Development of the economic environment and its impact on our business activities and performance indicators

War in Ukraine. Our business activities and key performance indicators have not so far been directly affected by the war in Ukraine. Deutsche Telekom does not own and operate mobile or voice networks in Russia or Ukraine. Neither does a stop on gas deliveries from Russia directly impact on our network operations. Deutsche Telekom is discontinuing its developer activities in Russia. Thanks to our active business continuity management including relocation, the impact on IT operations in particular remained minimal. Indirect effects on Deutsche Telekom arise primarily from increased energy prices in the Europe operating segment. The Group’s main energy costs are secured by long-term hedging transactions, especially in the United States and Germany operating segments. We have also secured the main financing requirements there with long-term fixed interest rates. We cannot assess with certainty the medium- and long-term effects on global economic development. But the overall economic outlook has deteriorated significantly, in part as a result of the extensive sanctions imposed on Russia, the limitations on trade in goods, the increased energy prices, and the general energy supply shortage.

Coronavirus pandemic. The pandemic continues to have implications for the global economy in the reporting year. Although it has only had a limited negative impact on the telecommunications sector so far, if the pandemic were to re-escalate, it could lead to further supply-side shortages. Based on experience so far, we expect the coronavirus pandemic to only impact our business activities and performance indicators to a limited extent going forward.

For further information on economic situation overall, please refer to the section “The economic environment.” For more information on global economic developments and the associated business risks, please refer to the section “Risk and opportunity management.”