Selected financial data of the Group

Net revenue

Net revenue increased by 6.2 % to EUR 28.0 billion. In organic terms, revenue increased by EUR 0.5 billion or 1.7 %. Service revenue increased by EUR 2.0 billion or 10.0 % to EUR 22.3 billion; in organic terms, it was up EUR 1.0 billion or 4.7 %.
Revenue growth in the United States of 9.5 % was mainly attributable to exchange rate effects. In organic terms, revenue increased by 1.5 % year-on-year due to higher service revenues.
Our Germany segment increased revenue by 0.9 %, on account of strong business performance.
Business also developed well in our Europe segment, where revenue declined by 0.9 % but increased by 4.2 % in organic terms.
Revenue in Systems Solutions decreased year-on-year by 1.9 %, due primarily to the decline in traditional IT infrastructure business, in line with expectations.
In Group Development, revenue increased by 5.5 % year-on-year on the back of operational and structural growth at our T‑Mobile Netherlands and GD Towers business units.

EBITDA AL (adjusted for special factors)

Adjusted EBITDA AL grew by 6.8 % to EUR 9.9 billion. In organic terms, our adjusted EBITDA AL increased by EUR 0.2 billion or 2.4 %.
In the United States, adjusted EBITDA AL increased by 8.2 %, essentially due to exchange rate effects. In organic terms, adjusted EBITDA AL grew by 0.3 %. Adjusted core EBITDA AL increased by EUR 0.9 billion or 18.9 % to EUR 5.7 billion.
Germany and Europe posted growth in adjusted EBITDA AL of 3.6 % and 3.2 % respectively, driven by high-value revenue growth and enhanced cost efficiency.
In Systems Solutions, adjusted EBITDA AL grew by 17.7 %. Efficiency effects from our transformation program and increased revenue in the growth areas exceeded the decline in the traditional IT infrastructure business.
Group Development likewise posted substantial growth in adjusted EBITDA AL, of 12.7 %. This was driven primarily by revenue growth at T‑Mobile Netherlands and GD Towers, and efficient management of costs.
At 35.2 %, the Group’s adjusted EBITDA AL margin increased by 0.2 percentage points against the prior-year level. The adjusted EBITDA AL margin was 39.8 % in the Germany segment, 36.1 % in the Europe segment, and 34.2 % in the United States segment.

EBIT

EBIT increased by EUR 2.8 billion or 79.8 % to EUR 6.3 billion.
EBITDA AL was positively affected by net special factors of EUR 1.2 billion compared to expenses of EUR 0.4 billion in the prior-year period. The deconsolidation of GlasfaserPlus and T‑Mobile Netherlands resulted in proceeds of EUR 1.7 billion and EUR 0.9 billion respectively. Net expenses of EUR 1.2 billion, mainly in connection with integration costs incurred as a result of the merger of T‑Mobile US and Sprint, had an offsetting effect.
Depreciation, amortization and impairment losses were on a par with the prior-year period.

Net profit

Net profit increased by EUR 3.0 billion to EUR 3.9 billion.
Our loss from financial activities decreased from EUR 1.7 billion to EUR 0.9 billion, with finance costs remaining stable at EUR 1.2 billion. Other financial expense improved from EUR 0.5 billion to other financial income of EUR 0.3 billion in connection with the measurement of derivatives.
The tax expense increased by EUR 0.5 billion to EUR 1.1 billion.
Profit attributable to non-controlling interests remained stable at EUR 0.4 billion.
Adjusted earnings per share rose from EUR 0.25 to EUR 0.45.

Equity ratio

The equity ratio increased by 1.1 percentage points against December 31, 2021 to 30.0 %.
The EUR 6.3 billion increase in shareholders’ equity is primarily attributable to profit of EUR 4.4 billion and to other comprehensive income of EUR 2.4 billion. This mainly includes effects from currency translations (EUR 1.4 billion) and the remeasurement of defined benefit plans (EUR 1.1 billion).
Shareholders’ equity was reduced in particular by changes in the composition of the Group in connection with the sale of T‑Mobile Netherlands (EUR 0.6 billion), and by the transactions with owners (EUR 0.1 billion).

Net debt

Net debt increased from EUR 132.1 billion at the end of 2021 to EUR 135.9 billion.
The increase was attributable in particular to the modification of the arrangements between T‑Mobile US and Crown Castle, which resulted in an increase of EUR 6.6 billion in right-of-use assets and of EUR 0.8 billion in property, plant and equipment. This effect is mirrored by growth in net debt of EUR 7.4 billion. Net debt was further increased in particular by the acquisition of spectrum (EUR 2.6 billion) in the United States and by exchange rate effects (EUR 1.9 billion).
The main factors reducing net debt were free cash flow (before dividend payments and spectrum investment) of EUR 4.8 billion and the corporate transactions involving T‑Mobile Netherlands and GlasfaserPlus totaling EUR 4.7 billion.

Cash capex (before spectrum investment)

Cash capex (before spectrum investment) increased by EUR 0.4 billion to EUR 4.7 billion.
This increase is largely attributable to the ongoing 5G network build-out in the United States.
Cash capex (including spectrum investment) decreased from EUR 12.3 billion to EUR 7.2 billion. Spectrum licenses were purchased for EUR 2.5 billion in the reporting period, in particular FCC mobile licenses in the United States segment. In the prior-year period, cash capex had included the acquisition of FCC mobile licenses at the C-band auction for EUR 7.9 billion in the United States segment and of mobile spectrum licenses for EUR 0.1 billion in the Europe segment.

Free cash flow AL (before dividend payments and spectrum investment)

Free cash flow AL was up by EUR 1.2 billion to EUR 3.8 billion.
In addition to the positive business performance of the individual operating segments, EUR 0.2 billion lower income tax payments and EUR 0.1 billion lower net interest payments also had an increasing effect. The decrease of EUR 0.5 billion in the principal portion of repayment of lease liabilities and the factoring agreements of EUR 0.1 billion also contributed to the increase.
EUR 0.4 billion higher cash capex (before spectrum investment) had a negative impact on free cash flow.

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

New communications standard (launched from 2020), which offers data rates in the gigabit range, converges fixed-network and mobile communications, and supports the Internet of Things.

Glossary

AL – After Leases

Since the start of the 2019 financial year, we have taken the effects of the first-time application of IFRS 16 “Leases” into account when determining our financial performance indicators. “EBITDA after leases” (EBITDA AL) is calculated by adjusting EBITDA for depreciation of the right-of-use assets and for interest expenses on recognized lease liabilities. When determining “free cash flow after leases” (free cash flow AL), free cash flow is adjusted for the repayment of lease liabilities.