Finance strategy
We presented our strategy for the years 2024 through 2027 at the Capital Markets Day in October 2024. For investors, Deutsche Telekom continues to pursue an attractive and reliable finance strategy. Excellent financial figures underpin our investments and unlock further customer growth. In parallel, we constantly strive to enhance efficiency.
Our finance strategy through 2027
Part of our finance strategy is to achieve our target financial ratios – relative debt (ratio of net debt to adjusted EBITDA) and equity ratio – along with a liquidity reserve that covers our maturities of the coming 24 months at least. With these clear statements we intend to maintain our rating in a corridor from A- to BBB and safeguard undisputed access to the capital market.
There is an attractive and sustainable dividend policy for shareholders, which is subject to approval by the relevant bodies and the fulfillment of other legal requirements. Starting from the 2024 financial year, the amount of the dividend continues to be 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, as announced in October 2024, we propose a dividend of EUR 0.90 for each dividend-bearing share. This equates to 47.3 % of adjusted earnings per share. This figure is set to rise from the 2023 level of EUR 1.60 to around EUR 2.5 by 2027. We thus offer our shareholders both an attractive return and a high level of planning reliability. As in previous years the dividend for the 2024 financial year will once again be paid out without deduction of capital gains tax.
At the 2024 Capital Markets Day, Deutsche Telekom AG’s Board of Management announced plans for total shareholder remuneration in 2025 of up to EUR 6.4 billion, including share buy-backs totaling up to EUR 2 billion. The buy-back commenced on January 3, 2025 and will be carried out in several tranches through December 31, 2025.
2024 Capital Markets Day: Ambition level a up to 2027
b Before dividend payments and spectrum investment.
c The ambition level is based on the organic figure for 2023, i.e., not including the gain on deconsolidation from the sale of GD Towers effective February 1, 2023.
With the strategy presented at the 2024 Capital Markets Day, we are aiming for a new phase of growth up to 2027: We expect average annual growth of around 4 % in both revenue and service revenue, and of 4 to 6 % in adjusted EBITDA AL. Our investments (Deutsche Telekom excluding T‑Mobile US) excluding expenses for spectrum are expected to account for around 21 % of service revenues in 2027. The scope for investment is to be used to further roll out our broadband infrastructure and to accelerate the transformation of the Company. In mobile communications, the infrastructure build-out will focus on the 5G standard and, in the fixed network, mainly on our continued build-out of fiber-optic infrastructure. The finance strategy supports the transformation of our Group into the Leading Digital Telco. In order to generate a sustainable increase in value, we intend to earn at least our cost of capital. We plan to meet this target by optimizing the utilization of our non-current assets on the one hand, and pursuing strict cost discipline and profitable growth on a sustainable basis on the other (ROCE 2024: 8.5 %). Growth is driven by the enhancement of our business model. Key factors in this are leveraging global economies of scale and the systematic use of artificial intelligence and data.
For further information on the expected development of business in 2025 and 2026, please refer to the section “Forecast.”
In order to set and achieve our strategic goals more effectively, we pursue a Group-wide, value-oriented performance management approach, which we explain in the section “Management of the Group.”