Expectations for the Group

Expectations up to 2026. We expect profitable growth to continue over the next two years. This will provide a sound basis for achieving our financial ambitions – as communicated at our Capital Markets Day in October 2024.

We expect our financial performance indicators to develop as follows in 2025 and 2026 on an organic basis, i.e., on a like-for-like basis with the prior year:

• We expect revenue to increase both in 2025 and in 2026 on the back of the positive development of service revenue. The primary driver of this trend will be the United States and Europe operating segments, where we likewise expect revenue to grow in both 2025 and 2026. We expect revenue in the Germany and Systems Solutions operating segments to increase slightly in both 2025 and 2026.
• Service revenue is projected to increase in both 2025 and 2026. This trend will be influenced by the growth expected in the United States and Europe operating segments for 2025 and 2026. In the Germany and Systems Solutions operating segments, we expect a slight increase in both 2025 and in 2026.
• Adjusted EBITDA AL is expected to increase to around EUR 44.9 billion in 2025 and to increase substantially in 2026. In particular, the favorable revenue trend and the realization of efficiency measures will have a positive impact.
• We anticipate a slight decrease in profit/loss from operations (EBIT) in 2025 on account of the impairment reversal that was recognized as a special factor in 2024 on FCC licenses held by T‑Mobile US. We expect a sharp increase in 2026. Expected EBIT will benefit overall from the trend in adjusted EBITDA AL.
• ROCE is expected to decrease in 2025 before rising sharply again in 2026. The expected initial decline is due to the effects described for the development of EBIT, as well as further impairment reversals recognized in 2024 with a positive effect on the carrying amounts of the investments in GD Towers and in GlasfaserPlus. We expect to achieve our target for ROCE to be higher than the expected weighted average cost of capital (WACC) for future years.
• Our investments – measured in terms of cash capex (before spectrum investment) – are expected to increase to around EUR 17.1 billion in 2025. In 2026, cash capex (before spectrum investment) is expected to remain stable. We want to continue investing heavily in building out our network infrastructure in Germany, the United States, and Europe in order to safeguard our technology leadership in the long term.
• Free cash flow AL (before dividend payments and spectrum investment) is expected to reach around EUR 19.9 billion in 2025. We expect a further increase in free cash flow AL in 2026 due to sound operational development.
• At the end of 2024, we had the following ratings: BBB+ with a stable outlook (Standard & Poor’s and Fitch), and Baa1 with a positive outlook (Moody’s). Maintaining an investment grade rating within the A– to BBB range will enable us to retain undisputed access to the international capital markets and is thus a key component of our finance strategy.
• We are anticipating earnings per share (adjusted for special factors) of around EUR 2.00 in 2025, based on the sound expected business development. We expect to see adjusted earnings per share increase sharply in 2026.

Our debt issuance program puts us in a position to place issues in the international capital markets at short notice. T‑Mobile US is being refinanced primarily in the form of senior unsecured notes. We can also issue short-term papers in the money market through our Deutsche Telekom and T‑Mobile US commercial paper programs.

Bonds and other financial liabilities in the total amount of EUR 5.4 billion and EUR 8.4 billion will fall due for repayment in 2025 and 2026, respectively, of which around EUR 3.9 billion and EUR 6.2 billion, respectively, relate to T‑Mobile US. A number of T‑Mobile US bonds include issuer termination rights. If the premature termination and refinancing of these bonds result in economic gains, this could give rise to further refinancing requirements. We plan to issue new bonds in various currencies. The exact financing transactions will depend on developments in the international finance markets. We also intend to cover part of our liquidity requirements by issuing commercial paper. In order to cover part of the refinancing needs in 2025, Deutsche Telekom AG issued bonds in January 2025 with a volume of EUR 1.5 billion and T‑Mobile US issued bonds in February 2025 with a volume of EUR 2.8 billion.

We want to continue leveraging economies of scale and synergies through suitable partnerships or appropriate acquisitions in our footprint markets. There are no plans, however, to expand into emerging markets. We will continue to subject our existing partnerships and equity investments to regular strategic reassessments with a view to maximizing the value of our Company.

If the economic situation should deteriorate or any unforeseen state or regulatory interventions arise, the expectations expressed here may change accordingly. Given the level of macroeconomic uncertainty, we also cannot rule out the possibility of deviations.

