Statement by the Board of Management on the expected development of the Group

We successfully continued our growth course on both sides of the Atlantic again in 2019. We already set ourselves apart by having the best and most modern networks, and we want to continue building on this technology leadership. Over the coming years, we will also focus more on convergent offerings, in line with the expectations of our customers. This goes hand in hand with our Leading European Telco strategy, where our aim is to become Europe’s leading telecommunications provider. This is closely related to our financial targets for the period up to 2021. As communicated at our 2018 Capital Markets Day, we are targeting the following compound annual growth rates (CAGR) for the period from 2017 through 2021:

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

For 2020, 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 in 2020.
• For 2020, we expect adjusted EBITDA AL of around EUR 25.5 billion. In the reporting year, adjusted EBITDA AL totaled EUR 24.7 billion.
• Free cash flow AL²² is expected to grow to around EUR 8.0 billion in 2020. In 2019, free cash flow AL came in at EUR 7.0 billion.

² Free cash flow AL for 2020, excluding the interest component from the repayment of Deutsche Bundespost treasury notes (zero-coupon bonds) falling due and the potential market value realization of interest rate swaps entered into by T‑Mobile US to hedge interest rates.