Good afternoon and welcome to Deutsche Telekom's Full Year 2023 Conference Call. As you can see, with me today are our CEO Tim Höttges and our CFO Christian Illek. As usual, Tim will first go through a few highlights for the year as a whole, followed by Christian who will talk about the quarterly performance and the group financials in greater detail. After this, we have time for Q&A. Before I hand over to Tim, please pay attention to our usual disclaimer, which you find in the presentation. Please also note that this conference will be recorded and uploaded to the internet. Now it's my pleasure to hand over to Tim.
Welcome, everybody. So where do we stand at the end of 2023? I think obviously our strategy is working. Our flywheel, as we always stated, is working pretty nice. Over the last 10 years, you know, we have invested EUR 170 billion. So, that's quite an amount. We now have 300 million customers on this infrastructure. We have leading networks. I think all networks are stating this on both sides of the Atlantic. And a result of a focused and far-sighted capital allocation strategy, which worked pretty well for us. We continue to invest into future growth, for sure, with our fiber investments, our new EUR 2 billion tech fund, with Open RAN technologies, with GenAI, all of this becoming stronger in regard to the leading tech digital telco. Magenta has become the most valuable brand in Europe, and it has become the most valuable global telco brand.
I think a very nice achievement. Our customer satisfaction scores are moving up as well, in all areas. And by the way, there's not a single market except Romania where we are not leading from a net promoter score. I think as well a good outcome. Customer growth continues at a high level. I think that's the stunning part of the fourth quarter here, the great customer growth on both sides of the Atlantic. We're seeing as well good customer growth in the B2B area, and mobile contract growth in Germany. I think a great number, despite the fact that we had strong competition here in this overall situation. Our customer service made huge progress as well. First-time resolution rate in Germany has now achieved 70%. Our complaint rate, by the way, came down since 2016 by 90%, from 5.4 million, you know, down to 300,000 last year.
T-Mobile in the U.S. has launched a dividend program on top of its buyback. And DT itself has launched a EUR 2 billion share buyback program on top of the dividend. Our total shareholder return was 20% in 2023. For the last 10 years, it was 174%. That brings me to our financials for 2023. And, you know the numbers. I'm quickly going over them. Our service revenue grew by 3.6% organically. EBITDA almost 7%. By the way, if you look hindsight, we are growing now since a couple of years with something in the vicinity of 4% on the service revenues and 7% on EBITDA. And the guidance going forward is in the same magnitude. So, this is a good indication, you know, four and seven. I like that number, especially when you know where the industry is coming from and where are we.
Our free cash flow grew by 41% to over EUR 16 billion, well in line with what we laid out. Europe is now on six, Germany on more than seven years of consecutive quarterly organic EBITDA growth. I think this investment in our infrastructure and in leading services is paying off. We delivered again against our 2023 guidance, which we have raised throughout the year. Our 2024 guidance means that strong growth will continue this year and that we are looking good for our 2021 capital markets targets. We will discuss that later on in more detail. Capital allocation remained focused. We regained our majority in T-Mobile last year despite the dilution from the true-up, well prepared. We completed our tower joint venture, and we reduced our net debt by EUR 10 billion in the last 12 months. T-Mobile launched a new shareholder remuneration program up to $19 billion.
For the first time, this includes a dividend as well. At the DT level, we proposed to increase our dividend by 10% to EUR 0.77. And on top of that, we have launched the EUR 2 billion share buyback program, which was mentioned to you already. Moving to the organic numbers, on page 6 here, you can find that all segments are contributing to our growth. By the way, it's not only true for EBITDA as well, true for revenues, on service we, customers as well. So it is in all categories. But here you see the EBITDA growth. Organic group service revenues grew up by 3.6%. Look, we have to consider some FX, some foreign exchange changes, but Christian will talk about that in a second. U.S. service revenue grew by 2.8%, and in the last quarter by 3.5%. Overall revenues were impacted by lower equipment revenues.
As mentioned, our organic EBITDA 6.8% growth, 6.9% growth, and 7.2% growth in the last quarter. The foundation of all this success is our network leadership. In the last 12 months, we passed 3.5 million additional European homes with FTTH and now reached 17 million fiber homes. We passed 2.6 million additional German homes with FTTH, and reached 8 million last month. In the U.S., 5G leadership is underpinned by spectrum leadership and confirmed by all the tests. T-Mobile got a clean sweep in every category of network performance from Ookla now for the fifth quarter in a row. In Europe, our 5G coverage increased 20 percentage points last year. There's clearly no doubt who has the best mobile network in Germany or even in the European entities. Please have a look to all the different network tests. Deutsche is always leading.
Our customer growth continues, both in the U.S. and in Europe. We totally added nearly 8 million postpaid customers last year. On broadband and TV nets, we accelerated as well, driven especially by strength in Germany. By the way, the customer growth of today is the service revenue growth of this year and tomorrow. So therefore, this number means a lot to me. Moving on to ESG. Despite strong growth in data usage, we further reduced our energy consumption on both sides of the Atlantic. We also reduced our CO2 emissions by 7%. By the way, this is more than what we have originally foreseen. With this, our climate targets are well on track, and our targets are SBTi approved. Our customer satisfaction improved further, while our employee satisfaction returned to no, that's not true.
To pre-pandemic levels, it's still higher than pre-pandemic, but they came down a little bit. So I'm sorry for this statement. So it is in the high 70s now, and it was a little bit about 80 in our survey in spring. Our campaigns against hate speech achieved absolutely great recognition. By the way, for the first time in history, we got the Black Effie, which is the highest recognition for any kind of advertising you can do on this. We were official partner of last year's Special Olympics, and T-Mobile has by now connected 6 million students through its education initiative. Before we get to our 2024 guidance on the next chart, let's review how we performed in the markets. Do you remember that we raised our guidance intra-year? And on this chart, we compare with our last guidance as of Q3.
To make it comparable, we adjust our actual 2023 results for our guidance parameters, mainly foreign exchange and 1 month of GD Towers. You can see that we delivered what we have promised, with a slight like for like beat, in core adjusted EBITDA and on free cash flow. With that, let's move to our guidance. As usual, our guidance is based on last year's average exchange rate, which was $1.08 per euro. Again, as usual, we are taking the midpoint of T-Mobile's guidance, subtract the GAAP and IFRS bridge, and add our expected results for DT ex-U.S., As you can see here, ex-U.S., we are guiding EBITDA of EUR 14.4 billion in 2024 and free cash flow of EUR 3.5 billion. So this is the European situation. Of course, as in 2023, our 2024 ex-U.S. free cash flow contains a regular annual return from our 49% stake in GD Towers.
