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 continuing across markets; group service revenues up 4.1% and adjusted EBITDA AL up 6.5% year-over-year.

• Free cash flow AL increased 25.9% to €8.9 billion, and adjusted EPS rose 23% to €0.95; net profit impacted by prior year's GD Towers gain.

• Major U.S. transactions completed, including Ka’ena (Mint Mobile) acquisition, and announced fiber JVs (Lumos, Metronet) and UScellular deal.

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

• T-Mobile US surpassed 100 million postpaid customers; strong customer momentum in US, Germany, and Europe.

Financial highlights

• Net revenue for H1 2024 was €56.3bn (+2.3% y/y); service revenue up 4.1% to €47.6bn; adjusted EBITDA AL up 6.5% to €21.3bn.

• Free cash flow AL rose 25.9% to €8.9bn; adjusted net profit up 31.3% to €4.7bn; adjusted EPS at €0.95 (+23% y/y).

• Adjusted EBITDA AL margin improved to 37.8%; net debt (excl. leases) stable at €97.1bn; equity ratio at 31.2%.

• Cash capex (before spectrum) decreased 16.7% to €3.7bn; dividend payments of €3.8bn.

• 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 around €19.0bn, reflecting strong US operating cash flow.

• Group adjusted EBITDA AL guidance at ~€42.9bn and recurring adjusted EPS at more than €1.75.

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