UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Form
6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For
the month of April 2009
Commission
file number 001-14540
Deutsche
Telekom AG
(Translation
of Registrant’s Name into English)
Friedrich-Ebert-Allee
140,
53113
Bonn,
Germany
(Address
of Principal Executive Offices)
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.
Form
20-F x Form
40-F
Indicate
by check mark whether the registrant by furnishing the information contained in
this form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes o No x
This report is deemed submitted
and not filed pursuant to the rules and regulations of the Securities and
Exchange Commission.
Press
Release
Bonn,
April 21, 2009
Deutsche
Telekom expects adjusted EBITDA in 2009 to be 2 to 4 percent below the
prior-year figure and free cash flow of around EUR 6.4 billion
In a
tough economic environment, Deutsche Telekom recorded increases in revenue and
adjusted EBITDA in the first quarter of 2009 with the Greek company OTE
consolidated for the first time. Measured for the consolidated Group prior to
this change, revenue remained almost stable and EBITDA declined.
Deutsche
Telekom recorded better than expected business developments in Germany, where
T-Home achieved the highest market share of new DSL business since 2005 and
T-Mobile Deutschland stabilized its revenue and EBITDA further. T-Systems also
increased its contribution to results.
On the
other hand, the Group felt the impact of the economic slowdown and the more
intense competitive environment, particularly in the United States. In addition,
there were dramatic movements in the exchange rates with the United Kingdom and
Poland.
Disregarding
the growth effect of OTE, Deutsche Telekom expects adjusted Group EBITDA to be
between 2 and 4 percent lower for the full year in these unfavorable
conditions. Free cash flow is expected to reach around EUR 6.4 billion on
the back of measures that were initiated early. This will lay part of the
foundation for a shareholder-friendly dividend policy.
Chief
Financial Officer Timotheus Höttges said: "We are currently in difficult times
for rapid, comprehensive and clear communication. For that reason, we have
decided to inform our shareholders as early as possible."
Monthly
revenue per customers in the United States fell, partly as a result of lower
roaming revenues due to the decrease in traveling. The roll-out of the 3G
network, on the other hand, and increased expenditure for new customer business
and retention lead to significantly increased costs.
The
Polish company PTC suffered considerably from the sharp decline in its home
currency, the zloty, which fell around 26 percent year-on-year against the
euro. In operating business, customer acquisition expenses also increased
significantly.
T-Mobile
UK recorded a significant drop in revenues of around 21 percent due to the
fall in the value of the pound sterling. Economic effects also had a negative
impact on monthly revenue per customer here, too. The increased numbers of
customers burdened the results for the first quarter with higher customer
acquisition costs.
In the
case of T-Mobile UK, Deutsche Telekom has initiated a nonscheduled impairment
test. Even taking into account the improvements in results planned in the course
of the year, the Board of Management expects an impairment charge on the
goodwill of T-Mobile UK to be necessary. This will be reported as a special
factor, however, and will not impact EBITDA, nor will it lead to a cash
outflow.
These new
expectations are based on the assumption that the economic environment will not
decline significantly further and that exchange rates will remain approximately
at current levels.
The
following statements are based on preliminary calculations prior to conclusive
consolidation and review. As such, these figures may deviate from the finalized
quarterly figures to be published on May 7.
Net
revenue of the Group increased by 6 percent thanks to OTE
Including
OTE, consolidated since the beginning of February 2009, net revenue of the Group
increased by 6 percent to EUR 15.9 billion. EBITDA adjusted for
special effects increased by 3 percent to EUR 4.8
billion.
Excluding
the consolidation of OTE, Group revenue remained stable at around EUR 15.0
billion, with adjusted EBITDA dropping by 5 percent to EUR 4.5
billion.
Market
share of new DSL customers further increased
In
Germany, T-Home continued its strong development of the past two years in the
first quarter of 2009 with a net add market share of around 53 percent and
around 390,000 net new retail customers. That was the highest market share since
2005.
Including
OTE, the Group recorded an increase of 4 percent in reported fixed-network
revenue to EUR 5.9 billion. The development of adjusted EBITDA was
considerably better, with an increase of 6 percent in the first quarter to
EUR 2.0 billion.
