Deutsche Telekom Ag S/Adr

Good afternoon and welcome to Deutsche Telekom's conference call. At our customer's request, this conference will be recorded and uploaded to the Internet. May I now hand you over to Mr. Hannes Wittig.

Good afternoon, everyone, and welcome to our second quarter and first half 2021 webcast and conference call. As you can see, with me today are our CEO, Tim Höttges, and our CFO, Christian Illig. Tim, as usual, will go through a few highlights first before Christian will dive a bit deeper into financials of the quarter and also the operating performance. And then we have time for Q&A. And as always, before I hand over to Tim, please pay attention to our usual disclaimer, which you find in the presentation. And with that, over to you, Tim.

Thank you. Welcome everybody to our second quarter and first half 2021 results. It's a sunny, warm day here in Bonn and coming with a sunny quarterly outlook. So I hope you're doing as well as we do. I feel we'll first review some year-to-date highlights. Then Christian will take you through the quarterly performance in more detail. We look at our second quarter results. as another strong step towards our full-year growth targets and also towards the mid-term ambitions we laid out at our recent Capital Markets Day. Of course, the Capital Markets Day was itself one of the highlights of this quarter, and we gave a lot of guidance, which we are now executing. First, we gained towards strong growth in all relevant financial metrics, including for earnings and for free cash flow. And this was underpinned by detailed segment level guidance. I'm sure you're all aware of this. Surely all of you also saw T-Mobile's excellent result in the US two weeks ago. They delivered strong quarter results on customer growth, on EBTR growth, and they raised their full year guidance. The merger is very well on track. Their network leadership is apparent and The churn is low. T-Mobile also confirmed their medium and long-term financial targets, as stated at this year's Investor Day. Today, we are reporting excellent results for all of our European operations as well and for Deutsche Telekom as a whole. And we raise our group guidance for 2021 to reflect the T-Mobile's guidance upgrade. Our organic XUS EBITDA was up 4.4% year-to-date, powered by around 2% organic revenue growth and 0.3 billion indirect cost savings. This puts us well on track for our full-year guidance. Our free cash flow was 2.7 billion in the first half year. This is also something relevant because it takes us a long way towards our 3.6 full-year target already. Customer growth remains strong across the board. Our German FTTH build is well on track, both in terms of volume and costs. We announced plans for major cities, including Hamburg, Munich, Frankfurt and Düsseldorf. And with Deutsche Bahn, we agreed plans to remove any remaining white spots in our railway coverage, by the way, countrywide. You can see our main financial targets and financial performance on page 4. For the group, we delivered 4.6% organic growth in adjusted EBITDA year-to-date. Without the deliberate wind-down of T-Mobile handset lease revenues, this would have been growth of nearly 10%. All segments contributed to our strong growth and is consistent with our EBTR guidance. The European segment has now delivered 14 consecutive quarters of organic EBTR growth. For Germany, this is now the 19th quarter in a row. By the way, Q2 was the 12th consecutive quarter of organic growth in our ex-US EBTR and the 7th consecutive quarter in which this growth exceeds 3%. We love statistics. Free cash flow is up by 44% year-on-year and adjusted earnings per share almost 30%. Moving to our networks. In Germany, we already cover 82% of the population with 5G. We will take this to over 90% by year-end. There have never been a rollout that fast. In the U.S., we reached 165 million people with our 2.5 GHz network, up 25 million in the quarter. We passed 1 million homes with FTTH in the last six months. There are 340,000 in Germany. In Germany, we are well on track to take this to over 1 million homes this year. 1.2 is, by the way, our interim target. And we are making very much and very good progress towards our stated target of cutting the cost per home by 25% by 2024. Our customer growth remains very strong. This really matters to me. We gained 2.5 million new postpaid customers in the U.S., 738,000 new contract customers on this side of the Atlantic, 328,000 new broadband customers, very strong, of which 186,000 in Germany, and 122,000 new TV customers. As already mentioned, today we raise our EBITDA guidance for 2021. This is based on the upgrade by T-Mobile US two weeks ago. We now expect adjusted EBITDA for the group based on last year's exchange rates at over 37.2 billion. We continue to expect more than $8 billion free cash flow, of which $3.6 billion from our ex-U.S. operations. And with this and a very optimistic and positive outlook for the reminder of the year, I hand over already to Christian, who will take you to the details of this quarter. Thank you.