Results of operations of the Group ^a

In order to increase the informative value of the prior-year comparatives based on changes to the Company’s structure or exchange rate effects, we also describe selected figures in organic terms, by adjusting the figures for the prior year for changes in the composition of the Group, exchange rate effects, and other effects. Changes in the composition of the Group related mainly to the acquisition of Kaʼena as of May 1, 2024 and the sale of the Wireline Business as of May 1, 2023 in the United States operating segment, as well as the sale of GD Towers as of February 1, 2023 in the Group Development operating segment.

Revenue, service revenue

In the reporting year, we generated net revenue of EUR 115.8 billion, which was 3.4 % or EUR 3.8 billion up on the prior-year level. In organic terms, revenue increased by 3.3 % against the prior-year level, with the changes in the composition of the Group having a net increasing effect of EUR 0.2 billion. High-value service revenue in the Group increased by EUR 3.6 billion or 3.9 % year-on-year to EUR 96.5 billion. In organic terms, service revenue increased by 3.7 %.

Revenue in our domestic market of Germany was up on the prior-year level, increasing by 2.1 %. This was primarily driven by growth in service revenues in the fixed-network core business, mainly due to broadband and IT business, and in mobile communications. In our United States operating segment, revenue was up 3.6 % against the prior-year level. In organic terms, revenue increased by 3.3 %, with an increase in service revenues mainly resulting from higher postpaid and prepaid revenues. Terminal equipment revenues increased slightly. In our Europe operating segment, revenue increased by 4.7 % year-on-year. In organic terms, it increased by 5.2 %, primarily due to the increase in service revenues in the mobile and fixed-network business. Contract customer additions also had positive effects on terminal equipment revenues. Revenue in our Systems Solutions operating segment was up 2.8 % year-on-year, mainly due to growth in the Digital, Cloud, and Road Charging areas.

For further information on revenue development in our segments, please refer to the section “Development of business in the operating segments.”

Contribution of the segments to net revenue ^{a, b}

%

Breakdown of revenue by region

%

Breakdown of revenue by region

%

^a For further information, please refer to Note 38 “Segment reporting” in the notes to the consolidated financial statements.
^b Following the sale of the GD Towers business entity in the prior year, the Group Development operating segment no longer provides a significant contribution to net revenue.

Our United States operating segment made by far the largest contribution to net revenue, with 64.8 % (2023: 64.7 %). The proportion of net revenue generated internationally decreased to 76.3 % (2023: 77.0 %).

Adjusted EBITDA AL, EBITDA AL

Adjusted EBITDA AL increased year-on-year by EUR 2.5 billion or 6.2 % to EUR 43.0 billion in the reporting year. In organic terms, adjusted EBITDA AL increased by 6.0 %, with the changes in the composition of the Group having a net increasing effect of EUR 0.1 billion. Adjusted core EBITDA AL, i.e., excluding terminal equipment leases in the United States, increased by EUR 2.7 billion or 6.8 % to EUR 42.9 billion.

Our Germany operating segment contributed to the increase thanks to high-value revenue growth and improved cost efficiency with 2.7 % higher adjusted EBITDA AL. Adjusted EBITDA AL in our United States operating segment increased by 8.1 %. In organic terms, it increased by 7.4 %, mainly due to higher service revenues, slightly higher terminal equipment revenues, and lower overall costs. Adjusted core EBITDA AL at T‑Mobile US increased by EUR 2.3 billion or 8.9 % to EUR 28.5 billion. In our Europe operating segment, adjusted EBITDA AL increased by 7.7 %. In organic terms, it increased by 8.1 %, with a positive net margin sufficient to more than offset the higher indirect costs. In our Systems Solutions operating segment, adjusted EBITDA AL increased by 14.8 %, mainly due to revenue growth in the Cloud and Digital areas.

Our EBITDA AL decreased significantly by EUR 7.3 billion year-on-year to EUR 43.8 billion. Special factors affecting EBITDA AL decreased by EUR 9.9 billion to EUR 0.8 billion. In the prior year, net income of EUR 12.2 billion had been recorded as special factors under effects of deconsolidations, disposals and acquisitions; EUR 12.9 billion of this related to the deconsolidation of GD Towers, which was partially offset by expenses of EUR 1.0 billion primarily in connection with integration costs incurred as a result of the business combination of T‑Mobile US and Sprint. In the reporting year, net expenses of EUR 0.7 billion were recorded under effects of deconsolidations, disposals, and acquisitions. This included the expenses from the forgone contingent consideration receivable from IFM Global Infrastructure Fund, as well as additional integration expenses, offset by the extension fees received from DISH for the options to buy mobile spectrum in the United States operating segment, which have now expired. The integration of Sprint was largely completed by the end of the second quarter of 2024. Expenses incurred in connection with staff restructuring totaled EUR 1.0 billion, compared with EUR 1.5 billion in the prior year. The prior-year figure included expenses of EUR 0.4 billion in connection with a program to reduce the workforce in the United States operating segment. Reversals of impairment losses recorded as special factors of EUR 2.6 billion resulted from the reversal in full of impairment losses recognized in prior years on FCC licenses at T‑Mobile US.

For further information on the development of (adjusted) EBITDA AL in the segments, please refer to the section “Development of business in the operating segments.”