Excluding
OTE, fixed-network revenue declined by 6 percent to EUR 5.3 billion.
Thanks to consistent cost cutting, the 3-percent decrease in adjusted EBITDA to
EUR 1.8 billion came in slightly lower than the decrease in revenue.
T-Home's revenue from domestic business decreased 6 percent to EUR 4.8
billion. With a decrease of 3 percent to EUR 1.6 billion, adjusted
EBITDA fared better than revenue here, too.
T-Mobile
Deutschland increased service revenues
Customer
usage in domestic mobile communications, measured in terms of the average number
of call minutes per customer, increased further. This led to service revenues
increasing by 1 percent in the first quarter of 2009. Total
revenue continued to stabilize, declining 1 percent to EUR 1.9
billion. In the first quarter of 2008 the year-on-year decrease in total revenue
was still 3 percent. The development of adjusted EBITDA was similar, also
stabilizing with a decline of 1 percent to EUR 0.7
billion.
Growth
in T-Systems' international revenue
T-Systems
recorded a positive development in its adjusted EBITDA, with an increase of
4 percent to EUR 0.2 billion. This increase can be seen even more
clearly in adjusted EBIT, which doubled. Revenue decreased 4 percent
year-on-year in the first quarter to EUR 2.1 billion. This is
attributable primarily to intra-Group business. International revenues were
boosted further by 6 percent in a comparison of the first
quarters. New corporate customers were a factor here.
Exchange
rate effects negatively impact on European mobile communications
business
Revenue
from European mobile communications increased by 2 percent in the first
quarter to EUR 5.1 billion. The development of adjusted EBITDA on the other
hand remained below that of revenue, and below expectations, with a decrease of
9 percent to EUR 1.6 billion.
Excluding
the first-time consolidation of the OTE group for two months of the current
year, revenue decreased by 8 percent or around EUR 0.4 billion to
EUR 4.6 billion, while adjusted EBITDA fell by 18 percent or around
EUR 0.3 billion to EUR 1.4 billion.
The
changes in exchange rates had a negative effect of around EUR 0.3 billion
on revenue and around EUR 0.1 billion on adjusted EBITDA. This is due in
particular to developments in the Polish and British currencies.
Rise
in costs from the successful acquisition of new customers
In
operating business, T-Mobile UK and the Polish company PTC successfully
continued to attract new customers: T-Mobile UK recorded 53,000 net contract
additions (19,000 more than in the same period last year), and net contract
additions in Poland totaled 198,000 (190,000 in the prior year). On the other
hand, this also resulted in increased costs for which there were no
corresponding revenues in the quarter.
On top of
that, the sharp drop, for example, in roaming and visitor revenues in both
countries as a result of the decrease in traveling due to the prevailing
economic situation, also had a significant impact.
Recession
weighs on revenues in the United States
In the
United States, T-Mobile USA's revenue increased by 20 percent to EUR 4.1
billion. Adjusted EBITDA also grew by 10 percent to EUR 1.1 billion.
The development of operations is being significantly boosted by the strength of
the U.S. dollar against the euro: measured in dollars, however, revenue
increased by 4 percent, and adjusted EBITDA fell by around
4 percent.
This was
the result of various factors. In the contract customer segment, for example,
the number of call minutes decreased by 8 percent in the first quarter.
Revenue from roaming charges also decreased. This was a major factor in the
decrease in revenue per contract customer of USD 3 compared with the
prior-year quarter to USD 53. In addition, the customer mix at T-Mobile
changed over the past quarters. Prepay business accounted for around
60 percent of a total of 415,000 new customers in the first quarter of
2009, compared with around 25 percent of 981,000 net additions in the same
quarter of 2008.
In
addition, the advance costs in the first quarter of 2009 resulting from the 3G
roll-out contributed to the decline in results. The sale of more than 1 million
G1 handsets since the market launch in October 2008 alone, and a total of over
1.5 million 3G-capable handsets sold in the United States, clearly shows,
however, that customers are demanding products and services based on these
increased bandwidths and that the provision of these products and services is an
important selling point in competition. T-Mobile USA will therefore increase the
number of POPs covered by the 3G network this year from 107 million to 205
million.
