Tear Sheet: Deutsche Telekom AG

In our view Deutsche Telekom (DT) continues to demonstrate strong potential to deleverage comfortably below 3.5x on an S&P Global Ratings-adjusted basis by year-end 2023. Deleveraging prospects are primarily because we expect healthy EBITDA growth in 2023 and 2024, chiefly driven by synergy realization at T-Mobile U.S. (TMUS) and steady growth in subscriber service revenue. However, we think DT?s deleveraging trajectory depends on how management decides to balance deleveraging, the speed of increase in ownership of TMUS, the pace of fiber roll-out in Germany, and shareholder returns. At year-end 2022, adjusted leverage stood at 3.6x (about 3.5x excluding captive finance related debt) and we expect DT will deleverage to about 3.0x-3.2x by year-end 2024. Our expectation is based on the

...In our view Deutsche Telekom (DT) continues to demonstrate strong potential to deleverage comfortably below 3.5x on an S&P Global Ratings-adjusted basis by year-end 2023. Deleveraging prospects are primarily because we expect healthy EBITDA growth in 2023 and 2024, chiefly driven by synergy realization at T-Mobile U.S. (TMUS) and steady growth in subscriber service revenue. However, we think DT's deleveraging trajectory depends on how management decides to balance deleveraging, the speed of increase in ownership of TMUS, the pace of fiber roll-out in Germany, and shareholder returns. At year-end 2022, adjusted leverage stood at 3.6x (about 3.5x excluding captive finance related debt) and we expect DT will deleverage to about 3.0x-3.2x by year-end 2024. Our expectation is based on the following assumptions:...

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