Deutsche Telekom counts on the USA and raises the forecast – columns

Advertising. Deutsche Telekom now generates almost 63 percent of its consolidated sales and 62 percent of its operating profit in the USA. And that is far from being the end of the flagpole. When T-Mobile US recently passed the 100 million customer mark, CEO Mike Sievert confidently commented: “We’re just getting started.” The merger with smaller competitor Sprint, whose integration is progressing faster than expected, has brought new momentum. T-Mobile US had long fought to merge with the former Softbank subsidiary. For Deutsche Telekom, the USA has now gained additional importance as the most important individual market.

In the most recent reporting period from July to September, business operations not only ran smoothly across the Atlantic. Although the corona pandemic led to burdens, sales climbed 31.9 percent over the previous year to EUR 26.4 billion. This growth was mainly due to the US merger with Sprint. In organic terms, however, there was also an increase in sales of 2.0 percent. Meanwhile, the adjusted operating profit excluding leasing expenses (Ebitda AL) increased by almost 50 percent to 9.7 billion euros. In organic terms, the increase was 10.0 percent compared to the previous year. Analysts had expected on average only revenues of just under 25.8 billion euros and an adjusted Ebitda AL of 9.03 billion euros.

The consequences of the Corona crisis were more than offset by the good business development. Burdens were noticeable, for example, from the low level of travel, which caused roaming revenues to fall. Smartphone sales also fell, also because customers were waiting for the new iPhone model. In particular, the systems business continued to suffer from the pandemic. In the third quarter, T-Systems’ sales fell by 11.6 percent to EUR 961 million. However, this partial weakness did not prevent CEO Tim Höttges from raising the forecast again. For 2020 as a whole, Europe’s largest telecommunications group is now expected to achieve an adjusted operating result (Ebitda AL) of more than EUR 35 billion instead of the previously forecast EUR 34 billion. Analysts speak of impressive progress despite the adverse economic conditions and describe the Deutsche Telekom share as a purchase candidate. The US business will continue to burden the group result through integration costs and necessary investments. But there is great potential for the future slumbering here.

Deutsche Telekom shares were not spared from price setbacks during the general Corona crash in spring 2020. Most of the losses have now been made up. Investors who generally share a positive assessment of Deutsche Telekom, but who shy away from direct entry, will find investment alternatives in Express Certificates Relax. These offer opportunities to implement your own strategy with a possible early repayment, high potential interest rates and a bullet buffer.

4.60 percent interest per period for early repayment and 35 percent final buffer

The DekaBank Deutsche Telekom Express certificate Relax 03/2027 (WKN DK0YPL) offers the option of early repayment at the nominal amount (EUR 1,000.00) plus the corresponding interest amount if the redemption thresholds fall. Otherwise, the maximum payment of EUR 1,276.00 per certificate can be achieved on the final maturity date in March 2027 if the closing share price on the valuation day maintains the barrier (65.00 percent of the starting value).

Falling below the barrier on the valuation day, however, leads to losses. In such a negative scenario, no interest is paid and 100 percent of the starting value of Deutsche Telekom shares that have fallen in value is transferred to the investor instead of the nominal amount. In addition, as with any certificate, the issuer risk must be taken into account, especially in the event of DekaBank’s insolvency, there is a risk of losses or even total loss.

The subscription runs from December 7th, 2020 to January 5th, 2021, subject to an extension or shortening.

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If courses / prices are mentioned, these are non-binding and do not serve as an indication of tradable courses / prices. The values ​​given here serve to explain the payout profile of this financial instrument. The values ​​are not a reliable indicator of future performance.

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As Head of Private Banking and Product Management at the Deka Group, Hussam Masri is responsible for product development and product management of mutual securities funds, asset management and pension products, certificates and private banking.


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