Deutsche Telekom AG (DTE) Earnings Call Transcript

Okay. Hello, everyone. Good morning. I hope you have recovered from our first half day of presentations yesterday. We are ready and eager to take the second installment today. To wake you up, we showed you -- we gave you Billie Eilish, and I tell you, from here, it's going to get even better. So can I please first refer you to our usual disclaimer. Let's move on once you've seen that, and what do we have for you today. So as I said, it gets better. We start with Claudia Nemat in technology, IT and all that stuff that is hard to understand but it really matters. When I was an analyst, I had no idea how important this is. And Claudia will show you where we are on all the buzz word stuff: digitization, cloudification, O-RAN, all this stuff. I'm glad to say we are right there. We got the nerds. We got the PhDs. We got the guys from Bangalore. And we got the bots and the self-learning ones. So let's get cloudified with Claudia. Claudia Nemat.

Thank you, Hannes. A wonderful good morning. It's great to digitally meet you. I hope you are all fine and healthy. For me, it is actually my fourth Capital Market Day, so special greetings to all of you who have joined us throughout the last decade. My summary, we actually delivered our CMD promises from 2018. We successfully implemented our superior production model, meaning we completed our all-IP migration with clear benefits regarding customer experience, cost savings and resilience. We did a very rigorous IT transformation with significant benefits regarding speed, stability and cost containment. And we further enhanced our integrated network leadership in Germany and Europe, and our perception is The 5G Company in the United States with clear business benefits. Going forward, we will evolve from a leading telco to an experience-obsessed tech player, and that means precisely 5 things. Number one, we are moving to a high degree of network automation, hyperscaler like regarding speed, but telco grade regarding security and reliability. On the basis of our increasingly cloud native infrastructures and, over time, disaggregated networks for lower cost and better experience. Number two, in addition to the digitization of our networks, we continue to digitalize the entire value chain: sales, service, G&A, for better experience and lower cost. To achieve that, we built on the software and data capabilities of our people. Number three, our integrated network leadership will continue to deliver clear business benefits. We are committed to 5G leadership in Germany, Europe and the U.S. and to fiber in Germany and Europe. Number four, to support our ambitious climate targets and to offset, by the way, the massive volume increase in our networks, we commit to double energy efficiency in our network production by 2024. And number five, experience obsession. As Srini said, [Foreign Language] guides our consumer innovation. We focus on products and experiences that leverage our superior networks. Coming to my review. We completed our all-IP migration with clear benefits precisely. In Germany, the IP migration was the necessary basis for broadband availability at scale. As a result, we have today 10 million households with speeds above 250 Mbps. Those are our top super vectoring lines plus fiber households. In both Germany and Europe, it was the basis for plug-and-play for all our customers. Today, you take the router, plug it into the wall, and it works, here you go. It works immediately. As a result, the activation incidents in Germany went down by 40%. And the annual cost savings we achieved in 2020 amount up to EUR 100 million. They are, by the way, the result mainly of our ATM platform shutdowns, leading to energy savings to make that tangible. When we shut down the ATM platform in Germany in Q3 last year, we saved in the subsequent quarter the annual energy consumption of the city of Cologne in just 1 quarter. Last but not least, I would add that without the IP migration, we would not have mastered the COVID crisis so well. Our networks are stable and safe in spite of massive volume increases, for example, plus 300% in video conferences. The IP migration was the, The Digitization Project of the previous decade. Now you might ask, what is different at DT compared to other telcos? Two things. Number one, we did it. We did it 100%, and that is not the case in U.K., Spain, France or Italy. And number two, in Germany, we did it together with a massive simplification of our aggregation network, the so-called BNG migration, which is the basis for further automation. Second, as I said, we did a super rigorous IT transformation. What is behind that? We actually fundamentally changed the way we work. IT and business, from us to them, to joint teams with joint targets. We radically changed the way we develop software from having only 4 so-called release containers per year, with very time-consuming linear, planning, testing, developing, planning, developing testing and 0 flexibility to a highly adaptive process. Today, 70% of all features and workload are delivered outside release containers, and that means we can flexibly adapt to market requirements and 80% with agile methodologies. Overall, with that, as you can see here, we reduced our time to market from 18 months to 3.5 months. And with that, we overachieved the promise which I gave 3 years ago. The event target was 6 months, not 3.5. So for us, for IT, speed is key. Why? To reduce waste for lower cost and better experience. Now in addition to that major speed increase, we also, as you can see here, doubled, we doubled the stability of our systems, while at the same time, reduced the IT spend by EUR 200 million. How did we do that? We moved away from silos, for example, here development here operations to a modern DevOp setup, making sure that operations requirements are being dealt with from the very beginning for less operational incidents and lower cost. We moved away from hierarchies and [ taylorisms ] to skill-based organizations with relevant investments in future proven capabilities of our people around the world. And finally, we moved away from deeply coupled architectures to decoupling architecture with modern APIs and micro services. We consider this level of change and speed increase industry-leading. From my point of view, it is how we do things that differentiates us. And for us, that is the avenue to becoming a modern tech company. The third point of the superior production model was our integrated network leadership. In Germany, we want all relevant tests. Among others, the Mobile Connect test, the 5G chip test and the 5G innovation world. Our mobile and fixed network perception is 23 percentage points better than the one of the next best competitor. With a population coverage of 80% for 5G, I would say, we are miles. We are just miles ahead of competition. And by the way, that is not only the result of superior spectrum position. Our superfast rollout is also the result of technology foresight. For example, we were the first operator worldwide to pilot dynamic spectrum sharing required for superfast rollout, and we were among the first operators in the world to commercialize that. In Europe, we are #1 in network perception in 8 out of 10 markets. And our network in the Netherlands was even ranked the best mobile network in the world. T-Mobile's perception, SD 5G company in the United States has increased by 100% since Q3 2019. And all of that together manifests our belief in superior networks. Superior networks are the key ingredient for our valuable brands, for our commercial strength and upside going forward. In summary, we delivered, as you can see here with the dominance of the green color. Srini and I ranked the ramp-up of the fiber rollout in Germany with a yellow traffic light. The reason is that we have achieved the planned rollout speed only -- or we will achieve the planned rollout speed only in the last quarter of that year, ramping up to the full 2 million fiber households slightly later than expected. Coming to the strategy going forward. As I said, we are a very successful telco, a leading telco. We have a superior production model. We are crisis resilient. We have invested into future proven capabilities like modern DevOps. But being a leading telco might not be enough, like being a leading automotive company is no longer enough. In today's software-driven world, that might put you into the role of the one eyed among the blind, and that is not our ambition. We are redefining ourselves. We are redefining the rules of our industry to become an experienced, obsessed tech player, a tech company obsessed with the experience [indiscernible] of our customers. And precisely, that means 5 things: We doubled down our efforts on network automation, cloudification and disaggregation. We will double down our digitization efforts along the entire value chain, leveraging what we have and the data and software capabilities of our people. Number four, we will enhance our integrated network leadership, sorry, #3, on the basis of fiber and 5G. We will double our efforts on energy-efficient production and we will focus on experience innovation, best connectivity experience, seamless interplay at home and focused innovations beyond the core. And I will now go into point number one, network automation. Historically, automation was like this. We analyze the process, took out a few steps and then quoted the result into software. Usually, the speed gains you get amount to 20%, 50%, 100%. Our new software-driven approach for network automation has a far more significant impact on speed. It was applied first for our new voice production platform, next-generation IMS in Germany, which is, by the way, a multivendor platform, open, fully automated and running out of the cloud. So what? So what is this cloud-based automation has significant impact on speed. That's what I call hyperscaler-like but telco-grade security-wise. Practically, the introduction of a new product feature takes 3 months compared to 18 months before. You see, I pursue similar ideas in network technology as an IT. We moved from 90 days for rolling out a software feature into the network to only 2 days. And fixing a buck takes no longer 14 days, but only 1 day. And finally, no night shifts are required. In June, 1 million fixed voice customers are live in Germany. By the way, our ambition is to have all voice and mobile customers in Germany and in Europe, on one, just one automation framework and at least 50% of our data customers on one cloudified platform by 2024. Automated production will contribute to achieving our cost targets. Can I have the video on NIMs, please. [Presentation]

