Net revenue increased by 32.3 percent in the first quarter of 2021 compared with the same period last year to 26.4 billion euros. Adjusted EBITDA AL rose by 41.3 percent to 9.2 billion euros, driven mainly by the acquisition of Sprint in the United States. In organic terms, i.e., adjusted for changes in the composition of the Group and exchange rate effects, revenue increased by 7.1 percent and adjusted EBITDA AL by 8.3 percent.
The Group’s investments in the first quarter – in terms of cash capex excluding spectrum investments – amounted to 4.3 billion euros. That is 27.7 percent more than in the previous year. At the same time, free cash flow AL increased by more than 100 percent to 2.6 billion euros.
“We are sustaining momentum and continuing our successful growth story,” said CFO Christian Illek. “Our customer numbers and key financial metrics are on track on both sides of the Atlantic.”
Net profit was up by 2.2 percent in the first quarter to 936 million euros. Adjusted net profit was down 6.5 percent to 1.2 billion euros. A number of factors contributed to the restrained development in net profit compared to adjusted EBITDA AL: These include higher interest expenses, higher depreciation, amortization and impairment losses, and higher non-controlling interests.
The Group has raised its full-year guidance for 2021. Outside of the United States, Deutsche Telekom now expects adjusted EBITDA AL of around 14.4 billion euros, up from the previous guidance of around 14.3 billion euros, and free cash flow AL of around 3.6 billion euros, up from 3.5 billion euros. Together with the guidance for T-Mobile US, which was raised at the beginning of the month, this means that the Deutsche Telekom Group now expects free cash flow AL to exceed the 8-billion-euro mark, up from the original planning of around 8 billion euros. Similarly, adjusted EBITDA AL is expected to exceed 37 billion euros, up from the previous guidance of around 37 billion euros.
Germany – fiber driving success
Deutsche Telekom’s broadband business continues to develop successfully in the German home market. In the first quarter of 2021, the company recorded 93,000 net broadband additions, i.e., 10,000 more than in the same period last year. The fiber build-out continues to be the basis for this success. At the end of March of this year, the number of fiber-based lines (FTTH, FTTC/vectoring) totaled 16.3 million – that is 1.5 million more than one year ago. In the quarter just ended, net additions stood at 368,000.
Deutsche Telekom won 167,000 new branded mobile contract customers in the first quarter of 2021 compared with 140,000 one year earlier. Mobile service revenues declined year-on-year by 0.8 percent. Excluding the negative effects of the coronavirus pandemic on roaming and visitor revenues, mobile service revenues would have increased by 1.2 percent.
Telekom Deutschland posted EBITDA growth for the 18th consecutive quarter. Adjusted EBITDA AL increased by 3.4 percent year-on-year in the first quarter of 2021 to 2.3 billion euros. At the same time, revenue grew 1.9 percent to 5.9 billion euros.
United States – Sprint takeover paying off sooner than expected
The integration of Sprint following the business combination effective April 1, 2020, is making further progress. T-Mobile US now expects synergies from the transaction to reach 2.8 to 3.1 billion U.S. dollars in 2021. That is 0.1 billion dollars more than the most recent forecast. On the back of the acquisition, the company’s key financial metrics rose sharply in the first quarter of 2021 compared with the prior year. Total revenue grew by 77.4 percent to 19.9 billion U.S. dollars. With an increase of 97.4 percent, adjusted EBITDA AL virtually doubled to 6.9 billion U.S. dollars.
T-Mobile US’ customer base totaled 103.4 million as of March 31 of this year, up 1.4 million against the year-end. Of these customer additions, 773,000 were postpaid phone customers – again a record figure in the U.S. wireless market.
Europe – sustained growth
The national companies in Europe made it through the first quarter undeterred by the crisis and local lockdowns. Despite the pandemic continuing to negatively affect roaming and visitor revenues, the Europe operating segment posted growth across all key metrics.
Adjusted EBITDA AL rose 4.1 percent year-on-year to 0.9 billion euros in organic terms. Total revenue grew by 0.8 percent to 2.7 billion euros in organic terms.
Customer numbers continued to increase. The national companies added 151,000 new mobile contract customers in the first quarter, 58,000 new broadband customers, and 191,000 new users of fixed-mobile convergence products.
System Solutions – order entry stabilized
The impact of the pandemic continues to be felt in Systems Solutions. In this difficult environment, T-Systems’ key financial metrics largely tracked a stable trend. At 0.9 billion euros in the first quarter of 2021, order entry was on a par with the same period of 2020.
Revenue decreased as expected, down 4.4 percent to 1.0 billion euros. Adjusted EBITDA AL for the period January through March came in at 62 million euros, up 3.3 percent year-on-year.
Group Development – TMNL strong despite lockdown
The Group Development tower business has included the sites in Austria since the start of the year. Adjusted for this inorganic growth, the number of sites increased year-on-year by 1,200 to 42,600. The tower business posted an increase in revenue in the first quarter of 4 percent to 282 million euros in organic terms. At the same time, adjusted EBITDA AL increased by 7.2 percent in organic terms to 169 million euros.
New customer growth in the Netherlands was negatively impacted by shop closures during the renewed lockdown, with T-Mobile NL adding 12,000 mobile contract customers in a very weak overall market. Revenue increased organically by 5.2 percent year-on-year to 513 million euros in the first quarter of 2021. Organic growth in adjusted EBITDA AL was even stronger, up by 6.2 percent to 151 million euros.
