T-Systems of Deutsche Telekom to increase basic profits, seeks to earn money

HANOVER, Germany (Reuters) – Deutsche Telekom's IT services group, T-Systems, is on track to boost its key profits this year, said Unit Director General Adel Al-Saleh. to Reuters. largest telecom group.

American Al-Saleh was invited in early 2018 to turn around T-Systems, which, under his previous leadership, was too engaged in large IT outsourcing contracts and had fallen behind in digital transformation.

Last summer, he had reached an agreement with the union leaders to reduce the number of German employees in the company by 6,000, to reduce the number of his offices to 25 and to increase it to 230, and to hire 3,000 people. – mainly in India – to complement its software skills.

At the same time, Al-Saleh has identified the areas of business that T-Systems could develop and those that it should sell or reduce to nothing.

"We had a huge year in terms of what we had to do," he said during an interview at the Hannover Messe trade show, where T-Systems featured business areas. promising ones like cybersecurity.

"We achieved 9% growth in these areas of growth. Our sales engine is back to life. We increased our sales performance. Order taking was pretty good. We talked about our costs.

"We still have a lot to do. We are always on this journey. We must become better. "

CASH CONTRIBUTION

T-Systems stabilized its revenues in 2018, with growth of 0.3% to 6.94 billion euros (7.76 billion dollars). However, current result before interest, taxes, depreciation and amortization (EBITDA) decreased by 16% to 429 million euros.

"This year is a year where we need to generate EBITDA growth, not just revenue," said Al-Saleh. "Our goal is to achieve a positive cash contribution for the company by the end of 2021 or the beginning of 2022."

T-Systems has already halted its loss-making IT services, such as call centers, desktop management and support, as well as the logistics of computers to be delivered to employees, Al-Saleh said.

It has also decided to "remove" its involvement in ngena, a partnership to create a global platform that effectively melds its software-defined extended networks (SD-WAN).

"We are going to phase out this commitment and have decided to do something different," Al-Saleh said, promising an announcement this summer.

He also highlighted a large-system IT alliance with IBM that was concluded in January and said new initiatives were underway in areas such as smart cities, healthcare and cybersecurity.