Forecast

The statements in this section reflect the current views of our management. The business combination of T‑Mobile US and Sprint has a material impact on our results of operations and financial position. The forecasts published in the combined management report in the 2019 Annual Report did not contain the possible effects of the transaction. Including the business combination of T‑Mobile US and Sprint concluded on April 1, 2020, we expect the new, larger United States operating segment to generate adjusted EBITDA AL of around USD 22 billion in the 2020 financial year compared with the original forecast of USD 13.0 billion. Cash capex will increase to around USD 11 billion also on account of the planned investments in connection with the integration of the business; cash capex was previously expected to remain stable at USD 6.0 billion, the level in the 2019 financial year. As a result, we are raising our Group guidance for the 2020 financial year, with adjusted EBITDA AL now expected to come in at approximately EUR 34 billion, up from EUR 25.5 billion, and cash capex (before spectrum investment) at around EUR 17 billion, up from EUR 13.0 billion. Expected free cash flow AL for the Group decreases from EUR 8.0 billion to around EUR 5.5 billion, mainly on account of the integration costs. We expect free cash flow AL of at least EUR 5.5 billion, instead of previously EUR 8.0 billion.

There is still a great deal of uncertainty regarding the extent to which business activities and thus the results of operations and financial position of Deutsche Telekom could be affected overall as the coronavirus pandemic unfolds. We continue to evaluate the latest studies published by prominent economic research institutes to monitor the impact of the coronavirus pandemic on the economy as a whole. Based on our current results, we can observe offsetting effects within adjusted EBITDA AL. In our Systems Solutions operating segment, we anticipate that the difficult market climate in terms of new business will cause us to fall short of our original guidance for revenue and adjusted EBITDA AL. Nevertheless, at the current point in time, the forecasts published in the combined management report in the 2019 Annual Report, together with the updated guidance in connection with the Sprint transaction, remain valid. However, given the current level of macro-economic uncertainty, we cannot generally rule out the possibility of future deviations.

For more information about the coronavirus pandemic and the associated business risks, please refer to the section “Risks and opportunities.” We also look at the economic trends in the section “The economic environment.” Readers are also referred to the Disclaimer at the end of this report.