So here is another example, automated fiber planning. Historically, fiber planning included many manual processes and most maps existed only in analog or in scan formats, plus super complex interactions with municipalities. And as a result, planning a typical fiber area took, on average, 25 days. At the last Capital Market Day, I showed you our demo for what was back then a pilot for a new fully automated fiber planning system. We actually digitized the maps and the applications for the municipalities, and we use street cars, like you see here, driving around and taking 360-degree pictures of surfaces and obstacles. And then these pictures are analyzed in a point cloud by algorithms and deliver a passive fiber planning. And on that basis, the planning time of the same average area got reduced from 25 to 5 days. Today, the system is deployed in 75% of all new areas. So it's up and running and ready for scaling. Needless to say that it is one out of many contributors to reducing our fiber unit cost by 25% until 2024. And for sure, it's one of the necessary conditions for doing the fiber rollout so fast. Okay. Now let's go to another aspect, network disaggregation. Historically, we have acquired large systems. In the future, these systems will be smaller. And soft and hardware gets decoupled, making hardware much cheaper because we can use standard hardware. One well known example is O-RAN, open radio access networks, what you can see here. In our today's single radio access network, the radio unit on top of the antenna pole and the baseband unit down in the gray box, all need to come from the same vendors. The stuff within the BBU comes from the same vendor, 2G, 3G, 4G and 5G and all antennas in one area. The advantage? High spectrum efficiency and high performance. The disadvantage, limited choice and higher TCO. That topic is being addressed in O-RAN. Now all these components I mentioned can come from different vendors. On top, we deploy software on a standard hardware rec. This then can look like that. That's an O-RAN basement unit. You see standard hardware recs and software deployed on that. The advantage, more choice, lower TCO. The challenge for the industry, end-to-end integration and automation. And I will now explain you back on stage how we are addressing that. So as I said, end-to-end integration and automation. So Deutsche Telekom was actually the first operator in Europe to set up an open test and integration lab in Berlin to test and operate exactly that, end-to-end testing and integration. The web is, by the way, open for all suppliers and our competitors. And in addition, in the second half of this year, we intend to start O-RAN town around Brandenburg, which will deploy O-RAN technology to actually test it in our real and our productive network. But this aggregation does not only happen in the mobile access, also in fixed. We call that 4.0, Access 4.0. Based on the aggregation network simplification, we did together with the IP transformation in Germany. Now that the simplification of the aggregation network was the result of the way we did the IP transformation in Germany, which is, by the way, another differentiator. And based on that, we created a fully disaggregated, Edge cloud, simplified fixed broadband access. As a pilot, it is live. By the way, the world's first fixed disaggregated access line. And the next step, of course, is work with the industry ecosystem to adopt those principles. In a nutshell, we are prepared. We have the capabilities in place to get it done as soon as the technology and the ecosystem matures, what I assume with regard to O-RAN in the next 2 to 5 years to happen. But we are not only digitizing the network but the entire value chain. And that chart shows 2 examples. One is our easy fiber ordering and configuring and provisioning system for our customers. With the previous legacy IT, it took 7 super cumbersome interactions for the customers to order fiber connection. Now only 2 very intuitive and easy ones are required. That system is cloud-based for all channels. And next year, the complete fiber rollout will be processed throughout this platform, which is another contributor for the speedy fiber rollout Srini mentioned. The other example here on the chart is our award-winning bot, Frag Magenta, the digital assistant that supports our services organization through automation. By now, more than 2 million issues were solved, and its independent solution rate without human help is 37%. Srini pointed it out in his speech, our belief is to combine human service with digitalization. AI-enabled, advanced, augmented. And our ambition is to have all service interactions augmented by AI or algorithms by 2025. And again, as I explained before, this is based on our industry-leading IT in terms of speed, flexibility and stability. And now our ambition is to move one step further and create a world-class IT. And that means that we will move to a very high degree of truly cloud native infrastructure, 80% in IT and 55% for NT across Germany and Europe. Plus, we will massively increase APIs at micro services, which means further decoupling the architecture. And we will, of course, retire. And if you express that in KPIs, we will further increase -- decrease -- sorry, decrease time to market down to 2 months with 100% agile working. Stability will further increase and the IT spend will go down by at least another EUR 200 million, which is a most significant contributor to the message Srini gave: fiber rollout, self-funded. And why can we do that? Because we are driving a capability and cultural transformation. Let me explain how we work. Traditional corporate thinking oscillates between centralization bias to capture synergy and decentralization bias to realize speed. I'm a fan of speed and experience focus. In other words, decentral accountabilities. On the other hand, for those of you who got educated in the software, rather in the telco industry, it's totally clear that you need economies of skill and scale when you want to get done this stuff I mentioned, like the scaling automation platforms. There's really no way, no way, to reinvent the wheel for that in every country and every location if you want to get it done. And our solution is a modern chapter tribe organization, which actually combines the best of both worlds. All IT engine product people were totally decentral with the businesses. For example, on the automated fiber planning or on the gigabit delivery system or on the 5G rollout. At the same time, every human being here in technology and innovation is part of a global skill chapter. For example, for software engineers, network engineers, data scientists or AI specialists. And the purpose of those chapters is to make sure, to really make sure, that everyone has her or his individual skill journey and, at the same time, to make sure that we have the right number of people with the right number of capabilities in place from a global perspective because that goes across Europe, Germany, Russia and India. Today, we have, by the way, in my Board area, 2,800 people with skills like software engineering, DevOps, data scientists or modern architecture skills. That's 23%. And as you can see here on that slide, that number will go up at least to 45% by 2024. Coming to the point number 3. We will remain network experience leader. Now Srini and Dominique talked about our ambition for 5G and for fiber and Mike and Neville about T-Mobile U.S., so I will not repeat that. I just want to say, to bridge the link to Tim's presentation, that in addition to our ambition of being the 5G and fiber-enabled technology experience and product innovation leader, we will also make sure, always, that we use our toolbox of best access technology combinations. Our own as well as third parties'. And that will include 4G, 5G hybrid routers or indoor repeaters, but it could also include broadband satellite connection for global IoT. So coming back to 5G. A couple of years ago, and you know that, the tech industry hyped 5G as the solution to everything, including World Hunger. And then a few years later, the finance and analyst community challenged 5G as a driver for growth. Now our conviction is -- my conviction is we are convinced by 5G. We are convinced by the comprehensive benefits of 5G. And I have summarized them on this slide. First of oil, following up on what Dominique and Srini said, 5G is the basis for up and cross-selling in the consumer area. Number two, 5G is a key enabler for B2B differentiation upside potential. By the way, together with IoT, Edge cloud and network slicing, the net letter being made available through end-to-end orchestration 5G stand-alone. But network slices could deliver the latency slice for those who want to operate drones over their campus networks or IoT slice if you have massive sensors. Another advantage is 5G has a higher CapEx efficiency than 4G only. We assume that the CapEx per top speed will go down by 40% by 2024 per Mbps. Another aspect, the 3G shutdown, together with 5G, is one contributor to our energy efficiency. And last but not least, there's the topic of fixed wireless access, mainly relevant in the United States and Europe. And I would say, let's listen to our customers. [Presentation]

Okay. Coming to the next topic, green. What is pretty obvious? Our societies path to carbon neutrality and waste reduction will be entirely, entirely impossible without digital technologies. And Deutsche Telekom is an important enabler. The COVID crisis showed video conferences reduced travel significant. And individual transportation is a super major contributor to CO2 emissions. Digital technologies enable a more diligent usage of natural resources in agriculture. Digital technologies are necessary to detect and reduce waste and CO2 footprints in logistical chains, and they are the basis for smart electricity grids and for smart homes. So super. Nevertheless, as an industry, we need to look at our own emissions as well. And as Tim pointed out yesterday, we commit to be carbon neutral. Regarding our own emissions, Scope 1 and 2 by 2025. Already this year, we will use, around the entire globe, Mike mentioned that as well, electricity from only renewable sources. For your info, electricity accounts for around 85% of our emissions, meaning in our own emissions, we have moved a big step ahead. We also commit to be CO2-neutral in Scope 3. So for our supply chain, latest by 2040. But -- and for me, that is very important. We have started to put major emphasis on this carbon footprint energy efficiency and waste avoidance in all our RFPs with our vendors. Our challenge, electricity including green electricity, by the way, is, of course, also a cost factor. And the data volume growth for all of us, we assume by at least 25% per annum. And to offset this volume increase, so to keep our energy consumption stable. To keep our energy consumption stable, we will double our energy efficiency by 2024. Energy efficiency being defined as the ratio between the gigabits you produce and the watt hours needed to produce them. What are the key levers to do that? One big lever, retirement. I talked about ATM. SDH will come next. Srini new mentioned 3G. And other levers are things like network site sharing, or, again, using algorithms and AI to do, for instance, a smarter tiering with the antennas with the scheduler. Another point are more efficient data centers and, of course, the copper-to-fiber migration. So that is our plan, doubling down on energy efficiency to keep the consumption stable to move credibly along the green path. My last point is about the consumer experiences. [Foreign Language] delightful home experiences are, of course, built on our best networks. And we focus on 3 experiences. Of course, the best connectivity experience anywhere, a seamless interplay of all our products, Magenta TV, Magenta Smart Home, Magenta Gaming, the apps for the telecom routers or Hello Magenta. And in a very focused manner, we innovate beyond the core. For example, our Magenta Gaming offering on the cloud gaming platform. For better experience, we focus on 3 enablers: voicification, again, Big Data and AI, and service orchestration. So that's the summary. And let me explain what is behind that on that chart. First, experience best connectivity. Our customers expect that they have a stable and fast connection anywhere in their home or in the office like at the curb. The reality is often different, a typical problem of the telco industry. In spite of having a super fiber or super vectoring line, connection might have issues. Why? Because the customer uses the wrong router for her or his access line. He or she might have put the router at the wrong place. I visited many homes, and you wouldn't wonder very often, I found it behind the fish tank or the book shelf. Sometimes the cabling in the house is outdated as is the access point. And also, we have the phenomenon that the interferences of the neighboring WiFis disturb. Obviously, There are some nontechnical solutions to that challenge, which is that our sales and service people convince our customers to take the right routers in the first place. Now other more automated solutions require a different technology. More precisely, a new router operating logic. What does it do? Again, it decouples software and hardware. So you see that's also my pet topic here. And it does real-time analysis of the connectivity data, again, based on algorithms and SI. And then as a result, you can support the customer with automated self-installment, a mesh WiFi placement tool or -- and that's what we are currently doing in Croatia. The router tool is automatically the best channel, and it also supports predictive maintenance for our service. Today, we have, in Europe, 1 million customers who got this new router operating system. And our ambition is to enable 75% of the entire Deutsche Telekom router base in Germany and in Europe with that new logic, first or second generation, until 2024. Next topic, experience the seamless interplay. Our customers expect super, super simple and intuitive onboarding, upgrading and operating of any new devices. My first benchmark is the Apple experience from [ one mount ] as item goes really seamless. Now to get that done, we've built a new API-first orchestration layer that acts as glue between the different services and devices. And with that, you can, for example, on your TV screen show the QR code of your home WiFi to the kids of your -- friends of your children or you can get "my mother called notification" on the screen or on the TV screen that someone is ringing at the door. So our ambition is -- by the way, it's being rolled out this year with already today 200,000 engaged customers on our Smart Home offering, and our ambition is to have 90% of our customer base across Germany and Europe enabled with that. And last but not least, Our voicification platform. The idea is not to compete against OTTs, but the objective is to voicify all our services. And our ambition is by 2024, to have all DT services voice enabled. But let us have a look at the homes of our customers. [Presentation]

