Deutsche Telekom : 2024 ‎Erstes Quartal Präsentation

Deutsche Telekom Q1 2024 results

May 16, 2024

Connecting your world

Disclaimer

This presentation contains forward-looking statements that reflect the current views of Deutsche Telekom management with respect to future events.

These forward-looking statements include statements with regard to the expected development of revenue, earnings, profits from operations, depreciation and amortization, cash flows and personnel-related measures. You should consider them with caution. Such statements are subject to risks and uncertainties, most of which are difficult to predict and are generally beyond Deutsche Telekom's control. Among the factors that might influence our ability to achieve our objectives are the progress of our workforce reduction initiative and other cost-saving measures, and the impact of other significant strategic, labor or business initiatives, including acquisitions, dispositions and business combinations, and our network upgrade and expansion initiatives. In addition, stronger than expected competition, technological change, legal proceedings and regulatory developments, among other factors, may have a material adverse effect on our costs and revenue development. Further, the economic downturn in our markets, and changes in interest and currency exchange rates, may also have an impact on our business development and the availability of financing on favorable conditions. Changes to our expectations concerning future cash flows may lead to impairment write downs of assets carried at historical cost, which may materially affect our results at the group and operating segment levels.

If these or other risks and uncertainties materialize, or if the assumptions underlying any of these statements prove incorrect, our actual performance may materially differ from the performance expressed or implied by forward-looking statements. We can offer no assurance that our estimates or expectations will be achieved. Without prejudice to existing obligations under capital market law, we do not assume any obligation to update forward-looking statements to take new information or future events into account or otherwise.

In addition to figures prepared in accordance with IFRS, Deutsche Telekom also presents alternative performance measures, including, among others, EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA after leases, adjusted EBITDA margin, Core EBITDA, adjusted EBIT, adjusted net income, free cash flow, free cash flow after leases, gross debt, net debt after leases and net debt. These alternative performance measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with IFRS. Alternative performance measures are not subject to IFRS or any other generally accepted accounting principles. Other companies may define these terms in different ways.

2

Q1 2024 results

Group

Q1/24

consistent reliable growth

Q1/2024 Highlights

• Organic Growth: Group service revenues up 4.1%, Group adj. core EBITDA AL up 6.9%, all segments contributing. FCF AL up 3.6%, adj. EPS up 15.4%1
• US/GER/EU: Strong customer momentum continues
• GER with 30th, EU with 25th consecutive quarter of organic EBITDA AL growth
• Improved outlook for TM US reflected in guidance
• TM US creates Fiber JV with EQT targeting 3.5mn homes by 2028
• Ka'ena transaction in the US closed in May
• TM US launches auction for its 800MHz spectrum
• TM US receives 2.5 GHz spectrum from auction 108

1 FCF AL and adj. EPS growth rate as reported.

4

Financials Q1/24 organic

strong organic growth

Q1/24 Adj. EBITDA AL	Adj. Core EBITDA AL
growth yoy, organic	growth of 7.9%1

TMUS

Q1/24 Adj. EBITDA AL by segment2

€ mn

Q1/24 Key Financials

% growth yoy, organic

GER

6.1%

+€401 mn

3.0%

+€75 mn

2,576

Group revenues

Group service revenues

ex US Service revenues

EU

8.1%

+€81 mn

SYS

1.5%

+€1 mn

1,069

6,932

77

Group adj. Core EBITDA AL

Group adj. EBITDA AL

ex US adj. EBITDA AL

1.6%

4.1%

3.6%

6.9%

5.8%

5.2%

TMUS GER EU SYS

1 according to IFRS. US GAAP growth is 8.0%. Adj. Core EBITDA excludes decreasing handset leasing revenues (US$ -0.1 bn yoy). 2 Excl. GHS & GD (-175 mn €). Group EBITDA AL €10,473 mn.

In this presentation the Group in Q1/2023 is presented in accordance with the management view: certain key performance indicators like revenue and adj. EBITDA AL are presented as if GD Towers still would be fully consolidated.

This view is different to the consolidated financial statements of DT where Group Development is treated as a discontinued operation. For more details, please refer to the back-up to this presentation, respectively the annual report of DT both available at www.telekom.com/en/investor-relations.

