Deutsche Telekom at a glance

Net revenue

Net revenue increased by 2.3 percent to EUR 19.9 billion. Excluding exchange rate effects, net revenue increased by EUR 0.2 billion or 1.1 percent.
Our United States operating segment recorded revenue growth of 3.7 percent. On a U.S. dollar basis, revenue increased slightly by 0.7 percent, due on the one hand to our ongoing success in the United States, and on the other to declines in terminal equipment revenue as a result of the impact of the coronavirus pandemic.
Our Germany operating segment recorded a slight increase in revenue of 0.9 percent and revenue in our Europe operating segment also edged up by 0.4 percent.
Revenue growth of 3.8 percent at our Group Development operating segment was attributable to operational growth at T‑Mobile Netherlands and DFMG.

Adjusted EBITDA AL rose by 10.2 percent to EUR 6.5 billion, with contributions from all operating segments. Excluding exchange rate effects, our adjusted EBITDA AL increased by EUR 0.5 billion or 9.0 percent.
Adjusted EBITDA AL in our United States operating segment increased by 18.0 percent. In U.S. dollars, this constituted growth of 14.5 percent in our U.S. operations.
Our Germany operating segment recorded an increase in adjusted EBITDA AL of 2.7 percent and our Europe operating segment an increase of 1.9 percent. Substantial increases in adjusted EBITDA AL were likewise recorded by the Systems Solutions and Group Development operating segments – the latter also due to positive synergies from the acquisition of Tele2 Netherlands.
At 32.8 percent, the Group’s adjusted EBITDA AL margin increased by 2.3 percentage points against the prior-year level. The adjusted EBITDA AL margin was 40.0 percent in Germany, 33.2 percent in Europe, and 31.1 percent in the United States.

EBIT increased from EUR 2.3 billion to EUR 2.5 billion.
EBITDA AL was negatively affected by special factors of EUR 0.6 billion compared to expenses of EUR 0.4 billion in the prior-year period. Expenses incurred in connection with staff-related measures were up slightly on the prior-year period. In connection with the coronavirus pandemic, expenses of EUR 0.1 billion were classified as special factors in the United States operating segment. As in the first quarter of the prior year, expenses of EUR 0.1 billion incurred in connection with the approval process for the business combination with Sprint were recorded.
At EUR 4.4 billion, depreciation, amortization and impairment losses were EUR 0.2 billion higher than in the prior-year period, due to the consistently high level of investment over the last few years.

Net profit is stable at EUR 0.9 billion.
Our loss from financial activities increased by EUR 0.6 billion to EUR 1.0 billion, mainly due to negative measurement effects from embedded derivatives at T‑Mobile US.
At EUR 0.5 billion, the tax expense was the same as in the prior-year period.
Profit attributable to non-controlling interests decreased year-on-year by EUR 0.2 billion to EUR 0.2 billion.
Adjusted earnings per share increased slightly to EUR 0.27 from EUR 0.25 in the prior-year period.

The decrease in the equity ratio from 27.1 percent at year-end 2019 to 26.4 percent mainly results from the increase of EUR 3.0 billion or 1.7 percent in total assets/total liabilities and shareholders’ equity.
Shareholders’ equity decreased from EUR 46.2 billion as of December 31, 2019 to EUR 45.9 billion. The carrying amount was reduced by the remeasurement of defined benefit plans (EUR 1.0 billion) and by actuarial losses from hedging instruments (EUR 0.9 billion), mainly in connection with forward-payer swaps concluded for borrowings at T‑Mobile US.
In particular, profit after taxes (EUR 1.1 billion), currency translation effects recognized directly in equity (EUR 0.2 billion), income taxes relating to components of other comprehensive income (EUR 0.2 billion), and capital increases from share-based payment (EUR 0.1 billion) had an increasing effect.

Cash capex (before spectrum investment) decreased by EUR 0.3 billion to EUR 3.4 billion, mainly due to the very high level of investment in the United States operating segment in the prior-year period.
Cash capex (including spectrum investment) decreased from EUR 3.8 billion to EUR 3.6 billion. In the United States operating segment, an advance payment of EUR 0.2 billion was made in the reporting period for the acquisition of FCC mobile licenses in connection with the auction of mobile licenses which ended in March 2020. The prior-year figure included EUR 0.1 billion for the acquisition of mobile spectrum licenses, also primarily for the United States operating segment.

Free cash flow AL decreased by EUR 0.3 billion to EUR 1.3 billion.
Excluding interest payments for zero-coupon bonds made in the first quarter of 2020, net cash from operating activities decreased by EUR 0.4 billion. Our contractual termination of a revolving factoring agreement in the Germany operating segment in particular had a negative impact. The continuing strong performance of the operating segments had an increasing effect on net cash from operating activities.
The year-on-year decrease of EUR 0.3 billion in cash capex (before spectrum investment) enhanced free cash flow.
The EUR 0.2 billion increase in repayments of lease liabilities – in particular for leases in the United States operating segment – had a negative effect.

Net debt increased by EUR 1.4 billion to EUR 77.4 billion compared with the end of 2019.
The main factors in this increase were measurement effects from forward-payer swaps for borrowings at T‑Mobile US (EUR 1.0 billion), the acquisition of spectrum (EUR 0.2 billion), and exchange rate effects (EUR 0.7 billion).
The main factor reducing net debt was free cash AL flow of EUR 1.3 billion.

^a Before interest payments for zero-coupon bonds.

For further information, please refer to the section “Development of business in the Group.”