Results of operations of Deutsche Telekom AG

Operating results improved from EUR -1.7 billion to EUR -0.8 billion, due mainly to a year-on-year increase in other operating income of EUR 1.3 billion and a EUR 0.2 billion decrease in personnel costs. In particular, an increase in other operating expenses of EUR 0.4 billion and a decline of EUR 0.3 billion in net revenue had an offsetting effect.

Lower intragroup cost transfers from hiring out employees and from renting and leasing out property were the main factors contributing to the reduction in net revenue of EUR 0.3 billion.

The year-on-year increase in other operating income of EUR 1.3 billion was mainly due to gains of EUR 0.6 billion on the intragroup disposal of shares in Erste DFMG Deutsche Funkturm Vermögens-GmbH, Bonn, and gains of EUR 0.5 billion arising from the buy-back of own shares by DFMG Holding GmbH, Bonn. The increase was also attributable to EUR 0.2 billion higher income from derivatives, mainly in connection with U.S. dollar contracts. In addition, an increase of EUR 0.2 billion in foreign currency translation gains had a positive effect. This increase is due in particular to effects from the maturity of cross-currency interest rate hedges. 

The decrease in personnel costs of EUR 0.2 billion is largely attributable to a lower headcount due to the take-up of the early retirement program for civil servants and other staff restructuring measures.

The increase of EUR 0.4 billion in other operating expenses compared with the previous year resulted primarily from the EUR 0.3 billion increase in expenses from derivatives. Of this figure, EUR 0.2 billion is attributable to negative measurement effects from a forward transaction concluded to hedge the price of acquiring shares in T‑Mobile US in the future. In addition, a EUR 0.1 billion increase in foreign currency translation losses on loans denominated in foreign currency had a negative impact on other operating expenses.

Net financial income increased slightly by EUR 0.1 billion to EUR 5.7 billion, due primarily to an increase of EUR 0.6 billion in income related to subsidiaries, associated and related companies. A EUR 0.3 billion increase in net interest expense and a write-down in the amount of EUR 0.2 billion on CTA Holding GmbH, Bonn, as a result of the impairment of this company’s indirectly held investment in BT Group plc, London, United Kingdom, had an offsetting effect.

Income related to subsidiaries, associated and related companies of EUR 6.5 billion (2021: EUR 5.9 billion) was positively affected in the reporting year in particular by profits transferred by Telekom Deutschland GmbH, Bonn, of EUR 7.1 billion (2021: EUR 4.3 billion) and by other German companies of EUR 0.7 billion (2021: EUR 2.5 billion). The transfer of losses of EUR 1.4 billion (2021: EUR 1.2 billion), including EUR 0.9 billion (2021: EUR 0.7 billion) from Deutsche Telekom IT GmbH, Bonn, and EUR 0.4 billion (2021: EUR 0.2 billion) from T‑Systems International GmbH, Frankfurt/Main, had an offsetting effect.

Income related to subsidiaries, associated and related companies was impacted in particular by the operating business of the consolidated subsidiaries. In addition, income of EUR 2.3 billion from the intragroup sale of shares in DFMG Deutsche Funkturm GmbH, Münster, and income of EUR 0.4 billion from the sale of 50.0 % of the shares in GlasfaserPlus Holding GmbH & Co. KG, Cologne, had an effect at Telekom Deutschland GmbH, Bonn, in the reporting year. In the previous year, income related to subsidiaries, associated and related companies had been positively impacted by the effect of a capital repayment by T‑Mobile Global Holding GmbH, Bonn, to T‑Mobile Global Zwischenholding GmbH, Bonn, in the amount of EUR 2.1 billion.

Net interest expense increased from EUR 0.3 billion to EUR 0.6 billion, due in particular to expenses arising from the negative trend in plan assets for pension obligations amounting to EUR 0.2 billion in the reporting year. In the previous year, by contrast, income of EUR 0.2 billion had been recognized in this context. A EUR 0.2 billion decline in expenses from interest added back to noncurrent pension accruals had a positive effect on net interest expense.

Income after income taxes was particularly impacted by the aforementioned effects and increased by EUR 0.4 billion year-on-year in the 2022 financial year.

Other tax expense of EUR 18 million combined with the aforementioned factors resulted in income after taxes of EUR 3,994 million in the 2022 financial year. Taking into account EUR 2,706 million in unappropriated net income carried forward, unappropriated net income totaled EUR 6,700 million.