive indications can clearly be seen. Obermann said, " the number of contract customers increased by 20 percent in the last twelve months to over 2.5 million. This also led to an increase in the total number of customers, despite substantial streamlining of the prepay customer base."  

Thomas G. Winkler, CFO of T-Mobile International, was very pleased with the balance sheet at September 30, 2003, above all in view of business in the USA: " T-Mobile USA increased the so-called cash contribution 
(i.e. EBITDA minus Capex) in all three quarters." Overall, with EUR 5 billion adjusted EBITDA, T-Mobile has already reached the level of the full 2002 financial year. Winkler said, " we more than doubled the cash contribution in the third quarter year-on-year."  

T-Mobile Germany 
T-Mobile Germany increased its customer base by 370,000 in the third quarter. 226,000 of these new subscribers were fixed-term contract subscribers. At the same time, T-Mobile Germany reduced the average acquisition costs per customer gained to EUR 85. While revenue increased by around 7 percent compared with the third quarter of 2002, EBITDA grew by over 11 percent to EUR 953 million. As a result, the EBITDA margin increased to over 43 percent, compared with around 41 percent in the same quarter last year. Monthly ARPU increased by EUR 1 to EUR 25 quarter-on-quarter, but was EUR 1 lower than the figure of the third quarter of 2002 of EUR 26 (rounded figures). 

T-Mobile USA 
With an increase of 670,000 new customers in the third quarter, T-Mobile USA now has a customer base of 12.1 million. The churn rate also increased in this period, as it did for other mobile communications operators in the USA, and reached 3.3 percent per month. However, this is substantially lower than last year's figure of 4.2 percent. Revenue increased by more than 26 percent compared with the same quarter last year to around EUR 2 billion or, expressed in US dollars, by over 45 percent to around USD 2.2 billion. Measured in US dollars, monthly ARPU remained constant compared with the previous quarter, at USD 50 (EUR 45). So compared with the same quarter last year, ARPU increased by USD 3. Translated into euros, this means a EUR 3 decrease, due to exchange rate effects. At USD 482 million (EUR 429 million), EBITDA more than quadrupled compared with the third quarter of 2002. The EBITDA margin tripled to 21.7 percent. 

T-Mobile UK 
As announced, T-Mobile UK again streamlined its customer base in the third quarter to remove inactive prepay customers. At the end of September, the company had 12.4 million customers, including Virgin Mobile customers, which is 0.6 million more than in the same quarter last year. In the past year, T-Mobile UK increased the number of contract subscribers by 20 percent to more than 2.5 million. 123,000 new contract subscribers were won in the third quarter of 2003 alone. As a result of the streamlining of inactive prepay customers, the churn rate increased to 4.2 percent. However, the churn rate for contract subscribers developed pleasingly. At 2.2 percent, it reached the lowest level for one and a half year. Monthly ARPU increased to GBP 45 (EUR 64), for all customers it was GBP 21 (EUR 31). Measured in pound sterling, revenue increased by almost 14 percent compared to the same quarter last year and amounted to GBP 761 million. Translated into euros, the increase was 3 percent to 
EUR 1.1 billion. In local currency, EBITDA increased by more than 26 percent compared to the same quarter last year to GBP 182 million, in euros by almost 15 percent to EUR 260 million. 

T-Mobile Austria 
T-Mobile Austria's customer base remained stable at more than two million subscribers. At the same time, ARPU increased to EUR 32. Revenue increased by 8 percent compared with the same quarter last year to EUR 277 million, EBITDA improved substantially in the same period by more than 56 percent to EUR 80 million. 

T-Mobile Czech Republic 
T-Mobile Czech Republic closed the third quarter with 3.7 million customers. Of the 84,000 new customers won in this quarter, 48,000 were contract subscribers. The average churn rate in the third quarter was 0.9 percent per month, and at EUR 16, monthly ARPU decreased slightly compared with the same quarter year-on-year. Revenue increased by almost 5 percent compared with the third quarter last year to 
EUR 195 million, whereas EBITDA decreased slightly to EUR 88 million. 