For the group, we expect EUR 42.9 billion EBITDA, EUR 18.9 billion free cash flow, adjusted EPS of at least EUR 1.75. And this is driven by the expected EBITDA growth, partially offset by higher year-on-year depreciation expenses in the U.S., and in the appendix, we compare our guidance with the consensus that uses a foreign exchange of EUR 1.09. And you can see that our guidance is close, very close to the consensus on a like-for-like basis. And with this, I hand it over to Christian to give you a deeper dive into the quarter.
Thanks, Tim. And welcome from my side. And let me start with T-Mobile U.S., So core EBITDA growth in the fourth quarter was at 9%. On the full year, as you can see, it was at 10%. We have put a reconciliation between the core EBITDA to the IFRS adjusted EBITDA bridge into the appendix.
What you're seeing there is that the drag from the handset leases is clearly coming to an end. Secondly, you see that the U.S. GAAP IFRS bridge in Q4 was roughly $200 million and totaled at $860 million for the full year of 2023. What we're also seeing in the U.S. numbers is that the total revenues are impacted by lower handset or equipment revenues. The U.S. GAAP service revenue grew on a year-on-year basis by 3.4%, largely driven by the postpaid service revenue growth, which grew at 6.4%. But we had negative drags from the wireline business as well as from the wholesale business. Look, our differentiated growth strategy on the three vectors continues to work. Let me start with small markets and rural areas. We now reached a market share of 17.5% by the end of the year.
Let me remind you, we started roughly at 13% in the year 2020. Same was true for the business segment. Obviously, the fourth quarter showed the highest net adds in 2023, the highest net adds on an annual basis ever. The high-speed internet segment continues to deliver really strong growth with more than 500,000 customers in the previous quarter and net add number of 2.1 million in the year 2023, or a total install base of close to 5 million. The postpaid phone net adds totaled at $934 million, which was industry-leading. On an annual basis, it was more than $3 million. Compare this against AT&T and Verizon. T-Mobile's initial guidance for 2024 is, when it comes to postpaid net adds, in between 5%-5.5% after we've reached close to 5.7% in the year 2023.
Moving over to Germany, our organic growth improved to 3%. There was a sequential acceleration driven by handset revenues in the fourth quarter. The organic EBITDA growth remained steady at 3%. I think this is now the 14th consecutive quarter where we have the 3% number. For the 2024 segment outlook, we expect EUR 10.5 billion in the German segment compared to the EUR 10.2 billion which Germany has achieved in the year 2023. In the fourth quarter, I think I want to highlight some numbers here. Mobile service revenue is really strong at 3.2%, driven by a stunning customer growth, but also through upselling activities. Fixed service revenue slowed down to 1.3% after a very strong Q3. I think we indicated this also throughout the call in the last quarter. As you also can see on page 17, the broadband revenue has slowed down this quarter.
This is not directly related through the broadband performance, but it is a positive; there were positive one-offs in the fourth quarter of 2022, and that basically brought down the growth. One is related to contract one-offs. And the second one, you should bear in mind that the single price increase, which we introduced in October 2022, has now rolled over in the fourth quarter. Wholesale revenues in total grew this quarter and were stable for the year, exactly along the lines as we indicated at the beginning of last year. So next page, on the broadband customer performance, you see a very solid performance. We had a stunning quarter in Q3 with 96%. And I think we benefited from an elevated competitor churn, not customer churn, sorry. But basically, we were on the same level as we have been in the previous quarters.
The sequential acceleration of T-Mobile net adds is mainly through the promotional success of the MegaStream bundle offer. Now coming to fiber. Look, we had almost 1 million customers by the end of the year. We added 300,000 customers to our base, and of which roughly 50% are new customers, which is a really, really good sign. Our mobile contract customer intake remains to be strong. You see the 290,000 net adds in the Q4, and it totaled to larger than 1.2 million of net add growth for the year 2023. Let's get to Europe. Europe is actually performing really well, and it's performing better than we initially expected it. You see the organic revenue growth is at 5.6%, EBITDA growth at 4.1%. For 2024, we basically expect an EBITDA after leases of $4.3 billion versus the $4.1 billion in the previous year.
The customer growth is truly strong, and it's continuing to contribute to the service revenue growth. You saw that the European segment has added more almost 750,000 contract customers and more than 300,000 broadband customers in the year 2023. Next segment, T-Systems. So on T-Systems, pretty good revenue growth organically at 5%. Bear in mind that we moved MMS from T-Systems into the German segment. A weaker order book, and we're working on this one, but you have to bear in mind that half of the decline was due to inorganic changes. And the organic EBITDA growth was really strong in the fourth quarter. The most important message on T-Systems is they had a positive cash contribution, which they also expect to have in this given year here. So let me get to the financials.
Our full reported year financials were impacted by basically two main effects. One is obviously foreign exchange, and the second one is the tower transaction. The headline revenue was also impacted by lower equipment revenues. As mentioned earlier on by Tim, the organic service revenue grew at 3.6% in the year 2023. Our adjusted net profit amounted almost to $8 billion for the year. Obviously, the GD Towers transaction were the main reason for the big net profit on an unadjusted basis. What you saw, that the $18 billion are slightly behind what people expected. This is due to the fact that we have a regular review on impairment tests in the fourth quarter, and we had to basically impair $2.6 billion on the GD Towers business along on our stake.
But this is completely driven, and it's actually more than 100% driven by the WACC increase, which we basically put into the model according to the interest rate increases. Let's move over to free cash flow. You see on the bridge, the key free cash flow bridge and also the net profit bridge, very strong free cash flow growth year-over-year, 115% in the last quarter, largely or almost completely driven by the reduction of T-Mobile U.S. CapEx. On the adjusted net profit, we see a decline of 8% due to the effect that we have very positive effects in the previous year in 2022, which we call non-recurring. If you exclude all these non-recurring effects, our EPS grew by 6% on a year-on-year basis. So moving to our leverage, I think this is a very positive view.
