Debt capital strategy

The strategy of Deutsche Telekom is covered by a financial strategy with three key core points:?

  • Attractive dividend policy for shareholders
  • Security for investors
  • Increase of the company value (ROCE)

Having undisputed access to the debt capital markets at all times is the core objective of Deutsche Telekom's debt capital strategy.

Please click on the terms below for further details about the cornerstones of our debt strategy:

In order to ensure unhindered access to the debt capital market at all times, Deutsche Telekom has set the following target corridor for its finance strategy: Credit ratings are to be in the solid investment grade, i.e., not over A- and not under BBB.

Deutsche Telekom's current ratings correspond to these requirements:

Moody'sS & PFitch
Long-term rating?

Baa1

BBB

BBB+

Outlook

Negative

Stable

Stable

Short-term rating

P-2

A-2

F2

Current study

Download? (pdf, 1.4 MB)Download? (pdf, 139.7 KB)Download (pdf, 803.0 KB)

What is a rating?

Ratings assess the creditworthiness of a company. The rating assesses to what extent the issuer of a bond will be able to meet its obligations for interest and capital repayments also in the future. The published assessments of the independent rating agencies are an important risk indicator for an issued financial instrument.

Deutsche Telekom AG's financial strength is regularly assessed by the international rating agencies Moody's Investors Service, Standard & Poor's, and Fitch Ratings.

Net debt is an important key performance indicator for investors, analysts and rating agencies. It is one of the Group's key management ratios, especially as a component of relative financial ratios such as net debt/adj. EBITDA, and fundamental information for the international financial markets.?

DT has a strong commitment to its financial policy and a long standing track record to stay within its tolerance levels:?

BI_Leverage Ratio

Net debt/adj. EBITDA ratio is at 2.64x at March31,?2020. ?

The main factors influencing this are given in the overview below.

Net debt increased from EUR 76?billion at the end of 2019?to EUR 77.4?billion as of March31, 2020.

  • Additional leasing (EUR 1?billion),
  • measurement effects from forward-payer swaps at T?Mobile US (EUR 1 billion),
  • as well as exchange rate effects (EUR 0.7 billion) and Others
  • were only partially offset by the positive effects from free cash flow (EUR 2.3?billion).

For more information on net debt and how it has developed please refer to Interim Report (pdf, 751.7 KB) as of March 31, 2020?on page? 19.

1Ratios for the interim quarters calculated on the basis of previous four quarters

One of the guidelines for our financial policies defines an equity ratio corridor of between 25 and 35 percent. Fixing of the equity ratio in this interval helps on the one hand to optimize risk for all equity and liabilities and on the other hand to increase the return on equity. The limiting factor for the level of debt is a defined ratio of net debt to EBITDA of between 2.25x and 2.75x.

Deutsche Telekom ensures the solvency and financial flexibility of the Group at all times by means of an adequate liquidity reserve. Credit lines and cash are assessed as covering the maturities of bonds and loans of the next 24 months. As of March 31, 2020?the liquidity reserve amounts to EUR 16.7?billion.

For more information on the liquidity reserve, please refer to page 18?of the current Q1/2020?Backup (pdf, 1.6 MB).


T-Mobile US and OTE have the possibility to finance themselves independently on the international debt capital markets. Both subsidiaries therefore have their own rating. For further details please refer to the company websites (TMUS, OTE). For an overview of TMUS’ current capital structure please see Q1/2020?Backup (pdf, 1.6 MB) on page 19.

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You have questions about the Telekom Share, financial reports or similar topics? Contact us!

Picture Contact

Investor Relations

Deutsche Telekom

[email protected]

+49 228 181‐88880

+49 228 181‐88899

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Address

Friedrich-Ebert-Allee 140, 53113 Bonn

Picture Markus Sch?fer

Markus Sch?fer

Vice President Debt Capital Markets

[email protected]

+49 228 181‐84255

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Address

Friedrich-Ebert-Allee 140, 53113 Bonn

Picture Christoph Lüttig

Christian Kuhlen

Senior Expert Debt Capital Markets

[email protected]

+49 228 181‐87842

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Address

Friedrich-Ebert-Allee 140, 53113 Bonn

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