T-Mobile Netherlands 
In the third quarter, T-Mobile Netherlands increased the number of customers by 150,000 to over 1.84 million. Monthly ARPU per customer is EUR 38, and is thus the highest of all T-Mobile companies in Europe. With revenue of EUR 225 million, and EDITDA of EUR 9 million in the third quarter, T-Mobile Netherlands again made a positive contribution to the EBITDA of the whole group, as in the second quarter of 2002. 

Key figures of the T-Mobile Group (incl. consolidated subsidiaries) for the first 9 months 2003
(Financial figures of T-Mobile including consolidation effect, unaudited)
Customers (,000) Q1-Q3/03 Q1-Q3/02 Delta Delta %
T-Mobile International 1) 4) 57,691 51,178 6,513 12.7
T-Mobile Germany 25,628 23,798 1,830 7.7
T-Mobile UK 1) 12,386 11,758 628 5.3
T-Mobile Austria 2,033 2,011 22 1.1
T-Mobile Czech Republic 3,691 3,283 408 12.4
T-Mobile Netherlands 4) 1,840 1,429 411 28.8
T-Mobile USA 12,113 8,899 3,214 36.1
Sales (Mio. Euro) Q1-Q3/03 Q1-Q3/02 Delta Delta %
T-Mobile International 16,787 14,245 2,542 17.8
T-Mobile Germany 6) 6,297 5,790 507 8.8
T-Mobile UK 6) 3,186 2,903 283 9.8
T-Mobile Austria 6) 809 754 55 7.3
T-Mobile Czech Republic 6) 564 511 53 10.4
T-Mobile Netherlands 6) 626 n.a. n.a. n.a.
T-Mobile USA 6) 5,423 4,361 1,062 24.4
EBITDA (Mio. Euro) 2) Q1-Q3/03 Q1-Q3/02 Delta Delta %
T-Mobile International 5) 5,005 3,850 1,155 30.0
T-Mobile Germany 6) 2,641 2,395 231 9.6
T-Mobile UK 6) 805 663 142 21.4
T-Mobile Austria 6) 249 221 28 12.7
T-Mobile Czech Republic 6) 262 247 16 6.5
T-Mobile Netherlands 6) 15 n.a. n.a. n.a.
T-Mobile USA 6) 1,195 388 807 208.0
ARPU (Euro)3) Q1-Q3/03 Q1-Q3/02 Delta
T-Mobile Germany 24 25 -1
T-Mobile UK 30 28 2
T-Mobile Austria 31 30 1
T-Mobile Czech Republic 15 16 -1
T-Mobile Netherlands 37 n.a. n.a.
T-Mobile USA 44 50 -6
SACs per gross add (Euro) Q1-Q3/03 Q1-Q3/02 Delta
T-Mobile Germany 96 95 1
T-Mobile UK 142 145 -3
T-Mobile Austria 115 88 27
T-Mobile Czech Republic 32 29 3
T-Mobile Netherlands 154 n.a. n.a.
T-Mobile USA 186 226 -40
Blended Churn (in %) Q1-Q3/03 Q1-Q3/02 Delta
T-Mobile Germany 1.4 1.5 -0.1
T-Mobile UK 3.5 2.0 1.5
T-Mobile Austria 1.6 2.4 -0.8
T-Mobile Czech Republic 1.1 0.8 0.3
T-Mobile Netherlands 2.8 n.a. n.a.
T-Mobile USA 3.1 4.2 -1.1
1) Including Virgin Mobile.

2) EBITDA: Results from ordinary business activities before net financial income/expense including income related to subsidiaries, associated and related companies, amortization and depreciation, and before othertaxes.3) ARPU contains monthly service fee, as well as voice-, non-voice- and roaming revenues. In contrast to the reporting of some competitors, visitor revenues are not included.4) 2002 includes T-Mobile Netherlands customers.5) EBITDA adjusted for special factors: In the second quarter of 2003, special factors included the sale of 15 percent of the shares of Russian mobile communications operator MTS for around EUR 500 million
(of which EUR 352 million was recognized as income), plus a EUR 7 million addition to pension accruals (additional minimum liability). There were no special factors affecting EBITDA in 2002.6) These amounts relate to the companies' respective unconsolidated financial statements (single-entity financial statements adjusted for uniform group accounting policies and reporting currency) without taking into consideration consolidation effects.

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