Deutsche Telekom’s corporate strategy is supported by a financial strategy, which focuses on three key aspects.
1. Attractive Payout-Policy for Shareholders*
We have committed to an attractive dividend policy: For the fiscal years 2016-2018 a dividend of at least EUR 0.50 per dividend-bearing is intended. Relative growth of free cash flow is also to be taken into account when measuring the amount of the dividend for the specified financial years. In accordance with the 10 % growth in free cash flow the Board of Management proposes a dividend of 0.55 € for each no par value share carrying dividend rights for the 2015 financial year.
* Subject to the necessary board resolutions and the resolution of the Annual General Meeting
2. Security for providers of debt capital
Deutsche Telekom seeks to have undisputed access to the debt capital markets at any time. Solid balance sheet ratios are meant to guarantee this access.Therefore Deutsche Telekom sets itself the following comfort zone targets/ratios:
- Rating: A-/BBB
- Ratio net debt/adj. EBITDA: 2 – 2.5x
- Equity ratio: 25-35%
- Liquidity reserve covering maturities of coming 24 months
3. Increase of Return on Capital Employed
The Finance Strategy supports the group wide transformation project to become the Leading European Telco. We want to become quality leader in our domestic market both in terms of mobile communication and fixed networks.The financial strategy, which supports the sustainable increase in value has a focus on the following three aspects:
- Return on Capital Employed:We aim to increase return on capital employed in the long-term. For the fiscal year 2015 we recorded a decline by 0.7 percentage points year-to-year to 4.8 percent. This decline was due to one-offs (IPO of Scout and sale of T-Online/Interactive Media). In 2016 we expect a slight and for 2017 a strong increase in our return on capital employed. Our ambition for 2018 is a return on capital employed that exceeds the cost of capital (ROCE>WACC).
- Portfolio Management:We continue to focus on our core business, but at the same time, retain a presence in growth areas with strong partners.
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