Comparison of the Group’s expectations with actual figures

In the 2018 Annual Report, we outlined expectations for the 2019 financial year for our financial and non-financial key performance indicators anchored in our management system. The following tables summarize the pro forma figures for 2018, the results expected for the reporting year, and the actual results achieved in 2019. The performance indicators that we also forecast in the 2018 Annual Report and their development are presented in the individual sections.

We look back on a successful financial year. Our performance in 2019 was once again dominated by substantial growth in revenue and adjusted EBITDA AL. Revenue reached EUR 80.5 billion, achieving the expected rate of increase – adjusted for exchange rate effects and changes in the composition of the Group, we also recorded an increase of EUR 2.2 billion or 2.8 percent. Adjusted EBITDA AL also increased significantly to EUR 24.7 billion – adjusted for exchange rate effects and changes in the composition of the Group, it came in at around EUR 24.1 billion, slightly higher than our most recent guidance. EBIT also echoed this clear growth trend, up by EUR 1.5 billion or 18.2 percent. Free cash flow AL amounted to EUR 7.0 billion, i.e., slightly above our expectations even before adjustments for positive exchange rate effects. At EUR 13.1 billion, cash capex (before spectrum investment) exceeded our most recent guidance figure; this was also due to positive exchange rate effects. Our key performance indicator ROCE (return on capital employed) improved by 0.4 percentage points in the reporting period to 5.1 percent. Growth was thus in line with our expectations.

We are also well on track with our non-financial key performance indicators. The customer base of our Germany operating segment developed as expected. In the United States operating segment, the number of branded postpaid customers continued to rise sharply. After factoring in an intra-year adjustment to the customer base, we recorded 0.3 million branded prepay customer additions. In our Europe operating segment, the total number of mobile customers declined by 8.7 percent to 46.2 million. This decline was largely a result of portfolio streamlining activities and the sale of the national company in Albania. Adjusted for these effects, the mobile customer base was down slightly year-on-year. The number of high-value contract customers rose by 3.4 percent compared with the end of the prior year. Order entry at our Systems Solutions operating segment improved markedly in 2018. This growth is primarily due to a positive trend in our growth areas, in particular digital solutions, public cloud, and also road charging.

At the end of the reporting year, customer satisfaction came in at 67.3 points versus 68.5 points at the start of the year. Following changes to the revenue shares contributed by each country and in order to create an equivalent basis for comparing the Group’s expectations with actual figures, we recalculated the baseline figure for 2019 on the basis of the new structures these changes entailed. The new baseline thus diverges from the figure of 67.7 reported as of December 31, 2018. While the scores for the Germany and Europe operating segments remained largely stable, the negative trend at Group level was the result of a decline in the previously above-average customer satisfaction rating in our Systems Solutions operating segment amidst its transformation efforts. Our goal for the coming years is to again improve customer satisfaction in all areas.

For further information on the trends in our main financial and non-financial key performance indicators, please refer to the relevant passages in this section as well as in the section “Development of business in the operating segments.”