To sum it up, here, you can see our midterm ambition level. It's a commitment to fiber rollout in Germany and Europe, a commitment to enhancing 5G leadership, a commitment to enhancing customer experience and innovation leadership. On value transformations, our commitment on cloudification, super fast time-to-market, share of agile 100%, IT spend reduction by at least EUR 200 million and, as I said, keep the energy consumption stable. Now Hannes, before I come to you, allow me one final remark. I believe what really differentiates us is the way how we do things and why. And I want to share with you my why. I have this ambition to transform us, as I said before, into an experience obsessed tech player, which means a tech more than a telco company. And it means being truly human-centric. [Foreign Language] Investing into digital capabilities of our people, turn shareholders to fence and increase shareholder value. And by the way, not to forget, have trusted relationships with our technology partners. Within this fragile world of impacted global supply chains, it's also a real differentiator. And last but not least, for me, it means also to be responsible digitally and socially. I call that human-centered technology. And for me, personally, it's the reason why I love to be here in this management team, get up every morning and try to make it even better for all the stakeholders or the human beings out there.

Lovely, that was -- it's a great vision. And it's not just a vision. I mean it's becoming very tangible for our customers with the help of the great teams that we've got together. So we've got time for, I think, about 4 people, 15 minutes. I'll start with Usman. Usman from Berenberg. Good to see you again.

I've just got one clarification and then two questions, please. The clarification I was seeking was, in the final slide, you show the percentage of cloudified production. I mean is this showing the data, the amount of data that you're looking to put on cloud networks? And if so, I mean, are these public or private cloud that you're referring to? So that was the first question. The second question was just on the statistic that you gave in one of the other presentations, on the 40% reduction in the cost per peak throughput. And I'm just wondering, that seems a bit conservative given you have 5x more spectrum in 5G with -- you have 4x more spectral efficiency with massive MIMO. So I mean other operators have spoken more like a 90% cost per bit kind of reduction going into 5G. So your comments there would be interesting. And then my final question was just on becoming more of a software company as opposed to -- you're focusing on connectivity. Could you share with us perhaps how -- what proportion of your network functions have been virtualized today, where you expect that to get to and on software developers, are you seeing that this is an issue when it comes to hiring this kind of talent when there's already a lot of competition for it?

Okay. So I start with question one. It is indeed our workload, 80% of our workload in IT internationally and 55% in the network workload. And it is a combination of public cloud and also private cloud and especially in the IT arena, we are working intensively. We are collaborating with the hyperscalers on that one. So second question. Okay, good. So what I said is, by 2024 to produce gigabit per second, yes. So for top speed, it's a relative number. We will have that efficiency. And by the way, this has a number of contributors. As you are referring to massive MIMO versus the normal antennas, to just give you a flavor, if you look just at the 32x32 massive MIMO antenna deployed on 3.6 gigahertz compared to 2x2 4G, 5G traditional antenna, you will find that the power used is twice as high. But when you look at that antenna in relative terms, it is around about 20%. As I said, it is one contributor. It's not only about this active element. This is actually, I think, how you need to read it. So the last question was?

I would say it's also the 5x spectrum efficiency, seems like a big number. Yes.

Yes, you could add that. Let me see. The last question was around the cloudification, yes. One, the voice and data platforms, which I mentioned, we intend to actually use that automation framework and the cloudified platform for all our customers until 2024. Today, it's 1 million customers. But the biggest, as you know, cost item is in the access network, fixed access network and mobile access network. And here, as I also mentioned before, technology is not yet mature. We expect it to mature in the next 2 to 5 years. And then if you wish, so the access part of the network will be cloudified as well, yes. So the cloudification happens together with the disaggregation and the further automation. Yes. You had another question on is it difficult to get people. Yes and no. You see, I'm actually extremely proud of having a few super gigs from across the world. So obviously, we are very attractive to get talent, whether it's from South Korea, from Africa, also from the United States. So I'm super proud actually of my very international team and of people who are real big. Having said that, I also strongly believe, when you look at the mass of people, that in addition to hiring, we need to invest for social and financial reasons, also in the capability building of our -- both network and software engineers. So we pursue an approach where we combine that.

Very good. So next question then, thank you, Usman, is from Ulrich at Jefferies.

Yes. Thanks very much. I have 3 short questions, if I may. First one is I'm interested in the comparison of how you see DT positioned within the industry? Where is DT ahead, where is it behind? I suppose your choice of topics probably tells us where you think DT is ahead. So the question really is where might you be behind or where's the opportunity relative to your peers? The second question is on O-RAN. You mentioned that. I suppose it's a difficult question to answer simply. But how far is O-RAN for mass deployment at DT? How many years? And my last question is a bit philosophical. But I mean with every -- I mean, much of the efficiency gains in your area come from taking out complexity, which has been layered on in past technology cycles, I suppose. That seems to be a bit of a hamster wheel. Is there any reason to expect that this hamster wheel slows down with the current technology cycle, so that in 5 years' time, we are not going to talk about delayering whatever has been added on in 2021, if you see what I mean?

Okay. So I start with where we are ahead and where do I see upside potential. I hope I made clear that when it comes to our 5G positioning in Germany and Europe, and you heard yesterday the U.S. team. And honestly, I see competition miles behind us. And I can ensure you one thing. We will make sure that this remains like that. In any dimension. If you talk about scope, if you talk about fiber backhauling, if you talk about the top speeds, the number 1. And by the way, also in our ambition to be integrated network leadership, and you see it from the customer feedback and the results, so in the network. Also, I would say, and I mentioned that in my talk, we have really an advantaged, Srini called it, tailwind, for having completed the IP migration because without having done that, you run into intrinsic complexity. For example, the next level of automation and disaggregation, which I mentioned for the fixed line network, when you want to virtualize that and use different vendors with lower hardware cost requires a level of simplification. And we really did it 100%, and we did it together with that access disaggregation. Yes. And also Based on some of the topics which I mentioned, the leverage of AI in fiber planning and the -- that very radical approach to automation on our platform, I think, enables us in the future to capture the potential because I would view it, if I were you like this, we have proven this, and now we are scaling. And because our ability to scale, we are able to execute, for example, on what Srini said, fiber upscale self-funded. So that is the scaling opportunity. On IT, to be honest, I think we are really industry-leading when it comes to radicality of transformation, capability, stability and speed. We are not world-class when it comes to cost. We are actually in the third quartile. So -- up a third quartile. And that is also an upside potential, which I laid out here in the presentation. Yes. And on the digitization front end, Srini and Dominique talked about it. I think we are also in a very good way with our bot farm, with the Magenta bot and the one app. Yes. So I see us, honestly, ahead in multiple dimensions. But because we have proven it with exactly that upside potential to get it done. A totally different level of automation. Now O-RAN, I think O-RAN, the question is when is it mature for a leading operator like us and some others. And my time estimation is in the next 2 to 5 years. But what can -- what I also want to say here, it will be a relevant component in the next request for proposal when it comes to the network modernization in Germany. So -- and the last question, complexity, hamster wheel.

Yes. Whether this is just another installment of a regular cycle or whether we are talking about something that is a structural change that will, let's say, last for -- give us more stability.

I believe once you went through the decoupling and the microservices APIs and this high degree of cloudification, which forces you to automate, yes, you have actually achieved a very strong level of simplification, then you can decide on, yes, what areas you put your additional investments. So I see it more evolutionary, but maybe more than just the historic automation projects where you always take out the next complexity and off you go.

Good. Okay. So next, we have -- thank you, Ulrich. And next, we have James at New Street.

Yes. I have two questions, please, Claudia. The first one was going back to the slide where you talked about the comprehensive benefits from 5G. And in particular, I'm really interested in the point you made around higher CapEx efficiency. Interested to kind of just dig into that a little bit more. What are your plans within Deutsche Telekom for further densification of your macro cell grid? I mean, do you think that's actually needed at all given some of the efficiencies that come through with 5G? I heard Srini yesterday talking a little bit about small cell build plant in Germany as well. So maybe you could kind of layer thoughts around that into the answer too, please? And then the second question I had just was very interested in the developments in the private campus network space and B2B. Could you talk a little bit about how you actually see the competitive environment there? How does Deutsche Telekom have an advantage there? Do you see competition in particular from non-MNO players who can maybe you shared 5G spectrum to compete in that area?

