Debt capital 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:

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.

Net debt/adj. EBITDA ratio is at 2.78x as of December 31, 2024.

Net debt increased from approx. EUR 132.3 billion at the end of 2023 to approx. EUR 137.3 billion as of December 31, 2024. The main factors influencing this are given in the overview below:

• Share buyback programs of TMUS (EUR 10.4 bn) and DTAG (EUR 2.0 bn),
• Dividend payments (EUR 5.6 bn),
• M&A transactions (EUR 0.9 bn) and spectrum investments (EUR 3.2 bn), as well as
• Additional leases (EUR 3.8 bn) and
• Negative FX-effects (EUR 6.2 bn)
• could not be compensated by strong Free cashflow (EUR 24.1 bn) and cash proceeds from the sale of TMUS shares by DT (EUR 3.6 bn).

For more information on net debt and how it has developed please refer to the Group Annual Report (pdf, 3.7 MB) as of December 31, 2024 on page 77.

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 up to 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 December 31, 2024 the liquidity reserve amounts to EUR 15.0 billion.

For more information on the liquidity reserve, please refer to page 14 of the current Q4/2024 IR Backup (pdf, 776.4 KB).

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 ).