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

The qualities that mark us out as an anchor of stability in difficult times remain in demand in a geopolitically and macroeconomically challenging environment. Our results for 2023 and our sound plans for sustainable growth once again demonstrate these capabilities and the trust that is placed in them. In the reporting year, significant transactions were closed and we secured a majority stake in 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 vision.

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 (U.S. dollar exchange rate of USD 1.14):

  • 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 in 2024.
  • Earnings per share (adjusted for special factors) is expected to exceed EUR 1.75 in 2024.

For 2024, we expect to post the following year-on-year trends, assuming a comparable consolidated group and constant exchange rates (U.S. dollar exchange rate of USD 1.08):

  • Revenue is likely to increase in 2024. We also expect service revenue to increase.
  • Adjusted EBITDA AL is expected to be around EUR 42.9 billion in 2024. In the reporting year, adjusted EBITDA AL came in at EUR 40.5 billion; on a like-for-like basis, i.e., adjusted for comparability with the adjusted EBITDA AL forecast for 2024, adjusted EBITDA AL stood at EUR 40.6 billion. We expect adjusted core EBITDA AL to increase significantly in 2024.
  • Free cash flow AL is expected to amount to around EUR 18.9 billion in 2024. Free cash flow AL in 2023 was EUR 16.1 billion; on a like-for-like basis, i.e., adjusted for comparability with the free cash flow AL forecast for 2024, free cash flow AL stood at EUR 16.2 billion.
  • We are anticipating earnings per share (adjusted for special factors) of over EUR 1.75 in 2024.
AL – After Leases
Since the start of the 2019 financial year, we have taken the effects of the first-time application of IFRS 16 “Leases” into account when determining our financial performance indicators. “EBITDA after leases” (EBITDA AL) is calculated by adjusting EBITDA for depreciation of the right-of-use assets and for interest expenses on recognized lease liabilities. When determining “free cash flow after leases” (free cash flow AL), free cash flow is adjusted for the repayment of lease liabilities.