Picture Strategy

Outlook & Financial strategy

Outlook
Forecast 


For the next two years, we expect profitable growth to continue. Revenue and adjusted EBITDA are expected to rise at Group level in 2018: a good basis to achieve our financial ambitions by 2018 as communicated at our Capital
Markets Day in February 2015. We are aiming for the following compound annual growth rates (CAGR) for the period from 2014 to 2018:

- Revenue: 1 to 2 percent
- Adjusted EBITDA: 2 to 4 percent
- Free cash flow: approx. 10 percent

For 2018, we expect to post the following year-on-year growth
trends, assuming a comparable consolidated group and constant
exchange rates:

- Revenue is likely to increase again slightly in 2018.
- Adjusted EBITDA is expected to reach some EUR 23.2 billion in 2018, up from EUR 22.2 billion in the reporting period.
- Free cash flow is expected to grow to around EUR 6.2 billion in 2018, up from EUR 5.5 billion in the reporting period.

Dividend

For the 2017 financial yeardividend2 amounts EUR 0.65 for each no par value share carrying dividend rights. (approval by annual shareholder meeting pending)

The dividend for the 2017 financial year will be paid out as in previous years tax-free.
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 2018. We expect a significant growth in revenue, especially in mobile service revenues that is driven by this additional customer growth.

Europe: The positive trend seen in the traditional communications markets in our Europe operating segment in 2017 will continue over the next two years. This positive development is based on growth in both the broadband and pay TV markets as well as growing data volumes in the mobile business.

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.

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 0.65 € for each no par value share carrying dividend rights for the 2017 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). In 2019, return on capital employed should remain stable year-on-year.

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

Latest Investor Relations publications

Pictures results Deutsche Telekom AG

First quarter 2018

On May 9, 2018 Deutsche Telekom published its financial results for the first quarter 2018.

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

+49 228 181‐88880

+49 228 181‐88899

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Friedrich-Ebert-Allee 140, 53113 Bonn

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Hannes Wittig

Head of Investor Relations Deutsche Telekom (SVP)

hannes.wittig@telekom.de

+49 228 181‐88331

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Friedrich-Ebert-Allee 140, 53113 Bonn

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Christoph Greitemann

Senior IR Manager

christoph.greitemann@telekom.de

+49 228 181‐88240

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Friedrich-Ebert-Allee 140, 53113 Bonn

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Andreas Puy

Vice President Investor Relations

andreas.puy@telekom.de

+49 228 181‐88131

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Friedrich-Ebert-Allee 140, 53113 Bonn

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Thomas Ris

Vice President Investor Relations

thomas.ris@telekom.de

+49 228 181‐88160

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Address

Friedrich-Ebert-Allee 140, 53113 Bonn

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Peer Roßbach

Senior IR Manager

peer.rossbach@telekom.de

+49 228 181‐88120

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Address

Friedrich-Ebert-Allee 140, 53113 Bonn

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Christian Kuhlen

Senior Expert Debt Capital Markets

christian.kuhlen@telekom.de

+49 228 181‐87842

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Friedrich-Ebert-Allee 140, 53113 Bonn

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Markus Schäfer

Vice President Debt Capital Markets

markus.schaefer01@telekom.de

+49 228 181‐84255

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Friedrich-Ebert-Allee 140, 53113 Bonn

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Renate Pohler

IR Manager Retail Investors & AGM

renate.pohler@telekom.de

+49 228 181‐88880

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Friedrich-Ebert-Allee 140, 53113 Bonn

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Simone Schlief

IR Manager SRI

simone.schlief@telekom.de

+49 228 181‐88380

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Friedrich-Ebert-Allee 140, 53113 Bonn

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T-Mobile US, Inc.

investor.relations@t-mobile.com

+1‐212‐358‐3210

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

OTE

OTE Investor Relations Department

esarsentis@ote.gr

+30 210 6115323

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

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Magyar Telekom Plc.

investor.relations@telekom.hu

+36 1 265 9210

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Address

1541 Budapest

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Hrvatski Telekom d.d. / Croatian Telecom Inc.

ir@t.ht.hr

+385 1 4911 114

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Roberta Frangeša Mihanovića 9, 10110 Zagreb

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