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

We are proving to be an anchor of stability in difficult times. We successfully continued our growth course on both sides of the Atlantic again in 2022 in a challenging macroeconomic environment. We want to continue the strong development of the last few years and lead the Group into the future with sustainable growth. In the reporting year again significant transactions have been closed and reorganizations completed, and we took further steps to secure control of T‑Mobile US. We want to use this strong starting position going forwards to underpin our success with solid financial growth rates, further extend our technology leadership with the best state-of-the-art networks, and thereby contribute to the implementation of our Leading Digital Telco strategy.

This ties in with our financial targets for the period through 2024, which we communicated at our Capital Markets Day in May 2021. From 2020 through 2024, we aim to achieve the following compound annual growth rates (CAGR) or targets for our key financial performance indicators:

• Revenue is expected to increase by an average of 1 to 2 %; service revenue by an average of 3 to 4 %.
• Adjusted EBITDA AL is expected to increase by 3 to 5 % on average; adjusted core EBITDA AL, i.e., adjusted EBITDA AL excluding revenues from terminal equipment leases in the United States, is expected to increase by 5 to 6 % on average.
• Free cash flow AL (before dividend payments and spectrum investment) is expected to increase steadily, exceeding EUR 18 billion^b in 2024.
• Earnings per share (adjusted for special factors) is expected to exceed EUR 1.75^b in 2024.

For 2023, we expect to post the following year-on-year trends, assuming a comparable consolidated group and constant exchange rates^b:

• Revenue is likely to increase slightly in 2023. We expect service revenue to increase.
• Adjusted EBITDA AL is expected to increase by around 4 % in 2023 to around EUR 40.8 billion. In the reporting year, adjusted EBITDA AL came in at EUR 40.2 billion; on a like-for-like basis, i.e., adjusted for comparability with the adjusted EBITDA AL forecast for 2023, adjusted EBITDA AL stood at EUR 39.3 billion. We expect adjusted core EBITDA AL to increase significantly by around 7 % to around EUR 40.5 billion in 2023.
• Free cash flow AL is expected to grow to over EUR 16 billion in 2023, i.e., up by more than 40 %. Free cash flow AL in 2022 was EUR 11.5 billion; on a like-for-like basis, i.e., adjusted for comparability with the free cash flow AL forecast for 2023, free cash flow AL stood at EUR 11.2 billion.
• We are anticipating earnings per share (adjusted for special factors) of over EUR 1.60 in 2023.