What you see here is this is the ex-leases view, and you see the leverage ratios on the right-hand side, including and excluding leases. We reduced the net debt by $10 billion on an absolute basis, obviously very much supported by the GD Towers transaction. And we also absorbed, let's say, a net debt increase of $16 billion coming from dividends and the share buyback in T-Mobile U.S. due to a very strong free cash flow performance. So as it is a good tradition for our full-year call, we're also taking a look at our five-year trends. And let me start with the ex-U.S. business. What you see is in the ex-U.S. business, we have now roughly a 2% revenue growth over the past three years and roughly a 4% EBITDA growth, and a continuous EBITDA growth over the past five years.
I think what you see is the guidance number below. I think this is broadly in line with the historic performance. Also on free cash flow, bear in mind that the free cash flow in 2023 was impacted by the deconsolidation of T-Mobile Netherlands. We have a higher operating free cash flow, but we also had to bear higher interest costs and taxes. And on the interest costs, we talked about in the previous quarter. On the next chart, you see the total numbers for the group, so including T-Mobile U.S., Our service revenue grew fairly consistent over the last 5 years, so did the EBITDA, and so does the guidance going forward. And with our U.S. merger essentially completed, our free cash flow continues to grow at a double-digit rate, which is 16% expected for the next year.
And you see that, this is also contributing quite a bit, or this is solely driven basically, by the U.S., So this is kind of our midterm perspective, also ex-post, and what we expect for the prognosis or for the outlook, for 2024. And with that, I hand it over to Tim.
I'm ready, guys. Let's have Q&A and go ahead.
Okay. Thank you, guys. And with that, we start the Q&A session. I think you have, you know, the instructions. If you'd like to ask a question via WebEx, please press the raise hand function. If you require to cancel your question, please press the raise hand function again. And by calling, or if you call in on your telephone, please press star three. And if you want to cancel your questions, press star three again. I'll announce your name when it's your turn. And, if you could, please, focus on two questions. And you obviously must mute and unmute yourself. And I can already see Andrew from Goldman Sachs. And, can we please have your questions, Andrew?
Yeah. Good afternoon, everyone. Can you hear me okay?
Great.
So look, I just wanted to ask a question around the decent amount of news flow we've had, over the last week, not on wage negotiations, but on the, you know, consolidation output from the EU. So we had an in-market mobile consolidation decision with remedies in Spain. And we also had the EU white paper focusing on consolidation. It'd be really good to get your response to this. Do you think there is any sign that the EU is showing signs of being more supportive either for cross-border consolidation, or for in-market mobile consolidation? What do you think now are the biggest hurdles to justify cross-border consolidation? Thank you.
Okay. In my white paper. Okay. Sorry. I was a little bit confused here. So sorry. So look, we are not particularly very close to that process here. You have all seen the Remedies, and now, we need to see, you know, what that means really in practice. From what we can see is that the European decision seems needlessly heavy-handed given the competitive realities of the Spanish market. It's a highly competitive environment. We would highly have recommended, you know, any kind of merger approval without Remedies. You know, Madame Vestager, she's a hardliner on this regard, while Breton, at least, you know, sometimes, has another position on this one.
Let's hope that the next commission will take the more, you know, a kind of enlightened view on such cases in the future. I think, you know, it is not really, let's say, a very good signal for the whole market. Nevertheless, you know, maybe I'm too far away from this situation, and therefore you should ask these people, primarily. But, anyway, it is not, you know, a game changer. With regard to the white paper, look, we have read it, you know, and there's a lot of good things in this white paper. And, I think it is a very good, written paper, which is, you know, a good foundation, which we can use, within, starting with the new commission.
This white paper touches on a lot of topics like fiber deregulation, big tech fair share, implicitly included, cross-border connectivity, this element of spectrum harmonization which is needed to run market, and even the element of including the telco sector into the taxonomy. I think the European Commission falls a little bit short on addressing the topic of in-market consolidation. But the overall description of the state of the sector by the EU Commission is, I think, spot on. There is too much fragmentation, too low returns on capital in that market. And I think this message which we are trying to convey, you know, for years now has finally landed. So therefore, I really welcome that paper.
To be honest, you know, there will be on the Mobile World Congress on Monday, you know, for the first time in history, Orange, Telefónica, Vodafone, and Deutsche Telekom being on stage and again, you know, describing the situation and what it would take for the, you know, for Europe, you know, to catch up with the U.S. and with some Asian markets. So, we will underscore, you know, these elements. We will use that. We'd see that as a kind of tailwind from the commission here, that finally, you know, a rethinking has started.
Great. Thanks, Tim. Next question is from Robert Grindle at Deutsche Bank, please.
Thank you, gentlemen. Well done on the year just past. Something exciting in the new year is your participation in the T-Mobile buyback. Can we draw any conclusion from your current pace of selling at around the $2 billion run rate? You said you would only part participate, but it looks like pretty full to me. And separately, your shares may be being impacted at the moment by speculation over a German government placing. Have you heard anything, and do you have any thoughts? Thank you.
Robert, Christian here. So, the low 50s was the old low 50s. It's the new low 50s. It's the current low 50s. So I, I think this is kind of the indication which we have given, and we're not moving away from this. On the potential sale from the German government, look, we have no privileged insight in what our big shareholder of ours is planning to do. We know that they have to fund $4 billion to support infrastructure programs at Deutsche Bahn.
We have seen the precedent with Deutsche Post, where they basically realized $2.2 billion. And this is what we know. I think what you should bear in mind, if there are opportunities, we have an ongoing share buyback program here on the DT AG side where we basically have kind of a pro rata per day participation. If there's an opportunity, obviously, we have a lot of dry powder still in that program to react accordingly. But I can't give you any privileged information on their plans because I don't have any.
Yes. And by the low 50s, Chris, Christian was, of course, referring to our planned target stake in T-Mobile.
Yeah. Target stake, yeah.
Yes, exactly. So next, thank you, Robert and Christian. Next is Mathieu at Barclays, please.
Yes. Good afternoon. Thank you for the presentation. The first question was around the spectrum auction.
We haven't had an update from the regulator, but obviously, one of your competitors has a strong view on how the auction or the non-auction should be conducted. So maybe if you could share your view in terms of what you think is sensible and any timeline, potentially. And then, the question about Germany. It is difficult, at least for me, to understand exactly what is the pace of rollout from some of the altnets. You posted 7.9 million homes passed. I think BREKO talks about quite a higher level already built by the altnets. So I just wanted to know if you could give us a sense as to how much the altnets have built and if there's any overbuild. And if I may sweep in that, the guidance you gave for German CapEx, you talk about a slight increase.
Could you quantify a bit what is a slight increase? Thank you.
