Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on DEUTSCHE TELEKOM AG-REG. We currently have 20 research reports from 1 professional analysts.
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DEUTSCHE TELEKOM AG-REG
DEUTSCHE TELEKOM AG-REG
Fragile network infrastructure!
29 Nov 16
According to Deutsche Telekom, it is still not quite clear whether the network failure was caused by a hacker attack or an in-house software problem. This event leaves some doubts about efficient system management. Around 0.9m routers (4.5% out of a total 19.87m fixed network customers in Germany) were involved. Deutsche Telekom indicated that, to date, no special pattern is recognisable. The speedport routers are bought from the Taiwanese-listed company Arcadyan (3596.TW) and Zyxel. The market leader in Germany is AVM (FritzBox). In 2015, the company generated total revenues of €400m with 570 employees. It is interesting to note that the routers of this company are still outperforming the market, also related to security issues.
Good idea but not the right company to start with!
24 Nov 16
The CtW Investment Group has started a request for an investigation. It believes the SEC should investigate T-Mobile US, based on the evidence of its failure to disclose adequately a change in accounting estimates. The main issue is revenue recognition from its sale of Equipment Installment Plans (EIP). According to CtW, T-Mobile reduced its allowance for credit losses as a percentage of EIP receivables. CtW has calculated the difference between allowances for credit losses based on a standard rate of 2.8% (CtW benchmark) per quarter starting in the first quarter of 2014 where this rate was used. In total, T-Mobile US reported US$121.51m higher income in the last two years due to lower allowances. In 2014, T-Mobile US reported net income of US$247m. Including the difference if the allowance had been 2.8%, net income would have declined by 11.3%, or US$27.86m. In 2015, net income reached US$733m and including US$93.64m of allowances, net income would have declined by 12.8%. The performance of the management is based on four metrics, of which adjusted EBITDA (20% weighting) and operating free cash flow (30% weighting) are based on net income. According to CtW Investment Group, without the US$93.6m generated by maintaining a lowered allowance for loan losses, the threshold for the maximum bonus would have been missed.
T-Mobile US is driving the operating performance
14 Nov 16
The company reported strong Q3 16 results. Revenues increased 5.9% to €18.1bn driven by stable business in Germany and a strong performance in the US. Real EBITDA grew disproportionately by 16.4% to €5.33bn and adjusted EBITDA 7.2%. The EBITDA margin increased from 26.8% to 29.5%. Net profit jumped 30.2% to €1.05bn. In the first nine months, revenues grew 4.2% to €53.55bn and EBITDA 14.5% to €15.2bn. The real EBITDA margin increased from 25.8% to 28.4%.
Solid performance expected
02 Nov 16
Deutsche Telekom has released consensus estimates for Q3`16. Group revenues are expected to reach €18.08bn (median estimates) and adjusted EBITDA €5.56bn, or €3.37bn excluding the contribution from T-Mobile US (estimate T-Mobile US €2.19bn). T-Mobile US has already reached an adjusted EBITDA of US$2.63bn or €2.39bn. We expect total revenues to reach €18.1bn and real EBITDA around €5.0bn. On 24th October T-Mobile USA reported Q3`16 results. Total revenues increased 17.8% to US$9.2bn and service revenues alone grew 13.2% to US$7.1bn. Operating profit jumped by 92.8% to US$989m and adjusted EBITDA increased by 37.8% from US$1.91bn to US$2.63bn. The company added 2m customers in the third quarter. Due to the strong operating performance, management raised the outlook for the current year. Branded postpaid net adds are now expected to range between 3.7m to 3.9m (previously 3.4m to 3.8m). Adjusted EBITDA is expected to range between US$10.2bn and US$10.4bn (prev. US$9.8bn to US$10.1bn).
Value creation already executed
06 Oct 16
According to the latest rumours in the market, Deutsche Telekom and United Internet are both bidding for the Anglo-German internet domain and hosting company Host Europe Group (HEG). The acquisition price is expected to reach at least €1.5bn. HEG operates seven data centres in Europe and the USA with over 1,100 employees. In Europe, HEG is the third largest hosting provider with more than 1.6m customers (1.5m customers in 2013) and over 7m domain names.
Main performance driver is the US business, not Europe
11 Aug 16
In Q2 16, revenues increased 2.2% to €17.82bn which was marginally lower than the estimate of €17.84bn. Adjusted EBITDA reached €5.46bn (estimate €5.45bn) and real EBITDA €4.7bn (increase of 3.6%). The EBITDA margin improved from 26% to 26.4% and the EBIT margin declined from 10.4% to 8.7%. Net income declined by 12.8% to €621m. In the first half year, revenues grew 3.4% to €35.45bn and EBIT improved 9.1% to €3.57bn (excluding gains from the joint venture EE). Net profit including gains jumped nearly 150% to €3.75bn.
