Deutsche Telekom Reports Q3

BERLIN -- Deutsche Telekom posts good figures to continue the positive development of the prior quarter. The Group therefore confirms its guidance for the year as adjusted in April despite the recent negative development in exchange rates, particularly the marked weakness of the U.S. dollar against the euro over the course of the year. Cost-cutting measures and improvements in efficiency continue to bear fruit: Deutsche Telekom posted year-on-year increases in profitability in all operating segments between July and September.

Net revenue of the Group increased by 5.2 percent year-on-year to EUR 16.3 billion in the third quarter. At the same time, adjusted EBITDA improved by 5.2 percent to EUR 5.5 billion. At EUR 3.3 billion, free cash flow was considerably higher than both the prior-year figure of EUR 2.2 billion and the figure for the full first half year of EUR 1.8 billion.

In a comparison of the first nine months, revenue increased by 6.2 percent to EUR 48.4 billion over the same period in 2008 and adjusted EBITDA rose by 5.5 percent to EUR 15.6 billion. At EUR 5.1 billion, free cash flow remained slightly lower than the figure of EUR 5.8 billion posted at the same time last year due to the weak performance at the beginning of this year. Adjusted net profit decreased by 3.1 percent compared with the first nine months of 2008 to EUR 2.5 billion.

"We have continued the positive trend of the second quarter and have picked up the pace," said CEO René Obermann. "We responded quickly and took effective steps in those markets we were concentrating on in the first quarter – the United Kingdom, the United States, and Poland."

T-Mobile UK's business stabilized over the course of the year. On September 8 Deutsche Telekom and France Telecom announced that they were holding exclusive negotiations on the establishment of a 50:50 joint venture between the Deutsche Telekom's UK subsidiary and Orange UK.The roll-out of the 3G network in the United States is progressing well.The sale of 3G-enabled handsets and the sharp increase in data revenues show that the company has enormous growth potential.The Polish subsidiary PTC has finally mastered the challenges it faced thanks to improvements in efficiency and is now once again successful in the Polish market.

The Save for Service program continued its particularly successful course in the third quarter. This efficiency enhancement program has generated savings totaling EUR 5.4 billion so far since its launch in 2005. Deutsche Telekom will continue its cost cutting and address the entire cost base of the Group. Further details will be made available when the financial figures for the full year 2009 are published.

Deutsche Telekom AG (NYSE: DT)