Statement by the board of management on the expected development of the group

We will remain on a course of successful growth and already differentiate ourselves from the competition by having the most modern and best networks. Going forward, we want to continue meeting our customers’ expectations with more integrated offerings. This strategic focus confirms our target of being the “leading telecommunications provider in Europe” and matches our financial targets up to 2018. As communicated at our Capital Markets Day in February 2015, for the period from 2014 through 2018, we are aiming for the following compound annual growth rates (CAGR):

  • Revenue: 1 to 2 percent
  • Adjusted EBITDA: 2 to 4 percent
  • Free cash flow: approx. 10 percent

For 2017, we expect to post the following year-on-year growth trends, assuming a comparable consolidated group and constant exchange rates:

  • Revenue is likely to increase again in 2017.
  • Adjusted EBITDA is expected to reach some EUR 22.2 billion in 2017, up from EUR 21.4 billion in the reporting period.
  • Free cash flow should increase from EUR 4.9 billion in 2016 to around EUR 5.5 billion.

In order to safeguard our success in the long term, we combined our Group-wide technology and innovation activities in a new Board department (Technology and Innovation) as of January 1, 2017. We also established Group Development, a new operating segment that will actively manage, and enhance the value of, selected equity investments of the Group. For further details of changes in the structure of the Group as of January 1, 2017, please refer to the section “Group organization”. The planning for the coming years, and thus the statements made in the following forecast, already take this new Group structure into account.