Financial position of the Group
millions of € |
|
|
|
|
|
|
Sept. 30, |
% |
Dec. 31, |
Change |
Sept. 30, |
---|---|---|---|---|---|
Assets |
|
|
|
|
|
Cash and cash equivalents |
12,204 |
4.2 |
7,274 |
4,930 |
7,470 |
Trade receivables |
14,340 |
5.0 |
16,157 |
(1,817) |
15,713 |
Intangible assets |
135,725 |
47.0 |
136,004 |
(278) |
141,048 |
Property, plant and equipment |
63,392 |
22.0 |
65,042 |
(1,650) |
66,142 |
Right-of-use assets |
30,894 |
10.7 |
32,826 |
(1,932) |
34,536 |
Investments accounted for using the equity method |
6,056 |
2.1 |
4,605 |
1,451 |
7,402 |
Current and non-current financial assets |
7,917 |
2.7 |
9,593 |
(1,676) |
10,448 |
Deferred tax assets |
4,211 |
1.5 |
6,401 |
(2,191) |
7,049 |
Non-current assets and disposal groups held for sale |
1,020 |
0.4 |
211 |
809 |
245 |
Miscellaneous assets |
12,851 |
4.5 |
12,193 |
657 |
12,462 |
Total assets |
288,608 |
100.0 |
290,305 |
(1,697) |
302,513 |
Liabilities and shareholders’ equity |
|
|
|
|
|
Current and non-current financial liabilities |
107,878 |
37.4 |
104,522 |
3,356 |
108,780 |
Current and non-current lease liabilities |
38,426 |
13.3 |
40,792 |
(2,367) |
42,620 |
Trade and other payables |
7,718 |
2.7 |
10,916 |
(3,198) |
10,223 |
Provisions for pensions and other employee benefits |
3,297 |
1.1 |
4,060 |
(763) |
3,625 |
Current and non-current other provisions |
7,336 |
2.5 |
8,100 |
(764) |
7,616 |
Deferred tax liabilities |
22,068 |
7.6 |
21,918 |
150 |
23,116 |
Liabilities directly associated with non-current assets and disposal groups held for sale |
0 |
0.0 |
0 |
0 |
0 |
Miscellaneous liabilities |
9,492 |
3.3 |
8,759 |
733 |
9,962 |
Shareholders’ equity |
92,393 |
32.0 |
91,237 |
1,156 |
96,570 |
Total liabilities and shareholders’ equity |
288,608 |
100.0 |
290,305 |
(1,697) |
302,513 |
Total assets amounted to EUR 288.6 billion as of September 30, 2024, down by EUR 1.7 billion against December 31, 2023. Exchange rate effects, primarily from the translation from U.S. dollars into euros, in particular had a decreasing effect on the carrying amount of total assets. By contrast, in the United States operating segment, the acquisition of spectrum licenses from Channel 51, the inclusion of the assets and liabilities from the acquisition of Kaʼena, and the issuing of bonds by T‑Mobile US, had an increasing effect on the carrying amount of total assets.
On the assets side, cash and cash equivalents increased by EUR 4.9 billion against the end of the prior year to EUR 12.2 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 14.3 billion, trade receivables decreased by EUR 1.8 billion against the 2023 year-end level, mainly on account of lower receivables in the United States operating segment due to a lower number of new contracts with equipment installment plans, as well as lower receivables from the termination of government assistance programs and from wholesale partners. Furthermore, receivables declined in the Germany operating segment. Exchange rate effects, mainly from the translation of U.S. dollars into euros, also decreased the carrying amount.
Intangible assets decreased by EUR 0.3 billion compared to December 31, 2023 to EUR 135.7 billion. Depreciation, amortization and impairment losses of EUR 5.0 billion and exchange rate effects of EUR 1.7 billion, primarily from the translation of U.S. dollars into euros, decreased the carrying amount. The reclassifications of intangible assets to non-current assets and disposal groups held for sale also 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. Additions increased the carrying amount by EUR 6.0 billion, EUR 2.6 billion of which related to the acquisition of mobile spectrum in the United States operating segment, primarily to the acquisition of spectrum licenses from Channel 51. 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.