Okay. Thank you for the question. I come to the first one on the macro and small cells. So 5G per se does not require network densification. Now the volume increase in some areas potentially, yes. So we assume that 5G deployment will kick in around 2023, 2024, and it will really depend on the deployment of our macro networks. The German team, for example, assumes to have a few thousand small cells in addition to the macro cells in place by 2024. Then the next question was around the campus network. Campus network, private versus public. What we actually see with our customers, different horses for different courses. There's a number of customers who want to have a combination of public and private or only public. For example, what you saw in the video, this big campus network at the University Hospital was actually based on a public network. And why is that? Because the customers want to also have mobility use cases, which move beyond the boundaries of the campus networks. Yes. And so therefore, we see a need for public campus network solutions or combined ones. Now in Germany, as you see, we have the very specific situation that private spectrum was granted. But what we see that 60% of those who asked for that private spectrum are basically universities or research institutions or certain manufacturers. For the other 40% who applied for these frequencies, I assume a combination of Deutsche Telekom, together with vendors will do it. Now your question was also how are we positioned against others. The feedback we get actually very well, in particular when you think about that combination of campus IoT connectivity and Edge cloud. I also need to say that I believe, as of today, the market is still in an early stage, yes, and we'll probably take up the moment the full benefits of network slicing come live.

Great. Just also maybe to add on the first question, we had a lot of densification -- network densification in the last few years. We extended our site footprint or will have extended by the end of this year by about 6,000 sites in Germany. A lot of that was actually densification. So we have a very strong grid right now. Next -- thanks, James, see you soon. Next is from Robert at Deutsche Bank.

Thank you very much. Thank you. I would like to follow up on Open RAN with Claudia, if I may. Some people think that the complexity of multiple interfaces from multiple vendors within an O-RAN environment will leave you as dependent on a few specialist aggregators in the same way you are dependent on a few mobile equipment vendors today. Do you think that's a risk for Deutsche Telekom or is it an advantage perhaps where you guys can manage the complexity yourselves, whereas smaller players may struggle? And a quicker side is, can Open RAN be as green as conventional technology or do you think there's a trade-off there?

So Robert, great question. So first of all, I think it's going to be very difficult for smaller telcos. I think it's an advantage for us. Having said that, I view the world not evolving to best-of-breed and then being dependent on just one integrator, but rather best of suite. I expect certain ecosystems to evolve on certain pre configurations. I believe also, if you want to capture the full TCO benefit, you -- as a telco, you will not go into software development. So don't be scared. We are not going to develop network -- virtualized network functions. But you need to have certain network integration capabilities in place. And I think I showed on one of my slides, we have that. Based on the work we did with Access 4.0 and O-RAN. So I believe actually it is an advantage. But in the end, it will not be a case where totally disconnected components get acquired and then all the TCO gainings you have, you'll waste by spending all the money for an integrator.

Agree.

Can -- must be. So our view is, yes. Yes. So there is when you really get the end-to-end automation done. And honestly, from a technical perspective, I don't see any reason why not to do it. What prevents progress from happening is, of course, the ability to capture value in the old expensive hardware systems. So I don't see any technical reason with the end-to-end automation why O-RAN shouldn't be as green as Single RAN. You're right. Today, it's not yet. And this is why I said we still need to solve some of the -- some of these technical challenges.

Excellent. And thank you, Robert. And the last question then is, for this round, is from Andrew at Goldman Sachs.

Yes. Thanks very much for the presentation. It's really helpful in terms of understanding new technologies and your progress. What I'm still struggling a little bit with is just how your mobile network will stack up versus your peers by 2024. It's really hard to kind of get a real sentence on specifics in terms of how you're going to look. So we've heard from O2 that they're going to get to around 35,000 towers by the mid-2020s with similar spectrum per customer to you. In Vodafone, we know it's going to have around 35,000 towers, but with more spectrum per customer to you. I'm not really sure on where the fiber backhaul differences are between you all. So the question really is, where will you end up on a number of towers in your 2024 plan? Will you need more additional spectrum versus your peers? And ultimately, will you increase or see a reduction in your network superiority versus peers?

So we will continue to have a superior network towards our peers. And I need to say, and I'm realizing you want to also say something. In the end, it's a combination. It's a combination of the spectrum position, which you have at any time. It is a question of coverage. It's a question of where you have the towers. It is also the question not to be underestimated on certain technological insight. And the moment you test it, you are not talking about it widespread, yes. Because our dynamic spectrum sharing thing was really a coup, I would say, when we rolled it out. And there is a question around the 3.X massive MIMOs in the cities. And don't underestimate we will always observe our peers. By the way, I forget the fiber backhauling, our intensified fiber backhauling. So we will always observe our peers. And then, if necessary, work on an adoption of the parameters.

I think you could have asked the same question a few years ago or even longer, the spectrum was looked -- I mean, one of our competitors even had a lot more spectrum than us. And now we have a very competitive spectrum position, best backhaul composition. We'll have more than the numbers that you have quoted because they include the white spots by that time. And that's a shared -- that we'll have those 2, and we have a build-out rate that is ways higher than anyone else. We've always been the best on coverage. And don't worry about it. Okay. So that's a great way of...

I wouldn't. You wouldn't worry at all. Don't worry, yes. So whatever happens, we will be a step ahead.

Excellent. So thank you very much. Thank you, Claudia. Thank you, Andrew. And that brings us to the close of this session. Now I'm happy to welcome Adel next. Adel is going to talk about, after Claudia has talked about how we digitize ourselves, he is going to talk about how we digitize our customers and how we enable the cloud in Germany and elsewhere. And It's been quite a journey the last few years. Some headwinds, but I think a lot of stuff got done. So let's hear what has got done and how we take this forward. Thank you. Next is Adel. Adel Al-Saleh.

