Tear Sheet: Deutsche Telekom AG

. DT's adjusted leverage declined to 3.1x at year-end 2023 from 3.7x in 2022 (company defined net debt to EBITDA of 2.82x in 2023 from 3.07x in 2022). This decline primarily stemmed from continued service revenue growth and EBITDA expansion as a result of synergy realization from DT's subsidiary TMUS, but also from a decline in exceptional costs affecting EBITDA (to €2.3 billion in 2023, from €4.2 billion in 2022) and declining adjustment for handset leases at TMUS, which historically have been the two key differences between company defined EBITDA and S&P Global Ratings-adjusted EBITDA. Although we forecast EBITDA expansion to continue, we expect limited deleveraging in 2024 since we assume cash out flows from shareholder distributions (dividends and share

...April 12, 2024 Despite a sharp decline in Deutsche Telekom AG (DT)'s S&P Global Ratings-adjusted leverage in 2023, we expect limited leverage reduction in 2024. DT's adjusted leverage declined to 3.1x at year-end 2023 from 3.7x in 2022 (company defined net debt to EBITDA of 2.82x in 2023 from 3.07x in 2022). This decline primarily stemmed from continued service revenue growth and EBITDA expansion as a result of synergy realization from DT's subsidiary TMUS, but also from a decline in exceptional costs affecting EBITDA (to 2.3 billion in 2023, from 4.2 billion in 2022) and declining adjustment for handset leases at TMUS, which historically have been the two key differences between company defined EBITDA and S&P Global Ratings-adjusted EBITDA. Although we forecast EBITDA expansion to continue, we expect limited deleveraging in 2024 since we assume cash out flows from shareholder distributions (dividends and share buybacks at TMUS and DT) and payments for spectrum licenses to be greater than...

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