Deutsche Telekom AG — Earnings Release 2004

Nov 11, 2004

News Details

Ad-hoc | 11 November 2004 06:34

Ad hoc notification of Deutsche Telekom AG

Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– Bonn, November 11, 2004 Deutsche Telekom: Board of Management aims to pay a dividend of EUR 0.62 for 2004 – Net revenue in the first nine months of 2004 grew in organic terms by approximately 6.3 percent year-on-year, reported net revenue increased by around 4 percent to approximately EUR 42.9 billion. – Adjusted Group EBITDA up by 6.1 percent to EUR 14.6 billion, organic growth in adjusted EBITDA at 7.6 percent. – Net income doubled from EUR 1.6 billion to EUR 3.2 billion, adjusted for special factors, it almost tripled from EUR 0.7 billion to EUR 1.9 billion. – Free cash flow before dividend payments decreased from EUR 7.4 billion to EUR 6.6 billion as a result of higher capital expenditure. – Net debt reduced by an additional EUR 5.8 billion to EUR 40.8 billion compared with EUR 46.6 billion at the end of 2003. – Further development of the dividend will depend on the future levels of net income. – Net income in 2004 will be around EUR 3.2 billion, exceeding the original target of EUR 2.5 billion – Adjusted EBITDA in 2005 expected to be between EUR 1.2 billion and EUR 1.5 billion higher than the target for 2004 of at least EUR 19.2 billion. End of ad hoc notification end of ad-hoc-announcement (c)DGAP 11.11.2004 Issuer’s information/explanatory remarks concerning this ad-hoc-announcement: Issuer’s information/explanatory remarks concerning this ad-hoc- announcement: Overview of selected key figures (third quarter of 2004) Q3/2004 Q3/2003 Change millions of millions of in percent Euro Euro Net revenue 14,524 14,077 3.2 – Domestic 8,535 8,553 (0,2) – International 5,989 5,524 8.4 Adjusted results 1,433 630 n.a. from ordinary business activities Results from 1,974 691 n.a. from ordinary business activities Adjusted net income 989 463 n.a. Net income 1,387 508 n.a. EBITDA excluding 5,264 4,711 11.7 special factors EBITDA 5,805 4,683 24.0 Net cash provided 3,680 4,784 (23.1) by operating activities Free Cash-Flow 2,391 3,427 (30.2) before dividend Investments in (1,275) (1,431) 10.9 property, plant and equipment and intangible assets (excluding goodwill) Q1-Q3 2004 Q1-Q3 2003 Change FY 2003 millions of millions of percent millions of Euro Euro Euro Net revenue 42,922 41,288 4.0 55,838 – Domestic 25,560 25,689 (0.5) 34,691 – International 17,362 15,599 11.3 21,147 Adjusted results 2,882 1,182 n.a. 1,122 from ordinary business activities Results from 4,726 1,783 n.a. 1,398 from ordinary business activities Adjusted net income 1,944 738 n.a. 222 Net income 3,211 1,617 98.6 1,253 EBITDA excluding 14,632 13,785 6.1 18,288 special factors EBITDA 16,476 14,297 15.2 18,475 Net cash provided 10,808 11,044 (2.1) 14,316 by operating activities Free Cash-Flow 6,585 7,393 (10.9) 8,285 before dividend Investments in (3,811) (3, 536) (7.8) (6,234) property, plant and equipment and intangible assets (excluding goodwill) Net debt 40,779 49,156 (17.0) 46,576 at balance sheet date Number of 247,891 249,974 (0.8) 248,519 employees at balance sheet date Deutsche Telekom continued its growth course in the third quarter of 2004 while substantially increasing profitability. Based on this positive trend in the first nine months of 2004, the Board of Management further substantiated its expectations for the full year and, in some cases, increased them considerably. Net income will be around EUR 3.2 billion, compared with the previous target of EUR 2.5 billion. Based on this expectation, the Board of Management is aiming to pay a dividend of EUR 0.62 for the 2004 financial year. This corresponds to a dividend yield based on the current share price of between 3.7 and 4.1 percent and a total dividend payment of between EUR 2.4 billion and EUR 2.6 billion. The final dividend will be dependent on the net income for 2004. The Board of Management, therefore, will present to the Supervisory Board, at its meeting to review the 2004 financial accounts, a dividend in the range of EUR 0.56 to EUR 0.62. Deutsche Telekom regards the level of the dividend for 2004 as a minimum level for future years. It is the intention to adhere to the principle of providing an attractive return to the company’s shareholders. The further development of the dividend will depend on the future levels of net income. The expectation for adjusted Group EBITDA for 2004 continues to be at least EUR 19.2 billion. Amounts exceeding this target will be invested in the further expansion of the growth areas of mobile communications and broadband. In the 2005 financial year, adjusted EBITDA is to increase by between EUR 1.2 billion and EUR 1.5 billion compared with the target for the current financial year. This is compared with an expected year-on-year increase of at least EUR 0.9 billion in 2004. End of part 1 of the explanatory remarks concerning this ad-hoc- announcement Follows part 2 of the explanatory remarks concerning this ad-hoc- announcement ——————————————————————————– WKN: 555750; ISIN: DE0005557508; Index: DAX, EURO STOXX 50 Listed: Amtlicher Markt in Berlin-Bremen, Düsseldorf, Frankfurt (Prime Standard), Hamburg, Hannover, München und Stuttgart; EUREX; London; Amsterdam; NASDAQ Europe; Virtex; New York (ADR); Tokio 110634 Nov 04