Thank you, Hannes. Good morning, good afternoon, good evening, wherever you're from. It's good to be with you. By the way, we all feel like in a Deutsche Telekom pop band. We're all wearing the same jackets. And I promise you, we all have our own jackets, right? So no sharing. Anyway, look, it's been exactly 3 years since I stood in front of you, it was live, and talked about T-Systems. And at that point in time, when I spend time with you, I got many questions. I said: "Look, we're not sure what T-Systems is all about. Why is it continuing to be a bleeding business within Deutsche Telekom. What are you going to do about it? How are you going to position the company?" And 5 months into my role in 2018, I shared with you the journey that we're going to get into in order to clarify those questions and fix the business as we go forward. So what I'll do today is I'm going to share with you the journey and what exactly have we done. But also, more importantly, talk about what happens in the next 4 years in front of us. Well, let me go ahead and get started. So first of all, it's really important to say that the transformation that we put T-Systems on has progressed. And as a matter of fact, hopefully, you realize after the presentation, what we have today is a very different company from what we had 3 years ago. Clearly, it didn't turn out exactly how we planned. So there were things that went well. There were things that were challenging and we struggled with. But at the end of the day, the biggest thing that we've accomplished is a new portfolio for T-Systems that is 100% IT services focused company. So that's point number one. Point number two, different than what DT Group experienced, we actually did see a big impact from COVID crisis in 2020. After a very good 2019, a lot of our customers were hit. 60% of T-Systems business is concentrated in automotive, industrial, manufacturing, travel and transportation, the industries that were hit the most, if you will, with the COVID crisis. Many of our customers were shut down and not even able to communicate with us and not able to continue their transformational programs or the projects that they were on. So we felt that pain. And the biggest issue we faced, of course, is the revenue development in T-Systems during 2020, but also the delay in our transformation. We, by the way, put on track as we went forward. The third point I hopefully will come across clear is, as we went through the 3 years, we have evolved our strategy. So now being an IT focused services player, our strategy to be the European leader, especially when it comes to cloud transformations, cloud operations, digital enabler and digital solutions with secure sovereign capabilities that our customers are looking for. And I'm going to share that strategy with you and how we take the company going forward. The fourth point is we have a very clear road map how to build value going forward. We know exactly what we need to do to accelerate our EBITDA growth, and I will share that with you as well throughout the presentation. And finally, I will share the financial outlook, which we are confident in to deliver 5% compounded annual growth rate through the planning period and get ourselves to a positive cash contribution. That are the key points, and now I want to get into the details of exactly what happened. Now before I dive into all of the granular information, I wanted to step back for a second and share with you the journey that we've been on. And I look at it in 3 phases for T-Systems. Phase #1, which was 2017, 2018, this is when I walked in and a little bit before that I joined the company, it was all around stabilizing the company. You remember the troubled contract. I had a lot of questions from you when we got to May of 2018. What are you going to do about these contracts? Is it more than your peers? How do you control it going forward? It was also about launching a new cultural transformation within T-Systems. To think differently, to modernize, to evolve. And we've done that through 2017 and 2018. I don't think you've read in the newspapers any of our troubled contracts since we met in 2018. We've launched a very ambitious cultural transformation where over 20,000 employees participated in that. We've enabled more like 70% of our employees. That was phase number one. Phase #2, and you'll recall it when I go to the next slide, was about this 4-pillar strategy, a tactical strategy that was focused on fixing the fundamentals with T-Systems. And that was 2018, 2019, 2020, and we're ending it in 2021. And we now entered a new phase, which is where we evolved our strategy and evolving our business model to deliver a consistent -- consistently performing company going forward. That is really important to visualize for us as we go now through the different areas. Now let's talk about the 2018 through 2021 phase, which was about the 4-pillar strategy. You remember, the 4 pillars were: number one, fix the portfolio; number two, fix your go-to-market; number three, what are you going to do with your delivery? And number four was about your SG&A. What do you do with the overheads? Let me go through this very, very quickly. So first of all, on the portfolio, huge accomplishments here. One is we changed the business model of the company. We created a portfolio-driven logic, where the P&L set in the company away from the divisional structure. We got clarity where do we make money, how do we compete, how can we make -- how can we grow, do we have the right to play in some of these areas. And that drove a bunch of decisions, things that we stopped. For example, end user services, which is painful on the top line, but it was a business we decided we're not going to do anymore. And we continued to bleed that out from the company. Second was exiting some of the geographies where we didn't see future for us like South Africa, like Malaysia, which were in the final phases of exiting. We also did a very important deal -- partnership deal with IBM, where we changed the fundamentals of how we deliver mainframe services, changing from a CapEx-heavy model to an OpEx model, accessing technology as fast as it becomes available. But the biggest component of our portfolio was about moving the connectivity businesses from T-Systems into Telekom Deutschland. It was very clear to me as soon as I started digging down into the organization that the value chain of delivering TC services business was usually fragmented in B2B between T-Systems, TDG, global wholesale, et cetera. And we decided as a team that it didn't make any sense. We're going to put it together with Srini, so he has the end-to-end value chain to deliver the service. And he talked about that yesterday. That was the big change in our portfolio as we went forward. The second area was about the integrated go-to-market. We were very fragmented in how we covered the market. We created an integrated sales force. We digitized that sales force through deployment of salesforce.com as a technology. It's now a data-driven management of our sales capabilities. And very important, we rebranded ourselves. We repositioned ourselves. I don't know how many you've seen the Missing T campaign, which by the way, won the FE Award, which is a very prestigious award in branding and positioning. And we started talking about the connectivity, security, cloud, digital as our key portfolio elements. The third area was about our delivery. We were very heavy dependent on high-cost locations. And we set ourselves to make sure we change that by, first of all, building up India, we went from almost 0 headcount in 2018 to over 2,000 people today. We're very proud of that team. We shifted a lot of our high-cost locations from a delivery into lower-cost locations. We declared that we have a 4-country delivery strategy. Germany, of course, as a foundation, but also Slovakia, Hungary, India and Russia, where we have a lot of software development. And we started building scale in these areas. And that drove a lot of synergies across the company. And the last pillar, of course, was about taking cost out of SG&A. I focused initially at the SG&A. I thought that was the first area we needed to address. So we looked at layers, managers, executives. We removed almost 40% executives from the company. We removed several layers of management, 4 layers of management. We deployed Agile organization structures. We reduced our HR, finance, G&A functions by 30% plus. And at the end, we delivered EUR 300 million net IDC savings. That's over 10% of our IDC capabilities in T-Systems. We deployed Agile structure across the organization, so we work differently. And there's more to come in this area, but that was what drove our EBITDA expansion in 2019 of 17%. Now all these 4 pillars, they were underpinned with our cultural transformation journey and a very tight management system to deliver. And that's what made the difference for us over the last several years. Now that is just a quick summary. And I already talked about the EUR 300 million net savings, and it was driven really by 4 key areas. Number one, our sales organization. As we integrated it, we saw a lot of duplication and ability to take some of the cost out. Second was about delivery integration and moving things offshore into lower-cost locations. We went from about 20% of low-cost locations of our total population to 30% in 2020. Third was overhead reduction. We talked about it. And the last one was, of course, overhead reductions. And I want to highlight that not only did we take headcount out of Germany, about 1,600 net reduction, which is about 11%. We also took headcount almost 2,000 people net from our other high-cost locations and moved that work -- a portion of that work into the lower-cost locations. That's what drove our IDC savings through the period. But we've had headwinds. I mean I already said about the impact of COVID. The biggest headwind we have was the revenue development. When I stood in front of you in May 2018, I said, our plan is to keep revenue stable or growing at low levels, 1%. We didn't get there. That is the big challenge. Now one of the things, of course, that drove the revenue down is our decisions to exit certain businesses like end-user services. By the way, through this planning period, it was EUR 180 million reduction on top line. Also, of course, the COVID impact that we have. But nonetheless, when you look at the shift into the growth areas, it did not go as well as we were hoping for. It was slower, although we had excellent growth in our public cloud, over 30%, very strong growth in our security. Our digital solutions was a disappointment, where we declined minus 2%. After growing first from '18 to '19, in 2020, we saw big headwinds for that. And our MIS business, our infrastructure business, declined at about 8%. But if you normalize for the end-user services, about minus 4%. So that did not give us the growth dynamic that we wanted. Although we did shift more of our business into the growth areas from 38% of our total business in 2018 to over 47% in 2020. And by the way, that will continue for us going forward. But that was our biggest challenge because that 1% growth would have expanded EBITDA much faster than what we've seen. If you normalize for things, by the way, if you normalize for end-user services, our revenue would have been minus 1% over the period, and our EBITDA would have been plus 1%. So challenging period, especially in 2020. Now let me go through the actual commitments that we made to you in May 2018 versus where do we expect to be landing in 2021. So first of all, our revenue growth. As I said, that is the element we could not -- we did not deliver on, right? We're declining minus 3% compared to what we promised, which was either a flat business or a plus 1%. Second was our EBITDA performance. We rated ourselves amber here because if you normalize for the portfolio shifts and some of the COVID crisis, we actually have a very strong EBITDA performance of plus 1%, given all of the changes that we were doing within the company. CapEx, we decreased our CapEx from a little bit closer to about EUR 300 million run rate to about EUR 250 million. And by the way, we expect to keep it like that. Our CapEx is between 5% and 6% of our revenue. I would like to drive it in the lower 5% and even below 5% as we progress this business going forward. Our special factors, we dropped it slightly from the run rates that we had, but we kept it pretty much stable throughout the period. So we did not escalate after a big bump in 2019. We brought it down to exact levels that we were, which are about EUR 160 million, EUR 170 million. Cash contribution, I committed to you in May of 2018 that we will get the business to a cash contribution breakeven by 2020. Well, in old T-Systems, when we still had the TC Services, we achieved that. I would say we achieved that by hook and crook in different ways than what we envisioned, but we got there. The new T-Systems needs another couple of years to achieve cash breakeven after we moved profitable business off TCN into the TDG business. And of course, our indirect cost was better than what I promised you. We talked about EUR 100 million of net savings in May of 2018. We delivered EUR 300 million, plus more to come in the future. Our EBITDA margin, we expanded by 2 points and our TRiM continue to be one of the best in the industry. We consistently score in the top quartile of our competitors with high 80s TRiM performance. So all in all, challenging 3 years, lots of things happened, a very different company we have today versus what we had in the past. We're proud of where we are, but we still have a lot of challenges in front of us to address. So we are not done with where we want the T-Systems to be. So what is the strategy going forward? So first of all, it's important to just step back and realize that we now have an IT services company focused on Europe and select countries around the world that is #1 in Germany, that is #2 in DACH. We serve majority of the DACH 30 companies. We have 8 strategically located security operations center across the world. We manage close to 600 petabytes of storage. By the way, we grow every month half a petabyte, about 100,000 servers across the world through 16 data centers. And we're operating in 20 countries, not in every country the same, because some of the countries are more delivery organizations with 28,000 people across the world. Out of the 28,000, about 12,500 sit in Germany. Out of 28,000, 12,500 sit in Germany. So we've shifted that population to be balanced across the world. That is who we are today. A very different company from what we were 3 years ago with a clear portfolio, which I will expand on in a few minutes and a clear path to value creation as we go forward. We operate as this IT services company in a very buoyant and a very fast-moving market environment. You heard Tim talk about digitize, digitize, digitize, where all of our customers are on that path. Digitization is a matter of survival now. And that drives a lot of the consumption and a lot of the spend in the marketplace. Now the buyers are changing as well from not only being the CIO into more of a business line managers. So the guys like Srini who are making the decisions, how do they digitize their companies. So we had to expand our customer contacts and our go-to-market to cover these business leaders in the marketplace. Of course, COVID accelerated the investments. Initially, it froze everything in 2020, but it is accelerating digitization as we go forward. No doubt about that. And cloud, as the biggest technology in terms of adoption, is the enabler of digitization as we go forward. Now that gives the European countries, the European market at about 4% to 5% growth going forward. And it gives us an opportunity because only 10% of Germany has been digitized so far. So there's a huge opportunity to come going forward. There is also this European sentiment of sovereignty that's becoming stronger and stronger and stronger. And this is an opportunity for us being a European player. It is not just in Germany, it's across the European -- EU European Union member states, and it's accelerating. And of course, data protection security continues to be a very, very big topic. So those are the dynamics in the marketplace. So the question is why T-Systems? How can T-Systems participate in this? So Again, repeating some of the things I said. Number one, we are a big player. We are #1 in Germany. We're bigger than our competitors, DXC, Accenture. We're equal in share, by the way, with IBM. So we share the #1 spot before IBM splits the company. After that, we will become #1. Again, undisputed #1. And we're #2 in DACH. And in several select countries, we're in the top 10. So we are a player with credibility. The second thing is we have proven market leadership and engineering capability when it comes to infrastructure management, transition to cloud and digital capability. And I'll use a few examples once I go through the presentation. Third, We have the industry expertise, especially in the industries that we have selected. We have deep knowledge of how these customers work. We have deep industry solutions. And we have horizontal platforms that can apply to any industry. And lastly, we have a very long-standing client relationships. Just last year in fourth quarter, we renewed over EUR 2 billion worth of contracts that extend our relationships with the like of Shell, DP DHL, Heineken, Adidas for another 5, 7, 10 years after having a relationship for over 10 years. That is a proof point how customers trust us. But I think it's best to hear from customers themselves. Can we play the video, please. [Presentation]

