Results of operations of the Group ^a

In order to increase the informative value of the prior-year comparatives based on changes to the Company’s structure or exchange rate effects, we also describe selected figures in organic terms, by adjusting the figures for the prior-year period for changes in the composition of the Group, exchange rate effects, and other effects. Changes in the composition of the Group related mainly to the sale of GD Towers as of February 1, 2023 in the Group Development operating segment, and the sale of the Wireline Business as of May 1, 2023 as well as the acquisition of Kaʼena as of May 1, 2024 in the United States operating segment. Negative exchange rate effects were primarily attributable to the translation of U.S. dollars to euros.

Revenue, service revenue

In the first nine months of 2024, we generated net revenue of EUR 84.8 billion, which was up 2.7 % or EUR 2.2 billion year-on-year. In organic terms, revenue increased by 2.9 % against the prior-year level, with the exchange rate effects having a net reducing effect of EUR 0.2 billion. On balance, the effects of the aforementioned changes in the composition of the Group evened each other out. Service revenue in the Group increased by EUR 2.7 billion or 3.9 % year-on-year to EUR 71.7 billion. In organic terms, service revenue increased by 4.0 %.

Revenue in our domestic market of Germany was up on the prior-year level, increasing by 2.9 %. This was mainly driven by growth in service revenues in the fixed-network core business and in mobile communications. Mobile terminal equipment revenues also had a positive effect on revenue. In our United States operating segment, revenue was up 2.1 % against the prior-year level. In organic terms, revenue increased by 2.3 %, with an increase in service revenues mainly resulting from higher postpaid revenues. By contrast, terminal equipment revenue fell due to declines in sales and leasing of terminal equipment. In our Europe operating segment, revenue increased by 5.3 % year-on-year. In organic terms, it increased by 5.5 %, primarily due to the increase in service revenues in the mobile and fixed-network business. Contract customer additions also had positive effects on terminal equipment revenues. Revenue in our Systems Solutions operating segment was up 3.5 % year-on-year, mainly due to growth in the Cloud, Digital, and Road Charging areas.

For further information on revenue development in our segments, please refer to the section “Development of business in the operating segments.”

Contribution of the segments to net revenue ^{a, b}

%

Breakdown of revenue by region

%

 ^a For further information on net revenue, please refer to the section “Segment reporting” in the interim consolidated financial statements.
 ^b Following the sale of the GD Towers business entity in the prior year, the Group Development operating segment no longer provides a significant contribution to net revenue and accounts for 0.0 %.

Our United States operating segment made by far the largest contribution to net revenue, with 64.3 % (Q1-Q3 2023: 64.7 %). The proportion of net revenue generated internationally decreased to 75.9 % (Q1-Q3 2023: 77.1 %).

Adjusted EBITDA AL, EBITDA AL

Adjusted EBITDA AL increased year-on-year by EUR 1.9 billion or 6.2 % to EUR 32.4 billion in the first nine months of 2024. In organic terms, adjusted EBITDA AL grew by 6.3 %. Adjusted core EBITDA AL, i.e., excluding terminal equipment leases in the United States, increased by EUR 2.1 billion or 6.8 % to EUR 32.3 billion.

Our Germany operating segment contributed to the increase thanks to high-value revenue growth and improved cost efficiency with 2.7 % higher adjusted EBITDA AL. Adjusted EBITDA AL in our United States operating segment increased by 7.7 %, or 7.4 % in organic terms. This rise is primarily attributable to the higher service revenue and lower overall costs. Adjusted core EBITDA AL at T‑Mobile US increased by EUR 1.7 billion or 8.6 % to EUR 21.3 billion. In our Europe operating segment, adjusted EBITDA AL increased by 8.2 % or 8.4 % in organic terms, with a positive net margin sufficient to more than offset the higher indirect costs. In our Systems Solutions operating segment, adjusted EBITDA AL increased by 8.8 %, mainly due to revenue growth in the Cloud and Digital areas.

Our EBITDA AL decreased significantly by EUR 10.6 billion year-on-year to EUR 30.9 billion. Special factors affecting EBITDA AL decreased by EUR 12.5 billion to EUR -1.5 billion. In the prior-year period, net income of EUR 12.3 billion had been recorded as special factors under effects of deconsolidations, disposals and acquisitions; EUR 12.9 billion of this related to the deconsolidation of GD Towers, which was partially offset by expenses of EUR 0.7 billion primarily in connection with integration costs incurred as a result of the business combination of T‑Mobile US and Sprint. In the first three quarters of 2024, these net expenses totaled EUR 0.6 billion euros, and included the expenses from the forgone contingent consideration receivable from IFM Global Infrastructure Fund, as well as additional integration expenses, offset by the extension fees received from DISH for the options to buy mobile spectrum in the United States operating segment, which have now expired. The integration of Sprint was largely completed by the end of the second quarter of 2024. Expenses incurred in connection with staff restructuring totaled EUR 0.8 billion, compared with EUR 1.2 billion in the prior-year period. The prior-year figure included expenses of EUR 0.4 billion in connection with a program to reduce the workforce in the United States operating segment.

