Outlook_Financial_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 2016 and 2017.

Adj. EBITDA expected to increase to € 21.2 billion in 2016 and to rise sharply again in 2017.

Free cash flow is expected to be approximately € 4.9 billion in 2016.

Our investments in terms of cash capex are expected to amount to around € 11.2 billion in 2016. In 2017 we expect an increase in capital expenditure against 2016.

Dividend

For the 2015 financial yeardividend2 amounts EUR 0.55 for each no par value share carrying dividend rights.

The dividend for the 2015 financial year is tax-free.

For the fiscal years 2016 and 2017 we intend to retain our shareholder remuneration policy: 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 necessary board resolutions and the resolution 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”. The main reason for the slight decrease in revenues in 2016 is the planned reduction in our low-margin mobile handset business. From 2017, we plan to stabilize our revenue.

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 this reasons we expect an increase in branded postpaid and branded prepay customers in 2016 and 2017. For the fiscal year 2016, we expect between 2.4 and 3.5 million additional customers. 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 2016 and 2017. After a decline in revenue in the current year, 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 0.55 € 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.

Latest Investor Relations publications

Bilanz-Q3-en

Third quarter 2016

On November 10, 2016 Deutsche Telekom published its results for the third quarter 2016.

Hauptvesammlung_Teaserbild_X

Shareholders' Meeting 2016

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

BI_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!

Allgemein_X

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

Wittig_X

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

Greitemann_X

Christoph Greitemann

Senior IR Manager

christoph.greitemann@telekom.de

Address

Friedrich-Ebert-Allee 140, 53113 Bonn

martinez_X

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

Puy_X

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

Ris_X

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

Roßbach_X

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

Lüttig_X

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

Schäfer_X

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

Pohler_X

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

Schlief_X

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

TMUS_X

T-Mobile US, Inc.

investor.relations@t-mobile.com

Phone: +1 877‐281‐TMUS

investor.relations@t-mobile.com

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Website

Address

Park Avenue, 14th Floor 1, 10016

OTE_X

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

MAGYAR_X

Magyar Telekom Plc.

investor.relations@telekom.hu

Phone: +36 1 265 9210

investor.relations@telekom.hu

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Website

Address

1541 Budapest

HRVATSKI_X

Hrvatski Telekom d.d. / Croatian Telecom Inc.

ir@t.ht.hr

Phone: +385 1 4911 114

ir@t.ht.hr

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Website

Address

Roberta Frangeša Mihanovića 9, 10110 Zagreb

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