DT Appoints New CEO

Deutsche Telekom’s supervisory board elects Kai-Uwe Ricke CEO; financials improve in the last nine months, so DT will cut 54,700 jobs

November 14, 2002

5 Min Read

BONN, Germany -- Deutsche Telekom’s supervisory board has unanimously elected Kai-Uwe Ricke as the company’s chief executive officer (CEO) at today’s meeting with effect from November 15, 2002. 41-year-old Ricke succeeds Professor Dr.Helmut Sihler, who headed the board of management as interim CEO since July. Sihler’s mandate as defined by the supervisory board was for a period of up to six months.“With Kai-Uwe Ricke we have chosen an experienced manager with an international vision who will use all of his energy and immense expertise to meet the challenges of the global telecommunications industry. Key tasks of his new position will include maintaining the consolidation course while developing new avenues of growth for the company,” said Dr. Hans-Dietrich Winkhaus, chairman of Deutsche Telekom’s supervisory board.Following an apprenticeship at a bank and studies at the European Business School in Schloss Reichartshausen, Germany, Ricke started his career as assistant to the board of Bertelsmann AG in Gütersloh, Germany. He then took up the position as head of sales and marketing of its Swedish subsidiary Scandinavian Club AG. From 1990 to June 1995, Ricke was CEO of Talkline GmbH and Talkline PS Phone Service GmbH in Elmshorn, Germany; from July 1995 he acted as the company’s chairman and CEO.In January 1998, Ricke took over as chairman of the board of management of DeTeMobil Deutsche Telekom Mobilnet GmbH. Under his leadership, the company again concentrated on its core business, the T-D1 network, and recaptured the market leadership in Germany. In February 2000, Ricke was appointed chairman of the newly founded T-Mobile International AG where Deutsche Telekom consolidated its principal mobile communications activities. In May 2001, he was appointed to the board of management of Deutsche Telekom. In his role as chief operating officer (COO), he is responsible for Deutsche Telekom’s mobile and online businesses. In a separate release:Deutsche Telekom increased its revenue in the first nine months of 2002 by 12 percent from EUR 35 billion to EUR 39.2 billion compared to the same period last year. In the same period, Group EBITDA excluding special influences increased by 5.6 percent from EUR 11.3 billion to EUR 12 billion. In addition to a slight reduction in net debt to EUR 64 billion, this strong operational development is offset by a net loss of approximately EUR 24.5 billion – which was mainly due to nonscheduled write-downs. Against this backdrop, the departing Chairman of Deutsche Telekom AG’s Board of Management, Prof. Helmut Sihler, presented the results of the strategic review which are designed to strengthen the company's financial scope for action in the long term. "On the basis of the measures adopted, there will be a sustained improvement of Deutsche Telekom’s situation", Mr. Sihler said with reference to the need to reorient the company. "One thing is clear: The level of the Group’s debt, the trends that we are seeing in the stock markets and the current valuation of the telecommunications sector at a time when the economic climate is deteriorating, all force us to take urgent action. Our future lies with debt reduction and growth. This is the only way for us to bring about a sustained improvement in our results", the newly elected Chairman of the Board of Management, Kai-Uwe Ricke, emphasized. "A properly-managed Deutsche Telekom should be a cash machine. This is an area where I see considerable room for improvement." According to Ricke, the four-pillar strategy remains the right approach for realizing growth potential. "At the same time, however, individual divisions must also become much more efficient." To achieve this goal, he will devolve even more responsibility to the divisions and give them greater authority to take their own decisions. At the same time, this ensures that Deutsche Telekom will stay as close as possible to its customers. And vice versa, this means that the strategic management holding will be clearly streamlined. Results of the strategic review Deutsche Telekom is aiming to achieve a level of net debt by the end of 2003 which equates to roughly three times the EBITDA expected for the full 2003 financial year. Based on the forecast EBITDA of EUR 16.7 to EUR 17.7 billion, this generates a target corridor of EUR 49.5 to EUR 52.3 billion net debt. In order to achieve this target, Deutsche Telekom, among other things, will withdraw from non-strategic business areas such as real estate, the remainder of the cable business and other shareholdings and business units. These sales are to generate proceeds of EUR 6.2 to EUR 8.5 billion. In addition, Deutsche Telekom intends to reduce its capital expenditure in 2003 to between EUR 6.7 billion and EUR 7.7 billion. It is not necessary to sell VoiceStream to ensure that Deutsche Telekom’s deleveraging targets will be met. "It would be wrong to sell it in view of the positive development of this company. A merger with another company with partial deleveraging still remains an option that we would definitely not want to rule out under the right circumstances", the departing Chairman of the Board of Management, Prof. Helmut Sihler, stressed as another result of the strategic review. Along the same lines, he announced that the Board of Management and the Supervisory Board will recommend to the 2003 Shareholders’ Meeting that no dividend be paid for the financial year, thus contributing to debt reduction on the order of EUR 1.6 billion. In addition, Deutsche Telekom is aiming to cut a total of 54,700 jobs gross or 43,400 jobs net by the end of 2005. 42,500 jobs are to be cut in Germany and 12,200 at subsidiaries abroad. In the same period, 11,300 new jobs are to be created through restructuring and expansions. The main method for this staff reduction is to be the transfer for employees to the newly created Human Resources Services Agency (PSA), which is mandated to find new jobs within and outside the Group for the employees concerned. This programme still need to be a greet upon with the various intrest groups. Talks on this matter have already begun.Deutsche Telekom AG

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like