Look, spectrum auction. Bundesnetzagentur in Germany recently published a study that assessed, you know, our competitors of the German mobile market. A very important, you know, study. And it was concluded that the German mobile market is, you know, highly competitive both on the wholesale side and on the retail side. This means that there's nothing left, you know, to prevent the expiring allocation in the frequency bands 800, 1800, and 2.6 gigahertz from being extended. We expect that the Federal Network Agency will now quickly consult on the terms and conditions of the renewal so that the applications for the extension of the rights of use can be made before the summer. And this would create then the visibility for investments in the remaining white spots and further 5G expansion.
So, I think, you know, it's on a good path now. We are very encouraged by the statements, and I expect that there will be an extension of the use. With regard to the pace of rollout of altnets, look, we are seeing that overbuilders are facing a lot of pressures here, from different angles. Look, German bureaucracy is already legendary. Higher financing costs are obvious. The construction costs are going up here in Germany due to inflationary developments. Also, the connecting homes, especially multi-dwelling units in Germany, this is quite a challenge. And finally, you know, they are fighting up against, you know, a very good vectoring and super vectoring infrastructure which is different to the European markets you might focus on. Customers, more than 90% of households are, you know, able to access up to 250 Mbps.
As a consequence out of that, you know, situation, we are seeing that build-out rates are being very slow or slower than planned. For instance, you know, Telefónica's, you know, joint venture already originally targeted, you know, something around 2 million homes, and they are now targeting only 1 million homes, by year-end 2026. So, that was their latest statement on the Capital Markets Day of Telefónica. Now, what does that mean for us? The first thing it means, you know, we, we were a lot of the developers we were foreseeing, okay? We had a CapEx overrun last year, but we were able to digest that. We built out 2.6 million households, which is, you know, ahead of the commitment we made, a little bit slower than what my personal ambition was.
But look, this is the run rate which we now want to sustain for the upcoming years. We know about, let's say, the environment in which we are operating, but we are highly committed to build out our infrastructure. Second, you know, that we are guilty of, you know, that the altnets are not able to build out is simply a lie. By the way, if you look to these situations, there were only 11,000, you know, municipalities in Germany for build-out, you know, on fiber, and there were 93 complaints. And by the way, most of the complaints are in areas where you have already a cable or, you know, a vectoring or a fiber infrastructure. So, you know, it's not an overbuild by one. It's already an overbuild by multi operators in this region.
The last one, only, let's say, if I look to overbuilds, including the ones where we get overbuild, like for instance here in Bonn, the amount is less than 2%. So therefore, I think, you know, it's a cheap excuse of this industry, about their own problems. I can tell you one thing. Deutsche Telekom is moving, and we are not stopping. We won't stop on this subject. Very much committed and very excited about running up the learning curve here.
So when it comes to the last part of the question, the quantification, look, we're spending roughly EUR 4.6 billion on CapEx in the German segment. So, if there's a slight increase, it's very low single digits, which we're expecting. I think we can absorb that given that we're forecasting or guiding a CapEx envelope of EUR 15.9 billion overall.
Maybe just to add to the answer to question two, we estimate that based on our assessment of the situation using consistent definitions that we are building two-thirds of what is currently being built in the German market, and we currently supply about half of the coverage in the German market. So next question is from David at Bank of America.
Thank you, guys. Can you hear me okay?
Very well.
Very good. Okay. Thank you for your time. I guess for Christian, the EBITDA growth in 2024 that you're forecasting ex-U.S. is not finding its way through to free cash flow. And I guess you have talked about higher cash tax, cash interest. So I just wondered if we could get a little guidance on that, please.
Maybe, you know, if it is maybe cash tax NOLs that are unwinding, should we expect that to step up again in 2025 if you're able to give us any insight there, that would be super useful. Then maybe just a second question, and it does follow up on the fiber build-out. Obviously, fiber build-out supports copper switch-off. One of your peers in Europe, Telefónica, is probably the most advanced, I believe, with a full copper switch-off this year, which, of course, confers OpEx and CapEx benefits. I just wondered if we could get any indication of how you guys are thinking about copper switch-off, any targets, etc. That would be great. Thank you so much.
So on the EBITDA versus free cash flow ex-U.S., David, I think it's due to several effects.
We talked about a slightly higher cash CapEx, but we also talked about higher cash taxes, which we expect for the year 2024. It's unclear right now because we have quite a bit of discussions, especially in Germany, on accelerated depreciation and so forth, whether this holds true also for 2025. So I don't have visibility into this. And the third one is also interest renewals. We had the privilege to actually have some of the refinancing coming in with negative interest rates. They're rolling over this year. So these are the three elements with why basically the EBITDA doesn't flow through the free cash flow.
And don't forget, before you start, the ex-U.S. free cash flow is, of course, and the interest, of course, are impacted by how much T-Mobile stock we buy and, of course, our share buyback as well. And keep that in mind when you calculate the, or consider the interest, expenses in the ex-U.S. free cash flow. Yeah.
And also bear in mind, and I think, we consciously, took that decision, we do not account for any kind of dividend which has come in our way in, in this, given year. And that's $1.5 billion U.S. dollars, so which would also basically qualify for our free cash flow ex-U.S., but we didn't build it in so far. Or not planning to build it in. Sorry.
Look, with regard to the, copper switch-off, I'm a big fan of it, if you ask what I'm thinking about it. And the faster, the better because, from a sustainability perspective, makes totally sense. And running to infrastructure, I think it's obvious that this cannot be the most effective way of, operating.
Nevertheless, you know, compared to other countries, you know, copper switch-off here in Germany is clearly something more of a longer-term perspective. A copper switch-off is only possible in areas where FTTH is fully available. So you have to deploy 100% of the households around the switching house, or at least, you know, the street cabinet. And you have to completely cover all these areas. So, in some areas, it makes sense. In some areas, it's too expensive. Now, we have to learn how that is working because you have to move as well all the wholesale customers on our network into the full fiber deployment. So as a first step here, we are working on 2 pilots in Germany. And this is taking place in coordination with the Gigabit Forum institution here and the Bundesnetzagentur, affecting around 700 households.
We will give you an update about, you know, the learnings, soon. On energy savings, that's a big thing. And therefore, I think from a taxonomy and from a Green Deal perspective, totally makes sense. We have to accelerate that. Our partners have to understand it. So, we have a lot of activities going on to convince our partners, but as well the Bundesnetzagentur, to define the rules of this switching, with us, ASAP.
