Deutsche Telekom is one of the world's leading integrated telecommunications companies, with approximately 132 million mobile customers, 32 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 58.2 billion with a staff of some 230,000 employees worldwide in the financial year 2012.
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 plan to lead the way in corporate responsibility (CR) too.
Telekom's organizational and management structure comprises the operating segments Germany, Europe, United States, Systems Solutions as well as Group Headquarters & Shared Services .
- Germany: The Germany operating segment comprises all fixed-network and mobile activities in Germany. In addition, it provides 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. We have held our own well in the market in the face of regulatory interventions and intense competition by focusing on value in the fixed-line sector. Our mobile customer base developed positively despite intense competition. Revenue at the operating segment in 2012 was 2 percent lower than the previous year, with the decrease being only half as much as that for 2011.
- Europe: The Europe operating segment comprises all fixed-network and mobile operations of the international subsidiaries in Greece, Romania, Hungary, Poland, the Czech Republic, Croatia, the Netherlands, Slovakia, Austria, Bulgaria, Albania, the F.Y.R.O. Macedonia, and Montenegro, as well as the Everything Everywhere joint venture in the UK. In addition, various international subsidiaries also offer ICT solutions to business customers. The Europe operating segment also includes the International Carrier Sales & Solutions unit, which mainly provides wholesale telecommunications services for the Group's other operating segments. In 2012, our Europe operating segment showed robust development in terms of the customer base despite intense competition and the still strained economic situation in most of the countries in this segment. Our Europe operating segment generated total revenue of EUR 14.4 million in 2012, down 4.7 percent compared with the prior-year level.
- USA: The United States operating segment combines all mobile activities in the U.S. market. Total revenue for the United States operating segment was EUR 15.4 billion in the financial year 2012, an increase of 3.8 percent compared to EUR 14.8 billion in 2011, which was due to fluctuations in the currency exchange rate. In U.S. dollars, total revenue declined by 4.1 percent year-on-year due primarily to a decrease in service revenues partially offset by an increase in equipment revenues associated with T-Mobile USA's Value plans. The business combination of T-Mobile USA and competitor MetroPCS was announced on October 3, 2012. The transaction was completed on April 30, 2013. The new company, in which Deutsche Telekom holds a 74 percent share, has been listed on the New York Stock Exchange under the name T-Mobile US since May 1, 2013.
- Systems Solutions: The Systems Solutions operating segment bundles business with ICT products and solutions for large multinational corporations under the T-Systems brand. In the financial year 2012, order entry at the segment increased substantially year-on-year by 18 percent. This was due to the conclusion of major new deals, such as those with the Catalan government, Shell, Clariant, BP, Daimler, British American Tobacco and the Swiss industrial group Georg Fischer.
Group Headquarters & Shared Services .
Group Headquarters & Shared Services comprises all Group units that cannot be allocated directly to one of the operating segments. Group Headquarters is responsible for strategic and cross-segment management functions. The Shared Services unit, which provides services primarily in Germany, is responsible for all other operating functions not directly related to the operating segments' core business activities. In addition to typical services such as financial accounting, human resources services, and operational procurement, Shared Services also includes Vivento, which is responsible for providing employees with new employment opportunities as part of the workforce restructuring program, Real Estate Services, and the Mobility Solutions unit, a full-service provider of fleet management and mobility services.
Net revenue in the 2012 financial year was EUR 58.2 billion, slightly down by 0.8 percent compared with the prior year. Intense competition, price changes imposed by regulatory authorities, and the strained economic situation in most countries in our Europe operating segment had a negative effect. Net exchange rate effects of around EUR 1.1 billion on the proportion of net revenue generated internationally, especially from the translation of U.S. dollars into euros, had a positive impact on net revenue.
Our United States and Systems Solutions operating segments both increased their revenue on a euro basis, whereas our Europe and Germany operating segments recorded a decrease in revenue.
The adjusted EBITDA of EUR 18 billion achieved in fiscal year 2012 means a decrease of 3.8 percent compared to the prior year. Net exchange rate effects of EUR 0.3 billion, especially from the translation of U.S. dollars into euros, had a positive effect on the development of adjusted EBITDA. With these results, we achieved the target we originally communicated for the year.
We recorded a net loss of around EUR 5.3 billion, primarily due to the recognition of an impairment loss in connection with the agreed business combination of T-Mobile USA and MetroPCS. Tax income for the financial year amounted to EUR 1.5 billion.
Free cash flow and net debt.
Free cash flow of the Group amounted to EUR 6.2 billion, EUR 0.2 billion less than in the prior year.
Net debt decreased by EUR 3.3 billion or 8.1 percent compared with the end of 2011 to EUR 36.9 billion.
For detailed information about the Group's performance and Telekom's financial data, please refer to the 2012 Annual Report.