5

Networks

leading with 5G, FTTH on track

FTTH (1 Gbps)

Fiber homes
mn			+3.6
					17.5
			13.9
			9.3
	EU	8.2
	GER	5.7	8.2
			Q1/23	Q1/24

GER

• Fiber: On track for >10mn HHs by YE.
• German fixed network: Magenta TV selected by "Connect" readers as No. 1 IPTV service

EU

• On track for 10 mn HHs with 1 Gbps by 2024. Coverage now at 36% of HHs

5G TM US

Ultra capacity 5G1

mn POPs

275	>300
Q1/23	Q1/24

Network Leader

• Ookla report finds T-Mobile's median download speeds are 2x faster than AT&T's and Verizon's.

5G

• Expansive breadth and depth of deployment: Nearly 95% of 5G network traffic on mid-band spectrum

5G ex US
Germany
% of POPs	+1pp
95	96
Q1/23	Q1/24

GER

• Telekom wins Chip magazine German mobile network test for the 14th time in a row.

EU

• Ongoing roll-out of 5G coverage: 68% POP coverage end of Q1/24. Up 17 pp since Q1/23

1 Ultra capacity on mid band spectrum.

6

Customers

growing strongly

Mobile net adds

000

US (postpaid)

1,293	1,220
Q1/23	Q1/24

Fixed line net adds2

000

Broadband

157
	95
Q1/23	Q1/24

Ex US (contract)1	465
378
Q1/23	Q1/24

1 GER + EU. GER: own brand only 2 GER + EU

TV	101
79
Q1/23	Q1/24

7

Society and Environment

strong ESG performance; energy consumption reduced again

Societal agenda

Customer satisfaction1

Tri*M
72.6	75.0	76.2
2021	2022	2023

Employee satisfaction2

%	80	81	78
	2021	2022	2023

Environment

• NEW We published our initial transition plan with the new CR report as well as PAIs and GSMA indicators for Telcos
• Climate targets validated by STBi3
• NEW DT is first telco in the world to use large-scale battery storage systems for renewable energies.
• NEW Group energy consumption -3% yoy in Q1/24 and CO2 emissions (Scope 1&2) -2%

Society

• NEW New spot ("lights on") of our often awarded
  #against hate speech campaign

Governance

• S&P Global ESG - Best European telco

Environmental agenda

Energy consumption mn MWh

	13.3	13.3	12.2
US	8.0	8.5	7.7
Group	5.3	4.7	4.6
ex US
	2021	2022	2023

CO2e emissions (scope 1+2)

kt	247	233	217
US	52
54
46
Group	195	179	171
ex US
	2021	2022	2023

1 ex US. 2 ex US. Positive answer on employee/pulse survey question: "How do you feel at our company" 3 SBTi=Science Based targets initative

8

Guidance 2024

adj. EBITDA and Core EBITDA outlook raised for T-Mobile US

Adj. EBITDA AL1	~+6%			TM US		DT Ex US
€ bn
40.6	~42.9	~42.9
26.6	~28.5	~28.6		+0.05
14.0	14.4	14.4
	FY 2023	Guidance 2024	Guidance
	pro forma		update Q1
Core EBITDA AL Adj.1	~+6%			TM US		DT Ex US
€ bn		~42.8
			~42.8
40.3
26.3	~28.4	~28.5		+0.05
14.0	14.4	14.4
	FY 2023	Guidance 2024	Guidance
	pro forma		update Q1

FCF AL1						TM US		DT Ex US
€ bn		~+16%
					~18.9
16.2
12.9		~15.4	+0.05
		3.52			3.52
	FY 2023	Guidance 2024

pro forma

Adj. EPS	Recurring adj. EPS
€/share	~+10%
1.60	>1.75
FY 2023	Guidance 2024

1 TM US guidance is based on midpoint of US GAAP guidance of US$31.5 - 32.0 bn adj. EBITDA; of US$31.4 - 31.9 bn Core adj. EBITDA and of US$16.4 - 16.9 bn FCF. FCF AL TM US guidance remains unchanged due to rounding. Guidance assumes a

negative bridge of US$-0.9 bn on adj. EBITDA and Core adj. EBITDA upon translation into IFRS. Based on 1€ = US$1.08. 2 2024 guidance includes €0.2 bn of cash returns related to tower transaction. 2023 pro forma includes 0.1bn cash returns related to tower transaction. Both exclude TM US dividend receipts.

9

Q1 2024 results

Review of segments and financials