Great. Thanks. And with that, we move on to, Polo at UBS, please. Hello.
Thank you for taking the questions. So I have two on Germany. So the first one is, what gives you the confidence that you can continue to deliver a steady 3% per annum EBITDA growth? And how should you think, or rather, how should we think about the risks and opportunities? So can you comment on whether you see any risks from increasing competition in the German market? And separately, given that you're likely to see higher wage inflation from mid-2024 onwards, are there any levers that you have to offset this? Second question is just on German TV, because your TV net ads were strong in Q4. But how should we think about the momentum in this part of the business for, for this year coming? So specifically, are you seeing any boost from changes to basic cable TV regulation? Thanks.
By the way, Polo, first thing is, you know, what gives us confidence? The confidence is that, you know, 10 years of sustainable investment to the infrastructure, EUR 170 billion, you know, big portion into Germany here, into superior infrastructure. The confidence which I get from that angle is that we are gaining market share in mobile.
We're gaining market share on broadband. On top of that, we have the new fiber infrastructure. Despite the fact that the utilization is still in the low 10-ish numbers here, you know, this is an opportunity for us to grow in this high-speed, high-data throughput pipes here. On top of that, we have a big program running on B2B. You know, we have entirely restructured new management team, you know, to give new impulses into this business. We know that we are already in benchmark better than all the other telcos, when it comes to SDx and communication services. We have never had these big declines like other telcos. We were always able to compensate that with IT services in other areas. We have high ambitions here as well. So they will help us to support that.
And then we have areas where we are not happy, where we are now fighting back, which is in the in some broadband elements of large oil corporates where we see even, you know, hunting potential for us. So really gaining market share in the B2B space, large enterprises, where we haven't been so competitive in the past. So that is, you know, what gives me confidence that you can deliver on on on the growth. And the most confidence always, you know, seeing believing what you see. And look to the last years. We have constantly improved our service revenues in Germany. And I see that not only in one business. I see that across all the businesses which we're having, including TV. Yes, we had strong net adds. A new platform launched, more simplicity, new bundles included.
We have, you know, more aggregation businesses there, you know, advantages with bringing together the big streaming platforms here to together the so-called MegaStream offer, which is, you know, an interesting promotion to attract new customers, new features on the new MagentaTV platform. And what makes me confident is exclusive rights, which we have for the European Championship in 2024. So, you know, we have partners. I think it's a great deal, working with ARD or the public TV services here and with RTL. But, you know, are all games on UHD quality on our network. And we will get some and gain some new customers on this one as well. So, therefore, you know, we are quite confident about the development of service revenues, you know, gaining shares in the market plus an increase on our profitability in the German environment.
And Polo, bear in mind, we're delivering 3% or better since 14 quarters. There's also kind of a trajectory that we're continuously delivering in that vicinity.
And our guidance says this will continue in 2024. So, of course, our guidance is, you know, positive. And it bakes in all the assumptions that we have made regarding all the factors that will impact our results this year and then, also next year. So the next question. Thanks, Polo. And we move on to Usman at Berenberg, please.
Hi, everyone. Thank you for the opportunity. I've got kind of one and a half questions, please, if you can entertain me. Just on the EBITDA growth for the ex-U.S. business. I mean, it's great. But, you know, I mean, if I look at the percentage increase, it's 2%. You've been doing kind of 3%.
Obviously, top-line trends have been strengthening. You know, energy, in theory, should be less of a headwind this year. You know, you're taking, I believe, that the higher restructuring charge in the cash flow, 2024 versus 2023, relates to some, you know, higher headcount reductions in Germany and GHS this year. It just, you know, I mean, why can't the 2% be closer to last year, 3% on the EBITDA growth? I mean, is this conservatism? Is there something else going on? And then just, related to, you know, cash flow in the ex-U.S. business, going back to the last CMD, you know, there was a chart showing that, you expected these, you know, cash payouts for special items to go from this EUR 800 million to a billion down to EUR 500 million by 2025.
I know consensus doesn't have any of that upside in the numbers yet, but I just wanted to understand if anything has changed significantly since the 2021 CMD to, you know, that means that, you know, the EUR 500 million could be closer to EUR 1 billion, let's say, again in 2025. Thank you.
So, let me come back to the EBITDA growth. Look, you mentioned all kind of the tailwinds. And I agree with you. Energy shouldn't be less of a headwind. We expect energy costs to be fairly stable. But I think what we also have to expect that whatever kind of tariff negotiation result we're going to achieve, it's not going to be a replication of what we achieved, achieved two years ago. So it's going to be, it's not comparable, by those means.
And the second one is also on the non-personnel cost. We're still fighting a lot with inflationary trends in many of the cost categories. And therefore, I think this is why we came up with that guidance of two. But again, in the last quarter, we delivered three. So the ambition is always to deliver higher. But the guidance is what it is and what we said. And, sorry, Hannes?
If we talk about the ex-U.S. guidance, we need to consider the pro forma adjustment. And the pro forma adjustment means we start. The guidance basis is 14.0, and you're going to 14.4, you know? And on my math, that's 3%. So it's 3%. So it's actually an acceleration.
On the restructuring, especially on the personnel restructuring, I think we will give you an update on the next Capital Markets Day. But I wouldn't expect a 500, soon, to be very clear.
Thanks, Christian. And with that, we move on to Ottavio at SocGen.
Hi. Good afternoon. Couple of questions on my side. The first is on GD Towers. And the second is on T-Mobile. The one on GD Towers, it's you mentioned about the impairment, mostly all driven by the WACC. Now, also, you carry significant capitalization releases in your books where you discount. So, the decision made on the WACC for the impairment will have also been bearing on the discount rate you use for the capitalization of the leases, and any read across for the U.S. because you also you get significant capitalization lease capitalized over there. And on GD Towers also, you mentioned that was also disclosed in the release, these returns you made on free cash flow.
It was $100 million last year, $200 million this year, I believe, because last year was netted against taxes. But if you can basically give some color of what these returns are, just dividends and any sort of how they'll progress going forward. The second one on T-Mobile U.S., it's effectively on a deadline that is really coming, is the $3.6 billion spectrum sales to DISH. It's fair to say that DISH is having some problem at the moment refinancing their own debt. So I'm not sure it's got $3.6 billion in the bank to settle. So it's very likely they're not going to exercise that particular option to buy the spectrum. If that will be the case, in the past you said that you have two options, either to retain the spectrum or to sell to a different party. We're just a month away.
