Deutsche Telekom (DTE) CMD 2024 Day 1 summary

Strategic direction and future ambitions

• Accelerating the Flywheel strategy by embedding data and AI, leveraging global scale, and focusing on both B2C and B2B growth.

• Maintaining leadership in 5G and fiber, targeting over 20 million fiber homes passed in Germany and Europe by 2024, and #1 5G coverage in the US, Germany, and EU.

• Portfolio management remains central, with ongoing asset optimization, recent tower monetization, and increased stake in T-Mobile US for financial flexibility.

• Committed to ESG, including 100% renewable energy for scope 1 and 2, ≥-55% Scope 1-3 emissions by 2030, and 100% circularity in technology and devices by 2030.

• Strategy emphasizes customer experience, digital transformation, and leveraging global platforms for operational efficiency and product innovation.

Financial guidance and targets

• Service revenue growth target raised to ~4% CAGR, with EBITDA growth guidance at 4%-6% through 2027.

• Adjusted EPS expected to grow by >11% annually, reaching ~€2.5 in 2027, and free cash flow projected at ~€21 billion by 2027.

• ROCE commitment increased to ~9% by 2027, maintaining a 21% CapEx-to-sales ratio in Europe and exceeding WACC.

• U.S. operations expected to deliver ~5% service revenue growth, ~7% EBITDA CAGR, and $18-19 billion free cash flow in 2027, with $80 billion capacity for investments and returns.

• European segment targets 2.5%-3% service revenue growth, 4%-5% EBITDA growth, and double-digit ROCE, with DT ex US aiming for 2.5-3% EBITDA CAGR and 3-4% FCF CAGR.

Business developments and operational highlights

• Over €71 billion invested in fiber and 5G since the last Capital Markets Day, resulting in #1 market positions and 300 million customers.

• Digital transformation and AI adoption have driven higher NPS, reduced churn, and improved efficiency, with >90k AI enablements since 2023.

• Fiber rollout continues at ~2.5 million homes per year in Germany and >1 million per year in Europe, with focus on high utilization and copper decommissioning.

• Workforce transformation includes increased diversity, a younger average age, and a growing share of digital and AI experts.

• Brand value has risen 84% in four years, making it the most valuable telco brand globally and a key differentiator in customer engagement.