T-Mobile
USA launched a campaign in February 2009 to combat churn as a consequence of
expiring two-year contracts which is beginning to generate results. The churn
rate among contract customers fell from 2.4 percent in the fourth quarter
of 2008 to 2.3 percent in the first three months of this year.
The
Board of Management has initiated a far-reaching package of measures to tackle
these challenges in the United States, Poland and the United
Kingdom.
In the
United States, the rollout of the 3G network to cover more than 200 PoPs by the
end of the year and the expansion of the portfolio to include 3G-capable mobile
handsets will enhance the attractiveness of the service offering. This includes
the U.S. launch this week of the 3G version of the T-Mobile Sidekick. In
addition, T-Mobile USA is significantly expanding its sales network under its
own brand. The program launched in the first quarter of 2009, geared towards
strengthening customer retention in the contract area, is being enhanced with
initiatives for improving service quality. T-Mobile USA is thus reaffirming its
commitment to positioning itself as the provider of the best-value services for
customers in the United States. A clear sign in this respect is another honor
from J.D. Powers for providing the best service quality.
Various
cost-cutting measures being planned at T-Mobile UK, particularly in the areas of
administration, advertising and technology. The main task of the new management
team is to strictly focus on repositioning the business in the difficult
economic environment. The focal points will include turning the best
3G network in the United Kingdom into a greater operating success. In addition,
prepay and contract customer services are to be improved, for example, by
extending SIM-only offers.
Expenditures
for new customer acquisition and retention are being reduced in Poland. On top
of this, PTC is reducing its overarching cost types, such as for advertising and
staff. The timing of the distribution of operating costs and expenditures will
be tied more closely to the development of business in order to avoid phases of
higher ongoing costs in coming quarters.
In the
Outlook section, this press release contains forward-looking statements that
reflect the current views of Deutsche Telekom management with respect to future
events. Forward-looking statements are based on current plans, estimates and
projections. They should therefore be considered with caution. 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 Company's
Form 20-F annual report filed with the U.S. Securities and Exchange Commission.
Among the relevant factors are the progress of Deutsche Telekom’s workforce
reduction initiative and the impact of other significant strategic or business
initiatives, including acquisitions, dispositions, business combinations, and
cost reduction measures. In addition, regulatory decisions, stronger than
expected competition, technological change, litigation and regulatory
developments, among other factors, may have a material adverse effect on costs
and revenue development. Furthermore, an economic downturn in Europe or North
America and changes in exchange and interest rates could also affect our
business development and the availability of capital under favorable conditions.
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 can offer no assurance that its expectations or
targets will be met. Deutsche Telekom does not assume any obligation to update
forward-looking statements to take new information or future events into account
or otherwise. Deutsche Telekom does not reconcile its adjusted EBITDA guidance
to a GAAP measure because it would require unreasonable effort to do so. As a
general matter, Deutsche Telekom does not predict the net effect of future
special factors because of their uncertainty. Special factors and interest,
taxes, depreciation and amortization (including impairment losses) can have a
significant effect on Deutsche Telekom's results.
In
addition to figures prepared in accordance with IFRS, Deutsche Telekom presents
non-GAAP financial performance measures, including EBITDA, EBITDA margin,
adjusted EBITDA, adjusted EBITDA margin, adjusted EBT, adjusted net profit, free
cash flow, gross debt and net debt. These non-GAAP measures should be considered
in addition to, but not as a substitute for, the information prepared in
accordance with IFRS. Non-GAAP financial performance measures are not subject to
IFRS or any other generally accepted accounting principles. Other companies may
define these terms in different ways. For further information relevant to the
interpretation of these terms, please refer to the chapter “Reconciliation of
pro forma figures” posted on Deutsche Telekom’s website (www.telekom.com) under
the link "Investor Relations."
Deutsche
Telekom AG
Corporate
Communications
Tel.: +49 (0)
228 181-49 49
E-mail:
presse@telekom.de
Further
information is available for journalists at
www.telekom.com/media
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
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DEUTSCHE
TELEKOM AG
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|
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By:
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/s/ Guido
Kerkhoff
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Name:
|
Guido
Kerkhoff
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Title:
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Member
of the Management Board for South Eastern
Europe
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Date:
April 21, 2009