So we're just wondering if you know that decision will be from T-Mobile board, that's for sure. But from Deutsche Telekom side, you will favor a sale of that spectrum, or you believe that given the growth trajectory of T-Mobile U.S., you probably need to use that spectrum. Thanks.
Let me start with the second part of your question on the 800 megahertz. So I think DISH still has time until the 1st of April to basically exercise the option. I think we then have time until, if I'm not mistaken, October, to conduct an auction. So we're seeing early indication that there is demand for this. Whether we're going to use the spectrum, yes or no, hasn't been decided because we're not in the position to take that decision right now because we have to basically conduct two further steps.
One is whether DISH wants to have the spectrum or whether somebody is actually willing to spend more, to spend more than $3.6 billion for that spectrum. Then we have to exercise that sale. The second one is the capitalization of leases and the GD Towers business is set on eight years. It's renewing. So we had an opportunity to agree that with the auditors. And there's no read across to the U.S. against that capitalization logic.
Thanks, Christian. Thanks, Ottavio. And then we move on to James at New Street, please.
Yes. Good afternoon. Thank you very much for taking the question. So I have two questions, please, on Germany.
So the first one is just on your growth outlook at the top line in Germany where, I mean, it's fair to say over the last three to four years, quite a lot of your growth has been driven by volume growth rather than pricing growth. As you suggested there in your comments, you know, you are seeing maybe slightly less competitor churn at the moment. Volume growth might be harder to come by. So to what extent can pricing start to become a lever you can pull to drive growth in Germany? And then the second question is just a bit more insight into your fiber build, please. So I think you're at 7.9 million homes passed at the moment. Can you give us a split of that between the MDUs and the SDUs?
And how many of the MDUs that you've passed are actually kind of ready for service to take the product if they want to call the call centers to order it today? And to expand coverage further, do you have any plans to do any more JVs because it's now, I think, you know, over two years since you did the deal with IFM? So I was wondering if you were interested in any more structures like that. Thank you. Do you want to?
Yeah. Thank you, James. Look, on the outlook for, for the top line, the first thing is, you know, we are carrying out, you know, a premium in that market. So therefore, it is not that easy for us, you know, to just increase prices in an environment, you know, where you have quite some competition.
Like, you have seen that in the mobile space here these days. Our strategy is, you know, more for more. Our strategy is, you know, always, you know, getting out of this rat race of pricing, which is taking place in non-differentiated brands. And that is what is working pretty well. It's all about, you know, convergence and about, you know, upselling in the base, which is working nicely. It is this idea of the families and taking, let's say, second brands into our prime brand, with second- and third-card offerings. And this is, let's say, the way of upselling. And that's the way of ARPU. Simple price increases, yes, we do that, you know, in some areas like in new broadband lines and the like.
But the majority of the business coming from this proposition, you know, you get a premium brand, you have better services, and you get more in this service. This is, let's say, the way how we are, you know, stabilizing ARPU perspectively. With regard to the split between MDUs and SDUs, and to expand the coverage, look, to be honest, I don't see us, you know, experimenting with more JVs, at that point in time. JVs, they have all their issues with the refinancing costs and the PEs and even the big pension funds. So that is a little bit, depending on their capabilities to build new partnerships here. Look, if there would be some, you know, we would be always open to expand our coverage. The second thing is we have an issue about capacity.
We have to manage, let's say, the construction for capacity in that market. It's not easy expandable. So therefore, I think we are running full stream. Even last year, we had higher ambitions than what we were able to realize, our internal targets here. Now the question, how much are ready for service? Look, on the last mile, most of the things were homes passed. Yeah. So to be honest, I do not know exactly the split, the MDUs, SDUs here. Maybe give us a chance that we give you a precise number, you know, in our, you know, after work here.
Yeah. I mean, I think, you know, there's a certain level of granularity we provide and a certain level we don't provide. But we, of course, provide a lot of information already. But the main answer to you is this is a broad-based buildout. We build in the rural areas. We build in the cities. So, you know, our fiber buildout is very representative. MDU share in Germany, I think, from memory, is about 60% or 70%. I'll need to look it up. So it would be fairly representative to this. In any case, we have agreed, 4.3 million homes, or units last year with housing associations where we will provide the in-house wiring. So we are on this, you know, we are on these connections. And it's, of course, not done overnight. So with that, maybe we move on to Josh Mills at Exane, please.
Hi, guys. Hopefully, you can hear me as well. I had a couple of questions. The first one is on pricing, but related more to the European segment than the German segment.
So when we look at the results, and you mentioned it earlier, Europe's performed better than expected. It looks like at least part of that is coming through from pricing rather than volume, which also is good, but probably not driving the 5% service revenue growth. So my question on this one is, can you give us a bit more color about how you've actioned price rises in the markets across Europe, how you've then managed that against customer churn, and whether there's any interesting learnings that you can take from that and apply to the domestic market as well? And then the second question is just going back a bit to the EBITDA growth outlook and the performance this year. So obviously, the 3% EBITDA growth in Germany has been very consistent. But it does look like the central cost in GHS went up a bit in Q4.
So my question is, how should we think about the run rate of EBITDA headwinds for GHS as we head into 2024? Is it more like the EUR 600 million which you ended this year with? And if so, were there any additional costs which were shifted from, say, Germany or Europe into GHS over the course of the year? Thanks very much.
Okay. Let me, let me start with the first question, Josh. The answer is country by country is a different answer. So for example, in Austria, you have CPI-linked pricing, so where you see that everyone's moving up, it's kind of an automatism. We have actually taken some price reductions in the Greek market given the new competition. We have lifted up pricing in Hungary, quite a bit to fight inflation.
So what Dominique is doing is she's basically always taken the local environment and taken an adequate approach on a given country. What we have seen in the European segment is that we have consistent behavior of competitors also. So if one was raising the prices, most others were raising the prices as well, which helped actually to maintain the fair share. And if you compare the net adds of the European segment versus the previous year, it's not that big of a slowdown. And that basically underpins that argument. For Germany, I think one thing which we should bear in mind is we have taken a front-book price increase in the German market. And we're trading currently net add share versus price increase. But that front-book price increase will effectively hit the installed base as well.
So there will be automatic price increases coming in the install base in the back book, driven by the front book. But it's coming in later rather than what other competitors have done. And on GHS, look, on GHS, the result was actually impacted. We were more optimistic. We were more optimistic on selling real estate in the last year. But given the commercial market of real estate, I think we have received offers which are not adequate to a fair value. And that obviously had an impact on the real estate generation or sales generation in the GHS segment.
