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41 Capital management

The overriding aim of Deutsche Telekom’s capital management is to strike a balance between the contrasting expectations of the following stakeholders, so that sufficient funding is available for an attractive dividend, debt repayment, responsible staff restructuring, and new investment in a sustainable and positive customer experience:

  • Shareholders expect an appropriate, reliable return on their capital employed.
  • Providers of debt capital expect an appropriate return and that Deutsche Telekom is able to repay its debts.
  • Employees expect jobs that are secure, prospects for the future, and that any necessary staff restructuring will be done in a responsible manner.
  • “Entrepreneurs within the enterprise” expect sufficient investment funding to be able to shape Deutsche Telekom’s future business and develop products, innovations, and services for the customer.
  • Society expects Deutsche Telekom to do everything within its power to protect the environment, encourage fair and democratic co-existence, and shape the digital transformation in a responsible manner.

An important key performance indicator for the capital market communication with investors, analysts, and rating agencies is relative debt, i.e., net debt to adjusted EBITDA. This ratio stood at 3.06x at December 31, 2021 (December 31, 2020: 2.78x). Deutsche Telekom is expected to exceed the target range for relative debt of 2.25x to 2.75x on account of the business combination of T‑Mobile US and Sprint until the end of 2024. Adjusted EBITDA and net debt are non-GAAP figures not governed by International Financial Reporting Standards, and their definition and calculation may vary from one company to another. A further essential key performance indicator is the equity ratio, i.e., the ratio of shareholders’ equity to total assets as shown in the consolidated statement of financial position. The equity ratio was 28.9 % as of December 31, 2021 (December 31, 2020: 27.4 %). The target range remains unchanged between 25 and 35 %. In addition, Deutsche Telekom maintains a liquidity reserve covering all maturities of the next 24 months.

For further information, please refer to the sections “Management of the Group” and “Development of business in the Group,” in the combined management report.

millions of €

 

 

 

 

 

Dec. 31, 2021a

Dec. 31, 2020

Change

Change
%

Bonds and other securitized liabilities

93,857

87,702

6,155

7.0

Liabilities to banks

4,003

5,257

(1,254)

(23.9)

Other financial liabilities

13,730

14,149

(419)

(3.0)

Lease liabilities

33,767

32,715

1,052

3.2

Financial liabilities and lease liabilities

145,357

139,823

5,534

4.0

Accrued interest

(1,012)

(1,035)

23

2.2

Other

(855)

(703)

(152)

(21.6)

Gross debt

143,490

138,085

5,405

3.9

Cash and cash equivalents

7,617

12,939

(5,322)

(41.1)

Derivative financial assets

2,762

4,038

(1,276)

(31.6)

Other financial assets

969

881

88

10.0

Net debt

132,142

120,227

11,915

9.9

a

Including the net debt of T-Mobile Netherlands included under liabilities directly associated with non-current assets and disposal groups held for sale as of December 31, 2021.