Outlook & Financial strategy
Here you find all information about our financial strategy and the outlook for the next years.
Deutsche Telekom offers its shareholders a strong dividend yield with high reliability. Deutsche Telekom shares have therefore been a component of the DivDAX, the index of the 15 DAX shares with the highest dividend yields, since 2005.
Deutsche Telekom plans to increase the dividend by 10 percent to 0.77 € from 0.70 € last year. In view of the guidance for earnings per share of over 1.60 euros for 2023, the proposed dividend of 0.77 euros per share is thus in the middle of the intended payout range. Shareholders eligible for tax credits in Germany will not have to pay tax on their dividends.
The joint dividend proposal by the Board of Management and the Supervisory Board for the 2023 financial year is subject to approval by the shareholders’ meeting and to fulfillment of other legal conditions.
In addition, the Board of Management plans to buy back shares in 2024 for up to a total of 2 billion euros. The planned share buy-backs in the coming year amounting to up to 2 billion euros are intended to recoup part of the dilution effect from Deutsche Telekom’s 2021 capital increase, which was made to acquire T-Mobile US shares from Softbank.
Deutsche Telekom is committed to pay out 40 to 60 percent of adjusted sustainable earnings per share (EPS) as dividend per share each year.
In line with our dividend policy, analysts expect a dividend per share between 40 to 60 percent of earnings per share (EPS).
Further details on the consensus are available here.
Out of today’s perspective the dividend payment from the tax contribution account in accordance with § 27 will continue over the next years.
Background: As the dividend is to be paid in full from the tax contribution account in accordance with § 27 of the Corporation Tax Act (Körperschaftsteuergesetz– KStG), payment will be made without deducting capital gains tax or the solidarity surcharge. Dividends paid to shareholders in Germany are not subject to taxation. Dividends do not entail tax refunds or tax credits. In the German tax authorities’ view the dividend payment reduces the acquisition costs of the shares for tax purposes.
Deutsche Telekom paid a dividend per share of EUR 0.70 for the 2022 financial year. This corresponds to 38 percent of adjusted earnings per share (EPS) of EUR 1.83. But as EUR 0.32 of the adjusted EPS in 2022 came from a large number of positive one-time effects, the sustainable adjusted EPS for 2022 were EUR 1.51. The positive one-time effects are related to the valuation of derivatives - in particular from the forward transaction to hedge the price of the future acquisition of shares in T-Mobile US and from the stock options to purchase T-Mobile US shares - as well as income from the valuation of provisions due to the significant increase in interest rates. We consider our proposed dividend to be consistent with our dividend policy, which is based on the long-term sustainable earnings trend. We thus offer our shareholders both an attractive return and planning reliability. Our dividend policy is to pay out 40 to 60 percent of our adjusted EPS with a EUR 0.60 minimum dividend. With regard to the sustainable adjusted earnings of EUR 1.51, the dividend for 2022 of EUR 0.70 equates to a pay-out ratio of 46%.
As usually at Deutsche Telekom, the dividend will be announced with the results for the third quarter of the fiscal year on November 9, 2022.
Hannes Wittig
Head of Investor Relations Deutsche Telekom (Senior Vice President)
Address
Friedrich-Ebert-Allee 140, 53113 Bonn
Christoph Greitemann
Senior IR Manager
christoph.greitemann@telekom.de
Address
Friedrich-Ebert-Allee 140, 53113 Bonn
T-Mobile US, Inc.
investor.relations@t-mobile.com
Address
Five Newport, 12920 SE 38th St, Bellevue, WA,