Yeah. Yeah. So, Josh, you also have seen our guidance for 2024 for U.S. and for Germany. The idea that we are shifting costs from Germany and Europe to GHS to make them look better also, I don't think is appropriate. Christian has explained why group's results were a bit worse this year. With that, we move on to Emmet at Morgan Stanley, please. Oh, sorry. George at Citi. Sorry. Emmet, you are next after that. Thank you.
Good afternoon, guys. And thank you for taking my questions. The first one is on fiber and maybe in two parts. Firstly, we've seen in the UK one of the incumbents, in a way, preparing to consolidate the alternate space. I'm curious, with the previous discussion you had, Tim, around alternates having issues in some cases with penetration with their financial plans, whether it's something you believe is possible in Germany from a regulatory perspective, something you would pursue if it became available. And then I just wanted a clarification on Hannes's point around the rollout in the MDUs. Obviously, we've seen limited connectivity of fiber customers so far.
Is the MDU market different? Is it easier to connect, cheaper to connect, do mass migrations of customers, which you may not be able to do in other parts of Germany? I'm just curious if we may see a different trajectory of the homes connected versus passed. And then just one clarification on the free cash flow outlook beyond this year, just these cash returns from the towers, whether it should continue at this EUR 0.2 billion level in the coming years or if there's going to be a change in that. And also if you could comment a bit for me to understand around the tax situation, if, if you have already assumed no tax deductibility for 2024 and that could be better, or if what you meant is that it could get worse beyond 2024 with even fewer tax being deductible. Thank you.
Look, I think, Josh, to your first question, not an easy task for Deutsche Telekom, because, you know, we have, still, you know, a good position on, on both on the copper world and in the fiber world. And the Bundesnetzagentur thinks that we are still market dominant. That is why we are fully regulated in this, in this setup here. So now, implicitly that says, you know, any kind of consolidation would, let's say, trigger the antitrust, offices, cartel offices, you know, to, to block this kind of activities. Nevertheless, you know, before somebody's going bankrupt of these guys or, if somebody's getting into trouble, it might be good that somebody's operating the infrastructure. So therefore, we are using the passive infrastructure and market that over our infrastructure. So, this is a clearly yes for everybody who is interested that we are utilizing the infrastructure, in these areas.
And this will help us to reduce the CapEx in these areas as well. And the second alternative is definitely that we are trying to approach the authorities if there is a case where somebody wants to divest its infrastructure. And I would always try it because, look, I'm not penalizing anybody with this. It's always good for the citizens here in Germany. And everybody who wants to use this infrastructure has open access to our infrastructure. So therefore, you know, he's not losing something, and it's in the interest of the citizens. But nevertheless, from an antitrust perspective, it looks difficult. With regard to rollout in MDUs, limited connectivity of fiber customers so far, yes, you're right. This is a little bit, let's say, the German specifics that our vectoring, super vectoring network is quite strong.
Customers, you know, we have to show them the use cases. They have to understand that this is, you know, creating value for their real estate. We have to show the need of new services coming soon on gaming, on computer, you know, collaboration tools, and as well on HD or UHD TV services. So there will be at one point in time super high data demand coming. So therefore, they should be prepared for that. I think our narrative should be to to convince customer that they have to upgrade their services here. The interesting one, is it easier to connect in some areas? Yes.
If you have inferior data throughput in areas and, at I would say, an inflection point, and we looked academically into this one of seven times higher speed, which is available compared to a speed of 16 megabit or around 30, you know, then that moment it is very easy for customers, you know, to switch over. So therefore, I'd say the different words where you find inferior infrastructure and you can offer, you know, an up to seven times higher speed, customers are switching immediately. So therefore, you know, you see the elasticity of the service. And that is why we are focusing on areas where, in the rural areas especially, where the data throughput is quite poor, to convince more customers to use the new infrastructure.
So let me start with the tax question. And what we're currently discussing in Germany is what they call the so-called Wachstumschancengesetz. In that Wachstumschancengesetz, they foresee a degressive depreciation opportunity, especially for our infrastructure. And that degressive depreciation opportunity, if it gets to a close, it's currently up in the air, the discussion, will have roughly EUR 50 million-EUR 100 million positive impact in 2025 and 2026, but not in 2024. Hannes, you want to answer the tower question?
Yeah. And I mean, generally, you know, keep in mind, and this was also a question I had online, we expect growing cash tax payments in our ex-U.S. business. It was EUR 1.2 billion cash taxes in 2023. And going forward, it expect this to continue growing.
You know, we have talked to you about this already, but do not underestimate that we're not expecting much tax relief beyond what Christian has described, which is a possibility, not a fact at this point, to provide us any shield. In terms of the towers, if I understand the question correctly, you know, of course, we clarified that we expect about EUR 0.2 billion of returns from the tower subsidiary this year, or the associate holding that we have. We own, of course, half of the tower company. We always expected a shareholder return from the tower company. This is what we told you in September, when we announced the tower deal in July 2022. It was.
We also gave a webinar at the beginning of January last year, end of January last year, where we explained how the tower returns would work. We had a tower cash return last year. You know, we treat it as part of the free cash flow ex-U.S. like we treat the BT dividend, for instance, or other dividends from subsidiaries with one exception. We have not included the dividend we get from T-Mobile. Strictly speaking, we should, because this EUR 1.5 billion we expect this year is actually a repayment for the investments that we have made in T-Mobile that are burdening our interest costs. So keep that in mind when you understand, when you analyze our trajectory in our ex-U.S. free cash flow, because it will reflect the extent to which we own T-Mobile. And but for the towers, there's absolutely nothing surprising here.
We always said we will get some returns upstream from this business. This is what's happening. There's no recap, just to be clear, right? Maybe this is the confusion today. There's no recap. The tower deal company has not levered up and given us extra money. This is the regular annual return we were always going to expect and see from the tower company. Okay. I hope that clarifies it. And with that, now we can go to Emmet, who is sharing his impressive collection of Impressionist paintings with us. Thanks for that.
Yeah. Thank you very much, Hannes. I guess, like Usman, I've got, I've got 1.5 questions or oder halb, I think, as you say in German. A couple of quarters ago, I asked about data centers and your exposure there.