So now let me talk about this new strategy that I keep alluding to, which is unevolved from where we were. There are 5 pillars to this new strategy. Number one, You'll hear me say this over and over again: focus, focus, focus, focus. Just like Tim says digitize, we are about focus right now. And the focus for us is to be the #1 player in Germany and focused on DACH and other select countries around the world. So we are not spreading ourselves thin by covering every country in the continents. We are focusing where we want to play with the biggest focus in Germany and DACH as a region. That's number one. Number two, we want to be the leader and maintain our leaderships in 3 to 5 industries with deep industries and a portfolio of horizontal solutions that apply to any industry. Number three. Historically, we have focused on the very large multinational companies, and we will continue to do that. We will protect our space and our base of these large international companies. But there is a massive opportunity in the market to focus on the EUR 1 billion to EUR 5 billion companies that are struggling to digitize, struggling to drive themselves forward. That is a big opportunity we have in [ capital ] in the past that that's going to be a focus area. The fourth area is we are positioning ourselves as the strong local partner for our customers. The customers we work with, they have access to the entire management team. They have our mobile numbers. They can call us at any time, and that gives them confidence that the one they're partnering with is not somebody who's sitting in the United States or in Asia somewhere. It's somebody local in the countries where we play. And finally, sovereignty and security is a big differentiator that we bring to the marketplace. Given where we come from as a Germany -- as a German- headquartered company, we understand what data privacy mean. We build it into our solutions. We understand what sovereignty means. So then if you look on the left-hand side -- you can see on the right-hand side, your right-hand side, you see how does this portfolio come together, and you'll see simplification there. First, you see the industries that we focus on. Right now, we pick the 4 industry being automotive, public health and public transport. But of course, we have other emerging industries that we cover. And our portfolio now consists of 4 straightforward elements: advisory service; advising clients on their digitization strategy, this is based on our DataCom company, a fully owned subsidiary of T-Systems; driving the transformation agenda with the CEOs and the C-level executives that then opens up the door for our cloud services; hybrid multi-cloud cloud capabilities, our digital enabler capability with over 7,000 experts in writing software and digitizing and automating and process improvements; and security being embedded in everything we do. That is our evolved portfolio. It's pretty straightforward. It's very clear where we need to focus. Now what I will do is I will run through each of these portfolios very, very quickly, given the time constraint that we have and then, of course, get into how do we deliver over the next 4 years our financial -- and in terms of our financial commitments. So first, cloud services. Everybody knows the market is driving very hard into public cloud but also hybrid clouds. There is speed of implementation that's happened over the last 18 months that we have not seen in years. And that will continue because cloud is the foundation where you digitize from. It's not only public cloud, it's also private cloud. It's also hybrid cloud. It's edge solutions. And what we have created here is a platform that gives the client the flexibility and the different platforms that they need in order to digitize. So we have partnership with public cloud companies. You've heard our partnership with AWS, with Microsoft, with Google, that are substantial in nature for us. We have our own platforms that we deliver, OTC being one of our public cloud solutions as well and our private cloud solutions. We have our EdgAIR that's been deployed in many campuses across the world, driving some mission-critical, real-time compute and store environment in order to drive data ingestion and AI capabilities to improve the results for our clients. On top of these platforms, we provide migration services to help plans move, including, of course, after that cloud application services. This is a big business for us. And there, we have a period of time for the next 3 years, where we're bleeding away some of the legacy like user services, where we still have about EUR 150 million to shut down. We didn't shut everything down. We're bleeding off the contracts that we have but also some of the lightly classical IT businesses that we have, which makes it difficult for us to grow. On the other hand, our public cloud, our private cloud businesses are growing at faster than market rates, as we've demonstrated already over the last 3 years. If you think about our digital enabler, we talked about digitization, we talked that this is a priority for a majority of the companies. Here, we focused ourselves with 7,000-plus experts across the world to start with industry solutions and services, things like the connected back end of the car. For the Daimler customers here, Mercedes me, that is an application that T-Systems has developed with Daimler that's deployed across millions and millions of cars. As an example, our police solutions, our hospital solutions, those are industry-specific solutions that drive digitization. They're fueled by innovation in some of the core technologies like AI, like 5G. The 5G campus question that Claudia got, it's not just putting the network in. It's how do you then deploy applications that use that network. Blockchain are some of the innovative areas that we drive. Third area is building platforms that we can repeat and scale so we don't have to invent it every time. For example, big data platforms so our data engineers don't have to think about what platform they focus on, what are the applications and how do I deploy them. And finally, it's all about transforming our customers in the cloud landscape. That is another big area for us as we go forward. And if you look about embedded security, just last 2 weeks, we've heard about the news of a pipeline company in the United States being held hostage with some of the hackers. That is not unique. Some of it makes it to the press; some of it doesn't. But every company, as they digitize, as they go into the cloud, they need security. And here, we have a survey on the [ land ] side from the Citi CIO survey in 2020 that continues to say that IT security is going to be the biggest area where CIOs are going to be spending over the next several years. And we have a platform that actually takes you throughout the value chain of security, identifying, protecting, detecting, responding and recovering. We have some of the world's most sophisticated FOX deployed in strategic areas. We deal, get ready, with 80 million attacks per day on our [ high part ] infrastructure that we deployed across the world. So we can learn the vectors. We know where we're coming. And our value proposition was having security in the network and IT is very unique in the marketplace. We can see the traffic coming through our networks, and we can apply to the IT environments, which is very unique. Now I'm going to [ skip ] advisory given the timing, and I'm going to go ahead and reinforce what I said earlier. We have a clear strategy and path to continue to build that. One of them, of course, is to deliver additional cost savings. And what we're committing to you is, over the next planning period, we'll deliver another EUR 200 million of IDC reductions. The next wave of IDC reductions is a little bit different than the past. We're now focusing deeper in our delivery, our nation, process improvements, toolings. We select ServiceNow as our digitization workflow management system across the entire company. There's still some left in G&A and sales and our real estate [indiscernible] By the way, in the beginning of this [indiscernible], we are not going to go back yet. We're going into a very different of working, where we have ration areas, development areas in big buildings where people come in and work together, and we tell them if they have things to do with your teams, you can work for whatever you want. So we are committing EUR 200 million worth of savings over the next planning period. And of course, all this kind of comes together to give us the new strategy. We -- our vision is to be the most reliable IT service provider with best technology and industry expertise. And our mission is to help our clients on their digital journeys. We are the European IT service leader in the markets where we choose to play. And we take our customers, we partner with them on a journey into modern, secure, resilient digital environments with 3 differentiators: data sovereignty; innovation in an open ecosystem; and secure operational excellence. And our enablers are learning, continuous learning, continuous improvement. It's our people, #peoplemakeithappen, and sustainability and diversity that Claudia already covered. We're all part of that plan that Claudia was talking about earlier. That is our strategy as we go forward. Then what does it deliver then? This is our commitment for the next 4 years. One, revenue, we are focusing to deliver slight growth. We have that balanced point we're reaching between our legacy and our new businesses, our growth businesses, where it's going to pass the 50% threshold, which should deliver us growth going forward. Second, EBITDA growth of 5%. Third, our margin, EBITDA will expand another 2 points in this planning period. And EUR 200 million in indirect costs as I described. Cash CapEx, we will keep stable. There is no plan to go back again to where we were after we reduced it from about 300 to about mid-200s, and delivering cash contribution positive in the planning period. This is for the new T-Systems. The old T-Systems, we did it. We demonstrated we could do it. This is now for the new T-Systems. So Hannes, that's our plan, and I think I'm ready for Q&A now.

Great then. Please join me for the Q&A over here. Thank you, Adel. Okay. Very good. The times change and we change with them. And that's the challenge, but it's amazing what has been done and what has been created to take us forward here. So very good. I have the first question here from -- it's from Steve at Redburn. Steve?

Yes. I think we probably saw 3 years ago, you had one of the toughest jobs in DT. I think you probably still have one of the toughest jobs in DT, and it seems you're doing pretty well in a tough market. Can you maybe just help us understand the trajectory of those financial metrics you set out? Because when you look at it, I guess, my sense is that as you burn off legacy and move into new collaborations on cloud, that's kind of a negative gross margin mix, but maybe not. You declined 5% in Q1. So when do you think you can get to growth? And just give us a sense of -- I guess, the 5% compound EBITDA is probably a bit back-end loaded, maybe not, but that would be helpful as well. And then just finally, just on, I guess, your division is probably in the front line of COVID than what you see in the last 12 months where you expect in the next 12. What your enterprise customers are telling you, how the business has changed through this process and what you're anticipating for the next 12 months in terms of challenges, as we come out of COVID, would be really interesting to hear as well.

