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T-Systems moderately increases full-year revenues
Bonn/Frankfurt, Germany, February 23, 2012
- Non-captive business has grown – above all internationally.
- Investments in quality lower margin.
- Customer satisfaction reaches all-time high.
T-Systems' business saw moderate growth in 2011. Total revenue increased slightly by 2.1 percent year-on-year to EUR 9.2 billion, with disproportionately high growth in external revenue (2.4 percent) and in international revenue (4.2 percent).
At EUR 8.8 billion, order entry was down 4.9 percent year-on-year. This decline was partly due to T-Systems' decision in 2011 to prioritize quality assurance in existing contracts over acquiring new business. It also reflects an industry-wide trend away from big deals toward more cloud-based contracts. Cloud-based contracts are billed based on use and only stipulate a minimum purchase quan-tity; the actual order volume per corporate customer is usually significantly greater.
The cost involved in quality assurance had an impact on earnings figures in 2011. Adjusted EBITDA declined 8.0 percent to EUR 0.9 billion. The adjusted EBIT margin for the full year was 2.7 percent, one percentage point under the 2010 figure. The adjusted EBIT margin recovered considerably in the fourth quarter compared with the prior quarter to 5.0 percent. This is attributable to high revenue in the fourth quarter due to seasonal effects with a high system utilization and virtually unchanged costs. In addition, the quality assurance measures have taken effect, leading to a historic high in terms of customer satisfaction.
Systems Solutions operating segment*:
|Q4 2011 millions of EUR||Q4 2010 millions of EUR||Change|
|FY 2011 millions of EUR||FY 2010 millions of EUR||Change|
|Of which: Computing Services||826||835||(1.1)||3,136||3,128||0.3|
|Of which: Desktop Services||374||409||(8.6)||1,373||1,461||(6.0)|
|Of which: Systems Integration||489||503||(2.8)||1,871||1,801||3.9|
|Of which: Telecommunications||853||832||2.5||3,197||3,086||3.6|
|Of which: Othera||(85)||(99)||14.1||(328)||(419)||21.7|
|Profit (loss) from operations (EBIT)||8||(5)||n.a.||(43)||44||n.a.|
|Adjusted EBITDA margin||11.5%||12.1%||(0.6)p||9.4%||10.5%||(1.1)p|
|Number of employees |
Comments on the table:
a Non-core activities and consolidation.
a Non-core activities and consolidation.
This media information contains forward-looking statements that reflect the current views of Deutsche Telekom management with respect to future events. These forward-looking statements include statements with regard to the expected development of revenue, earnings, profits from operations, depreciation and amortization, cash flows, and personnel-related measures. 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. Among the factors that might influence our ability to achieve our objectives are the progress of our workforce reduction initiative and other cost-saving measures and the impact of other significant strategic, labor or business initiatives, including acquisitions, dispositions, business combinations, and our network upgrade and expansion initiatives. In addition, stronger than expected competition, technological change, legal proceedings, and regulatory developments, among other factors, may have a material adverse effect on our costs and revenue development. Further, the economic downturn in our markets and changes in interest and currency exchange rates may also have an impact on our business development and the availability of financing on favorable conditions. Changes to our expectations concerning future cash flows may lead to impairment write-downs of assets carried at historical cost, which may materially affect our results at the group and operating segment levels. If these or other risks and uncertainties materialize, or if the assumptions underlying any of these statements prove incorrect, our actual performance may materially differ from the performance expressed or implied by forward-looking statements. We can offer no assurance that our estimates or expectations will be achieved. Without prejudice to existing obligations under capital market law, we do not assume any obligation to update forward-looking statements to take new information or future events into account or otherwise.
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About Deutsche Telekom
Deutsche Telekom is one of the world’s leading integrated telecommunications companies with more than 128 million mobile customers, about 35 million fixed-network lines and approximately 17 million broadband lines (as of September 30, 2011). The Group provides products and services for the fixed network, mobile communications, the Internet and IPTV for consumers, and ICT solutions for business customers and corporate customers. Deutsche Telekom is present in over 50 countries and has around 238,000 employees worldwide. The Group generated revenues of EUR 62.4 billion in the 2010 financial year – more than half of it outside Germany (as of December 31, 2010).
Drawing on a global infrastructure of data centers and networks, T-Systems operates information and communication technology (ICT) systems for multinational corporations and public sector institutions. T-Systems provides integrated solutions for the networked future of business and society. The company's some 47,600 employees combine industry expertise and ICT innovations to add significant value to customers’ core business all over the world T-Systems generated revenue of around EUR 9.1 billion in the 2010 financial year.
In Switzerland, T-Systems has over 650 employees and, in addition to the head office in Zollikofen, has offices all over Switzerland. Since March 2011, the Swiss SAP integrated systems provider, Data Migration Consulting AG, has been a subsidiary of T-Systems Switzerland AG.