Deutsche Telekom plans to accelerate growth through the systematic use of artificial intelligence and global economies of scale. The refined strategy aims to introduce a new phase of growth, with expectations for faster expansion over the next few years. Key elements include global economies of scale and a data-driven business model, alongside the systematic use of artificial intelligence.
Based on the financial figures for 2023, the Group anticipates average annual growth of around 4 percent in both net revenue and service revenues through 2027. Adjusted EBITDA AL is projected to grow by an average of 4 to 6 percent per year. Growth will stem from business operations on both sides of the Atlantic - for the Group excluding the United States, service revenues are expected to grow by an average of 2.5 to 3 percent annually, and adjusted EBITDA AL by between 3 and 4 percent.
By 2027, Deutsche Telekom aims to generate a total of more than 15 billion euros, on top of the investments in the business and dividend payments. This leeway will provide the flexibility to either increase its stake in T-Mobile US or buy back additional shares, as well as facilitate general strategic flexibility. Investments of the Group (excl. United States), excluding expenses for mobile spectrum, are expected to account for around 21 percent of service revenues in 2027. The leverage ratio (net debt including leases to adjusted EBITDA) is expected to remain stable from 2024, at 2.75 or lower.
In the global B2B business, including T-Systems, the Company plans to accelerate revenue and earnings development. After an average revenue growth of 1.9 percent between 2020 and 2024, growth in this area is expected to rise to 3 percent, with a corresponding increase in profitability. Key drivers include an increase in awarded contracts from corporate customers, stronger growth in the public sector, cross-selling opportunities, and the expansion of the portfolio in cloud, security, IoT, and AI. T-Systems is integral to differentiating the Company from competitors.
Tim Höttges, CEO, Deutsche Telekom
We are initiating the next stage. In recent years, our strategy has made us the undisputed number one in Europe. We have achieved or even exceeded nearly all of our targets and are now worth more than all our peers on our domestic continent combined. We will build on this position in the future, for example, by further intensifying the use of artificial intelligence.