Results of operations of the Group ^a

In order to increase the informative value of the prior-year comparatives based on changes to the Company’s structure or exchange rate effects, we also describe selected figures in organic terms, by adjusting the figures for the prior-year period for changes in the composition of the Group, exchange rate effects, and other effects. Changes in the composition of the Group with a reducing effect related mainly to the sale of GD Towers as of February 1, 2023 in the Group Development operating segment, and the sale of the Wireline Business as of May 1, 2023 in the United States operating segment. Negative exchange rate effects were primarily attributable to the translation of U.S. dollars to euros.

Revenue, service revenue

In the first quarter of 2024, we generated net revenue of EUR 27.9 billion, which was slightly up EUR 0.1 billion or 0.4 % year-on-year. In organic terms, revenue increased by 1.6 % against the prior-year level, including negative net exchange rate effects of EUR 0.2 billion, with the changes in the composition of the Group having a net reducing effect of EUR 0.1 billion. Service revenue in the Group increased by EUR 0.7 billion or 2.9 % year-on-year to EUR 23.5 billion. In organic terms, service revenue increased by EUR 0.9 billion or 4.1 %.

Revenue in our domestic market of Germany was up on the prior-year level, increasing by 2.6 %. This was mainly driven by growth in service revenues in the fixed-network core business and in mobile communications. Mobile terminal equipment revenues also had a positive effect on revenue. In our United States operating segment, revenue was down 1.4 % against the prior-year level, due mainly to exchange rate effects. In organic terms, revenue increased by 0.4 %, with an increase in service revenues mainly resulting from higher postpaid revenues. By contrast, terminal equipment revenue fell due to declines in sales and leasing of terminal equipment. In our Europe operating segment, revenue increased by 6.3 % year-on-year. In organic terms, revenue increased by 5.7 %, primarily attributable to the increase in high-margin service revenues in the mobile business. Contract customer additions also had positive effects on terminal equipment revenues. Revenue in our Systems Solutions operating segment was up 5.0 % year-on-year. This positive revenue trend was mainly driven by growth in the Cloud and Road Charging portfolio areas.

For further information on revenue development in our segments, please refer to the section “Development of business in the operating segments.”

Contribution of the segments to net revenue ^a

%

Breakdown of revenue by region

%

^a For further information on net revenue, please refer to the section “Segment reporting” in the interim consolidated financial statements.

At 64.4 %, our United States operating segment again provided by far the largest contribution to net revenue of the Group, which was down 1.2 percentage points against the prior-year level. The proportion of net revenue generated internationally also decreased from 77.4 % to 75.8 %.

Adjusted EBITDA AL, EBITDA AL

Adjusted EBITDA AL increased year-on-year by EUR 0.5 billion or 5.1 % to EUR 10.5 billion in the first quarter of 2024. In organic terms, adjusted EBITDA AL increased by EUR 0.6 billion or 5.8 %; including negative net exchange rate effects of EUR 0.1 billion. Adjusted core EBITDA AL, i.e., excluding terminal equipment leases in the United States, increased by EUR 0.6 billion or 6.2 % to EUR 10.4 billion.

Our Germany operating segment contributed to the increase thanks to high-value revenue growth and improved cost efficiency with 3.5 % higher adjusted EBITDA AL. Adjusted EBITDA AL in our United States operating segment increased by 6.1 %. This rise is primarily attributable to the higher service revenue and lower overall costs. Adjusted core EBITDA AL at T‑Mobile US increased by EUR 0.5 billion or 7.8 % to EUR 6.9 billion. In our Europe operating segment, adjusted EBITDA AL increased by 8.7 %. In organic terms, it increased by 8.1 %, with a positive net margin more than sufficient to offset the higher indirect costs. In our Systems Solutions operating segment, adjusted EBITDA AL increased by 2.7 %, mainly due to revenue growth in the Cloud area.

Our EBITDA AL decreased significantly by EUR 12.2 billion year-on-year to EUR 10.2 billion. Special factors affecting EBITDA AL decreased by EUR 12.7 billion to EUR ‑0.3 billion. In the prior-year period, net income of EUR 12.6 billion had been recorded as special factors under effects of deconsolidations, disposals and acquisitions; EUR 12.9 billion of this related to the deconsolidation of GD Towers, which was offset by expenses of EUR 0.3 billion primarily in connection with integration costs incurred as a result of the business combination of T‑Mobile US and Sprint. In the first quarter of 2024, this item included EUR 0.1 billion in further integration costs generated in the United States operating segment. Expenses incurred in connection with staff restructuring were on a par with the prior-year level at EUR 0.2 billion.

