Development of selected financial data
Net revenuea, b
- Net revenue increased by EUR 6.6 billion or 6.1 % to EUR 114.4 billion. In organic terms, it was on a par with the prior-year level. Service revenue increased by EUR 8.8 billion or 10.6 % to EUR 91.9 billion. In organic terms, it increased by EUR 3.3 billion or 3.7 %.
- Our United States segment recorded revenue growth of 11.3 %, mainly due to exchange rate effects. In organic terms, revenue declined by 1.3 % year-on-year due to lower terminal equipment revenues, partially offset by higher service revenues.
- Revenue in our Germany segment was up 1.9 % year-on-year, mainly due to the positive trend in service revenues.
- In our Systems Solutions segment, revenue increased by 1.4 % year-on-year, mainly driven by growth in the Digital Solutions, Road Charging, and Advisory portfolio units.
- In our Europe segment, revenue decreased by 1.2 % year-on-year, mainly due to the sale of the Romanian fixed-network business. In organic terms, however, revenue increased by 3.9 %, primarily as a result of the strong performance in mobile business.
- Revenue in our Group Development segment declined by 46.0 % due to the sale of T‑Mobile Netherlands. In organic terms, revenue increased by 6.5 % on the back of operationally and structurally driven growth at the GD Towers business entity.
billions of €
EBITDA AL (adjusted for special factors)a
- Adjusted EBITDA AL increased by EUR 2.9 billion or 7.7 % to EUR 40.2 billion. In organic terms, it increased by EUR 0.7 billion or 1.7 %.
- In our United States segment, adjusted EBITDA AL increased by 12.9 %, essentially due to exchange rate effects. In organic terms, it increased slightly year-on-year by 0.1 %. Adjusted core EBITDA AL increased by EUR 4.4 billion or 21.9 % to EUR 24.3 billion.
- In the Systems Solutions segment, adjusted EBITDA AL grew by 4.8 % and by 0.9 % in organic terms. Efficiency effects and increased revenue in the growth areas contributed to this trend.
- In the Germany segment, adjusted EBITDA AL was up 3.2 %, driven by high-value revenue growth and enhanced cost efficiency.
- Adjusted EBITDA AL in the Europe segment decreased by 1.1 %, but increased by 3.1 % in organic terms, mainly due to a positive net margin.
- Adjusted EBITDA AL in the Group Development segment declined by 26.2 %, but increased by 26.4 % in organic terms driven by the consistent positive development of the GD Towers business entity.
- At 35.1 %, the Group’s adjusted EBITDA AL margin was above the prior-year level. The margin was 40.1 % in Germany, 35.5 % in Europe, and 34.0 % in the United States.
billions of €
Profit/loss from operations (EBIT)a
- EBIT increased by EUR 3.1 billion or 23.8 % to EUR 16.2 billion.
- Special factors had a negative effect of EUR 4.2 billion on EBITDA AL (2021: EUR -3.4 billion). Deconsolidations, acquisitions, and disposals resulted in expenses totaling EUR 2.3 billion. Expenses for staff-related measures amounted to EUR 1.2 billion. In addition, impairment losses of EUR 0.3 billion were recognized on right-of-use assets, and other special factors affecting EBITDA AL were recognized in the same amount.
- Impairment losses increased by EUR 0.9 billion to EUR 1.2 billion and primarily related to the United States, Systems Solutions, and Europe segments. In the United States, the impairment losses mainly related to the former Sprint’s fiber-optic-based wireline assets and were attributable to the sale of the business.
- Depreciation and amortization decreased by EUR 0.5 billion, due in part to the suspension of depreciation and amortization as a result of the business entities T‑Mobile Netherlands and GD Towers being held for sale on account of corresponding sales agreements.
billions of €
Net profit
- Net profit increased by EUR 3.8 billion or 91.6 % to EUR 8.0 billion.
- Our loss from financial activities decreased from EUR 5.1 billion to EUR 4.5 billion, with other financial income/expense improving in particular due to the measurement of derivatives, in particular as a result of the forward transaction to hedge the price of acquiring shares in T‑Mobile US shares, and the stock options to buy shares in T‑Mobile US. The interest component from the measurement of provisions and liabilities also increased due to the higher interest rate level. By contrast, finance costs increased and the share of profit/loss of associates and joint ventures accounted for using the equity method decreased.
- Tax expense came to EUR 2.2 billion compared with EUR 1.8 billion in the prior year.
- Profit attributable to non-controlling interests decreased from EUR 1.9 billion to EUR 1.5 billion.
- Adjusted earnings per share amounted to EUR 1.83 compared with EUR 1.22 in the prior year.
billions of €
For a reconciliation for the organic development of key figures for the prior year, please refer to the section “Additional information.”
