Strong business figures: Telekom plans to pay out record dividend

The CEO of Deutsche Telekom misses a sense of responsibility for future issues in Europe - and especially from Germany. "I wonder why the largest economy in Europe has not managed to organize an AI summit," asked Tim Höttges on Wednesday when Telekom presented its financial figures in Bonn. French President Emmanuel Macron had shown the way and brought all leading companies and politicians to Paris. At the event, EU Commission President Ursula von der Leyen had spoken out in favor of mobilizing 200 billion euros in private and public funds for the expansion of AI infrastructure. There is nothing comparable in Germany, criticized Höttges. He had therefore also initiated a cloud conference in his own company.

"We need to bring optimism about technology and growth into the country," said Höttges. He expects the new government to provide impetus in this regard. In the coming years, there will be an increase in the need for computing capacity of at least 30 percent, with companies like Microsoft investing billions in new data centers. "Where is Europe?" asked Höttges.

Telekom wants to make its contribution and invest more in this area, companies have a responsibility. "We will certainly not altruistically throw money into the landscape. But I am certainly prepared to build more data centers," said Höttges. But it is not just about money, but also about permits and a stable and affordable power supply.

The Telekom boss also argued that German and European companies and the public sector should also buy products and offers from local companies and not just rely on American hyperscalers. "We can't just complain," said Höttges. At the same time, even Telekom, as the largest European telecommunications company, is not in a position to change the situation on its own. "We invest 16 billion euros a year, and that's constant," said Höttges, adding that 21 percent of sales are invested in Germany. "These are values ​​that you can't just add on to." Chinese and American cloud companies are generating excess returns that enable billions in investments.

In principle, attempts to support European sovereignty, such as by attracting chip companies to Germany, are welcome. "I think it's right that we are becoming a little more independent of the world markets. We can't rely on a rich uncle somewhere who will provide for us," said Höttges. But the Americans cannot be criticized for being leaders when at the same time too little is happening in Europe . "Only competitiveness and the fact that we are capable of performing independently give us the chance to be on an equal footing with the Americans," said Höttges.

In the past financial year, Telekom also benefited primarily from the strength of its American subsidiary T-Mobile US. Group revenue rose by 3.4 percent to 115.77 billion euros in 2024, a record high. Adjusted operating profit increased by 6.2 percent to 43.02 billion euros. Free cash flow, which is considered a barometer for the dividend amount, improved by 18.7 percent to 19.16 billion euros. For this reason, Telekom also wants to pay out the highest dividend in its company history and pay 90 cents per share to shareholders.

For the current financial year, Telekom expects an operating profit of around 44.9 billion euros and a cash flow of around 19.5 billion euros, which is in line with the medium-term forecasts from the capital market day. Some analysts had expected a little more, and apparently some shareholders too: Telekom's share price was down almost 2.5 percent over the course of the day. "I think that's also profit-taking that's happening right now," said Höttges. The share price recently reached a high of 35 euros, which hasn't been seen for more than 24 years.

Höttges, whose contract was recently extended for another two years and now runs until the end of 2028, announced that he will also aim for another record year this year and wants to continue to grow in all business areas. "No company in the telecommunications sector has such economies of scale. That will help us," said Höttges. The large exposure in the American market - Telekom holds 51.5 percent of T-Mobile US and reserves the right to increase its stake further - is expected to drive growth. T-Mobile US recently announced that it will invest more than ten billion euros in acquisitions and partnerships in the USA.

Höttges, however, does not fear too much dependence. "We are well-liked by Donald Trump because we invest heavily and have created many jobs." At the same time, T-Mobile produces everything in the USA, so Telekom is not affected by tariffs. Due to existing close partnerships such as with Softbank - a major shareholder in Telekom - Höttges can also imagine participating as a partner in the "Stargate" technology investment in the USA. However, not as an investor in data centers or similar. "I see us as bridge builders, we want to ensure understanding," said Höttges. In view of the announcement by many companies in the USA that they are reviewing their diversity programs, he sees no need for change for Telekom. "We will act neutrally and will not deny the values ​​that we have developed as Telekom."