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Comparison of the Group’s expectations with actual figures

In the 2020 Annual Report, we outlined expectations for the 2021 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 2020, the results expected for the reporting year, and the actual results achieved in 2021. The performance indicators that we also forecast in the 2020 Annual Report and their development are presented in the individual sections.

Comparison of the expected financial key performance indicators with actual figures

 

 

 

 

 

 

Pro forma figures for
2020

Expectations for
2021

Results in
2021

ROCE

%

4.6

decrease

4.1

Net revenue

billions of €

106.7

slight increase

108.8

Service revenue

billions of €

83.3

increase

84.1

Profit (loss) from operations (EBIT)

billions of €

13.5

slight decrease

13.1

EBITDA AL (adjusted for special factors)a

billions of €

37.6

around 38

37.3

Earnings per share (adjusted for special factors)

1.20

slight decrease

1.22

Free cash flow AL (before dividend payments and spectrum investment)a, b

billions of €

6.6

around 8.5

8.8

Cash capex (before spectrum investment)

billions of €

(17.8)

(18.4)

(18.0)

Rating (Standard & Poor’s, Fitch)

 

BBB, BBB+

from A- to BBB

BBB, BBB+

Rating (Moody’s)

 

Baa1

from A3 to Baa2

Baa1

a

Contrary to the forecasts published in the 2020 combined management report (2020 Annual Report), we adjusted the guidance for 2021 for EBITDA AL (adjusted for special factors) and free cash flow AL (before dividend payments and spectrum investment) during the course of the year (Interim Group Reports as of March 31, 2021, June 30, 2021, and September 30, 2021).

b

Before interest payments for zero-coupon bonds and before termination of forward-payer swaps at T-Mobile US (both in 2020).

Comparison of the expected financial key performance indicators with actual figures

 

 

 

 

 

 

 

Pro forma figures for
2020

Expectations for
2021

Results in
2021

 

ROCE

%

4.6

decrease

4.1

 

Net revenue

billions of €

106.7

slight increase

108.8

 

Service revenue

billions of €

83.3

increase

84.1

 

Profit (loss) from operations (EBIT)

billions of €

13.5

slight decrease

13.1

 

EBITDA AL (adjusted for special factors)a

billions of €

37.6

around 38

37.3

 

Earnings per share (adjusted for special factors)

1.20

slight decrease

1.22

 

Free cash flow AL (before dividend payments and spectrum investment)a, b

billions of €

6.6

around 8.5

8.8

 

Cash capex (before spectrum investment)

billions of €

(17.8)

(18.4)

(18.0)

 

Rating (Standard & Poor’s, Fitch)

 

BBB, BBB+

from A- to BBB

BBB, BBB+

 

Rating (Moody’s)

 

Baa1

from A3 to Baa2

Baa1

 

a

Contrary to the forecasts published in the 2020 combined management report (2020 Annual Report), we adjusted the guidance for 2021 for EBITDA AL (adjusted for special factors) and free cash flow AL (before dividend payments and spectrum investment) during the course of the year (Interim Group Reports as of March 31, 2021, June 30, 2021, and September 30, 2021).

b

Before interest payments for zero-coupon bonds and before termination of forward-payer swaps at T-Mobile US (both in 2020).

The comparison shown in the table of the pro forma figures for 2020 and the expectations formulated on this basis for 2021 with the results actually generated for 2021 is not like-for-like, i.e., these figures are not based on comparable exchange rates. The results generated on a like-for-like basis are set out below.

Our business performance was once again characterized by positive growth rates for our key performance indicators. We met or significantly exceeded our expectations. In organic terms, i.e., adjusted for exchange rate effects and changes in the composition of the Group, we recorded not just moderate growth, but a substantial increase of 4.5 % in revenue, with significant organic growth of 3.5 % in service revenue as well. Adjusted for exchange rate effects and changes in the composition of the Group, adjusted EBITDA AL increased by 1.9 %, despite the gradual withdrawal from the terminal equipment lease business model in the United States. With negative exchange rate effects being taken into account, adjusted EBITDA AL was well ahead of our latest guidance of around EUR 38 billion. In line with our strong operational performance, adjusted earnings per share exceeded our expectation, at EUR 1.22. At EUR 8.8 billion, free cash flow AL (before dividend payments and spectrum investment) clearly exceeded our latest guidance of around EUR 8.5 billion, even without negative exchange rates being taken into account. For cash capex (before spectrum investment), we met our guidance on a like-for-like basis with the prior year. ROCE decreased, as expected, due to the integration costs arising in connection with the business combination of T‑Mobile US and Sprint.