I've kind of got a follow-on on that subject, but maybe a little bit more on the cloud side. We're clearly seeing a pretty big change in the geopolitical situation around the world. And I know that German B2B and B2C customers, they really value data security, data privacy. And with this in mind, I'm just wondering, are you beginning to see any kind of increase in demand from German corporates for a pure sovereign German cloud solution? So a product that's provided by a kind of a European company that comes rubber stamped with data security guarantees. And as a follow-on, the half question is related to AI. Obviously, a very big day for NVIDIA yesterday. There's kind of like a follow-through from AI into cloud and into data centers as well.
Are you beginning to see any kind of demand coming through from German corporates for AI services? Does some of this feed through to T-Systems, or should we expect most of the benefits to go to the hyperscalers? Thank you.
Okay. Starting with the AI question first here, by the way, I will have a keynote speech on AI at the Mobile World Congress on Monday. And I will not use it for bashing the regulator. I will do that jointly with Orange, Telefónica, and Vodafone on a panel. I will talk about AI and, you know, a guide for telcos, you know, to use AI. I would say, you know, we have today 200 cases within AI within the company and outside the company.
And we have different kind of ways of using it from, you know, taking GenAI and other services to shaping AI by prompting or even, you know, working with other telcos on own LLM services to train the LLM with our own telco-specific data so that it becomes a telco learning system. We are as well productizing AI for our customers. Now, so there are a lot of initiatives which we have within the company. We see both efficiency gains. We see security elements like anomaly detection areas. We see areas where we can productize. Now, I expect as well revenues on the B2B side on this one. Both that we can resell some of AI service with us like Copilot and others which we anyhow do with Microsoft but as well that we are developing our own services here.
So yes, there is an element. Now, if this is moving EUR 115 billion of revenues immediately, Emmet, you know, we have to be realistic. But it helps that, you know, our B2B area stays on a growth track. And, you know that we have some aspirations in this area here. And I can tell you we have entirely embraced this AI opportunity here within the company. Follow my presentation. Data center exposures. I told you that we're investing into data centers, our own with DT Capital Partners. It is as well that you're right in the geopolitical situation, the demand from, especially privileged, you know, services like banking services, financial services, and the public, the governmental services here is high on our offers. So that is the area of B2B with in the cloud area of T-Systems, where we are focusing on.
Look, the issue is we are working here with Google on a partnership in Germany. There's some functionalities where we are still working on coming to the market in the first quarter. So I can go in deeper to this one. But I think maybe we should show a detailed view on this one. But this is coming. But I see the demand. Now, whether we are really beating the big, you know, hyperscalers, I doubt that because their scale is much bigger. But nevertheless, we expect a significant, you know, growth, which you can then see in the T-Systems numbers already throughout this year in this environment.
Excellent. Thank you very much. And I've had two further emails. Thanks, Emmet. We from Stephane at Oddo and from Adam at HSBC who have had problems connecting.
So, on—maybe just quickly read them out and give the answer. So first, Stephane at Oddo, he's asking if we should expect German earnings trends, Germany earnings trends to be stronger in the second half than in the first half. Sorry, in the first half than in the second half. I got that wrong, due to various factors, including potentially salary increases, etc. So answer would be we like consistency in our German EBITDA trajectory. So if we can achieve it and we are confident we will, then we have a steady earnings development during the year. Secondly, can you give us the cash taxes for 2024 and beyond? When will you pay more tax in the U.S.? I think we have talked about the ex-U.S. tax situation already. As far as the T-Mobile is concerned, they would not expect to be a significant taxpayer before 2025.
And of course, we also have discussions about extending bonus depreciation in the U.S., but those haven't concluded. As for Adam, he has asked at HSBC; he asked whether the BuyIn joint venture could be extended and to other partners. And indeed, you know, we have other partners or the joint venture has other partners, including Proximus, Bell Canada, Odido, and NOS. He asked whether T-Mobile can be included in this partnership, and I think that's something that is being explored. So with that, we come to the end of today's Q&A. And I hand back to Tim for any closing remarks.
Yeah. Look, investors here, look, I like very much, you know, the trajectory where we are.
You know, I like very much the four and seven, you know, the growth on service revenues and the, EBITDA line, and as well, you know, in line with, let's say, the last years and in line with what we expect for the future. I like very much, you know, that we are very well financed here now, with a 10% decrease on our debt side. I like very much that we were able to increase the dividend and the share buyback program within the company. And on top of that, what I like most is the customer growth, because the customer growth is, you know, the guarantee for profitability next year is being it, let's say, 5.6 million our customers in the U.S., 2 million more on the mobile side in, in Europe, which is very, very strong compared to our competitors.
I think I like to flag that. The free cash flow, you know, a 41% increase, another strong number this year and another growth coming, you know, with 16% free cash flow next year or this year, 2024. I think that's helping. So now what are we doing here? What is the most important things, you know, until the Capital Markets Day, which is a big event. And by the way, we are already preparing that today. First, you know, keeping the commercial performance, in, in, in all the markets where we are operating. So this is, let's say, where and by the way, focusing very much, as well on the, on the base. So, and, a high net promoter score, a high trim, high customer satisfaction, low churn. The value sits in our 300 million, customer base. And that's an area where we, are focusing on.
We are very much focusing on new customers in the areas where we have built 5G and fiber. So the utilization of the infrastructure is out on our highest priority this year. The allocation of CapEx is something which is very important for us as well this year, because a lot of money is, you know, we can allocate, and we have to do it in the right way that we are monetizing that. The higher the utilization of fiber is, the more money we can refund than in other areas. Customer growth is as well coming from B2B. So the B2B transformation is on high pace going on. I would maybe consider either on the capital markets there before maybe making a bigger deep dive on the B2B and what we are aiming for from a product side here.
Emmet managed cloud, and he mentioned the data center business, but they are much more on SASE, on security services and other areas, where I see the growth potential already coming in. And as well the tools within the company. So the cost optimization, the AI, optionalities which we have in this company, this is something we are intensively working on. We will have, let's say, tariff negotiations with the German workforce coming in the second quarter. So a very important point to find a decent, you know, agreement with that with these partners, another milestone for us, you know, to deliver on things. But you find us quite optimistic to deliver on all the capital markets targets which we have laid out on the last time. We will do everything to deliver on that one. And we are quite optimistic with regard to the outlook for 2024.
Thank you very much, and see you soon.
Excellent. So with that, we come to the end of today's conference call. We'd like to thank all those who have participated in this call. Should you have further questions, we kindly ask you to contact our Investor Relations Department and look forward to talking to you again soon. Thank you very much, and goodbye.