For further information on the financial data of our segments, please refer to the section “Development of business in the operating segments” in the combined management report and to the IR back-up on our Investor Relations website.
ROCE
- ROCE (return on capital employed) increased by 0.4 percentage points to 4.5 %. This was due to stronger percentage growth in net operating profit after taxes (NOPAT) than in the average amount of net operating assets (NOA) over the year.
- The positive development in NOPAT is mainly due to the increase in adjusted EBITDA AL. Higher total expenses classified as special factors had an offsetting effect.
- The increase in NOA is due in part to the acquisition of additional spectrum licenses by T‑Mobile US and the associated increase in intangible assets. In addition, the development of NOA reflects our consistently high investment volume.
%
Net debtc
- Net debt increased by EUR 10.3 billion from EUR 132.1 billion to EUR 142.4 billion.
- The increase was attributable in particular to the modification of the arrangements between T‑Mobile US and Crown Castle, which resulted in an increase of EUR 6.6 billion in right-of-use assets and of EUR 0.8 billion in property, plant and equipment. This effect is mirrored by growth in net debt of EUR 7.4 billion. Exchange rate effects (EUR 5.9 billion), additions of lease liabilities and right-of-use assets (EUR 4.6 billion), the dividend payment – including to non-controlling interests – (EUR 3.4 billion), spectrum acquisitions primarily in the United States (EUR 3.2 billion), the share buy-back program at T‑Mobile US (EUR 3.0 billion), and the increase of the stake in T‑Mobile US (EUR 2.2 billion) also had an increasing effect.
- The main factors reducing net debt were free cash flow (before dividend payments and spectrum investment) of EUR 15.2 billion and the corporate transactions involving T‑Mobile Netherlands and GlasfaserPlus totaling EUR 4.7 billion.
billions of €
Cash capex (before spectrum investment)
- Cash capex (before spectrum investment) increased by EUR 3.0 billion to EUR 21.0 billion.
- The increase is largely attributable to the accelerated 5G network build-out in the United States, the integration of Sprint, and to exchange rate effects. In the Germany segment, too, our capital expenditures for the fiber-optic and 5G build-out were higher compared with the prior year.
- By contrast, cash capex (including spectrum investment) decreased by EUR 2.3 billion to EUR 24.1 billion. Spectrum licenses were purchased for EUR 3.1 billion in the reporting year, in particular mobile licenses in the United States segment. Another EUR 0.1 billion was paid for spectrum in the Europe segment. In the prior year, cash capex had included the cash outflows for mobile licenses – primarily at the C‑band auction in the United States segment – totaling EUR 8.4 billion.
billions of €
Free cash flow AL (before dividend payments and spectrum investment)d
- Free cash flow AL (before dividend payments and spectrum investment) increased by EUR 2.7 billion to EUR 11.5 billion.
- The basis for this increase was the strong business performance in the operating segments. Exchange rate effects also had an increasing effect. Net cash from operating activities increased by EUR 3.6 billion. The decrease of EUR 1.8 billion in the principal portion of repayment of lease liabilities, primarily in the United States, also had a positive effect.
- By contrast, EUR 3.0 billion higher cash capex (before spectrum investment), higher cash outflows in connection with the integration of Sprint, and an increase of EUR 0.4 billion in net interest payments had a decreasing effect.
billions of €
For further information, please refer to the section “Development of business in the Group” in the combined management report.
For further information on the level of achievement of our main financial and non-financial key performance indicators, please refer to the relevant section “Development of business in the Group – Comparison of the Group’s expectations with actual figures” in the combined management report.
a aSince the third quarter of 2022, the GD Towers business entity, which operates the cell tower business in Germany and Austria, assigned to the Group Development operating segment, has been recognized in the consolidated financial statements as a discontinued operation. However, both here and in the combined management report we continue to include the contributions by GD Towers in the results of operations according to the management approach. For information on the agreement with DigitalBridge and Brookfield on GD Towers, please refer to the section “Group organization” in the combined management report and to the section “Summary of accounting policies” in the consolidated financial statements.
b bThe prior-year comparatives were adjusted retrospectively to take account of changes to the principal/agent policy regarding the recognition of gross and net revenues as of the third quarter of 2022. For further information, please refer to the section “Development of business in the Group” in the combined management report and to the section “Changes in accounting policies and changes in the reporting structure” in the consolidated financial statements.
c cIncluding net debt included under liabilities directly associated with non-current assets and disposal groups held for sale.
d dBefore interest payments for zero-coupon bonds and before termination of forward-payer swaps at T‑Mobile US (both in 2020).