Deutsche Telekom (DTE) CMD 2024 Day 2 summary

Strategic Review, Capital Allocation, and Portfolio Management

• Emphasizes a disciplined, ROCE-driven approach, avoiding risky M&A and focusing on value creation through strategic investments and divestments.

• Achieved >50% TMUS stake, maintains strong balance sheet with leverage ≤2.75x, and a €15 billion surplus for share buybacks or increasing the US stake.

• Shareholder remuneration for 2025 includes a €0.90 dividend and up to €2 billion share buyback, with flexibility to adjust based on market conditions.

• Launched a €2 billion Tech Fund for strategic investments in SaaS, AI, and IoT, targeting attractive returns and future growth.

• No major M&A currently planned; focus remains on operational investments, share buybacks, and maximizing shareholder value.

Financial Guidance and Operational Outlook

• Targets €21 billion free cash flow AL by 2027, 4–6% group EBITDA growth, 3–4% ex-US EBITDA growth, and >50% EPS growth, with ex-US CapEx rising to €8 billion by 2027.

• Adj. EPS expected to rise to ~€2.5 and ROCE to ~9% by 2027.

• Delivered on previous commitments, tripling free cash flow and exceeding EBITDA guidance, with consistent revenue and profit growth.

• Efficiency gains from AI, automation, and network scaling to deliver ~€1.5 billion in cost reductions by 2027.

• Ex-US business expects €2 billion EBITDA growth, but only €300 million free cash flow increase due to tax, interest, pension, and working capital effects.

Technology, Innovation, and Segment Strategies

• Focus on scaling product and tech platforms, aiming for €200 million scale value in networks and €800 million impact from AI and automation by 2027.

• Autonomous networks and AI-driven operations target 20–30% productivity increase in field service and 15% in DevOps by 2027.

• Ambition to have >3,000 ORAN sites live and >90% automated/AI-based fault resolution rate by 2027.

• B2B group targets ~5% CAGR in service revenues and profitability growth above service revenue growth from 2023–2027.

• T-Systems continues portfolio transformation, focusing on cloud, digital, and AI, with double-digit EBITDA growth in 2024.