UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 March 2004
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 if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101 (b)(1): [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101 (b)(7): [ ]
Indicate by check mark whether the registrant by furnishing the information
contained in this form, the registrant is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.
Yes [ ] No [X]
This report is deemed submitted and not filed pursuant to the rules and
regulations of the Securities and Exchange Commission.
Ad hoc announcement of Deutsche Telekom AG
March 10, 2004 /
Net revenue increased in 2003 by EUR 2.1 billion year-on-year to EUR 55.8
billion
Net debt reduced by EUR 14.5 billion to EUR 46.6 billion
Adjusted Group EBITDA increased to EUR 18.3 billion, EUR 2 billion higher than
in previous year
Free cash flow before dividend increased by over EUR 3.5 billion to EUR 8.3
billion
Net income of EUR 1.3 billion after a net loss of EUR 24.6 billion in 2002
T-Com increases adjusted EBITDA from EUR 10.3 billion to EUR 10.4 billion
T-Mobile continues its strong profitable growth trend
T-Systems improves EBITDA despite negative economic influences
T-Online triples EBITDA
OVERVIEW OF SELECTED KEY FIGURES
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millions of euro FY/03 FY/02 change %
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Net revenue 55,838 53,689 4.0
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Net income/loss 1,253 -24,587 n.a
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EBITDA 18,475 16,116 14.6
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EBITDA adjusted to 18,288 16,314 12.1
exclude special factors
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Free cash flow before dividend 8,285 4,838 71.2
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Investments in property,
plant, and equipment 6,234 7,928 -21.4
and intangible assets
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Net debt 46,576 61,106 -23.8
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FOURTH QUARTER OF 2003
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millions of euro Q4 2003 Q4 2002 change %
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Net revenue 14,550 14,512 0.3
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Net income/loss -364 -77 n.a,
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EBITDA 4,178 4,734 -11.7
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EBITDA adjusted to 4,503 4,354 3.4
exclude special factors
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Deutsche Telekom increased its net revenue - according to preliminary figures
for the 2003 fiscal year - by 4 percent year-on-year to EUR 55.8 billion. With
adjusted EBITDA of EUR 18.3 billion, Deutsche Telekom exceeded its target by
far. This represents growth of 12.1
percent and reflects the efficiency improvements the Group has made on its path
towards profitable growth. Group EBITDA for the full 2003 financial year
amounted to EUR 18.5 billion. Special factors impacting EBITDA in the fourth
quarter of 2003 amounting to negative EUR 0.3 billion relate mainly to personnel
accruals. The Group's adjusted EBITDA margin improved to 32.8 percent compared
with 30.4 percent for the full 2002 financial year. All divisions contributed to
this increase.
Deutsche Telekom achieved the turnaround with net income of EUR 1.3 billion,
after recording a net loss of EUR 24.6 billion in 2002. Adjusted net income
totaled EUR 0.2 billion compared with a loss of EUR 4.8 billion in 2002.
Net income decreased in the fourth quarter of the year, mainly due to the burden
of the Toll Collect project, amounting to EUR 442 million. The provision for
risks included in this figure means that, from the current perspective, all
foreseeable risks are covered. Despite these negative effects, Deutsche Telekom
achieved its net income target for the full financial year, both in absolute and
adjusted figures.
Net debt was reduced further in the fourth quarter of 2003 by EUR 2.6 billion to
EUR 46.6 billion at the end of the year. This means net debt has decreased by a
total of EUR 17.7 billion since the strategic review in 2002. This achievement
is attributable to the sale of noncore assets totaling EUR 6.7 billion, as well
as to the continued progress made in increasing profitability and sustained
growth in key areas of the Group. With free cash flow before dividend of EUR 8.3
billion in 2003 and EUR 8.5 billion since the strategic review in the third
quarter of 2002, Deutsche Telekom exceeded its target of generating free cash
flow of more than EUR 6 billion by the end of 2003 by a clear margin of over EUR
2 billion.
The focus in the 2004 financial year is on profitable growth. Deutsche Telekom
is aiming to generate adjusted Group EBITDA of at least EUR 19.2 billion. The
use of free cash flow will depend on the opportunities that arise: to further
reduce debt and to increase investments. The possibility of selective
acquisitions has not been ruled out, provided they offer an opportunity to
further increase the value of the Group.
The Board of Management and the Supervisory Board will propose to this year's
shareholders' meeting that no dividend be paid. The Board of Management plans,
however, to generate a dividend in 2004 for payment in 2005.
SELECTED KEY FIGURES FOR THE DIVISIONS
T-COM
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millions of euro FY/03 FY/02 change %
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Net revenue 29,206 30,559 -4.4
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EBITDA 10,164 10,051 1.1
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Adjusted EBITDA 10,356 10,268 0.9
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millions of euro Q4/03 Q4/02 change %
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Net revenue 7,459 8,027 -7.1
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EBITDA 2,480 2,427 2.2
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Adjusted EBITDA 2,579 2,644 -2.5
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T-MOBILE
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millions of euro FY/03 FY/02 change %
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Net revenue 22,778 19,735 15.4
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EBITDA 7,016 5,038 39.3
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Adjusted EBITDA 6,671 5,038 32.4
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millions of euro Q4/03 Q4/02 change %
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Net revenue 5,991 5,490 9.1
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EBITDA 1,666 1,188 40.2
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Adjusted EBITDA 1,666 1,188 40.2
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T-SYSTEMS
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millions of euro FY/03 FY/02 change %
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Net revenue 10,614 10,489 1.2
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EBITDA 1,412 753 87.5
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Adjusted EBITDA 1,415 1,151 22.9
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millions of euro Q4/03 Q4/02 change %
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Net revenue 2,870 2,822 1.7
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EBITDA 336 300 12
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Adjusted EBITDA 399 318 25.5
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T-ONLINE
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millions of euro FY/03 FY/02 change %
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Net revenue 1,851 1,584 16.9
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EBITDA 335 103 n.a.
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Adjusted EBITDA 310 76 n.a.
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millions of euro Q4/03 Q4/02 change %
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Net revenue 504 463 8.9
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EBITDA 75 53 41.5
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Adjusted EBITDA 75 53 41.5
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GROUP HEADQUARTERS & SHARED SERVICES
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millions of euro FY/03 FY/02 change %
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Net revenue 4,268 4,411 -3.2
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EBITDA -276 447 n.a.
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Adjusted EBITDA -316 30 n.a.
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millions of euro Q4/03 Q4/02 change %
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Net revenue 1,048 1,238 -15.3
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EBITDA -491 828 n.a.
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Adjusted EBITDA -311 213 n.a.
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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.
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.
DEUTSCHE TELEKOM AG
By: /s/ ppa. Rolf Ewenz-Sandten
--------------------------------
Name: Rolf Ewenz-Sandten
Title: Vice President
Date: March 10, 2004