30 Nov 16
Abzena (ABZA): Interim results indicate happy customers (BUY) | Horizonte Minerals* (HZM): Fund raise completed (CORP) | SacOil* (SAC): Half-year trading statement (CORP) | Revolution Bars (RBG): New openings (BUY) | Amino Technologies* (AMO): Multi operator FUSION roll out (CORP)
Panmure Morning Note 05-12-16
05 Dec 16
Filtronic, the designer and manufacturer of microwave electronics for the wireless telco market, has provided a solid 1H17 trading update. As seen during 1Q17, demand for its new ultra-wide band integrated antennas has been driven by its key customer. Crucially the roll-out provides a reference client and adoption from other clients should be coming in due course. Having said that, programme roll-outs tend to be lumpy in nature and management expect activity to be slowing in the early part of 2H17 until customer concentration is remedied, meaning Filtronic will be exposed to short-term fluctuations in demand.
Joy of Techs
21 Nov 16
ICT evolution is driven by technological development as advances are made which both meet and shape customer requirements. Our 2011 note No such thing as a telco described the modern reality in that former ‘telcos’ now deliver varying elements of a range of managed services. We built on this theme last year, exploring in further detail their evolutionary paths, operating fundamentals, and cashflow yield similarities. In the consumer environment, demand for bundles of technology is complemented by demand for content. Across the pond, the mooted combination of AT&T and Time Warner typifies the bundled need of ‘pipe’ and content, since unbundled alternatives such as FaceTime and WhatsApp can be easier and clearer to chat over, and Amazon and Netflix are easier to watch anywhere. In the UK, BT’s defensive actions cover delivery, content and capabilities, acquiring EE yet also buying football rights. While TV was long ago added to triple play to become quad play, voice is now merely an app, and fixed and mobile seen as just dumb pipes: it's the content that will influence consumer choices. Growth of TV and film as well as music and gaming over IP leads to UK small cap opportunities. In context of the drive to maximise value from pipes and access by offering content and data, we look at some amongst the potential tech small cap beneficiaries: Amino*, Keyword Studios, ZOO Digital*, 7digital*, KCOM* and CityFibre*.
N+1 Singer - Morning Song 06-12-2016
06 Dec 16
With FY16 volume and revenue already disclosed in the pre-close, the focus in today’s prelims is on PBT (£100.3m versus our £101m) and EPS (96.8p versus our 95.4p). No special dividend triggered this year (none forecast) and DPS is held at 46.8p (N1SE: 48.0p). On end markets, recent commentary is reiterated – the core business is growing, whilst consumer electronics will be subdued in the current year (competitive capacity from Solvay). On currency, there will be a material benefit in the current year (a little more than the £14m to £15m previously indicated), and a further tailwind next year if current rates are maintained (quantum TBC). There is also an investment of £10m today in a minority interest in Magma Global, Victrex’ oil and gas mega programme partner. Although the share price is now close to our TP of 1730p, we feel that there is enough in today’s announcement to retain a positive stance on medium term opportunities with strong cashflow and a special dividend potentially to look forward to in the current year.
Strategic focus at interims
30 Nov 16
KCOM’s interims show a focus on the continuing transformation of the business in cost and investment, under a single brand. The benefit of the cash injection from the network sale has led to the opportunity for significant investment both in the Hull & East Yorkshire division and the nationwide Enterprise division, to create a platform for growth. With a reiterated commitment to a minimum 6p dividend for FY17 and FY18, ongoing cost-saving initiatives, and proof of customer enthusiasm for the integrated platform which investment will further support, KCOM continues to deliver an attractive dividend in anticipation of its return to headline growth. Target 130p reiterated.
N+1 Singer - Mobile Streams - Applying the model to India
06 Dec 16
MOS has proven its model for mobile content in a very tough market, Argentina. After monitoring and examining a number of other markets it has successfully tested India to prove its commerciality. Further to this, key agreements with telecom operators have been signed and the Company has announced a £2.2m equity raise to help fund working capital. The Indian market is vast (c25x the size of Argentina) meaning MOS has to only be slightly successful to surpass its previous record results. If MOS can build a business with similar penetration it will vastly surpass our high growth forecasts that already imply the stock is very cheap.