For further information on the development of (adjusted) EBITDA AL in our segments, please refer to the section “Development of business in the operating segments.”

Profit/loss from operations (EBIT)

Group EBIT decreased significantly to EUR 5.7 billion, down EUR 12.3 billion against the level of the prior-year period. This change was primarily due to the deconsolidation gain from the sale of GD Towers in the prior year. At EUR 6.1 billion, depreciation, amortization and impairment losses on intangible assets, property, plant and equipment, and right-of-use assets were up against the level of the prior-year period in the first quarter of 2024. Depreciation and amortization were slightly higher than in the prior-year period. In the United States operating segment, higher depreciation expense in connection with the acceleration of certain technology assets as part of T‑Mobile US modernizing its network, technology systems, and platforms was offset by lower depreciation of right-of-use assets. In the Germany operating segment, depreciation and amortization increased, partly as a result of the sale and leaseback of passive network infrastructure in connection with the sale of GD Towers. No significant impairment losses were recorded either in the reporting period or in the prior-year period.

For information on the presentation of the sold GD Towers business entity in the prior year, please refer to the section “Group organization, strategy, and management.”

Profit before income taxes

Profit before income taxes decreased by EUR 12.4 billion to EUR 4.3 billion. The loss from financial activities increased year-on-year from EUR 1.3 billion to EUR 1.4 billion, primarily due to the slight increase in finance costs.

Net profit, adjusted net profit

Net profit decreased year-on-year by EUR 13.4 billion to EUR 2.0 billion. This change was primarily due to the deconsolidation gain from the sale of GD Towers in the prior year. Tax expense increased by EUR 0.9 billion to EUR 1.2 billion. The tax rate was significantly reduced in the first quarter of 2023 by the realization of non-taxable income from the sale of GD Towers. Taxes were furthermore reduced in the prior-year quarter by deferred tax effects arising in connection with the concluded sale-and-leaseback transaction. Profit attributable to non-controlling interests increased by EUR 0.1 billion to EUR 1.2 billion. This increase was primarily attributable to our United States operating segment. Excluding special factors, which had a negative overall effect of EUR 0.3 billion on net profit, adjusted net profit amounted to EUR 2.2 billion, compared with EUR 2.0 billion in the prior year.

For further information on tax expense, please refer to the section “Income taxes” in the interim consolidated financial statements.

Earnings per share, adjusted earnings per share

Earnings per share is calculated as net profit divided by the weighted average number of ordinary shares outstanding, which totaled 4,969 million as of March 31, 2024. This resulted in earnings per share of EUR 0.40, compared with EUR 3.09 in the prior-year period, which was mainly affected by the proceeds from the sale of GD Towers. Earnings per share adjusted for special factors affecting net profit amounted to EUR 0.45 compared with EUR 0.39 in the prior year.

Employees

The Group’s headcount increased by 0.8 % compared with the end of 2023. In our Germany operating segment, the number of employees declined by 0.3 % against the end of the prior year. The total number of full-time equivalent employees in the United States operating segment increased by 2.2 % compared with the end of 2023, primarily due to an increase in retail employees to support T‑Mobile US’ growing customer base. The headcount in our Europe operating segment grew by 1.8 % against the end of the prior year, mainly due to an insourcing measure in connection with the build-out and maintenance of network infrastructure in Croatia. The headcount in our Systems Solutions operating segment was down 0.1 % against year-end 2023, mainly due to a workforce reduction in traditional infrastructure business. The headcount in the Group Headquarters & Group Services segment was down 0.9 % compared with the end of the prior year, mainly due to the continued staff restructuring measures at Vivento.

Reconciliations of financial performance indicators from the IFRS consolidated financial statements

A reconciliation of the definition of EBITDA to the “after leases” indicator (EBITDA AL) can be found in the following table:

The following table presents the reconciliation of net profit to net profit adjusted for special factors:

The following table presents a reconciliation of EBITDA AL, EBIT, and net profit to the respective figures adjusted for special factors: