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 live Q3 2021 webcast and conference call. As you can see with me today, our CEO, Tim Hoedges, and our CFO, Christian Illig. Tim will first go through a few highlights and will be followed by Christian, who will take you through the quarter's financials in more detail. After this, we have time for Q&A. And before I hand over to Tim, please pay attention to our usual disclaimer. which you find in the presentation. With that, I hand over to Tim.

Thank you very much, Hannes, and welcome everybody to our quarter results here. After nine months, 2021, it's a pleasure having you here. I hope some of you still remember this year's Capital Markets Day. And at the beginning of the Capital Markets Days, I showed you my all-in-one chart with our strategic priorities. I'm very happy to say that only a few months later, less than six months, we have already made big progress with our strategic agenda. Our commercial growth has continued to be strong on both sides of the Atlantic. We overdelivered against our stated cost saving target, 1.7 billion compared to the 1.5 billion. And we are driving our transformation towards our longer-term ambition to become the leading digital tagger. Once again, we are raising our 2021 guidance for EBITDA and free cash flow on both sides of the Atlantic and for the group as a whole. On the capital allocation, which you find in the middle, we have also been very active. Honestly, you know that I'm always criticizing Deutsche Telekom for sometimes being a little bit slow. But I have to admit that this time, I'm very surprised how many things were able to be executed just in this few months after the capital markets. We took a decisive step towards the majority in the U.S. by securing a 5.2 percent point stake increase. We exited the Netherlands and Romanian fixed line business as promised. Our exit multiple for the Netherlands were 8.7 times EBITDA. And that's after we already monetized the Dutch towers earlier this year. We made great progress towards undistributed network leadership in all of our markets. And as of today, we passed over 2 million new fiber homes so far here in Europe. Of this, 1 million in Germany, 1.3 million in Europe. In Germany, we have already achieved 87% 5G coverage. And in the U.S., we already have almost nationwide 5G coverage. And now we cover 190 million pops with 5G in the 2.5 GHz band. This gives us 10 times faster speeds. Our adjusted earnings per share is up 13% year-to-date, and we are well on track for our greater than €1.75 target in 2024. To reflect the positive developments of our business and consistent with our stated policy, we will propose a dividend increase from 60 cents to 64 cents for 2021. On the next page, you can see that all segments contributed to our organic year-to-date EBITDA growth. Very convincing. 3% growth overall. 1.9% from the U.S. operation. 3.7% from the German operation. 5% from Europe. 5% really record number. Group development grew by 10.6%. And systems grew by 6.5%. Germany has now delivered 20 consecutive quarters of EBITDA growth. That's already five years. Europe is on 15 quarters growth. And our total ex-US business has now grown 13 quotas in a row. In sum, our organic group EBITDA grew by 3% so far this year. If you compare that on a core adjusted EBITDA level, it's 8.7% growth in this quarter. Without the accelerated unwind of handset leases, T-Mobile's core EBITDA grew by 11.9% organically. So, on the most relevant metric for cash flow, our group EBITDA grew by 9%. Our investments are up 12% in the first nine months to almost 13 billion. This is another rocket number. And still, our free cash flow is up 55% year-to-date to over 8 billion. It's nice to see that our flying wheel is still very strongly working. Let's go to the networks. I already referred to the good progress we made with our fiber and our 5G build-out. In Germany, we passed 700,000 homes with FTTH in the first nine months and reached 1 million this week. This brings our total to 2.9 million and shows that we are on track for our 1.2 million target this year. We are also well on track to lower our fibre build cost, as promised, by around one quarter. In Europe, we passed 1.1 million homes as of Q3, bringing the total to 6.7 million new FTTH. In sum, we now pass almost 10 million homes with FTTH across our European footprint. In Germany, we cover 87 of the population with 5G. We are also making good progress with our European 5G networks. And in the U.S., we reached 100 million people with our ultra-capacity 2.5 GHz 5G network on track for our 200 million year-end target. Our customer growth remains strong. In the first nine months, we gained 3.8 million postpaid net ads in the US, 1.2 million postpaid net ads on this side of the Atlantic, 488,000 new broadband customers, of which 276,000 coming from Germany, and 193,000 new TV customers. As already mentioned, today we raise our group guidance for 2021 for the first time in this year. Sorry, for the third time in this year. We are raising our EBITDA and free cash flow guidance. We do so on both sides of the Atlantic. Let's start with the EBITDA. We raise ex-US EBITDA by further 200 millions to 14.6. This is 300 million more than we guided initially. We also raise our US EBITDA again by around 400 million to over 23.2 billion, amounting to an over half a billion increase since the beginning of the year. We raise group EBITDA guidance to around $38 billion. This is, and now carefully listen, $1 billion more than what we have guided at the beginning of this year. When it comes to our free cash flow, we raise our ex-US free cash flow guidance also by $200 million to around $3.8 billion. This is $300 million more than we guided initially. We raise our U.S. free cash flow guidance also by $200 million to over $4.7 billion. And in sum, we now guide for around $8.5 billion free cash flow. This is half a billion more than what we have guided at the beginning of the year. And with this, the great numbers, I hand over to Christian, who will take you through this quarter results in greater detail. Thank you.