Deutsche Telekom AG — Earnings Release 2003

Mar 10, 2004

News Details

Ad-hoc | 10 March 2004 06:29

ad hoc notification of Deutsche Telekom English part 3 and the end

Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– ad hoc notification of Deutche Telekom part 3 and the end end of ad-hoc-announcement (c)DGAP 10.03.2004 Issuer’s information/explanatory remarks concerning this ad-hoc-announcement: Part 3 and the end of ad hoc notification of Deutsche Telekom Among the divisions, T-Com was once again the largest revenue generator in the Deutsche Telekom Group with revenue of EUR 29.2 billion in 2003. The 2003 financial year was one of strong growth rates in broadband business for T-Com. Revenue in this division decreased by around 4 percent in comparison with the 2002 financial year as a result of the sale of the remaining regional cable companies in February 2003, as well as the impact of national regulatory interventions and the weak economic environment. Excluding special factors, EBITDA increased slightly by 1.1 percent from EUR 10.3 billion to EUR 10.4 billion. The adjusted EBITDA margin thus increased by almost 2 percentage points to 35.5 percent. Including special factors, EBITDA increased by 1.1 percent from EUR 10.1 billion to EUR 10.2 billion. The T-Mobile division recorded strong growth in total revenues of more than 15 percent, around EUR 3.0 billion, to EUR 22.8 billion in 2003, adjusted EBITDA increased by more than 32 percent to EUR 6.7 billion, far exceeding the growth in revenue. EBITDA growth was strongest at T-Mobile USA, where it almost tripled from EUR 0.5 billion to EUR 1.5 billion. T-Mobile’s total adjusted EBITDA margin improved from 25.5 percent to 29.3 percent. T-Systems recorded good results in 2003, despite the generally unfavorable market environment, generating revenue of EUR 10.6 billion in the year under review, an increase of 1.2 percent year-on-year. The improvement is attributable to the very positive development of revenue from telecommunications business, which increased by 5.3 percent. Business with information technology solutions declined on the other hand, with revenue 2.3 percent lower than in the previous year. T-Systems’ EBITDA excluding special factors increased by 23 percent or approximately EUR 0.3 billion to EUR 1.4 billion. Including special factors, EBITDA increased by a good 87 percent, from EUR 0.75 billion to EUR 1.4 billion. The adjusted EBITDA margin improved by 2 percentage points in 2003 from 11 to around 13 percent. T-Online increased its total revenue by almost 17 percent, just under EUR 0.3 billion, year-on-year to around EUR 1.9 billion (figures in accordance with German GAAP). EBITDA improved from EUR 0.1 billion to EUR 0.3 billion over the same period and thus underlines the success of T-Online’s focus on increasing profitability and the consistent further development of its combined business model. Group Headquarters & Shared Services recorded a 3.2 percent decrease in revenue in 2003 to EUR 4.3 billion. EBITDA adjusted to exclude special factors decreased year-on-year to EUR -0.3 billion. This was mainly attributable to personnel costs relating to Vivento of around EUR 0.5 billion. This was partially offset by the reduction in rebranding expenses and the non-recurrence of start-up costs incurred for the sale of receivables in 2002. At December 31, 2003, approximately 15,500 employees (calculated as full-time equivalents) were assigned to the “Vivento” personnel service agency which also had roughly 440 permanent staff. Approximately 19,200 employees have been transferred to Vivento since its establishment in the fourth quarter of 2002. Of this figure, around 3,700 employees had left Vivento permanently at the end of 2003, roughly 2,200 of which to jobs outside the Group. These successful placements reduced the costs for the Group by roughly EUR 150 million over the course of the year. This press release contains forward-looking statements that reflect the current views of the Deutsche Telekom management with respect to future events. Forward-looking statements are based on current plans, estimates and projections, and therefore too much reliance should not be placed on them. Such statements are subject to risks and uncertainties, most of which are difficult to predict and are generally beyond Deutsche Telekom’s control, including those described in the sections “Forward-Looking Statements” and “Risk Factors” of the Form 20-F submitted to the U.S. Securities and Exchange Commission. If these or other risks and uncertainties materialize, or if the assumptions underlying any of these statements prove incorrect, Deutsche Telekom’s actual results may be materially different from those expressed or implied by such statements. Deutsche Telekom does not assume any obligation to update forward-looking statements to take new information or future events into account. In addition to the figures shown in accordance with German GAAP, Deutsche Telekom also shows so-called pro forma figures, e.g., EBITDA, adjusted EBITDA, net debt, and free cash flow. These pro forma financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with German GAAP. For a definition of these pro forma figures, please refer to the explanations under “Reconciliation to pro forma figures” on Deutsche Telekom’s Investor Relations website at http://www.telekom.de. ——————————————————————————– 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 100629 Mär 04