* Revenue of 80.5 billion euros – up 6.4 percent
* Adjusted EBITDA AL up 7.2 percent to 24.7 billion euros
* Free cash flow AL at 7.0 billion euros, up 15.9 percent compared with 2018
* Net profit up by almost 80 percent to 3.9 billion euros
* Guidance for 2020: adjusted EBITDA AL of around 25.5 billion euros and free cash flow AL of around 8.0 billion euros
* Figures for Germany driven by fiber-optic build-out
* Customer boom in the United States delivers record results
* Europe accelerates growth trend
* T-Systems transformation bears fruit
Record revenue, profit growth in all operating segments, and a further increase in investments: Deutsche Telekom looks back on the most successful year in the history of the company. Revenue grew by 6.4 percent in 2019 compared with the prior year to 80.5 billion euros. Adjusted EBITDA AL increased by 7.2 percent to 24.7 billion euros. Free cash flow AL increased by 15.9 percent to 7.0 billion euros. Thus, Deutsche Telekom achieved its guidance for 2019, as raised in November.
“This is a historic day for Deutsche Telekom,” said Tim Höttges, CEO of Deutsche Telekom. “We have confirmed our position as the clear number one in our industry in Europe with these record results”.
Cash capex before spectrum investment stood at 13.1 billion euros in 2019, 7.6 percent above the prior-year level. This increase was due to the accelerated 5G build-out in the United States. Net profit increased by 78.5 percent to 3.9 billion euros. Negative special factors like the settlement agreement in the toll arbitration proceedings and impairment losses in the prior year compared with a range of much smaller effects in 2019. Adjusted for special factors, net profit increased by 8.9 percent to 4.9 billion euros.
For the 2020 financial year, Deutsche Telekom expects another increase in revenue. Adjusted EBITDA AL is expected to grow to around 25.5 billion euros, of which around 13.9 billion euros will come from business outside of the United States. As in 2019, growth is expected in all operating segments. The Group expects free cash flow of around 8.0 billion euros. All these figures are based on constant exchange rates and exclude changes in the composition of the Group.
Germany – networks and customer base continue to grow
The focus in Germany in the reporting year was on building out superfast internet connections, with some 28 million households and business locations now being able to use super vectoring with bandwidths of at least 250 Mbit/s. There were 14.4 million fiber-optic-based lines in the Telekom network at the end of 2019, 2.2 million more than a year earlier. More than 3.6 million customers use the internet-based MagentaTV service. 74,000 new customers signed up in the fourth quarter of 2019 alone. 4.7 million customers have opted for the MagentaEINS product package. Consequently, the share of mobile contract customers with MagentaEINS increased from 51 percent to 57 percent.
Mobile service revenues increased by 1.4 percent in the quarter, clearly confirming Deutsche Telekom’s market leadership. In the Germany operating segment as a whole, revenue rose by 0.9 percent in 2019 to 21.9 billion euros. Adjusted EBITDA AL for the full year increased by 2.4 percent compared with 2018 to 8.7 billion euros.
United States – triumphant success story continues
T-Mobile US ended the year with 86 million customers, 6.4 million more than a year earlier. 2019 was the sixth year in succession with more than five million customer additions. The company recorded more than a million net additions to branded postpaid phone customers in the fourth quarter. Thus, T-Mobile US led the U.S. mobile market in this most important customer metric for the 24th quarter in a row.
The huge number of new customers is paying off. T-Mobile US increased total revenue by 5.0 percent in 2019 to 45.2 billion U.S. dollars. Adjusted EBITDA AL increased by 4.7 percent compared with the prior year to 12.5 billion U.S. dollars.
Europe – growth accelerates
Revenue and earnings growth has been gaining pace for two years now in the Europe operating segment. In organic terms, revenue increased by 1.4 percent year-on-year in 2019 to 12.2 billion euros. Adjusted EBITDA AL rose 3.1 percent to 4.0 billion euros, driven by cost reductions and improved margins. In the fourth quarter, the organic growth rates were even higher, at 3.8 percent for revenue and 5.7 percent for adjusted EBITDA AL.
One of the success factors of the past year was fixed-mobile convergence products. Nearly 4.8 million customers now use such offers, 45.3 percent more than a year earlier. The percentage of broadband households that have opted for a product bundle also increased in this period from 39.9 percent to 49.1 percent. Product bundles lead to lower churn rates and higher revenues per household. Other customer figures also went up. The number of broadband lines grew 4.2 percent during the year to 6.7 million, the number of mobile contract customers increased by 3.4 percent to 27.6 million.
Systems Solutions – strong in new orders
T-Systems ended the year with a strong trend in order entry. The order volume was up 8.2 percent in 2019 at 7.3 billion euros, also largely driven by the growth areas.
Revenue declined slightly by 1.9 percent in the full year to 6.8 billion euros. Business in growth areas such as public cloud or security, each posting double-digit growth rates, was not sufficient to fully offset declines in traditional IT. At 0.5 billion euros, the annual target for adjusted EBITDA AL was achieved. The growth of 17.4 percent was primarily attributable to the ongoing transformation of the company. A further increase is expected for 2020.
Group Development – T-Mobile Netherlands continues to grow
Business developed very positively in the Netherlands over the past year. Revenue increased by 44.5 percent compared with 2018 to 1.9 billion euros. Adjusted EBITDA AL rose by 21.5 percent to 0.5 billion euros. This increase was mainly driven by the takeover of Tele2. But even without this effect, T-Mobile Netherlands recorded growth of 1.6 percent in revenue and of 19.4 percent in adjusted EBITDA AL. The company’s outstanding market position was underlined by the addition of 83,000 new mobile customers and 18,000 broadband customers in the fourth quarter alone.
With 34,300 sites at the end of 2019, the number of sites in Germany in the cell tower business rose by 1,800 year-on-year. Revenue in this business area increased by 2.5 percent on a like-for-like basis compared with 2018 to 0.9 billion euros.