For further information on the development of (adjusted) EBITDA AL in our segments, please refer to the section “Development of business in the operating segments.”

For further information on the contingent consideration receivable, please refer to the section “Risks and opportunities.”

Profit/loss from operations (EBIT)

Group EBIT decreased significantly to EUR 17.8 billion, down EUR 10.8 billion against the level of the prior-year period. This change was primarily due to the deconsolidation gain from the sale of GD Towers in the prior year. At EUR 17.9 billion, depreciation, amortization and impairment losses on intangible assets, property, plant and equipment, and right-of-use assets were up slightly by EUR 0.1 billion year-on-year in the first three quarters of 2024, due in particular to higher depreciation and amortization. In the United States operating segment, higher depreciation expense in connection with accelerations of certain technology assets as part of T‑Mobile US modernizing its network, technology systems, and platforms was partly offset by lower depreciation of right-of-use assets. In the Germany operating segment, depreciation and amortization increased, partly as a result of the sale and leaseback of passive network infrastructure in connection with the sale of GD Towers. No significant impairment losses were recorded in the reporting period. In the prior-year period, impairment losses amounted to EUR 0.1 billion.

For information on the presentation of the sold GD Towers business entity in the prior year, please refer to the section “Group organization, strategy, and management.”

Profit before income taxes

Profit before income taxes decreased by EUR 9.5 billion to EUR 14.7 billion for the aforementioned reasons. Loss from financial activities included in this decreased year-on-year from EUR 4.4 billion to EUR 3.1 billion, mainly due to the increase in the share of profit of associates and joint ventures included in the consolidated financial statements using the equity method to EUR 1.3 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. Finance costs and other financial income remained stable compared with the prior-year period.

Net profit, adjusted net profit

Net profit decreased year-on-year by EUR 11.8 billion to EUR 7.0 billion. This change was primarily due to the deconsolidation gain from the sale of GD Towers in the prior year. Tax expense increased by EUR 1.3 billion to EUR 3.6 billion. The tax rate was significantly reduced in the first three quarters of the prior year by the realization of tax-free income from the sale of GD Towers. Taxes were furthermore reduced in the prior-year period by deferred tax effects arising in connection with the concluded sale-and-leaseback transaction. Profit attributable to non-controlling interests increased by EUR 0.9 billion to EUR 4.1 billion. This increase was primarily attributable to the United States operating segment. Net profit adjusted for special factors amounted to EUR 7.1 billion compared with EUR 6.1 billion in the prior-year period.

For further information on tax expense, please refer to the section “Income taxes” in the interim consolidated financial statements.

Earnings per share, adjusted earnings per share

Earnings per share is calculated as net profit divided by the weighted average number of ordinary shares outstanding, which totaled 4,948 million as of September 30, 2024. This resulted in earnings per share of EUR 1.42, compared with EUR 3.78 in the prior-year period, which was mainly affected by the proceeds from the sale of GD Towers. Earnings per share adjusted for special factors affecting net profit amounted to EUR 1.43 compared with EUR 1.23 in the prior-year period.

Employees

The Group’s headcount remained stable against the end of 2023. The total number of full-time equivalent employees in the United States operating segment increased by 4.8 % compared to December 31, 2023, primarily due to an increase in retail employees to support T‑Mobile US’ growing customer base, and the Ka’ena Acquisition in the second quarter of 2024. In our Germany operating segment, the number of employees declined by 2.7 % against the end of the prior year. Employees continued to take up socially responsible instruments as part of staff restructuring activities, such as dedicated retirement and phased retirement. In our Europe operating segment, the headcount was down slightly by 0.4 % compared with the end of the prior year, in particular in Greece. The headcount in our Systems Solutions operating segment was down 1.5 % against year-end 2023, mainly due to a workforce reduction in traditional infrastructure business. The headcount in the Group Headquarters & Group Services segment was down 3.5 % compared with the end of the prior year, mainly due to the continued staff restructuring measures, in particular at Vivento.

Reconciliations of financial performance indicators from the IFRS consolidated financial statements

A reconciliation of the definition of EBITDA to the “after leases” indicator (EBITDA AL) can be found in the following table:

The following table presents the reconciliation of net profit to net profit adjusted for special factors:

The following table presents a reconciliation of EBITDA AL, EBIT, and net profit to the respective figures adjusted for special factors: