Statement of the Board of Management on business development in 2024
Bonn, February 18, 2025
Deutsche Telekom remained reliable and successful amid the challenging geopolitical and macroeconomic environment in the 2024 financial year. At our Capital Markets Day in October 2024, we were able to demonstrate that we achieved our medium-term corporate targets by 2024, even surpassing some of them. The course of growth continued in our operating segments, as shown by rising customer numbers and corresponding revenues.
We raised our full-year guidance for 2024 two times in the course of the year. Net revenue increased by 3.4 % to EUR 115.8 billion. High-value service revenue was up 3.9 % to EUR 96.5 billion. This is the result of the high popularity of our mobile and broadband offerings in particular. Adjusted EBITDA AL grew by 6.2 % to EUR 43.0 billion. The main reason for this increase is sound operational development and further enhanced cost efficiency. EBIT was down year-on-year and amounted to EUR 26.3 billion. In 2023, the result was boosted by the gain on deconsolidation from the sale of GD Towers.
Loss from financial activities decreased substantially, primarily as a result of the reversals of impairment losses on our investments in GD Towers and GlasfaserPlus. These impairment losses had to be recognized in the prior year mainly due to lower discount rates as a result of macroeconomic developments. Adjusted net profit increased substantially by 18.3 % to EUR 9.4 billion. Adjusted earnings per share increased to EUR 1.90.
ROCE fell slightly year-on-year to 8.5 %, due to a reduction in net operating profit after taxes (NOPAT). This was mainly down to the sale of GD Towers in the prior year, which was only partially offset by the aforementioned reversals of impairment losses.
Net debt increased from EUR 132.3 billion to EUR 137.3 billion. The majority of this increase is attributable to the share buy-back programs of T‑Mobile US and Deutsche Telekom AG, our dividend payments, and a stronger U.S. dollar. The strong increase in free cash flow (before dividend payments and spectrum investment) in particular had a reducing effect on net debt.
The trends in the industry, in particular on the European telecommunications markets, remain challenging due to ongoing competitive pressure and strict regulatory requirements. In order to succeed in the future, we invest systematically in the key to our success: our network infrastructure and our technology. In 2024, we made Group-wide investments (before spectrum) of EUR 16.0 billion. Including the spectrum payments, this figure was EUR 19.2 billion in the reporting year. In Europe, we remained focused on the parallel build-out of our broadband and mobile infrastructure (optical fiber and 5G). Our free cash flow AL (before dividend payments and spectrum investment) increased to EUR 19.2 billion. We are therefore still a solid investment-grade company with access to the international capital markets. The rating agency Moody’s upgraded our rating outlook in October 2024 from Baa1/stable to Baa1/positive.
As communicated at our 2024 Capital Markets Day, we are aiming for a new phase of growth going forward. Adjusted earnings per share (EPS) is expected to increase to around EUR 2.50 by 2027. We are continuing our attractive dividend policy of paying out 40 to 60 % of adjusted EPS each year for our shareholders. For the 2024 financial year, we will propose a dividend of EUR 0.90 for each dividend-bearing share. This year, the dividend will once again be paid out without any deduction of capital gains tax, and we expect this to be also the case in the years to come. We started our new 2025 share buy-back program with a total volume of up to EUR 2 billion on January 3, 2025.
The international stock markets continued to be dominated by buoyant share prices in 2024. 2024 was also a good year for the European telecommunications sector: The industry’s barometer, the Dow Jones STOXX® Europe 600 Telecommunications rose 20.7 % by the end of 2024. The T-Share closed 2024 up even more substantially by 32.8 %. On a total return basis, it was up by as much as 37.8 %. Our strategy of sustainable corporate governance is also paying off on the capital market: our share price rose to more than EUR 30 over the course of the 2024 financial year, and continues its upward trajectory.
Our goal is firmly in our sights: We want to become the Leading Digital Telco. At our 2024 Capital Markets Day, we presented our refined strategy, which has our flywheel at its center. It describes the effective mechanisms of our strategic priorities in the areas of Investments, Customers, Efficiencies, and Financials. It is to be accelerated using the dimensions of data and artificial intelligence, as well as global scaling. After all, we want to continue investing more than our competitors in the future. In this way, Deutsche Telekom can win over more and more people, and turn customers into fans by offering them the best products and the best services on the best network. This enables us to scale up and become more efficient. Building on this, we will improve our financial figures; higher profitability in turn enables higher investments.
For further information on our refined strategy and the flywheel, please refer to the section “Group strategy.”
At the same time, we are adhering to our values and convictions. Deutsche Telekom still stands for trust, quality, and innovation. Every single person in the Company contributes to making our promise a reality: Connecting your world.
All the details of the strategy presented at our 2024 Capital Markets Day can be found on our Investor Relations website.