Deutsche Telekom sees solid growth continuing in 2016

News General Europe 25 FEB 2016
Deutsche Telekom sees solid growth continuing in 2016
Deutsche Telekom said it expects continued growth in 2016, led by its US operations. In 2015, the company exceeded its guidance, with adjusted EBITDA up 13.3 percent to EUR 19.9 billion compared to guidance of EUR 18.3 billion, helped by the stronger dollar. Free cash flow was also better than expected, up 9.8 percent to EUR 4.5 billion. Revenues rose 10.5 percent to EUR 69.2 billion, and the adjusted net profit was up by almost 70 percent to EUR 4.1 billion. 

For 2016, the operator forecast an increase in revenue and adjusted EBITDA up over 6 percent to around EUR 21.2 billion. Growth will be led by the US, helped by continued customer growth and the switch to a handset leasing model there. EBITDA in Germany and Europe is expected stable on slightly lower revenues. German revenue will suffer from a withdrawal from low-margin mobile hardware sales, while Europe is not expected to stabilise revenue until 2017. DT said it will continue to focus on its bundled fixed-mobile Magenta plans in Europe, which count already 2 million users in Germany and over 1 million in the rest of Europe. The concept was launched in five countries last year, and more markets will follow in 2016. 

Free cash flow growth is estimated at 8 percent to EUR 4.9 billion, and the company plans an increase in capital expenditure to EUR 11.2 billion from EUR 10.8 billion last year. The extra investment will go mainly to expanding network population coverage and backhaul, as well as the continued IP upgrade in Germany and the rest of Europe. Hungary will be the latest country to complete the IP transition this year. DT said part of the capex will be funded by cost savings, helped by its new group services unit in Europe. 

DT's outlook excludes an expected one-time gain of EUR 2.5 billion from the sale of its stake in UK operator EE. This will be booked in the first quarter. DT also proposed a 10 percent increase in its annual dividend, to EUR 0.55 per share for 2015. The company aims to continue to grow the dividend in line with free cash flow. 

In the last quarter of 2015, the company reported revenues up 5.0 percent year-on-year to EUR 17.9 billion. T-Mobile US led with growth of 15.5 percent to EUR 7.5 billion, while German revenues were 1.1 percent lower at EUR 5.7 billion, Europe fell 2.6 percent to EUR 3.3 billion, and T-Systems was up 0.7 percent to EUR 2.3 billion. Adjusted EBITDA rose 15.7 percent to EUR 5.1 billion, and net profit improved to a profit of EUR 946 million from a loss of EUR 110 million a year ago. 

Categories:

General

Companies:

T-Systems,  Deutsche Telekom,  T-Mobile US

Regions:

Europe

Countries:

United States

Tags:

Voice services, Data services, Financial figures, Internet Access

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