Financial position of the Group

Total assets amounted to EUR 296.0 billion as of June 30, 2024, up by EUR 5.7 billion against December 31, 2023. In addition to the acquisition of spectrum licenses from Channel 51, the inclusion of the assets and liabilities from the acquisition of Kaʼena in the United States operating segment, and the issuing of bonds by T‑Mobile US, exchange rate effects from the translation of U.S. dollars into euros in particular had an increasing effect on the carrying amount of total assets.

On the assets side, cash and cash equivalents increased by EUR 1.3 billion against the end of the prior year to EUR 8.6 billion.

For further information, please refer to the section “Notes to the consolidated statement of cash flows” in the interim consolidated financial statements.

At EUR 15.1 billion, trade receivables decreased by EUR 1.0 billion against the 2023 year-end level, due to lower receivables in the United States and Germany operating segments. By contrast, exchange rate effects, mainly from the translation from U.S. dollars into euros, increased the carrying amount.

Intangible assets increased by EUR 5.6 billion compared to December 31, 2023 to EUR 141.6 billion. Additions increased the carrying amount by EUR 4.8 billion, EUR 2.5 billion of which related to the acquisition of mobile spectrum in the United States operating segment, in particular for the acquisition of the first tranche of spectrum licenses in the 600 MHz band in connection with the agreements in place between T‑Mobile US and Channel 51. Exchange rate effects, primarily from the translation of U.S. dollars into euros, also increased the carrying amount by EUR 3.8 billion. Effects of changes in the composition of the Group resulting from the acquisition of Ka’ena in the United States operating segment increased the carrying amount by EUR 1.4 billion, EUR 0.7 billion of which related to the goodwill acquired in this connection. By contrast, amortization and impairment losses of EUR 3.4 billion reduced the carrying amount. The reclassifications of intangible assets to non-current assets and disposal groups held for sale reduced the carrying amount by EUR 1.0 billion and arose primarily in connection with agreed transactions concerning the exchange of spectrum licenses in the United States operating segment.

Property, plant and equipment decreased from EUR 65.0 billion as of December 31, 2023 to EUR 64.9 billion. Depreciation and impairment losses totaling EUR 6.0 billion and disposals of EUR 0.2 billion decreased the carrying amount. Additions, primarily for the upgrade and build-out of the network (broadband, fiber-optic, and mobile infrastructure) increased the carrying amount by EUR 4.9 billion. Exchange rate effects, primarily from the translation of U.S. dollars into euros, also increased the carrying amount by EUR 0.9 billion. Reclassifications of lease assets upon expiry of the contractual lease term to property, plant and equipment, primarily for network technology in the United States operating segment, increased the carrying amount by EUR 0.2 billion.

Right-of-use assets decreased by EUR 0.2 billion compared with December 31, 2023 to EUR 32.6 billion. Depreciation and impairment losses reduced the carrying amount by EUR 2.7 billion. The previously mentioned reclassifications of lease assets to property, plant and equipment also reduced the carrying amount by EUR 0.2 billion. The carrying amount was increased by additions of EUR 1.8 billion. Exchange rate effects, primarily from the translation of U.S. dollars into euros, increased the carrying amount by EUR 0.9 billion.

Investments accounted for using the equity method increased by EUR 0.1 billion compared to December 31, 2023, to EUR 4.7 billion, mainly due to a capital increase in the investment in GlasfaserPlus.

Current and non-current financial assets decreased by EUR 0.7 billion to EUR 8.9 billion, with the net total of originated loans and receivables decreasing by EUR 0.5 billion, mainly due to lower collateral paid for derivatives due to normal fluctuations in fair value. The carrying amount of the derivatives without a hedging relationship decreased by EUR 0.4 billion, in particular in connection with the options to acquire additional T‑Mobile US shares exercised by Deutsche Telekom on June 7, 2024. Exchange rate effects increased the carrying amount of other financial assets by EUR 0.1 billion.

