Earnings Call Excerpt
Deutsche Telekom (DT)
Full Year 2005 Earnings Conference Call
March 2nd 2006, 7:30 AM.
Executives:
Thilo Kusch, Head of IR
Kai-Uwe Ricke, Chairman of the Management Board, Chief Executive Officer, Chief Operating Officer and Head of Business Customer Segment
Dr. Karl-Gerhard Eick, Deputy Chairman of Management Board, Deputy Chief Exeutive Officer and Head of the Financial & Controlling
Analysts:
Nick Lyall, Morgan Stanley
Scott McKenzie, SG Securities
Graeme Pearson, Lehman Brothers
Brian Rusling, Cazenove
Hannes Wittig, Dresdner Kleinwort
James Golob, Goldman Sachs
Guy Peddy, Deutsche Bank
Stefan Borscheid, WestLB
Frank Rothauge, Sal Oppenheim
Andrew Beale, Arete Research
Justin Funnell, Credit Suisse
Richard Prentiss, Raymond James
Mark Cardwell, Sanford Bernstein
Jonathan Dann, Bear Stearns
James Ratzer, New Street Research
John Carlides, Man Securities
Jacques de Grayling, IXIS Securities
Stephen Garibaldi, Credit Suisse
Presentation
Operator
Good afternoon and welcome to Deutsche Telekom's Full Year 2005 Results Conference Call. On our customer's request, this conference will be recorded.
Company Speaker
This presentation contains forward-looking statements that reflect the current views of Deutsche Telekom management with respect to future events. They include statements as to market potential and the planned T-Online merger and the "Outlook 2006" statements at the end of this presentation. Forward-looking statements are based on current plans, estimates and projections. You should consider them with caution. Such statements are subject to risks and uncertainties, most of which are difficult to predict and are generally beyond Deutsche Telekom's control, including those described in the sections "Forward-Looking Statements" and "Risk Factors" of the company's Form 20-F report filed with the US Securities and Exchange Commission. Among the relevant factors are the progress of Deutsche Telekom's workforce reduction initiative and the impact of other significant strategic or business initiatives, including acquisitions, dispositions and business combinations. In addition, stronger than expected competition, technological change, litigation and regulatory developments among other factors may have material adverse effects on costs and revenue development. If these or other risks and uncertainties materialize, or if the assumptions underlying any of these statements prove incorrect, Deutsche Telekom's actual results may be materially different from those expressed or implied by such statements. Deutsche Telekom can offer no assurance that its estimates or targets will be achieved. Deutsche Telekom does not assume any obligation to update forward-looking statements to take new information or future events into account or otherwise.
In addition to figures prepared in accordance with IAS/IFRS, Deutsche Telekom presents so-called non-GAAP financial performance measures, e.g. EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted EBT, adjusted net income, special influences, free cash flow, free cash flow before purchase of network assets and spectrum in the US, leverage, net debt, net debt adjusted, EBITDA and the adjusted figures on the page titled "FY 2005 Net Income". These non-GAAP measures should be considered in addition to, but not as a substitute for the information prepared in accordance with IAS/IFRS. Non-GAAP financial performance measures are not subject to IAS/IFRS or any other generally accepted accounting principles. Other companies may define these terms in different ways. For an explanation of some of these terms, please refer to "Reconciliation to pro-forma figures" under the "Publications" heading on Deutsche Telekom's Investor Relations webpage at: www.deutschetelekom.com.
Whereas I do not want to comment on Vodafone and any other outlooks, let me dive a little bit into the German and the UK performance. Yes, you are right; what you see is, and that is where we are very proud of, a decent growth in service revenues, not only in Germany, but also in the UK. And that’s very specifically in the fourth quarter, which is, and I'd like to stress that, a direct result of our strategy which we started some time in 2004, as I recall it, to ?Save for Growth
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