For further information on the reversal of the impairment losses on FCC licenses, please refer to Note 6 “Intangible assets in the notes to the consolidated financial statements.”

Profit/loss from operations (EBIT)

Group EBIT decreased to EUR 26.3 billion, down EUR 7.5 billion against the prior-year level. This change was primarily due to the deconsolidation gain from the sale of GD Towers in the prior year.

At EUR 24.0 billion, depreciation, amortization and impairment losses on intangible assets, property, plant and equipment, and right-of-use assets were at the prior-year level, with depreciation and amortization up slightly from EUR 23.8 billion to EUR 23.9 billion, primarily in the Germany operating segment. Impairment losses amounted to EUR 0.1 billion in the reporting year and mainly related to non-current assets in the Europe operating segment. These related to the Romania cash-generating unit, which operates in the structurally challenging and highly competitive Romanian market. The impairment losses recognized in the prior year amounted to EUR 0.2 billion and related mainly to assets in the Systems Solutions operating segment and the Group Headquarters & Group Services segment.

For further information on depreciation, amortization and impairment losses, please refer to Note 27 “Depreciation, amortization and impairment losses” in the notes to the consolidated financial statements.

Profit before income taxes

Profit before income taxes decreased by EUR 2.0 billion to EUR 23.0 billion. Loss from financial activities decreased year-on-year by EUR 5.5 billion to EUR 3.3 billion, mainly due to the EUR 5.3 billion increase in the share of profit of associates and joint ventures included in the consolidated financial statements using the equity method to EUR 2.5 billion. This was mainly attributable to reversals of impairment losses in the reporting year of EUR 2.1 billion and EUR 0.3 billion, respectively, on the carrying amounts of the investments in GD Towers and in GlasfaserPlus. These reversals of impairment losses were, at GD Towers, due to lower discount rates and improved planning, and at GlasfaserPlus, almost entirely due to lower discount rates. In the prior year, by contrast, impairment losses of EUR 2.6 billion and EUR 0.1 billion, respectively, were recognized on the carrying amounts of the investments in GD Towers and in GlasfaserPlus. Other financial expense improved by EUR 0.2 billion to EUR -0.2 billion in particular in connection with the interest component from the measurement of provisions and liabilities. This improvement was partly attributable to the subsequent measurement using actuarial principles of the present value of the provision recognized for the Civil Service Health Insurance Fund (Postbeamtenkrankenkasse – PBeaKK). By contrast, gains/losses from financial instruments decreased by EUR 0.2 billion. Finance costs remained stable at EUR 5.7 billion.

Net profit, adjusted net profit

Net profit decreased year-on-year by EUR 6.6 billion to EUR 11.2 billion. This was primarily due to the aforementioned deconsolidation gain from the sale of GD Towers in the prior year. Tax expense increased by EUR 2.3 billion to EUR 5.3 billion. In the prior year, the tax rate was significantly reduced by the realization of non-taxable income from the sale of GD Towers and by deferred tax effects arising from the sale-and-leaseback transaction concluded in this context. In addition, the tax rate was increased by impairment losses on GD Towers in the prior year not to be considered for tax purposes, and reduced by the reversal of impairment losses in the reporting year. Profit attributable to non-controlling interests increased by EUR 2.2 billion to EUR 6.4 billion. This increase was primarily attributable to our United States operating segment. Net profit adjusted for special factors amounted to EUR 9.4 billion compared with EUR 7.9 billion in the prior year.

For further information on tax expense, please refer to Note 32 “Income taxes” in the notes to the consolidated financial statements.

Earnings per share, adjusted earnings per share

Earnings per share is calculated as net profit divided by the weighted average number of ordinary shares outstanding, which totaled 4,938 million as of December 31, 2024. This resulted in earnings per share of EUR 2.27, compared with EUR 3.57 in the prior year, which was mainly affected by the proceeds from the sale of GD Towers. Earnings per share adjusted for special factors affecting net profit amounted to EUR 1.90 compared with EUR 1.60 in the prior year.

Employees

The Group’s headcount fell slightly by 0.7 % compared with the end of the prior year. In our Germany operating segment, the number of employees declined by 4.0 % against the end of the prior year. Employees continued to take up socially responsible instruments as part of staff restructuring activities, such as dedicated retirement and phased retirement. The total number of full-time equivalent employees in the United States operating segment increased by 4.0 % compared to December 31, 2023, primarily due to an increase in retail employees to support T‑Mobile US’ growing customer base, and the Ka’ena Acquisition in the second quarter of 2024. In our Europe operating segment, the headcount was down slightly by 0.5 % compared with the end of 2023, in particular in Greece. The headcount in our Systems Solutions operating segment was down 1.3 % against year-end 2023, mainly due to a workforce reduction in traditional infrastructure business. The headcount in the Group Headquarters & Group Services segment was down 5.5 % compared with the end of the prior year, mainly due to the continued staff restructuring measures, in particular within the Technology and Innovation Board of Management department and at Vivento.

Reconciliations of financial performance indicators from the IFRS consolidated financial statements

A reconciliation of the definition of EBITDA to the “after leases” indicator (EBITDA AL) can be found in the following table:

The following table presents the reconciliation of net profit to net profit adjusted for special factors:

The following table presents a reconciliation of EBITDA AL, EBIT, and net profit to the respective figures adjusted for special factors: