Group profile.

Deutsche Telekom is one of the world's leading integrated telecommunications companies, with approximately 129 million mobile customers, 34 million fixed-network lines and almost 17 million broadband lines in around 50 countries. We offer consumers as well as corporate and business customers a comprehensive portfolio of products and services in the areas of fixed-line/broadband, mobile communications, Internet and Internet TV as well as other innovative solutions for connected life and work. We were able to generate revenues of EUR 58.7 billion with a staff of some 235,000 employees worldwide in fiscal year 2011.

The Group is expressly committed to its corporate responsibility and bases its actions on economic as well as social and ecological criteria. In line with our goal of becoming a global leader in connected life and work, we continue to pursue our vision of leading the way in corporate responsibility (CR).

Group structure and operating segments.

Telekom's organizational and management structure comprises the operating segments Germany, Europe, United States, Systems Solutions as well as Group Headquarters & Shared Services .

The organizational structure at a glance
The organizational structure at a glance

  • Germany: The Germany operating segment entails all the activities of the fixed-line and mobile business in Germany as well as wholesale telecommunications services for the Group's other operating segments. Continued demand for broadband products in the fixed network and mobile communications has driven revenues in these fields. However, this positive trend was not enough to compensate for the negative revenue effects, especially due to the decrease in voice telephony. Compared to the previous year revenue in this segment fell by 4.4 percent to EUR 24.0 billion.
  • Europe: The Europe operational segment covers the fixed-network and mobile operations of the subsidiaries in Greece, Romania, Hungary, Poland, the Czech Republic, Croatia, the Netherlands, Slovakia, Austria, Bulgaria, Albania, the FYRO Macedonia, and Montenegro as well as the joint venture in Great Britain. The International Carrier Sales & Solutions unit, which mainly provides wholesale telecommunications services for the Group's other operating segments, is also part of the Europe segment. Intense competition, continuously falling retail prices and strong government and regulatory impact had a negative effect on business in the countries of the Europe segment and put pressure on total revenue. There was a slight increase in revenue from the fixed-network business, and especially the broadband/TV area. In addition, strong mobile data revenue growth had a positive impact.
  • USA: The United States operating segment combines all mobile activities in the U.S. market. Despite a challenging market situation, including impacts from the formerly proposed deal with AT&T and increased competitive intensity, total revenues declined by only 3.3 percent. The decrease in revenue caused by the declining number of net customers was partially offset by strong growth in data revenue from customers using smartphones with mobile broadband data plans.
  • Systems Solutions: T-Systems offers individual ICT solutions for corporate customers, operating networks and data centers all over the world. Despite an overall declining price trend in ICT business, total revenue of T-Systems increased by 2.1 percent year on year.

Group Headquarters & Shared Services .
Group Headquarters & Shared Services  comprises all Group units that cannot be allocated directly to one of the operating segments. This area performs strategic and cross-divisional management functions and is responsible for operating activities that are not directly related to our core business. Shared Services  include, for example, property management, DeTeFleetServices GmbH vehicle fleet management and the internal personnel services provider Vivento. The Shared Services  unit primarily provides services in Germany.

Corporate transactions during the reporting period.
  • OTE: Following the transfer of an additional 10 percent of shares in the Greek OTE to Telekom on July 11, 2011, the Hellenic Republic holds—directly and indirectly—around 10 percent of the shares, while Deutsche Telekom now holds around 40 percent. The purchase price for the approx. 49 million OTE shares was EUR 0.4 billion.
  • Procurement joint venture with France Télécom-Orange. Our procurement cooperation BUYIN with France Télécom-Orange was launched on October 7, 2011. We pooled our procurement activities in the areas of terminal devices, mobile communications networks, fixed-network equipment, and service platforms in a 50/50 joint venture. In addition, the two companies intend to launch pilot projects to explore other areas for inclusion in the joint venture, including IT infrastructure and other IT areas.
  • PTC rolls out T-Mobile brand. The Polish subsidiary successfully launched the T-Mobile brand on the Polish market in June 2011. Since then, PTC has been operating under the name T-Mobile and using the "T" as its corporate logo in line with the Group's overall brand strategy.
  • Commitment in Bratislava stepped up. Deutsche Telekom Shared Services  s.r.o. in Bratislava, Slovakia, will gradually take over the financial and accounting services for all our European subsidiaries. The relevant processes will be pooled in Bratislava over the next few years. This step is intended to create more than 500 additional jobs in Bratislava by the end of 2015.
  • OTE S.A. sells share in Telekom Srbija a.d. OTE S.A. signed a purchase agreement with Telekom Srbija to sell its entire stake of 20 percent in Telekom Srbija to the Serbian company. The value of the transaction amounts to EUR 380 million.
Business development in 2011.

Deutsche Telekom's total revenue was EUR 58.7 billion, which amounts to EUR 3.8 billion less than the previous year. However, this was significantly influenced by negative exchange rate effects and the deconsolidation of T-Mobile UK, which already took place in the prior year. The Systems Solutions operating segment recorded a revenue increase, whereas all others recorded decreases.

We also fully delivered on the shareholder remuneration policy we announced for the 2010 to 2012 fiscal years with a dividend payment of EUR 0.70 per share in 2011. With investments of EUR 8.3 billion, we pushed ahead above all with the broadband roll-out and invested in expanding the capacities of existing networks and in faster mobile networks.

Adjusted EBITDA.
The adjusted EBITDA of EUR 18.7 billion achieved in fiscal year 2011 means a decrease of 4 percent compared to the prior year. EBITDA was impacted by negative exchange rate effects as well as the non-recurrence of the contribution of T-Mobile UK, which had been deconsolidated in the prior year. Our performance corresponded to our Guidance published at the beginning of the year.

Net profit.
The adjusted net profit of Deutsche Telekom declined in 2011 from EUR 3.4 billion to EUR 2.9 billion. Unadjusted for special factors, the decrease amounted to EUR 1.1 billion to EUR 0.6 billion.

Free cash flow and net debt.
At EUR 6.4 billion the Group's free cash flow was EUR 0.1 billion less than in the prior year. This means that we achieved the expected value which we announced at the beginning of the year.

Net debt decreased by EUR 2.2 billion year-on-year, to EUR 40.1 billion.

For detailed information about the Group's performance and Telekom's financial data, please refer to the Annual Report 2011.



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