For further information on the business risks, please refer to the section “Risk and opportunity management.”

The following tables summarize the forecasts for our financial and non-financial performance indicators up to 2026. They assume a comparable consolidated group and constant exchange rates, i.e., an organic basis. In order to create a comparable basis with the forecast period, the results of the 2024 financial year have been adjusted for significant changes in the composition of the Group which have been included in the planning, and for changes in the organizational structure in the pro forma presentation. Thus, the expectations for 2025 are based on the pro forma figures for 2024; expectations for 2026 are based on expectations for 2025. To indicate the intensity and trends of our qualified comparative forecasts, we apply the following aspects: strong decrease, decrease, slight decrease, stable trend, slight increase, increase, strong increase.

For further information on the expected development of the financial performance indicators of our operating segments, please refer to the section “Expectations for the operating segments.”

For further information on the expected development of the non-financial performance indicators of our operating segments, please refer to the section “Expectations for the operating segments.”

Our customer satisfaction – which is expressed using the TRI*M index performance indicator – is expected to remain stable in both 2025 and 2026 against the baseline that is already at a very high level in the benchmark and has been recalculated for 2025. The values achieved in particular for our Germany and Systems Solutions operating segments, as well as across most of the Europe operating segment, put us in a leading position relative to the respective benchmarks. With the exception of the Europe operating segment, where our goal is to post slight improvements in some areas, we plan to maintain these leading positions in the benchmark for 2025.

Having achieved a high level of 77 points – on a scale of 0 to 100 – on the engagement score in the 2024 pulse survey, we expect the positive response of our employees regarding our Company to remain stable in the next surveys both in 2025 and 2026.

We expect our energy consumption to increase slightly at Group level in both 2025 and 2026, and to remain stable in the same period for Deutsche Telekom excluding T‑Mobile US. In both 2025 and 2026, we expect CO₂ emissions (Scope 1 and 2) to decline both at Group level and excluding T‑Mobile US. Since 2021, 100 % of the electricity requirements for all Group units have been met from renewable sources. As such, the majority of emissions have been eliminated.

For further information on our ESG KPIs, please refer to the section “Combined sustainability statement.”

Our planning is based on the following exchange rates:

Expectations for Deutsche Telekom AG. The development of business at Deutsche Telekom AG, the Group’s parent company, is reflected particularly in its service relationships with its subsidiaries, the results of the subsidiaries’ domestic reporting units, and other income from subsidiaries, and from associated and related companies. In other words, our subsidiaries’ results from operations and the opportunities and challenges they face are key factors shaping the future development of Deutsche Telekom AG’s figures. Accordingly, in addition to our expectations for the Group, the expectations described below concerning the operating segments’ revenue and earnings – such as strong competition, regulatory intervention, market and economic expectations, etc. – have an impact on our expectations concerning the development of Deutsche Telekom AG’s future net income. Furthermore, net income can be affected by the use of hidden reserves in the course of making changes to the investment structure or as a result of capital repayments by subsidiaries.

Since 2024, subject to approval by the relevant bodies and the fulfillment of other legal requirements, the amount of the dividend is based on a dividend payout ratio of 40 to 60 % of adjusted earnings per share, with a lower limit fixed at EUR 0.60 per dividend-bearing share. For the 2024 financial year, we propose a dividend of EUR 0.90 for each dividend-bearing share.

While the dividend for the 2023 financial year was paid out in the planned amount and, as forecast, there were no significant changes in the contributions of the subsidiaries to operating results, Deutsche Telekom AG’s unappropriated net income increased significantly against the prior-year forecast. This development is mainly influenced by positive effects from the intragroup aggregation of shares in the multi-level holding structure for the investment in T‑Mobile US, as well as by an intragroup capital repayment, each by means of using hidden reserves.

Taking into account the proposed dividend payments totaling EUR 4.4 billion and barring any significant changes to the contributions of subsidiaries to earnings, we expect a decline in unappropriated net income in 2025, mainly due to unappropriated net income carried forward of EUR 24.7 billion. For the 2025 financial year, we expect an unappropriated net income that will allow the distribution of a dividend of 40 to 60 % of adjusted earnings per share.