Deutsche Telekom raises guidance on strong Q3
November 9, 2023
Deutsche Telekom has reported it continues to grow in all key performance indicators, and has raised its guidance for the full year and plans to pay out a higher dividend. In Q3 revenue increased by 0.7 per cent year-on-year in organic terms – i.e., excluding exchange rate fluctuations and changes in the composition of the Group – to €27.6 billion. Service revenues increased by 4.1 per cent in organic terms. At the same time, the Group’s adjusted EBITDA AL grew 6.2 per cent in organic terms to €10.5 billion. The business on both sides of the Atlantic contributed to this. Despite higher capital expenditure in Germany year-on-year, free cash flow AL increased by 61.4 per cent to €4.7 billion in the quarter.
In its home market, Deutsche Telekom recorded a positive trend in its customer numbers and financial figures in the third quarter. The company once again led the market with 96,000 broadband net additions. 6.7 million or 45 per cent of Telekom consumers have now subscribed to a line offering bandwidths of up to 100 Mbit/s or higher. The MagentaTV customer base increased by 51,000 in the quarter to 4.3 million. The new mobile rate plan structure continues to draw in strong numbers. Telekom recorded 350,000 branded contract customer additions between July and September. Telekom remains market leader in mobile service revenues, which were up 2.9 per cent. Deutsche Telekom has increased its earnings in Germany in every quarter for seven years now. In the third quarter of 2023, adjusted EBITDA AL recorded organic growth of 3.1 per cent year-on-year, increasing to €2.6 billion. At the same time, revenue increased by 2.1 per cent in organic terms to €6.3 billion. United States: industry leader in customer additions
Between June and September, T-Mobile US recorded postpaid net additions of 1.2 million. The year-on-year decline is attributable to the deactivation of SIM cards issued to students during the pandemic, which are now no longer required. In the postpaid phone customer segment, net customer additions were on a par with the prior-year level at 850,000. Both figures represent the best in the US mobile industry. Another 557,000 users opted for the fixed-network high-speed internet substitute product in Q3, bringing the customer base for this offering to 4.2 million. The company recorded organic year-on-year growth in service revenues of 4.7 per cent in the quarter to reach $15.9 billion. The key earnings indicator, adjusted core EBITDA, which eliminates effects from the planned withdrawal from the terminal equipment lease business, grew by 12.7 per cent in organic terms to $7.3 billion. Europe: Growth trend continues
The Europe operating segment once again delivered strong financials. In organic terms, adjusted EBITDA AL increased by 3.3 per cent year-on-year in the third quarter to €1.1 billion. Revenue generated by the European national companies increased by 3.7 per cent in organic terms to €3 billion. This growth was primarily driven by organic growth of 5.2 per cent in mobile service revenues. Customer numbers in Europe also saw good growth. Mobile contract net adds totalled 223,000, the number of broadband lines increased by 76,000, and the number of TV customers by 52,000. System Solutions: solid revenue growth
T-Systems saw revenue and earnings growth in Q3. Order entry fell short of expectations, decreasing by 11.9 per cent in organic terms to €742 million, which was partly attributable to phasing effects. Revenue increased organically by 7.1 per cent year-on-year to €960 million between July and September. Adjusted EBITDA AL increased by 1.2 per cent in organic terms to €86 million.