Property, plant and equipment decreased from EUR 65.0 billion as of December 31, 2023 to EUR 63.4 billion. Depreciation and impairment losses totaling EUR 8.9 billion, exchange rate effects of EUR 0.4 billion, primarily from the translation of U.S. dollars into euros, 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 7.5 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 0.3 billion.
Right-of-use assets decreased by EUR 1.9 billion compared with December 31, 2023 to EUR 30.9 billion. Depreciation and impairment losses reduced the carrying amount by EUR 4.0 billion. The previously mentioned reclassifications of lease assets to property, plant and equipment, and exchange rate effects, primarily from the translation of U.S. dollars into euros, also reduced the carrying amount by EUR 0.3 billion, respectively. The carrying amount was increased by additions of EUR 2.8 billion.
Investments accounted for using the equity method increased by EUR 1.5 billion compared to December 31, 2023, to EUR 6.1 billion. This was primarily attributable to reversals of impairment losses recognized in the reporting period of EUR 1.0 billion and EUR 0.3 billion, respectively, on the carrying amounts of the investments in GD Towers and in GlasfaserPlus. These reversals of impairment losses were, at GD Towers entirely, and at GlasfaserPlus almost entirely, due to lower discount rates as a result of macroeconomic developments in the reporting period and changes within the peer group. Capital increases in the investments in GlasfaserPlus and Glasfaser NordWest also increased the respective carrying amount by EUR 0.1 billion.
Current and non-current financial assets decreased by EUR 1.7 billion to EUR 7.9 billion. The net total of originated loans and receivables decreased by EUR 0.8 billion to EUR 5.8 billion, mainly due to lower collateral paid for derivatives due to normal fluctuations in fair value (EUR 0.4 billion), unscheduled repayments of shareholder loans to GD Towers (EUR 0.2 billion), and lower receivables from publicly funded projects (EUR 0.2 billion). The carrying amount of debt instruments declined by EUR 0.4 billion to EUR 0.3 billion due to the forgone contingent consideration receivable from the IFM Global Infrastructure Fund. The carrying amount of the derivatives without a hedging relationship decreased by EUR 0.6 billion, in particular in connection with the options to acquire additional T‑Mobile US shares.
For further information on the contingent consideration receivable, please refer to the section “Risks and opportunities.”
Non-current assets and disposal groups held for sale increased by EUR 0.8 billion to EUR 1.0 billion. This increase is primarily attributable to the transactions agreed between T‑Mobile US and other telecommunications companies for the exchange of spectrum licenses.
Miscellaneous assets increased by EUR 0.7 billion to EUR 12.9 billion. Current and non-current other assets contributed EUR 0.3 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 – and higher receivables from other taxes. Inventories increased by EUR 0.1 billion due to higher stocks of high-value mobile terminal equipment in the United States and Germany operating segments. In addition, current recoverable income taxes and contract assets each increased by EUR 0.1 billion.
On the liabilities and shareholders’ equity side, current and non-current financial liabilities increased by EUR 3.4 billion compared with the end of 2023 to EUR 107.9 billion. Bonds and other securitized liabilities increased overall by EUR 4.4 billion, primarily as a result of USD bonds issued by T‑Mobile US with a volume of USD 5.5 billion (EUR 4.9 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 EUR bonds of EUR 0.9 billion by Deutsche Telekom AG. 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. Exchange rate effects decreased the carrying amount of bonds and other securitized liabilities by EUR 1.0 billion. Other non-interest-bearing liabilities increased by EUR 0.5 billion, mainly due to the stake of the cash dividend of USD 0.88 per share – declared by T‑Mobile US on September 18, 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, and liabilities with the right of creditors to priority repayment in the event of default by EUR 0.7 billion, mainly due to the repayment of former Sprint bonds in the United States operating segment. Other interest-bearing liabilities decreased by EUR 0.5 billion, primarily due to the scheduled repayment of loans in the United States and Germany operating segments and exchange rate effects.
