Deutsche Telekom at a glance

Net revenue

• Net revenue increased by 8.8 % to EUR 79.9 billion. In organic terms, revenue increased by EUR 4.0 billion or 5.3 %.
• Our United States segment posted an increase in revenue of 13.4 %. In organic terms, revenue increased by 7.1 % year-on-year due to higher service and terminal equipment revenues.
• In our Germany and Europe segments, we increased revenue by 1.8 % and 1.3 % respectively, on account of strong business performance.
• Revenue in our Systems Solutions segment decreased year-on-year by 2.9 %, due primarily to the decline in traditional IT infrastructure business, in line with expectations.
• In the Group Development segment, revenue increased by 9.7 % year-on-year on the back of operational and structural growth at our T‑Mobile Netherlands and GD Towers business units. In organic terms, revenue increased by 4.3 %.

billions of €

EBITDA AL (adjusted for special factors)

• Adjusted EBITDA AL grew by 8.7 % to EUR 28.3 billion with all operating segments contributing to this positive trend. In organic terms, our adjusted EBITDA AL increased by EUR 0.8 billion or 3.0 %.
• Adjusted EBITDA AL rose sharply by 11.4 % in our United States segment, primarily as a result of the business combination of T‑Mobile US and Sprint. In organic terms, adjusted EBITDA AL grew by 1.9 %, despite negative effects of the initiated withdrawal from the terminal equipment lease model in the United States.
• Adjusted EBITDA AL increased by 3.7 % in our Germany segment and by 3.1 % in our Europe segment.
• Adjusted EBITDA AL grew substantially in our Group Development segment, by 16.6 %. This was driven primarily by revenue growth at T‑Mobile Netherlands and GD Towers, the acquisition of Simpel, and efficient management of costs at T‑Mobile Netherlands.
• At 35.5 %, the Group’s adjusted EBITDA AL margin remained at the prior-year level. The adjusted EBITDA AL margin was 39.9 % in the Germany segment, 36.0 % in the Europe segment, and 34.5 % in the United States segment.

billions of €

EBIT

• EBIT increased by EUR 2.0 billion or 22.6 % year-on-year to EUR 10.7 billion, mainly as a result of the effects described under adjusted EBITDA AL.
• EBITDA AL was negatively affected by special factors of EUR 2.0 billion compared to expenses of EUR 2.4 billion recognized as special factors in the prior-year period. Expenses of EUR 0.9 billion were recorded in connection with the business combination of T‑Mobile US and Sprint. These related to acquisition and integration costs, as well as the restructuring costs for realizing cost efficiencies. A further EUR 0.6 billion related to a reduction in the useful life of leased network technology for cell sites in the United States. The sale of the Dutch cell tower business resulted in a gain on deconsolidation of EUR 0.2 billion. Expenses in connection with staff restructuring measures were down year-on-year by EUR 0.5 billion.
• Depreciation, amortization and impairment losses were EUR 1.7 billion higher than in the prior-year period due in particular to the acquisition of Sprint.

billions of €

Net profit

• Net profit increased by EUR 1.2 billion or 49.0 % to EUR 3.7 billion.
• Our loss from financial activities increased from EUR 3.2 billion to EUR 3.7 billion, with finance costs increasing by EUR 0.4 billion to EUR 3.5 billion, mainly due to the financial liabilities assumed in connection with the acquisition of Sprint and the related restructuring and increase in financing. Other financial expense increased slightly to EUR 0.2 billion. The increase in interest income from the measurement of provisions and liabilities was more than offset by a decrease in gains/losses (net) from financial instruments.
• The tax expense increased year-on-year by EUR 0.3 billion to EUR 1.7 billion.
• Profit attributable to non-controlling interests was on a par with the prior-year level at EUR 1.6 billion.
• Adjusted earnings per share rose by EUR 0.11 to EUR 0.97.

billions of €

Equity ratio

• The equity ratio increased by 1.4 percentage points against December 31, 2020 to 28.8 %.
• The EUR 6.3 billion increase in shareholders’ equity is primarily attributable to profit of EUR 5.3 billion and to other comprehensive income of EUR 4.9 billion. This mainly includes effects from currency translations (EUR 3.8 billion) and the remeasurement of defined benefit plans (EUR 1.1 billion).
• Shareholders’ equity was reduced in particular by dividend payments to our shareholders (EUR 2.8 billion) and other shareholders of subsidiaries (EUR 0.2 billion), as well as the exercise of existing stock options to purchase shares in T‑Mobile US (EUR 0.8 billion). This took the form of a capital increase against a non-cash contribution.

%

Net debt

• Net debt increased from EUR 120.2 billion at the end of 2020 to EUR 130.4 billion.
• The following factors in particular contributed to the increase: acquisition of spectrum (EUR 8.3 billion), mainly in the United States segment, exchange rate effects (EUR 5.0 billion), dividend payments to our shareholders – including to non-controlling interests – (EUR 3.1 billion), additions of lease liabilities (EUR 4.0 billion), the acquisition of Shentel (EUR 1.9 billion), as well as measurement effects in connection with the stock options received from SoftBank (EUR 0.5 billion).
• The main factor reducing net debt was free cash flow (before dividend payments and spectrum investment) of EUR 12.8 billion.

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Cash capex (before spectrum investment)

• Cash capex (before spectrum investment) increased from EUR 11.5 billion to EUR 12.9 billion.
• This increase is largely attributable to the inclusion of Sprint and the ongoing 5G network build-out in the United States. In the Germany segment, cash capex decreased due to reduced cash outflows and lower investments in optical fiber as a result of bad weather conditions. In the Europe segment, we continued to invest in our fiber-optic network and forged ahead with the build-out of our mobile communications infrastructure.
• Cash capex (including spectrum investment) increased from EUR 12.9 billion to EUR 21.3 billion. Spectrum licenses were purchased for EUR 8.3 billion in the reporting period, in particular FCC mobile licenses at the C-band auction in the United States segment. In the prior-year period, FCC mobile licenses had been acquired for a total of EUR 1.0 billion In the United States segment and mobile spectrum licenses in the amount of EUR 0.2 billion in the Europe and Group Development segments.

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

• Free cash flow AL increased from EUR 5.3 billion to EUR 8.3 billion.
• Apart from the positive performance of the individual operating segments, this increase was attributable to factoring agreements in the reporting period accounting for EUR 0.2 billion, whereas in the prior-year period, factoring agreements had had negative effects of EUR -0.6 billion.
• Apart from the EUR 1.4 billion higher cash capex (before spectrum investment), the increase was partially offset in particular by an advance payment for the lease of sites made by T‑Mobile US in September 2021 and higher net interest payments, mainly as a result of the financial liabilities recognized and the restructuring begun in connection with the acquisition of Sprint, and the related increase in financing. Higher income tax payments also had an increasing effect on free cash flow AL.

billions of €

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