Non-current assets and disposal groups held for sale increased by EUR 0.9 billion to EUR 1.1 billion. This increase is primarily attributable to the transactions agreed between T‑Mobile US and other telecommunications companies for the exchange of spectrum licenses to improve mobile network coverage.

Miscellaneous assets increased by EUR 0.8 billion to EUR 13.0 billion. Current and non-current other assets contributed EUR 0.7 billion to this increase, due in part to an increase in various advance payments, mainly in connection with agreements on services for certain mobile communications and fixed-network equipment. In addition, current recoverable income taxes increased by EUR 0.2 billion and contract assets by EUR 0.1 billion. By contrast, inventories decreased by EUR 0.2 billion, due in particular to the sale of mobile terminal equipment, in connection with, among other factors, marketing campaigns in the United States operating segment, partially offset by the stockpiling of mobile terminal equipment in the Germany operating segment.

On the liabilities and shareholders’ equity side, current and non-current financial liabilities increased by EUR 4.6 billion compared with the end of 2023 to EUR 109.1 billion. Bonds and other securitized liabilities increased overall by EUR 4.9 billion, primarily as a result of USD bonds issued by T‑Mobile US with a total volume of USD 3.0 billion (EUR 2.7 billion), the issue of EUR bonds with a volume of EUR 2.0 billion, and the issue of asset-backed securities (ABS notes) with a volume of USD 0.5 billion (EUR 0.5 billion). The carrying amount was also increased by the issue of a EUR bond of EUR 0.7 billion by Deutsche Telekom AG, and exchange rate effects of EUR 2.5 billion. By contrast, the scheduled repayment of a EUR bond of EUR 0.8 billion and a USD bond of USD 2.5 billion (EUR 2.3 billion) reduced the carrying amount. Other non-interest-bearing liabilities increased by EUR 0.4 billion, mainly due to the stake of the cash dividend of USD 0.65 per share – declared by T‑Mobile US on June 13, 2024 – attributable to non-controlling interests in T‑Mobile US. By contrast, liabilities to banks decreased by EUR 0.3 billion, due in part to the repayment of a loan from the European Investment Bank, liabilities with the right of creditors to priority repayment in the event of default decreased by EUR 0.4 billion, mainly due to the repayment of former Sprint bonds in the United States operating segment, and other interest-bearing liabilities decreased by EUR 0.1 billion.

Current and non-current lease liabilities decreased by EUR 0.5 billion to EUR 40.3 billion compared with December 31, 2023. Lease liabilities in the United States operating segment decreased by EUR 1.4 billion, mainly due to the decommissioning of the former Sprint’s wireless network and a decline in network and build-out investments, primarily on account of higher capital efficiency resulting from the accelerated build-out of the nationwide 5G network in the prior year. Exchange rate effects, in particular from the translation of U.S. dollars into euros, increased the carrying amount by EUR 1.1 billion.

Trade and other payables decreased by EUR 0.4 billion to EUR 10.5 billion. This was due to lower liabilities in the Europe and Germany operating segments. By contrast, exchange rate effects, in particular from the translation from U.S. dollars into euros, increased the carrying amount.

Provisions for pensions and other employee benefits decreased by EUR 0.8 billion compared with December 31, 2023 to EUR 3.3 billion. Overall, the remeasurement of defined benefit plans resulted in an actuarial gain of EUR 0.7 billion to be recognized directly in equity, mainly due to the increase in the fair values of plan assets and the increase in the discount rate compared with December 31, 2023. Benefits paid directly by the employer in the reporting period also contributed to the reduction in the carrying amount.

Current and non-current other provisions decreased by EUR 0.9 billion to EUR 7.2 billion compared with the end of 2023. Other provisions for personnel costs decreased by EUR 0.4 billion, primarily in connection with the performance-based remuneration components for the prior year paid out to employees in the first half of 2024 and due to an interest rate-based decline in the carrying amount of the provision recognized for the Civil Service Health Insurance Fund (Postbeamtenkrankenkasse – PBeaKK). Provisions for termination benefits also decreased by EUR 0.2 billion, partly as a result of the program implemented to reduce the workforce in the United States operating segment. Furthermore, provisions for procurement and sales support decreased by EUR 0.1 billion, mainly in connection with the bonuses paid out to sales partners in the United States operating segment, and the provisions for restoration obligations by EUR 0.1 billion.

Miscellaneous liabilities increased by EUR 0.9 billion compared to December 31, 2023 to EUR 9.7 billion, with contract liabilities increasing by EUR 0.5 billion, mainly in connection with the contract liabilities assumed in the acquisition of Ka’ena in the United States operating segment. Furthermore, other liabilities increased by EUR 0.3 billion, mainly due to an increase in liabilities from other taxes. Income tax liabilities increased by EUR 0.1 billion compared with December 31, 2023.

For further information on the acquisition of Ka’ena, please refer to the section “Changes in the composition of the Group and other transactions” in the interim consolidated financial statements.

Shareholders’ equity increased by EUR 1.2 billion as of December 31, 2023 to EUR 92.4 billion, with profit of EUR 6.7 billion and capital increases from share-based payments of EUR 0.3 billion having an increasing effect. Other comprehensive income also increased the carrying amount by EUR 3.0 billion. Income taxes relating to components of other comprehensive income of EUR 0.3 billion had an offsetting effect. Shareholders’ equity was reduced in connection with dividend payments for the 2023 financial year to Deutsche Telekom AG shareholders in the amount of EUR 3.8 billion and to other shareholders of subsidiaries in the amount of EUR 1.3 billion. The latter figure includes cash dividends of EUR 1.0 billion paid by T‑Mobile US to non-controlling interests, as declared in the reporting period. Transactions with owners reduced the carrying amount by EUR 2.6 billion, due in particular to the T‑Mobile US share buy-back program from September 2023. Furthermore, the carrying amount was reduced by Deutsche Telekom AG’s share buy-back program that started in January 2024 with share buy-backs of EUR 0.9 billion.

For further information on the statement of financial position, please refer to the section “Selected notes to the consolidated statement of financial position” in the interim consolidated financial statements.

Changes in net debt

millions of €

Net debt increased to EUR 135.1 billion in the first half of 2024, mainly as a result of the T‑Mobile US share buy-back program, dividend payments (including to non-controlling interests), and negative exchange rate effects. By contrast, the main factors affecting net debt were free cash flow (before dividend payments and spectrum investment) and the sale of T‑Mobile US shares by Deutsche Telekom. Corporate transactions mainly included payments by Deutsche Telekom AG for the acquisition of T‑Mobile US shares by exercising existing fixed-price options, and changes in cash and cash equivalents in connection with the acquisition of Ka’ena in the United States. Other effects include spectrum purchases of EUR 0.2 billion, among other things.

Free cash flow AL (before dividend payments and spectrum investment) increased by EUR 1.8 billion year-on-year to EUR 8.9 billion. The following effects impacted on this development:

Net cash from operating activities increased by EUR 1.0 billion to EUR 19.9 billion. The strong development of the operating business was offset in part by an increase in tax payments of EUR 0.2 billion and an increase in net interest payments of EUR 0.1 billion, among other effects.

Cash capex (before spectrum investment) decreased by EUR 0.8 billion to EUR 8.3 billion. In the United States operating segment, cash capex decreased by EUR 1.0 billion to EUR 4.3 billion, mainly as a result of higher cash outflows for the accelerated build-out of the 5G network in the prior years. In the Germany operating segment, cash capex totaled around EUR 2.6 billion in the reporting period, EUR 0.3 billion more than in the prior-year period. In the Europe operating segment, cash capex stood at EUR 0.9 billion, which was on a par with the prior-year period. In the Systems Solutions operating segment, cash capex remained on a par with the prior-year period at EUR 0.1 billion.

For further information on the statement of cash flows, please refer to the section “Notes to the consolidated statement of cash flows” in the interim consolidated financial statements.