Very good. Well, Steve, so let me start kind of with the last part of your question, and then I'll build it up backward. So what are we seeing in terms of COVID dynamics? So first of all, we are seeing customers spending again, and we started to see that happening in -- towards the end of 2020, especially our industries, where we are very concentrated. But I say, 60% of our business concentrated in automotive, manufacturing, industrial, travel and transportation. So we've seen that come back. And as a matter of fact, one of our biggest disappointments over the last 3 years was our digital solutions that grew strong from '18 to '19 then declined for us in 2020. And now in the first 4 months of the year, it's up towards 10% growth. So we're seeing that come back. Now I wouldn't celebrate yet and say that the market has recovered. I think it's still very measured. There are very clear plans to continue to spend. We started the projects. People are pushing forward with their digital agendas, if you will, but I'm still skeptical. I think it will be a very gradual recovery, and people will still prioritize quite heavily where they want to spend. So like security would be front and center. Cloud movement would be front and center. But other areas like changing your SAP systems, it's something that people are thinking more carefully about. So that's what we've seen. Now in terms of the metrics and how it comes, especially on the top line, look, we've seen very good growth in the growth areas, and you've seen that we've moved the needle to being almost 50% of our portfolio now made out of growth. Every single element of our growth portfolio is making money. That was not the case in 2018. As a matter of fact, even public cloud at that point was losing quite significant amount of money. So over the last 3 years, we moved them into making money without starting an investment in them. So as we go forward, the growth in these units is accretive to us on a bottom line and top line. That's why getting 1% growth is super critical, right, because that does come with incremental EBITDA and incremental cash contribution different than what it was in the past. And the margins for us, they differ, the digital solutions margin. For example, the work that we do with the governments, the work that we do with EU, you guys heard about the Corona-Warn-App that we did with SAP, the vaccination back ends that we've deployed across, these are good projects for us. They generate reasonable return for us. And the issue for us is how do we expand the margin further by creating more repeatable assets. So the Corona-Warn-App that we built, we've used those assets to go build other areas like an enterprise tracking system for folks in manufacturing, like, who want to deploy a more closer proximity tracker, who's standing where. We use that platform. There's work going on around vaccination sharing across the EU countries. We reused a lot of the work that we've done in the past in order to do it, and we want to do that more and more. So not having to recreate everything, having more built-up assets that we can build -- that we can reuse, and that expands the margin going forward. So the tricky part is -- for me is can we sustain digital solutions growth that we have demonstrated in the first 4 months. If we can, growth is a real achievable number. If we can't, if the market changes, and we're not fast enough in changing and shifting more and more towards these innovative platforms, then we will struggle to show the growth going forward. But I'm optimistic in terms of the financials and how they come across with those growth profile.

Yes. And you've given EBITDA guidance, and you said this year will be stable. And then that implies that '22, '23, '24 will be better than state?

It's not back-end loaded, Steve. So it's not all sitting in 2024. But it is -- we plan for gradual recovery as we go forward.

Okay. Well, thank you, Steve. And next is Polo, Polo, again.

Yes. Just as a few different questions. The first one is really just about your peer group. You made the point that you had a leading position in DACH, but who do you see as your main competitors? And are there any listed companies that you think resemble T-Systems? Second question is really just a clarification on client concentration. And you said that you're focused on multinationals. But can you maybe just give us some sense in terms of what percentage of revenues your top 10 clients account for? And then my third question is really just a bigger picture question in terms of what you see as the benefits of T-Systems being parts of the DT group.

So Polo, first of all, it's a very good question on the peers, right? So we have repositioning the company to not be compared to the likes of DXC, IBM, Accentures, the very large global players that have a different scale and go very much after this very large horizontal kind of place, right? We focused ourselves in more of the European leaders. We include Atos in that, of course, because they are very present in Europe, Capgemini, of course. But companies like Sopra, like Reply, right, like Indra, right? Those are companies -- and since we're big in Spain, we do look at Indra as a key competitor. So that is who we compare ourselves to. And by the way, when we look at the performance of these companies, the median performance in 2020 was about 1% revenue growth and minus 9% EBITDA growth, that unit that I just described with a few other company, European companies. So we did actually better than competition on EBITDA side because our reported numbers were about minus 2%. But like-for-like, if you normalize for all of the movement we had, it was flat year-on-year in EBITDA. But revenue-wise, we were lower because we were minus 1% normalized with some of the areas. But those are the competitors that we look at going forward. And we just chase less of these big global deals and focus ourselves more on this local opportunity that we have, which are still very large companies. Like I said, DAX 30, we serve most of the DAX 30. We serve a big portion of the Fortune 500, but we serve them from a local perspective, when they're buying local things. When you -- to answer your question on concentration, we haven't published these numbers everywhere. But I will tell you this, our top 30 customers make up a big portion of our business, more than 50% of our business. And this is where I see the opportunity, Polo, right? Because out of those top 30, a very small -- about 20% of them are the EUR 1 billion to EUR 5 billion revenue companies. And if you look at Germany alone or you look at DACH, the number of this EUR 1 billion to EUR 5 billion companies is much larger from a total market opportunity that they're real big multinationals. So we are focusing ourselves with a different go-to-market and approach to really get traction in that customer segment. And we have some examples already that we've done, right, in several [ zealous ] customers. And then I guess the last question you had, what is the benefit of T-Systems being within the Deutsche Telekom Group. Well, look, it's the following. First, when you think about our entire portfolio of DT in T-Systems, we are the only company in the world that can offer our customers a true end-to-end capability that covers connectivity, cloud, digital and security. The security work that we keep talking about is driven by T-Systems, and it's a company -- our [ TC ] company serves everybody in Deutsche Telekom, right? So they -- although managed and consolidated in T-Systems, it's a big part of Deutsche Telekom. Examples of 5G deployment and private networks. We depend on our colleagues in the network side to deploy the 5G campus. But the use cases in the campus is driven by T-Systems, i.e., the autonomous vehicles, i.e., big data, edge solutions that we deploy. How do you actually capture? We do Daimler's tests, all of the Daimler's heart condition test environments are managed by T-Systems. So we have edge solutions in very harsh areas in the deserts and in North Pole where we capture data through edge solutions, and having network expertise brings a real good consolidated solution to the market. But as I said, we've created this IT services company, right, that's no longer confused kind of what we do but still quite a bit of opportunity to leverage DT as a whole.

Excellent. Thank you, Adel, and thank you, Polo, for the questions. And now we have a very short break before we move on to the grand finale and -- of Thorsten Langheim on Group Development and Christian Illek on the finance development, and then they will have a final Q&A also including Tim Hottges. So we have a short break. We reconvene at 1:00 p.m. German time, 12 p.m. GMT and look forward to seeing you back. Thank you. Thanks, Adel. [Break]

So welcome back, everyone. Now it's the turn of Thorsten Langheim. He leads our Group Development department. As I think most of you know, Thorsten is our living legend. He will talk about how we have created value from the portfolio in recent years and not just in the United States. And it's equally amazing how Thorsten and team have turned around the Dutch business. This is stuff for the textbooks. Let's see Thorsten talk about how we will create even more value from our portfolio. So Thorsten, the stage is yours. Thorsten?

