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DT Q2 Slightly Ahead Of Consensus On Most Metrics; Slight Credit Positive

COMMUNICATIONS

Baa1/BBB+/BBB+


Strong performance across markets, slight ahead of consensus across the main metrics, with FY guidance upgraded slightly for TMUS. EBITDAal performance particularly strong in Europe and TMUS while the German number was impacted by one-off wage factors. Leverage stable with strong FCF because of lower capex and the strong operating performance.


  • Q2 revenue +4.3% YoY (+1.2% vs. company-provided consensus) with growth across regions (TMUS +2.9%, Germany +3.6%, Europe +6%) with service revenue +4.9%.
  • EBITDAal +7.8% YoY (+0.4% vs. consensus) albeit with a slightly weaker German performance here at +1% vs. +3.5% in Q1 on one-off wage impacts but strong growth of 8.9% in Europe and 9.1% for TMUS.
  • Cash CapEx was -16.3% YoY (-4% vs. BBG consensus) with FCFal +48.5% from EUR 3.5bn to EUR 5.3bn.
  • EBITDAal leverage of 2.32x from 2.3x at Q1 and FY23 and from 2.4x at H123.
  • FY guidance raised; TMUS core EBITDAal seen at EUR ~28.5bn from EUR ~28.4bn and TMUS FCFal seen at EUR ~15.6bn from EUR ~15.4bn.
  • YoY net German additions higher for TV and FTTH but lower for broadband in line with recent quarters.
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