Current and non-current lease liabilities decreased by EUR 2.4 billion compared with December 31, 2023 to EUR 38.4 billion. Lease liabilities in the United States operating segment decreased by EUR 1.7 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, reduced the carrying amount by EUR 0.4 billion.
Trade and other payables decreased by EUR 3.2 billion to EUR 7.7 billion. This was due to lower liabilities in the United States, Europe, and Germany operating segments. Exchange rate effects, in particular from the translation from U.S. dollars into euros, also decreased 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 compared with December 31, 2023. The decline in the discount rate compared with December 31, 2023 had a slight offsetting effect. Benefits paid directly by the employer in the reporting period also contributed to the reduction.
Current and non-current other provisions decreased by EUR 0.8 billion to EUR 7.3 billion compared with the end of 2023. Other provisions for personnel costs decreased by EUR 0.2 billion overall, mainly due to an interest-rate based decline in the carrying amount of the provision recognized for the Civil 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, and the provisions for restoration obligations by EUR 0.2 billion. Furthermore, provisions for procurement and sales support decreased by EUR 0.1 billion and provisions for litigation risks by EUR 0.1 billion.
Miscellaneous liabilities increased by EUR 0.7 billion compared to December 31, 2023 to EUR 9.5 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 0.1 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 11.1 billion and capital increases from share-based payments of EUR 0.5 billion having an increasing 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 1.7 billion. The latter figure includes cash dividends of EUR 1.5 billion paid by T‑Mobile US to non-controlling interests, as declared in the reporting period. Transactions with owners reduced the carrying amount of shareholders’ equity by EUR 3.2 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 1.5 billion. Other comprehensive income decreased the carrying amount by EUR 0.2 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.
millions of € |
|
|
|
|
|
||||
|
Sept. 30, |
Dec. 31, |
Change |
Change |
Sept. 30, |
||||
---|---|---|---|---|---|---|---|---|---|
Bonds and other securitized liabilities |
92,131 |
87,773 |
4,357 |
5.0 |
90,339 |
||||
Liabilities to banks |
3,226 |
3,560 |
(334) |
(9.4) |
3,576 |
||||
Other financial liabilities |
12,522 |
13,189 |
(667) |
(5.1) |
14,865 |
||||
Lease liabilities |
38,426 |
40,792 |
(2,367) |
(5.8) |
42,620 |
||||
Financial liabilities and lease liabilities |
146,304 |
145,314 |
989 |
0.7 |
151,400 |
||||
Accrued interest |
(1,160) |
(1,009) |
(151) |
(15.0) |
(1,156) |
||||
Other |
(1,428) |
(966) |
(463) |
(47.9) |
(1,204) |
||||
Gross debt |
143,715 |
143,339 |
376 |
0.3 |
149,041 |
||||
Cash and cash equivalents |
12,204 |
7,274 |
4,930 |
67.8 |
7,470 |
||||
Derivative financial assets |
1,173 |
1,780 |
(608) |
(34.1) |
2,520 |
||||
Other financial assets |
1,615 |
2,006 |
(391) |
(19.5) |
1,923 |
||||
Net debt a |
128,723 |
132,279 |
(3,556) |
(2.7) |
137,128 |
||||
Lease liabilities b |
36,249 |
38,533 |
(2,284) |
(5.9) |
40,205 |
||||
Net debt AL |
92,474 |
93,746 |
(1,272) |
(1.4) |
96,923 |
||||
|
Net debt decreased by EUR 3.6 billion in the first nine months of 2024 to EUR 128.7 billion, due to free cash flow (before dividend payments and spectrum investment), the sale of T‑Mobile US shares by Deutsche Telekom, and exchange rate effects. By contrast, the main factors increasing net debt were the share buy-back program at T‑Mobile US, the dividend payments (including to non-controlling interests), additions to lease liabilities and to right-of-use assets, and the acquisition of spectrum, primarily the Channel 51 licenses in the United States operating segment. 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 gains/losses from derivatives of EUR 0.6 billion.
