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Deutsche Telekom exceeds guidance

February 24, 2022

Deutsche Telekom increased its financial figures in 2021. The Group’s total revenue grew by 7.7 per cent in the 2021 financial year to €108.8 billion, with service revenues increasing by 6.5 per cent to €84.1 billion. Adjusted EBITDA AL rose by 6.6 percent year-on-year to €37.3 billion. Based on constant exchange rates, i.e., those used for the 2021 guidance, the Group reached €38.2 billion, exceeding its forecast for adjusted EBITDA AL, which had just been raised in November.“We won’t let up,” said Tim Höttges, CEO of Deutsche Telekom. “Profits are growing in all areas. The Group’s successful course continues.”In 2021, Deutsche Telekom invested €18 billion worldwide, excluding expenses for mobile spectrum. Some 5.9 per cent more than in the previous year. Adjusted net profit increased by 2.6 per cent to €5.9 billion; on an unadjusted basis, it increased by 0.4 per cent to €4.2 billion.For the current financial year, the Group expects free cash flow AL of around €10 billion. Adjusted EBITDA AL is expected to reach €36.5 billion. The comparison with 2021 must take into account changes in the composition of the Group, primarily the deconsolidation of T-Mobile Netherlands, and effects from the reduction of the terminal equipment lease business in the US. The figure adjusted for these lease effects – adjusted core EBITDA AL – is expected to increase by around 5 per cent in 2022 on a like-for-like basis. Adjusted earnings per share are expected to reach more than €1.25, compared to €1.22 in 2021. Deutsche Telekom also confirmed its target of at least €1.75 for 2024.Germany: Growth trajectory continues
In its home market, Deutsche Telekom can look back on a year of substantial growth in customer numbers and of strong earnings. In the broadband business, the Company recorded 360,000 customer additions, thus significantly increasing its market share in 2021. At year-end, 17.2 million (retail and wholesale) customers were using a fibre-optic based line (FTTH, VDSL/vectoring), 1.2 million more than a year earlier.In mobile communications, Telekom recorded growth in branded contract customers of 666,000 for the full year. The clear market leadership in terms of mobile service revenues was reinforced. In the fourth quarter, this figure was up 2.3 per cent against the prior-year period.The Germany operating segment increased total revenue by 1.6 per cent year-on-year in the 2021 financial year to €24.2 billion. Growth in adjusted EBITDA AL was even stronger: up 3.6 per cent to €9.5 billion.

United States: Positive outlook
T-Mobile US ended the year with 108.7 million customers, an increase of 6.7 million within 12 months. More than 2.9 million of these additions related to the particularly profitable postpaid phone segment.Total revenue increased by 15.2 per cent to $80.8 billion. At the same time, adjusted EBITDA AL increased by 11.8 per cent to $26.9 billion. The business combination with Sprint is paying off. Last year, synergies leveraged in shared functions, sales, and networks amounted to $3.8 billion. In 2022, this figure is expected to rise to between $5 and 5.3 billion, thereby exceeding the integration costs of the merger on a full-year basis for the first time since the business combination with Sprint as of April 1st 2020.Europe: Milestone reached

The Europe operating segment generated adjusted EBITDA AL of more than €4 billion within a year for the first time. In organic terms, i.e., adjusted for exchange rate effects and changes in the composition of the Group, this was 5.4 per cent more than in the prior year. This indicator for earnings performance had increased organically year-on-year in every quarter of the last four years. Service revenues grew by 2 per cent in organic terms in 2021 to €9.6 billion.Customer numbers increased in all areas in 2021. The European national companies won 770,000 new mobile contract customers in total. The number of broadband customers went up by 350,000. The number of users of convergent fixed-mobile product bundles increased by 842,000.Systems Solutions: Delivered in terms of earnings
T-Systems has achieved the most important financial target for 2021. The corporate customer segment generated adjusted EBITDA AL of 286 million euros, primarily thanks to strict cost discipline. That is 2.5 per cent more than in the previous year.Revenue declined by 3.4 per cent in the year just ended to €4 billion euros. Order entry was 8.5 per cent down year-on-year at €4.2 billion,Group Development: Cell tower business continues to grow
The cell tower business in the Group Development segment performed well in the year just ended. In organic terms, revenue increased in 2021 by 5.4 per cent year-on-year to €1.1 billion. At the same time, adjusted EBITDA AL grew 6.3 per cent in organic terms to €0.6 billion. The comparison on an organic basis is adjusted for the sale of the Dutch cell towers. The number of cell sites grew by 1,100 in organic terms in the past 12 months to 40,600.The sale of T-Mobile Netherlands (TMNL), announced in September, is not yet complete. As such, the TMNL figures are included in full in the consolidated data for 2021. In the past year, the Dutch business recorded 192,000 mobile contract additions. Total revenue amounted to €2.1 billion, adjusted EBITDA AL to €0.7 billion.

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