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. In the Interim Group Report as of June 30, 2020 we published our guidance already taking the business combination of T‑Mobile US and Sprint as of April 1, 2020 into account.

Contrary to the forecasts published in the Interim Group Report as of June 30, 2020, we now expect to post stronger-than-expected increases in the Group’s adjusted EBITDA AL and free cash flow AL for the 2020 financial year despite the challenging economic environment in consequence of the coronavirus pandemic. We now expect adjusted EBITDA AL for the Group of at least EUR 35 billion, up from the previous forecast of around EUR 34 billion, for the 2020 financial year. This latest upward revision is partly attributable to stronger-than-expected business performance in the United States operating segment, where we now anticipate adjusted EBITDA AL to come in at around USD 23.5 billion or around USD 1.0 billion higher than our previous forecast, and partly to business outside of the United States, where we expect adjusted EBITDA AL of EUR 14.0 billion, up from the previous guidance of EUR 13.9 billion. We thus expect overall business performance to more than offset the negative effects in our Systems Solutions operating segment, where we anticipate that the pandemic-driven difficult market climate in terms of new business will cause us to fall short of our original guidance for revenue, adjusted EBITDA AL, and order entry.

Due to our raised guidance for adjusted EBITDA AL, we are also raising our Group forecast for full-year free cash flow AL from the previous figure of at least EUR 5.5 billion to at least EUR 6.0 billion in 2020.

For cash capex, our most recent guidance continues to apply: We expect cash capex (before spectrum investment) for the United States operating segment of around USD 11 billion; among other factors, this is attributable to the investments expected in connection with the integration of the two companies. We expect cash capex (before spectrum investment) for the Group in 2020 to come in at around EUR 17 billion.

The realignment of the B2B telecommunications business did not result in any changes in the forecasts published in the 2019 Annual Report in the affected operating segments apart from retroactively adjusted original values.

For details on the realignment of the B2B telecommunications business, please refer to the section “Group organization, strategy, and management.”

All other statements made remain valid.

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.