Mr. Höttges, what do you hope to achieve with the share buy-back?
Timotheus Höttges: The share buy-back is an integral part of our new shareholder remuneration policy. We intend to pay a dividend of at least 70 cents per share for the financial years 2010 to 2012. We also intend to buy shares back in the same period.
In total, the dividend and share buy-backs are intended to generate an unchanged payment to shareholders of EUR 3.4 billion per year.
As you can see, the share buy-back represents the start of implementation of the shareholder remuneration policy we announced in February 2010. By the way, share buy-backs are a perfectly normal instrument used by large DAX-listed companies to improve their capital structure, for example. Share buy-backs will also become more and more significant in coming years as a form of shareholder remuneration.
Does the share buy-back mean that shareholders will only receive a dividend of 70 cents per share for 2010?
Timotheus Höttges: Yes. Following completion of the share buy-back, we – together with the Supervisory Board – intend to propose to the shareholders' meeting on May 12 that the dividend payment for the current financial year be set at 70 cents per share. This means that the payout – in other words, the total sum of share buy-back and dividend – will be around EUR 3.4 billion, the same as in the previous year.
Mr. Höttges, Deutsche Telekom is a pioneer in the DAX by announcing its dividend for the next three years in advance, and at the same time announcing share buy-backs. Why did you decide to do this?
Timotheus Höttges: It is a strong signal to investors. We plan to pay out EUR 10 billion to the shareholders in the next three years in dividends and share buy-backs. That means: We face the future with optimism and will involve investors appropriately in the company’s success. That creates security in uncertain times. At the same time, our investment will safeguard the development of the company in the long term as part of the financial strategy. And we also continue to have unlimited access to the debt capital market. Deutsche Telekom is therefore committing itself clearly to continue taking into account the interests of all its stakeholders - investors, creditors, entrepreneurs in the enterprise, and employees.
There has been speculation in the media about whether Telekom can still afford to pay a dividend, even after the sale of T-Mobile USA...
Timotheus Höttges: There will be no changes to our medium-term shareholder remuneration policy. It is correct that our company is getting smaller with the sale of T-Mobile USA, so in future it will generate less free cash-flow, which we use to pay the dividend. Therefore we will buy back shares because that means that we will have to pay out fewer dividends in the future. This program will span several years. In this way, we offer investors planning security in the coming years. This is an important thing in uncertain times.
Timotheus Höttges: Our investors are primarily value investors. They are investors that invest pension payments for teachers, for example. These investors value the sustainability of their investment. They are primarily interested in a secure rate of return, reliability and planning security. With this in mind, investments in public utilities and telecommunication companies are attractive. Today, telecommunication companies are only growing slowly. If this changes in the next few years, the focus could shift to the share price. But currently, the dividend yield is very important to value investors. And we can well afford the dividends.