millions of € |
|
|
|
|
|
|
|
|
|
||
|
Q1-Q3 |
Q1-Q3 |
Change |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q3 2023 |
Change |
FY 2023 |
||
---|---|---|---|---|---|---|---|---|---|---|---|
Net cash from operating activities |
30,703 |
28,556 |
7.5 |
9,614 |
10,280 |
10,810 |
9,692 |
11.5 |
37,298 |
||
Cash outflows for investments in intangible assets |
(5,932) |
(3,711) |
(59.8) |
(1,378) |
(1,303) |
(3,251) |
(1,270) |
n.a. |
(5,560) |
||
Cash outflows for investments in property, plant and equipment |
(8,438) |
(9,990) |
15.5 |
(3,340) |
(2,557) |
(2,542) |
(2,995) |
15.1 |
(12,306) |
||
Cash capex |
(14,370) |
(13,702) |
(4.9) |
(4,718) |
(3,859) |
(5,793) |
(4,265) |
(35.8) |
(17,866) |
||
Spectrum investment |
2,424 |
459 |
n.a. |
57 |
175 |
2,192 |
203 |
n.a. |
1,275 |
||
Cash capex (before spectrum investment) |
(11,946) |
(13,243) |
9.8 |
(4,661) |
(3,684) |
(3,601) |
(4,062) |
11.4 |
(16,591) |
||
Proceeds from the disposal of intangible assets (excluding goodwill) and property, plant and equipment |
95 |
82 |
15.5 |
33 |
28 |
33 |
25 |
34.7 |
205 |
||
Free cash flow (before dividend payments and spectrum investment) |
18,852 |
15,395 |
22.5 |
4,986 |
6,624 |
7,242 |
5,655 |
28.1 |
20,912 |
||
Principal portion of repayment of lease liabilities a |
(3,726) |
(3,605) |
(3.3) |
(1,277) |
(1,395) |
(1,053) |
(967) |
(9.0) |
(4,770) |
||
Free cash flow AL (before dividend payments and spectrum investment) |
15,126 |
11,789 |
28.3 |
3,708 |
5,229 |
6,189 |
4,688 |
32.0 |
16,141 |
||
|
Free cash flow AL (before dividend payments and spectrum investment) increased by EUR 3.3 billion year-on-year to EUR 15.1 billion. The following effects impacted on this development:
Net cash from operating activities increased by EUR 2.1 billion to EUR 30.7 billion. The strong development of the operating business was offset in part by an increase in tax payments of EUR 0.3 billion and an increase in net interest payments of EUR 0.1 billion, among other effects.
Cash capex (before spectrum investment) decreased by EUR 1.3 billion to EUR 11.9 billion. In the United States operating segment, cash capex decreased by EUR 1.4 billion to EUR 6.1 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 3.6 billion in the reporting period, EUR 0.2 billion more than in the prior-year period. In the Europe operating segment, cash capex stood at EUR 1.4 billion, which was up EUR 0.1 billion year-on-year. In the Systems Solutions operating segment, cash capex remained on a par with the prior-year period at EUR 0.2 billion.
An increase of EUR 0.1 billion in cash outflows – in particular in the Germany and United States operating segments – for the repayment of lease liabilities reduced free cash flow AL.
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.
Rating
On October 23, 2024, the rating agency Moody’s raised our rating outlook to positive, taking the rating to Baa1 with a positive outlook. We are therefore still a solid investment-grade company with access to the international capital markets.