Picture Strategy

Outlook & Financial strategy

Outlook
Forecast 


We plan to increase our customer base in the segments glass-fiber, television and integrated offers, as well as a rising sales volume in our cloud business and again a significant growth in mobile customers in the US. We intend to maintain the dynamic development of this past financial year in 2016 and 2017 and continue to grow profitably.

Revenue expected to increase year-on-year in 2017.

Adj. EBITDA expected to increase to around € 22.2 billion in 2017

Free cash flow is expected to be around € 5.5 billion in 2017.

Our investments in terms of cash capex are expected to amount to around € 12 billion in 2017.

Dividend

For the 2016 financial yeardividend2 amounts EUR 0.60 for each no par value share carrying dividend rights. (approval by annual shareholder meeting pending)

The dividend for the 2016 financial year is tax-free.

We intend to retain our shareholder remuneration policy for the fiscal year 2017 (to be paid out in 2018): We intend to pay a dividend of at least EUR 0.50 per dividend-bearing share, the relative growth of free cashflow is also to be taken into account when measuring the amount of the dividend.

2 Subject to the approval of the Annual General Meeting

Operations:

Germany: We continue to work on out comprehensive transformation program with the goal to secure our position on the market as the leading integrated telecommunications provider. We plan to do so through innovative and competitive offers. Core elements are strong broadband offers in our fixed and mobile networks as well as our convergence offer “MagentaOne”.

USA: After a strong fiscal year, T-Mobile U.S. will continue to execute on its promise to deliver distinctive value for consumers in all customer segments – postpaid and prepay. For these reasons we expect an increase in branded postpaid and branded prepay customers in 2017. We expect a significant growth in revenue, especially in mobile service revenues that is driven by this additional customer growth.

Europe: We continue to increasingly rely on technology leadership: With the pan-European all-IP network (Pan-Net), we are building a simplified, standardized network across all national companies. By 2018 we plan to have converted all of our integrated national companies to IP. We will increase our investment in our network infrastructure, particularly in the fiber-optic build-out and an increased reach of LTE coverage within our mobile network. The concept of our convergence brand “Magenta One” will contribute to the positive development in our broadband and TV customer base in 2017. After a decline in revenue in 2016, we plan to stabilize our revenue from 2017.

System Solutions: Our objective is to become the preferred provider of telecommunications and IT services. In the context of a comprehensive transformation program we have driven forward the development and expansion of growth areas, improved the efficiency of our existing business, and discontinued or handed over to partners a number of activities that were not sufficiently profitable for us. We are among the top players in the European IT market and strive to be the number one in cloud computing by 2018.

Financial strategy

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 0.60 € for each no par value share carrying dividend rights for the 2016 financial year.

* Subject to 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 2016 we recorded an increase by 0.9 percentage points year-to-year to 5.7 percent. 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.

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.

Latest Investor Relations publications

Picture results Deutsche Telekom AG

Full year results 2016

On Thursday 2, March 2017 the Deutsche Telekom published its results for the 2016 financial year.

Picture SHM 2016

Shareholders' Meeting 2016

The shareholders' meeting 2016 of Deutsche Telekom AG has taken place at Lanxess arena in Cologne.

Symbolbild Cloud

Webinar: Cloud Strategy

Cloud computing has created a paradigm shift in IT as data, processing power and IT applications are increasingly moving onto the net.

The next Investor Relations events in detail

Your Contact

You have questions about the Telekom Share, financial reports or similar topics? Contact us!

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Investor Relations

Deutsche Telekom

investor.relations@telekom.de

Phone: +49 228 181‐88880

Fax: +49 228 181‐88899

investor.relations@telekom.de

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Address

Friedrich-Ebert-Allee 140, 53113 Bonn

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Hannes Wittig

Head of Investor Relations Deutsche Telekom (SVP)

hannes.wittig@telekom.de

Phone: +49 228 181‐88331

hannes.wittig@telekom.de

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Address

Friedrich-Ebert-Allee 140, 53113 Bonn

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Christoph Greitemann

Senior IR Manager

christoph.greitemann@telekom.de

Address

Friedrich-Ebert-Allee 140, 53113 Bonn

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Stanley Martinez

Vice President Investor Relations

stanley.martinez@telekom.com

Phone: +1 212 301 6114

stanley.martinez@telekom.com

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Address

One Rockefeller Plaza 16th Floor, 10020 New York

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Andreas Puy

Vice President Investor Relations

andreas.puy@telekom.de

Phone: +49 228 181‐88131

andreas.puy@telekom.de

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LinkedIn

Address

Friedrich-Ebert-Allee 140, 53113 Bonn

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Thomas Ris

Vice President Investor Relations

thomas.ris@telekom.de

Phone: +49 228 181‐88160

thomas.ris@telekom.de

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LinkedIn

Address

Friedrich-Ebert-Allee 140, 53113 Bonn

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Peer Roßbach

Senior IR Manager

peer.rossbach@telekom.de

Phone: +49 228 181‐88120

peer.rossbach@telekom.de

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Xing

LinkedIn

Address

Friedrich-Ebert-Allee 140, 53113 Bonn

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Christoph Lüttig

Senior Expert Debt Capital Markets

luettig.christoph@telekom.de

Phone: +49 228 181‐87062

luettig.christoph@telekom.de

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Xing

Address

Friedrich-Ebert-Allee 140, 53113 Bonn

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Markus Schäfer

Vice President Debt Capital Markets

markus.schaefer01@telekom.de

Phone: +49 228 181‐84255

markus.schaefer01@telekom.de

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Xing

LinkedIn

Address

Friedrich-Ebert-Allee 140, 53113 Bonn

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Renate Pohler

IR Manager Retail Investors & AGM

renate.pohler@telekom.de

Phone: +49 228 181‐88880

renate.pohler@telekom.de

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Address

Friedrich-Ebert-Allee 140, 53113 Bonn

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Simone Schlief

IR Manager SRI

simone.schlief@telekom.de

Phone: +49 228 181‐88380

simone.schlief@telekom.de

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Address

Friedrich-Ebert-Allee 140, 53113 Bonn

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T-Mobile US, Inc.

investor.relations@t-mobile.com

Phone: +1‐212‐358‐3210

investor.relations@t-mobile.com

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Website

Address

1 Park Avenue, 14th Floor, New York, NY 10016

OTE

OTE Investor Relations Department

esarsentis@ote.gr

Phone: +30 210 6115323

esarsentis@ote.gr

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Website

Address

Ikarou & Agiou Louka St. 1, 19 002 Paiania - Attica

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Magyar Telekom Plc.

investor.relations@telekom.hu

Phone: +36 1 265 9210

investor.relations@telekom.hu

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Website

Address

1541 Budapest

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Hrvatski Telekom d.d. / Croatian Telecom Inc.

ir@t.ht.hr

Phone: +385 1 4911 114

ir@t.ht.hr

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Address

Roberta Frangeša Mihanovića 9, 10110 Zagreb

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