Outlook & Financial Strategy

3 min read

Outlook

Forecast

For 2026, we expect further growth:
- Group sales is expected to increase in 2026.
- Adjusted EBITDA (after leases) in 2026 is expected to grow to c.€ 47.5 billion, compared to € 44.7 billion on a pro forma basis in 2025.
- Free cash flow (after leases) is expected to come in around € 19.8 billion in 2026 compared to € 19.3 billion on a pro forma basis in 2025.

To keep the expectations clear of the impact of currency fluctuations, all figures refer to constant exchange rates (average exchange rates of the previous year; € 1 = $ 1.13).

Shareholder remuneration:

For the 2025 fiscal year, a dividend of €1.00 per share was paid out, up from €0.90 in the previous year (+11.1%). This corresponds to a payout ratio of 51% of the adjusted sustainable earnings per share of €1.97. As in previous years, the dividend payment was tax-free. In addition, as in previous years, a share buyback program for approximately €2 billion by the end of the year has been announced for 2026.

For further details on the dividend, such as the analyst consensus for earnings per share and future dividend payments, our dividend history and more, click here.

Operating business:

Germany: Telekom Deutschland will maintain its clear market leadership. We continue to roll-out our fiber networks at high speed with 2.5 million additional homes passed by FTTH. Our 5G coverage is already at 99 percent and we continue to invest in our mobile network. This will enable us to accelerate growth in the residential and business customer segments. By systematically exploiting the opportunities offered by digitization, AI and scale, we will reduce costs and improve our earnings and return on equity.

USA: T-Mobile US continues to grow its customer base in B2C and B2B thanks to the superior network quality.

Europe: The positive trend of recent years in the traditional communications markets of our Europe operating segment will continue in the next years. Growth is being driven by a further increase in demand for mobile data and broadband and pay TV lines.

System Solutions: We want to be the preferred provider of IT services. As part of an extensive transformation program, we have driven forward the establishment and expansion of growth themes and improved the efficiency of our existing business.

Financial strategy

Deutsche Telekom’s corporate strategy is complemented and supported by a financial strategy focused on the following three priorities:

1. An attractive dividend policy for our shareholders
The dividend amount is based on adjusted earnings per share, of which between 40 and 60 percent is distributed. For the 2025 fiscal year, a dividend of €1.00 per share was paid, up from €0.90 in the previous year. The payout ratio of adjusted sustainable earnings per share is 51 percent. Earnings per share are expected to rise to around €2.50 by 2027.

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-

Ratio net debt/adj. EBITDA: ≤2.75x

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 Digital 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 2025 we recorded a ROCE of 7.5 percent. Our ambition for 2027 is a return on capital employed of around 9 percent.

Portfolio Management: We continue to focus on our core business, but at the same time, retain a presence in growth areas with strong partners.