Deutsche Telekom, Saturn Oil + Gas, and Rheinmetall – Succeeding despite the economic crisis!

Deutsche Telekom – Growth through strategic measures

Deutsche Telekom has consistently continued its growth in 2024. The main drivers are the expansion of networks and international performance. The Company is strengthening its position in its domestic market by investing in 5G and fibre optic networks – 5G is already available to 97% of households. At the same time, technological innovations such as Open RAN and 5G standalone are driving competitiveness. Internationally, T-Mobile US, in particular, remains a real growth engine, while the European businesses are also posting solid growth. These strategic moves are securing success on both sides of the Atlantic.

The latest quarterly figures also support the positive picture: revenue rose organically by 3.6% to EUR 28.5 billion, while service revenue grew by 3.8% to EUR 24.1 billion. Even more remarkable is the adjusted EBITDA-AL, which climbed by 6.4% to EUR 11.1 billion. Free cash flow increased by an impressive 32% to EUR 6.2 billion. Adjusted net profit rose year-on-year to EUR 2.3 billion. These results allowed Deutsche Telekom to raise its guidance for the year. For 2024, the Company plans to propose a dividend of EUR 0.90 and launch a share buyback program.

T-Mobile US, which continues to gain market share in the US, remains indispensable. In the third quarter, the US subsidiary added 865,000 new contract customers – more than all its competitors combined. In particular, the subsidiary's service revenues grew by 5.1% to USD 16.7 billion. This area is considered an important indicator of sustainable growth. T-Mobile US significantly contributes to Deutsche Telekom's overall momentum and remains a key pillar of the Company's economic success and prospects. Since the end of May, the share price has risen almost continuously and is currently trading at EUR 30.35.

Saturn Oil & Gas - Focus on efficiency and growth

Saturn Oil & Gas Inc., a rapidly growing Canadian producer, delivered impressive performance figures in the third quarter of 2024. Production averaged a high 39,049 barrels of oil equivalent per day (boe/d), while the Company generated adjusted EBITDA of CAD 135.8 million and adjusted funds flow (AFF) of CAD 94.1 million. During the three months, 48 wells were drilled as part of the ongoing drilling program. A total of CAD 80.8 million was invested. After debt restructuring, net debt at the end of the quarter was CAD 779 million, comprised of second lien notes of USD 650 million which are not due until 2029. Saturn maintained liquidity at quarter end with a cash balance of approximately CAD 113 million and a fully undrawn credit line of CAD 150 million.

A key element of Saturn's strategy is to take advantage of market opportunities through a flexible hedging program. Saturn optimized its hedging positions in the third quarter by making a one-time payment of CAD 19.9 million to terminate existing contracts early and implement new contracts. With the goal of hedging approximately 50% of forecasted oil and NGL production, the Company aims to ensure stable revenues in the face of volatile oil prices. This approach underscores the Company's forward-looking risk management strategy.

For the fourth quarter, Saturn forecasts a further stable production of between 39,000 and 40,000 boe/d. At the same time, the Company will continue to pursue its initiated share buyback program. With a clear focus on efficiency and sustainability, Saturn underscores its goal of creating long-term value for shareholders and establishing itself as a leading player in the energy and commodities market. Analysts see growth potential and issue a "Buy" recommendation with target prices between CAD 3.75 and 7.35. In general, the stock is considered undervalued. At the current share price of CAD 2.29, the market capitalization is just CAD 462.5 million.

Rheinmetall - Strengthens US presence with the acquisition of Loc Performance Products

German defense contractor Rheinmetall has completed the acquisition of US vehicle components maker Loc Performance Products. The transaction, based on an enterprise value of USD 950 million, was finalized at the end of November 2024, following regulatory approval. Loc Performance, headquartered in Michigan, supplies drive systems and armor components for civilian and military vehicles. The acquisition grants Rheinmetall access to an extensive production facility and over 1,000 highly skilled employees. This move significantly strengthens the Company's position in the strategically important US defense market.

The Düsseldorf-based company's latest financial figures illustrate its dynamic development. In the first nine months of 2024, revenue rose 36% year-on-year to EUR 6.27 billion, with the international share accounting for a full 70%. Operating earnings rose by an impressive 72% to EUR 705 million, which is also due to the contribution of the Spanish subsidiary Expal Munitions. The significant increase in earnings per share, which climbed from EUR 4.88 to EUR 7.32, is particularly encouraging. Operating free cash flow also improved, recovering significantly compared to the same period of the previous year.

But the Company continues to expand. As part of a German-Lithuanian partnership, Rheinmetall is building a state-of-the-art production plant for artillery ammunition in Lithuania. The EUR 180 million investment includes a 340-hectare site with advanced technology for manufacturing 155-mm ammunition. From 2026, the plant is expected to produce tens of thousands of rounds annually, bolstering both Lithuania's defense capabilities and its own supply chain. Around 150 new jobs will be created, while the project is also seen as a strategic response to increased geopolitical uncertainty. The stock is trading near its all-time high at EUR 625.

Despite the current economic crisis, Deutsche Telekom, Saturn Oil & Gas and Rheinmetall are impressively demonstrating that success is still possible even in challenging times. Deutsche Telekom is convincing with strong international growth, particularly through its US subsidiary T-Mobile and a solid network strategy in Europe. Saturn Oil & Gas scores with high production efficiency, forward-looking risk management and a stable financial position. Rheinmetall is strengthening its market position by acquiring Loc Performance Products in the US and expanding with strategic investments such as a new production plant in Lithuania. These three corporations stand for adaptability and long-term growth strategies.