Deutsche Telekom Q2: “All operations performing well”
August 8, 2024
Deutsche Telekom delivered what it described as “strong figures yet again” for the second quarter of 2024. Service revenues increased by 4.9 per cent year-on-year to €24.1 billion. At the same time, adjusted EBITDA AL grew 7.8 per cent to €10.8 billion. Excluding the effects from exchange rate fluctuations and changes in the composition of the Group, growth amounted to 4 per cent for service revenues and 6.6 per cent for adjusted EBITDA AL. Free cash flow AL increased substantially by 48.5 percent to €5.2 billion.
“All our operations are performing well,” said Tim Höttges, CEO of Deutsche Telekom. “Quarter by quarter, we are seeing our strategy pay off.”
At €2.1 billion, net profit in the second quarter was up 35.6 per cent against the same period of the prior year. Adjusted for special factors, net profit increased by 31.3 per cent to €2.5 billion.
Following suit from T-Mobile US, Deutsche Telekom also raised its full-year guidance for free cash flow AL. The Group now expects around €19 billion, slightly up from previously around €18.9 billion. There is no change in the guidance for adjusted EBITDA AL at around €42.9 billion.
Germany: strong customer growth
Fiber-optic usage in Germany is gaining momentum. In the second quarter of 2024, the number of customers with pure fiber-optic lines increased by 113,000. The rate of growth has thus risen steadily over recent quarters, with the total number of customers using pure fiber-optic lines reaching over 1.2 million at the end of June. TV net adds stood at 114,000, with positive effects including the UEFA European Championship and the abolition of the privilege for property owners to pass on cable and internet service fees as ancillary costs to tenants as of July 1st 2024. Broadband net adds for the quarter stood at 41,000.
Mobile communications also delivered positive figures. The branded contract customer base grew by 311,000 between April and June. Mobile service revenues increased by 3.7 per cent year-on-year.
Revenue in the Germany operating segment amounted to €6.4 billion in Q2, up by 3.6 per cent against the prior-year period. Adjusted EBITDA AL increased by just 1 per cent to €2.6 billion, with the one-time payment to employees agreed in the collective agreement having a negative impact.
United States: milestone reached
As of June 30th, T-Mobile US reported more than 100 million postpaid customers for the first time. In the second quarter, postpaid net adds of 1.3 million were recorded, including 777,000 postpaid phone net customer additions.
Regarding financial performance indicators, adjusted EBITDA AL increased by 9.1 per cent year-on-year to $7.8 billion. At the same time, service revenues increased by 4.4 per cent in the second quarter to $16.4 billion.
Europe: profit growth at record level
The European national companies once again stepped up the pace of profit growth. Adjusted EBITDA AL reached €1.1 billion in the second quarter, an increase of 8.9 per cent in organic terms against the prior-year quarter. The rate of growth is expected to slow in the second half of the year, as the tailwind from lower energy costs in the first six months compared to the prior-year period will fall off. Revenue grew by 6.8 per cent in organic terms to €3.1 billion.
The growth in customer numbers also continued. The companies recorded mobile contract net adds of 183,000, broadband net adds of 53,000, and TV net adds of 23,000 in the second quarter.
Systems Solutions: growth in order entry
The positive trends in T-Systems’ business figures continued in the second quarter of this year. This is particularly the case for new deals, with order entry increasing by 28.3 per cent to €957 million.
Revenue in Systems Solutions totaled €981 million between April and June, an increase of 2.1 per cent year-on-year. This revenue growth was driven by both business with cloud services and by digitalisation solutions. Adjusted EBITDA AL rose by 1.4 per cent in organic terms to €87 million.