Results of operations of Deutsche Telekom AG

Operating results declined from EUR 10.5 billion to EUR -1.2 billion, due mainly to a year-on-year decrease in other operating income of EUR 12.4 billion and a EUR 0.2 billion decrease in net revenue. In particular, a decline in other operating expenses of EUR 1.1 billion had an offsetting effect.

The decrease in net revenue totaling EUR 0.2 billion is largely due to lower intragroup cost transfers from hiring out employees as well as from renting and leasing out property.

EUR 0.4 billion of other operating income in the reporting year relates to the write-up on the shareholding in Hellenic Telecommunications Organization S.A. (OTE), Marousi. In the previous year, other operating income had been largely comprised of book gains of EUR 12.8 billion arising from the use of hidden reserves in connection with the intragroup aggregation of shares.

The increase in personnel costs is largely attributable to expenses of EUR 0.3 billion for early retirement arrangements for civil servants. The statutory regulation on which these arrangements are based has been extended through the end of 2026 and its application for the 2025 and 2026 financial years resolved. A lower number of civil servants and employees had an offsetting effect.

Other operating expenses decreased by EUR 1.1 billion. In the previous year, this item included expenses of EUR 0.8 billion attributable to a reduction in shares in affiliated companies in connection with the capital repayment by the indirect subsidiary Deutsche Telekom Holding B.V., Maastricht. Lower expenses from derivatives also contributed EUR 0.2 billion to this decline.

Net financial income decreased by EUR 5.5 billion to EUR 5.2 billion, due primarily to a decrease of EUR 5.7 billion in income related to subsidiaries, associated and related companies. Net interest expense improved slightly to EUR 0.7 billion.

Income related to subsidiaries, associated and related companies of EUR 5.8 billion (2024: EUR 11.5 billion) was positively affected in the reporting year, in particular by profits transferred by Telekom Deutschland GmbH, Bonn, of EUR 5.3 billion (2024: EUR 4.9 billion) and by Deutsche Telekom Towers Holding GmbH, Bonn, of EUR 0.6 billion (2024: EUR 0.1 billion). The transfer of losses of EUR 0.9 billion (2024: EUR 0.9 billion) had an offsetting effect. Transfers of operating profits were up slightly in the reporting year.

Income related to subsidiaries, associated and related companies was positively affected in the reporting year by the operating business of the subsidiaries and in particular by the distribution of profit by the indirect subsidiary GD Towers Holding GmbH, Bonn. The resulting income of EUR 0.5 billion was transferred to Deutsche Telekom AG through the shareholder Deutsche Telekom Towers Holding GmbH, Bonn. The prior-year figure for income related to subsidiaries, associated and related companies, which was nearly twice as high, was affected in particular by the capital repayment of the indirect subsidiary Deutsche Telekom Holding B.V., Maastricht, which directly holds the shares in T‑Mobile US. The capital repayment generated income from the use of a portion of hidden reserves of EUR 6.5 billion, applying IDW ERS HFA 13 as amended, at the level of the shareholder T‑Mobile Global Holding GmbH, Bonn, which due to the multi-level holding structure was reflected in the profit transfers to T‑Mobile Global Zwischenholding GmbH, Bonn, and to Deutsche Telekom AG.

Despite a drop in net income of EUR 17.4 billion, income taxes were up on the prior-year figure. The positive one-time effects from intercompany transactions included in net income for the previous year were tax-neutral.

Other tax expense of EUR 13 million resulted in net income of EUR 3.2 billion in the 2025 financial year. Taking into account EUR 24.7 billion in unappropriated net income carried forward, unappropriated net income totaled EUR 28.0 billion (prior year: EUR 29.1 billion).