Comparison of the expected non-financial key performance indicators with actual figures

 

 

 

 

 

 

Pro forma figures for
2020

Expectations for
2021

Results in
2021

Customer satisfaction (TRI*M index)

 

72.2

slight increase

73.4

Employee satisfaction (engagement score)a

 

4.0

stable trend

77

Fixed-network and mobile customers

 

 

 

 

Germany

 

 

 

 

Mobile customers

millions

48.5

increase

53.2

Fixed-network lines

millions

17.6

stable trend

17.5

Retail broadband lines

millions

14.1

increase

14.5

United States

 

 

 

 

Postpaid customers

millions

81.4

increase

87.7

Prepaid customers

millions

20.7

increase

21.1

Europe

 

 

 

 

Mobile customers

millions

45.6

slight increase

45.8

Fixed-network lines

millions

9.1

stable trend

7.8

Broadband customers

millions

7.0

increase

6.4

Systems Solutions

 

 

 

 

Order entry

billions of €

4.6

stable trend

4.2

a

Engagement score as per the 2021 employee survey. In 2021, we changed from a scale of 1 to 5 for the engagement score (previously the “commitment index”) to a scale of 0 to 100.

Comparison of the expected non-financial key performance indicators with actual figures

 

 

 

 

  

 

 

Pro forma figures for
2020

Expectations for
2021

Results in
2021

 

Customer satisfaction (TRI*M index)

 

72.2

slight increase

73.4

 

Employee satisfaction (engagement score)a

 

4.0

stable trend

77

 

Fixed-network and mobile customers

 

 

 

 

 

Germany

 

 

 

 

 

Mobile customers

millions

48.5

increase

53.2

 

Fixed-network lines

millions

17.6

stable trend

17.5

 

Retail broadband lines

millions

14.1

increase

14.5

 

United States

 

 

 

 

 

Postpaid customers

millions

81.4

increase

87.7

 

Prepaid customers

millions

20.7

increase

21.1

 

Europe

 

 

 

 

 

Mobile customers

millions

45.6

slight increase

45.8

 

Fixed-network lines

millions

9.1

stable trend

7.8

 

Broadband customers

millions

7.0

increase

6.4

 

Systems Solutions

 

 

 

 

 

Order entry

billions of €

4.6

stable trend

4.2

 

a

Engagement score as per the 2021 employee survey. In 2021, we changed from a scale of 1 to 5 for the engagement score (previously the “commitment index”) to a scale of 0 to 100.

We are also well on track with our non-financial performance indicators. In the Germany and United States operating segments, our customer numbers developed in line with expectations or even exceeded them. In our home market, we recorded, as expected, customer additions of around 5 million especially in mobile communications. In the United States operating segment too, we once again recorded strong growth in postpaid customers: The number of customers increased by 5.5 million, thereby exceeding our already high expectations. Our Europe operating segment recorded a stable, or in some cases a declining trend in customer numbers compared with the guidance level. This is mainly due to the sale of Telekom Romania Communications as of September 30, 2021, which was not yet taken into account in the guidance for 2021 stated in the 2020 Annual Report. Order entry in our Systems Solutions operating segment fell short of our expectations. This development was mainly due to a decline in both traditional IT infrastructure business and SAP business, which was only partially offset by the strong upward trends in our growth areas.

Employee satisfaction held steady at the high level of 77 points in 2021, after revising the measurement model on a like-for-like basis. At the end of the reporting year, customer satisfaction came in at 73.4 points compared with an adjusted baseline figure of 72.7 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 2021 on the basis of the new structures these changes entailed. The new baseline thus diverges from the figure of 72.2 reported as of December 31, 2020. The Germany and Systems Solutions operating segments contributed to the positive development with improvements in customer loyalty. Our aim for the next few years is to further improve customer satisfaction for Germany and Europe; in Systems Solutions, we want to stabilize the already high level.

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

AL – After Leases
Since the start of the 2019 financial year, we have taken the effects of the first-time application of IFRS 16 “Leases” into account when determining our financial performance indicators. “EBITDA after leases” (EBITDA AL) is calculated by adjusting EBITDA for depreciation of the right-of-use assets and for interest expenses on recognized lease liabilities. When determining “free cash flow after leases” (free cash flow AL), free cash flow is adjusted for the repayment of lease liabilities.
Glossary
Postpaid
Customers who pay for communication services after receiving them (usually on a monthly basis).
Glossary