Comparison of the Group's expectations with actual figures

In the 2015 Annual Report, we outlined expectations for the 2016 financial year for our financial and non-financial key performance indicators anchored in our management system. The following tables summarize the results in 2015, the results expected for the reporting year, and the actual results achieved in 2016. The performance indicators that we also forecast in the 2015 Annual Report and their development are presented in the individual sections.

Comparison of the expected financial key performance indicators with actual figures
    Results in 2015  Expectations
for 2016
Results
in 2016
ROCE % 4.8 slight increase 5.7
Net revenue billions of € 69.2 increase 73.1
Profit (loss) from operations (EBIT) billions of € 7.0 strong increase 9.2
EBITDA (adjusted for special factors) billions of € 19.9 around 21.2 21.4
Free cash flow (before dividend payments and spectrum investment) billions of € 4.5 around 4.9 4.9
Cash capex a billions of € 10.8 around 11.2 11.0
Rating (Standard & Poor's, Fitch)   BBB+ from A– to BBB BBB+
Rating (Moody's)   Baa1 from A3 to Baa2 Baa1
 
a Before spectrum investment.
Comparison of the expected non-financial key performance indicators with actual figures
    Results
in 2015
 Expectations
for 2016
Results
in 2016
Customer satisfaction (TRI*M index)   67.4 slight increase 70.2
Employment satisfaction (commitment index) b   4.1 stable trend 4.1
Fixed-network and mobile customers        
Germany        
Mobile customers millions 40.4 slight increase 41.8
Fixed-network lines millions 20.2 slight decrease 19.8
Broadband lines millions 12.6 slight increase 12.9
United States        
Branded postpaid millions 31.7 strong increase 34.4
Branded prepay millions 17.6 slight increase 19.8
Europe        
Mobile customers millions 52.7 decrease 51.7
Fixed-network lines millions 8.8 slight decrease 8.7
Retail broadband lines millions 5.2 increase 5.6
Systems Solutions        
Order entry millions of € 5,608 increase 6,605
  
b Commitment index according to the most recent employee surveys in 2015 and 2012.

In the reporting year, we met or exceeded all of our financial key performance indicators forecast in the prior year. Our performance in 2016 was dominated by substantial growth in revenue and adjusted EBITDA, driven mainly by U. S. business, which recorded growth on the back of the persistently rapid rate of new customer acquisition as a result of the Un-carrier campaigns. Net exchange rate effects were only a subordinate factor influencing these performance indicators. The positive effect of the terminal equipment lease model introduced at T-Mobile US had already been factored into our expectations for adjusted EBITDA and, at the time of our forecast, we had also made reference to the higher volatility of our financial figures. As for cash capex (before spectrum investments), though we came in just below the forecast figure of around EUR 11.2 billion, our investment volume of EUR 11.0 billion was even higher than last year’s already strong level. In the Germany, Europe, and United States operating segments, cash capex increased as a result of the investments made in connection with the network build-out and the network modernization.

Our key performance indicator ROCE (return on capital employed) improved by 0.9 percentage points in the reporting period to reach 5.7 percent. This positive trend was due to a substantial increase in net operating profit after taxes (NOPAT), which more than offset the rise in the average amount of net operating assets (NOA) over the year. The main positive factors influencing NOPAT in 2016 were income from the sale of our stake in the EE joint venture and income from transactions for the exchange of spectrum licenses between T-Mobile US and two competitors. These positive factors were partially offset by the impairments of goodwill and property, plant and equipment recognized in the financial year. The increase in average NOA is largely the result of the build-up of assets in our United States and Germany operating segments. In Germany, this development was largely due to the investments made as part of our integrated network strategy. In the United States, the increase in NOA was not only down to ongoing network build-out, but also to the acquisition of spectrum and spectrum exchange transactions.

We are also extremely well on track with our non-financial key performance indicators. In our United States operating segment, in particular, we again recorded continued strong mobile customer additions, both in the postpaid and prepay segments. 2016 was the third year in succession in which we won over more than eight million new customers. In our Systems Solutions operating segment, the order volume rose more sharply than expected. This was attributable, on the one hand, to delays with order entries that we had expected in 2015 and, on the other, to two additional major contracts that we signed at the end of 2016. Details on the trends in our financial and non-financial key performance indicators can be found in this section as well as in the section “Development of business in the operating segments”.