44 Capital management

The overriding aim of Deutsche Telekom’s capital management is to strike a balance between the contrasting expectations of the following stakeholders, so that sufficient funding is available for an attractive dividend, debt repayment, responsible staff restructuring, and new investment in a sustainable and positive customer experience:

• Shareholders expect an appropriate, reliable return on their capital employed.
• Providers of debt capital expect an appropriate return and that Deutsche Telekom is able to repay its debts.
• Employees expect jobs that are secure and that any necessary staff restructuring will be done in a responsible manner.
• “Entrepreneurs within the enterprise” expect sufficient investment funding to be able to shape Deutsche Telekom’s future business and develop products, innovations, and services for the customer.
• Society expects Deutsche Telekom to do everything within its power to protect the environment, encourage fair and democratic co-existence, and shape the digital transformation in a responsible manner.

An important key performance indicator for the capital market communication with investors, analysts, and rating agencies is financial flexibility, which Deutsche Telekom determines based on relative debt, i.e., net debt to adjusted EBITDA. At 2.78x, we did not quite meet the target value for relative debt of ≤ 2.75x, mainly due to exchange rate effects, in particular from the translation of U.S. dollars into euros. Adjusted EBITDA and net debt are non-GAAP figures not governed by International Financial Reporting Standards, and their definition and calculation may vary from one company to another.

A further essential key performance indicator is the equity ratio, i.e., the ratio of shareholders’ equity to total assets in the consolidated statement of financial position. The equity ratio was 32.3 % as of December 31, 2024. The target range remains unchanged between 25 and 35 %. In addition, Deutsche Telekom maintains a liquidity reserve covering all maturities of the next 24 months.

For further information, please refer to the sections “Management of the Group” and “Development of business in the Group” in the combined management report.

The following table shows the calculation of net debt from the statement of financial position values.