Deutsche Telekom (DTE) Q2 2024 earnings summary

Executive summary

• Achieved strong Q2 and H1 2024 results, with all segments contributing to growth and operational momentum across markets; group service revenues up 4.1% and adjusted EBITDA AL up 6.2% year-over-year.

• Free cash flow AL increased 25.9% to €8.9bn, and adjusted EPS rose 23% to €0.95 year-over-year.

• Major U.S. transactions completed, including Ka’ena (Mint Mobile) acquisition, Lumos, Metronet, and UScellular deals; TMUS surpassed 100 million postpaid subscribers.

• Finalized wage agreement in Germany, absorbed government stake sale, and entered binding agreement on Chinese equipment usage.

• Ex-lease leverage reduced to 2.32x; all rating agencies at BBB+ with stable outlook.

Financial highlights

• Net revenue rose 2.3% to €56.3bn; service revenue up 4.1% to €47.6bn; adjusted EBITDA AL up 6.5% to €21.3bn.

• Free cash flow AL increased 25.9% to €8.9bn; adjusted net profit up 22.6% to €4.7bn; adjusted EPS at €0.95, up 23% year-over-year.

• Q2 2024 revenue rose 4.3% to €28.4bn; service revenues up 4.9% to €24.1bn; adjusted EBITDA AL grew 7.8% to €10.8bn.

• Net debt (excl. leases) stable at €97.1bn; net debt/adj. EBITDA AL at 2.32x; equity ratio at 31.2%.

• Paid €0.70 dividend and repurchased 43 million shares YTD; shares near 23-year highs.

Outlook and guidance

• 2024 group free cash flow AL guidance raised to ~€19.0bn, reflecting strong US operating cash flow and T-Mobile’s increased guidance.

• Group adj. EBITDA AL guidance raised to ~€42.9bn (+6%), FCF AL ~€19.0bn (+17%), adj. EPS >€1.75 (+10%).

• Ex US FCF AL guidance unchanged at €3.5bn; Germany segment EBITDA guidance of €10.5bn for 2024 reaffirmed.

• 2025 outlook: further increases expected in revenue, EBITDA AL, and FCF AL.