Development of business at Deutsche Telekom AG
Deutsche Telekom AG prepares its annual financial statements in accordance with the principles of German GAAP, as specified in the German Commercial Code (Handelsgesetzbuch – HGB) and the German Stock Corporation Act (Aktiengesetz – AktG).
As the Headquarters of the Deutsche Telekom Group, we perform strategic and cross-segment management functions and provide services for other Group companies. The profits and losses of our subsidiaries and Group financing measures have a material effect on our financial position and results of operations. Total revenue in the United States operating segment increased by 51.4 %. This increase was mainly attributable to higher service and terminal equipment revenues, due in particular to postpaid customer additions in connection with the business combination with Sprint, growing success of new customer segments as well as continued growth in existing and new markets. Total revenue in our Germany operating segment was almost flat on the prior-year level with an increase of 0.2 %. Higher revenue in the fixed-network business compensated for revenue declines in the mobile communications business. The coronavirus pandemic had a negative impact on roaming, visitor, and terminal equipment revenues. It also resulted in delays or postponements to current orders in B2B telecommunications business. Revenue in our Europe operating segment decreased by 2.2 %. In organic terms, revenue remained stable at the prior-year level, despite the deterioration in economic conditions due to the coronavirus pandemic. The fixed-network business showed a very solid performance. Revenue from our mobile communications business recorded a slight decline, in particular in roaming, visitor, and terminal equipment revenues. These negative effects were partially offset by higher service revenues (excluding roaming). Total revenue in our Systems Solutions operating segment decreased by 5.6 %, reflecting the coronavirus-induced decline of the IT market in Western Europe. The upward revenue trend in our growth areas public cloud and security was not sufficient to fully offset the declines in traditional IT and project business. Total revenue in our Group Development operating segment increased by 3.1 % year-on-year, thanks to operational growth at T‑Mobile Netherlands B.V., The Hague, and at DFMG Deutsche Funkturm GmbH, Münster.
Deutsche Telekom AG reported income after taxes for the 2020 financial year of EUR 2.5 billion. Alongside the operating business, the development of business in the reporting year was affected by a large number of other factors, including capital repayments based on fair values, write-downs resulting from the impairment of the indirectly held investments in BT Group plc, London, and the write-ups on Hellenic Telecommunications Organization S.A., Athens. The latter were required under German GAAP due to improved earnings prospects. Furthermore, in connection with the realignment of the B2B telecommunications business, the Deutsche Telekom Global Carrier (DTGC) business area was transferred to Telekom Deutschland GmbH, Bonn, with retroactive economic effect as of January 1, 2020, as part of a spin-off with realization of hidden reserves.