Deutsche Telekom AG Outlook Revised To Positive On Strong Operating Performance; 'BBB/A-2' Ratings Affirmed

After Deutsche Telekom AG's (DT) solid 2021 full-year results, including 3.5% organic growth in service revenue, S&P Global Ratings expects the company will deliver steady operational performance, underlined by EBITDA growth and robust free operating cash flow (FOCF), and driven by increased service revenue, synergies from the U.S. merger, and contained capital expenditure (capex). After $9.3 billion of spending on spectrum in the U.S. in 2021, deleveraging headwinds will persist in 2022 due to significant increases in lease liabilities, resulting from recent U.S. tower contract renewals, but will subside thereafter, paving the way for accelerated deleveraging from 2023. We therefore revised the outlook to positive on DT and its fully owned financing subsidiary Deutsche Telekom International Finance B.V. We affirmed

...April 22, 2022 - After Deutsche Telekom AG's (DT) solid 2021 full-year results, including 3.5% organic growth in service revenue, S&P Global Ratings expects the company will deliver steady operational performance, underlined by EBITDA growth and robust free operating cash flow (FOCF), and driven by increased service revenue, synergies from the U.S. merger, and contained capital expenditure (capex). - After $9.3 billion of spending on spectrum in the U.S. in 2021, deleveraging headwinds will persist in 2022 due to significant increases in lease liabilities, resulting from recent U.S. tower contract renewals, but will subside thereafter, paving the way for accelerated deleveraging from 2023. - We therefore revised the outlook to positive on DT and its fully owned financing subsidiary Deutsche Telekom International Finance B.V. We affirmed our '###/A-2' long- and short-term issuer credit ratings on the companies. - The positive outlook reflects a potential one-notch upgrade within two years,...

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