All right. I want to make it [indiscernible] because I'm the only difference between a good weekend and this presentation. I look forward to this presentation because I get 2 beers. Beer #1 is for this wearing this jacket and the second beer is coming a little later. In any case, let me come to this wonderful picture. Of course, yesterday, when I looked at the -- that page of the Capital Markets Day, I picked up that there was one in 2010. And in 2010, we had our wonderful leader, Tim, presenting on the topic, efficiency and capital returns. We were the #4 in the market behind Vodafone, Telefónica and Orange, our key competitors, and we had a burning platform in the U.S. Now today, if you look at it, we all look different. We wear fancy jackets and we are the #1 in the European marketplace. And if you see this, we are almost the size of Orange, Telefónica and Vodafone. Why do I show you this? I show you this because we are investors. We are shareholders. We are a management team that is in for the long haul and that history is not always a good prediction for the future, but I think our track record is good, and you can trust us. If you look at my presentation, I think I want to leave 3 major things with you that you should remember. That's all. I think, number one, we have built the best telco portfolio in the sector. And this gives you earnings per share growth, free cash flow growth and strategic optionality. We have no burning platform like in 2010. We will continue with what we have done over the last 10 years, active portfolio management and exploiting strategic optionality. In the U.S., we want to retain control. In Europe, we will reduce strategic options for our towers in T-Mobile Holland. And I will explain to you in a minute why. Number three, we don't have a share price or Chief Share Price Officer. We have 8 -- this management team has aligned interest with our shareholders. We won't shock you, and we want to build out our lead. You can trust us. This is my personal business card. It's kind of interesting to look at Capital Markets Days and then see presentations. Everything can be interpreted as you have won, you have delivered your numbers. I'm just a simple number guy. And I'm just looking at the numbers and want to be judged on this. We, at Group Development, are responsible for 2 things. And I think this, to a certain extent, is unique in the industry. Of course, number one, we are responsible for the portfolio, for active portfolio management. I'm certainly not the most popular person in the group because we have trade-off discussions. We have to allocate capital and not on a first come first served basis but on a risk-adjusted return basis. Second one, sometimes we run activities, like in the past, Scout or Strato, over the last 3 years, towers and fixing T-Mobile Holland or building up DT Capital Partners from scratch. We are the department for, call it, value creation. And these are my most important metrics. Of course, you will find further operational KPIs in the booklet. But I'm just focusing on this $44 billion since our last market -- Capital Markets Day in 2018 on the U.S. for DT shareholders alone. And the sum of the parts based on your best estimates of the value of T-Mobile Holland and GD Towers creating EUR 10 billion of value. How we've done that, you've seen on the right-hand side. We have done in-market consolidation because we believe in that. We have also bolstered up assets for FMC capabilities like in Austria by acquiring UPC or, just recently, Holland by teaming up with KKR and DT Capital Partners for building out fiber. The result of our work, I think, is impressive. I still want to be humble because at the moment of your great success, you sometimes overestimate the future. And this is the moment where you should be most vigilant. However, having said that, we have a fantastic portfolio standing on 2 major legs. T-Mo US on the left-hand side is our racehorse, 50% free cash flow gross, $18 billion of free cash flow in 2026. I think a very smart analyst has recognized that mid-May that this level of free cash flow is almost representing the whole free cash flow of the European sector. But on the other hand, we have, let's say, a stable and steady workhorse for the digitization in Europe. This is our European business, which is -- has delivered 3% EBITDA growth, and Christian will tell you in a minute how -- what we see in the future. It's #1 in revenues. So now dwelling on this, let me move on and give you a bit more detail on the 3 assets that we are kind of overlooking T-Mobile US, Holland and our towers. So this is 10-year story. You cannot create value overnight, and it's not coming to you as a present. It was a long and sometimes difficult journey. For us, it's always important to get the right asset, but also at the right price, not just the deal that looks great at announcement day. And it takes time. Even when we get a deal done, we are always looking ahead, and you have seen us negotiating a valuable call option on 45 million shares in the U.S. as a subsequent step to putting these wonderful companies together in the U.S. I very well remember the long journey that we had, starting with the AT&T break fee, the reverse merger into MetroPCS, selling our tower business to fund our top line and Un-carrier moves, identifying a fantastic management team that embedded the Un-carrier or sales at a time when it was fancy to think about media content skills to differentiate in wireless or the 2016, '17, '18, Ross and Rachel episode between Tim and Masa about we get engaged, we don't get engaged, which finally lead to our transaction in 2018. You may remember what I said in 2018, we have a $70 stock with a free option on deal approval. This is a picture that I showed you at the Capital Markets Day in 2018, and we were celebrating. But to be honest, we were celebrating too early. In football, as the saying, Nach dem Spiel ist vor dem Spiel, or after the match is before the match, and what follows were 2 tough years, tiring and frustrating at times. So let me look at this picture here. This is Tim and me outside the New York quarters after the cross-examination by the state attorneys. It's fair to say that we looked a little bit like [Foreign Language], frustrating and completely tired. To be honest, in 2018, we had no idea. We needed 2 years with a lot of ups and downs to get to a deal approval. Of course, the heavy lifting has been done by the T-Mobile's management team, by John, Mike, Braxton and Dave Miller. But remedies are a tricky thing. They need to be balanced, not killing the merger, but the merger benefits by addressing the competitive concerns to get to deal approval. So far, so good. I honestly believe that Judge Marrero took the right decision, not only from myself as position of shareholder value, but also from the consumer perspective. If you look at the recent C-band auction and Verizon spending $45 billion on it, how on earth should we or Sprint have been able to compete as stand-alone companies? Moreover, last week's refocusing and shedding of some media assets by AT&T tells you a story about how competitive our merger is. So since closing, another 12 months have passed. So what has happened since then? And I'm just focusing on the stuff that we -- as a shareholder, we're focusing on not on what Mike clearly claims as strong operational performance and improvements over the last 12 months. Number one, we conducted a successful management transition from certainly one of the best management team, if not in the U.S. alone with John and Braxton leaving the firm, succeeded by Mike and Peter Osvaldik. We renegotiated, as you know, the exchange ratio, and we negotiated the valuable call option that we currently enjoy because it's a $101 while the stock is shortly below $140. We have been conservative enough on synergies. We've learned our lessons out of MetroPCS, and we'd like to outperform expectations. You've seen that we have increased synergy estimates and that we have put T-Mo US in a position where, even on a balance sheet basis, they can compete with the big guys. The target price has been increased over the last 12 months from $102 to $106, which gives us great hopes that everything is going to improve in the future even further. And looking at the share price 3 years ago, I showed you that our stake value has improved from $9 billion to $32 billion. Now we are at $76 billion. Let me stress it a little and take a little bit of a pause. This is $67 billion value creation since 2013. That's a lot of value that has been created. For us, it's $44 billion over the last 3 years. I'm not smart enough to judge but has this been the most value-creating transaction in telco land? I'm asking, as Tim is always asking, for bring me awards. We started together with collecting the largest break fee in history. We enjoyed a 4:3 consolidation in Europe without remedies, and maybe the future will tell. It may be too early to celebrate, but in 2 or 3 years, hopefully, this is being seen as one of the better transactions. Even my old world of private equity, we would get [ about ] 2x money with -- on an unlevered return in 3 years. It's not too shabby. And also for us, as a German company, it's a relief after the challenges that, for example, Bayern or Daimler experienced with U.S. M&A. To be honest, it's not a given. And actually, people will know most of the big-ticket M&A transactions go wrong, and so far, this team in the U.S. and we, as shareholders, have delivered on a good story. And why is that? The value comes from a strategic rationale that has been very compelling from the get-go. The C-band auction showed you how valuable the Sprint spectrum is, especially in the 5G world. We can build the best network far better than we would ever do it organically and by ourselves. And if you look on the right-hand side, the implicit valuation of Sprint based on the exchange ratio was about $70 billion on an EV basis. The synergies are now at about $70 billion. The value of the spectrum that brings to the -- that Sprint brings to the table based on the C-band auction, implicit price is $64 billion, and on top of it, DT shareholders got customers, network and EBITDA. Now look forward, what does it mean for our shareholders? T-Mobile is a sustainable, well-positioned company. We believe there's a lot of further value creation in front of us. Therefore, gaining control is a priority. And most importantly, it would certainly be financially attractive. Having said that, control in itself is not a value. However, we'd like to be invested in [ this ], and as shareholders, we like to determine a few things in order to devote our full horizon track. We want to bring our expertise to the table for capital allocation, M&A, capital structure and, as we have demonstrated to you in the past, to pick the right team on the bus. There's plenty of optionality around our U.S. stake, and we have time. There is no message today, want to increase to [ 50.1% ] tomorrow. We have 3 years and who got -- who knows what SoftBank may do when the lockup expires mid-2024. If they are not selling their shares, we have a proxy forever. However, if they sell, we have an [ offer ] and we have a call option. So we could act earlier if we want to. And on top of the call option on the 101 million shares, 45 million comes at $101. I think that's a good position we are in. Now look at the T-Mobile U.S. Capital Markets Day in February. Based on their own projections, they outlined and indicated a share buyback of $60 billion between '23 and '25. This gives us even more opportunity and choices, either enormous cash inflows if we keep our stake flat or increasing our stake if we are not selling anything in the share buyback. We will figure something out like we figured out how to fix the 2016 burning platform, T-Mobile Holland. So let me move to our Dutch friends. Let's look at Tim and Christian in 2017 when they tried to figure out who issues responsibility for T-Mobile Holland. Whoever plays tennis, and Christian is almost a pro on the tennis side, knows what happens when the ball comes through the middle of the court when you play doubles. Everybody is looking at each other and says, "It's yours." And guests who ended up taking the T-Mobile Holland ball? It was me. So much to that. T-Mobile Holland was certainly an intensive care in 2017, very competitive 4-player market, multiple MVNOs, converged duopoly of KPN and VodafoneZiggo. And you may remember that at this moment in time, in 2017, Vodafone was acquired by Ziggo and Ziggo ditching us at the altar. What did we do? Drastic measures were required. First thing to do, align management with value creation by a [ hard ] restructuring. What do I mean by that? We introduced an innovative equity incentive scheme, and on the back of it, we were able to hire one of the best management teams in the sector. Søren, my friend, Abildgaard and Johan Andsjö have been the key architects of this turnaround, a bit like John Legere and Mike Sievert in the U.S., combined with an equity incentive scheme that in the U.S. was a reverse merger into MetroPCS, aligning our interest. The rest was fairly simple: radical cost takeout, self-funded network improvement, copying T-Mo US, such as unlimited. And then we applied our M&A playbook to create value: market consolidation, tower separation and monetizing it; a recent JV on building out fiber with KKR; exploiting remedies of the VodafoneZiggo merger by acquiring the small fixed line business to its. Results are good. Best network in the world. As Claudia said, market leadership assumed on B2C mobile, and we have the fastest-growing B2B business in Holland. We more than doubled free cash flow since hitting the trough in 2018. And on top of it, we outperformed the competition, something that is always very important for Tim. The numbers speak for itself. The EBITDA growth between 2018 and 2020, has been 15% on the headline side, including, obviously, the acquisitions. But even organically, it's a 5% -- a 5.3% CAGR that stacks up very well in the European sector. Johan would look at this, Johan, the former CEO of Yoigo and Orange Switzerland would look at this and say, "Oh, Thorsten, it looks like Real Madrid." And I say, "Not true." It's Bayern Munich winning the ninth championship in a row. And here's my second beer. Johan promised me before making a joke about Bayern. The problem, I don't know a joke about Bayern, but I know one about Real. I just want to share this with a second. A guy throws a coin on the pitch at [indiscernible]. What is it? People are asking themselves, is that a missile on a player? Or is it a takeover bid, given high debts of Real Madrid? I don't know. In any case, I have my second beer. So look at the value creation. In 2018, we had a bit on the table by a private equity firm, roughly at about EUR 2 billion. If I look to your best guesstimates, and we obviously monetize our towers, we are now at about EUR 6 billion. The company is extremely well positioned. It has a fantastic team. It's not only the CEO. It's 2,000 big fans that are working for T-Mobile Holland in that market. We have a pass to FMC via the fiber JV. We will overdeliver on the synergies on Tele2 but also on the simple acquisition that we recently done. And we will, as we said, initiate a strategic review of that asset. Let me say one thing. I don't like the word monetize. What we want to do is crystallize, not monetize. This company deserves more than being monetized. It deserves to find a good partner for its next journey. The second asset that we have in Group Development is towers. I called it our sleeping beauty in 2018, and we spend a lot of time on it. We learned a lot. We did deals. We partnered with the smartest cookies in the European sector with the likes of Cellnex. And we don't have -- and we certainly have done a fairly good job on improving the towers also on an operational level. How do we think about towers? Towers is a super attractive asset class. DFMG, in specific, is a gold standard. We have 9,000 [ poor ] ground-based towers. This is 2x Vantage and 4x American Towers. We currently bid 1,500 new sites per annum, and we have significant colocation upside. [ STDG ] is a single tenant on 1/3 of our towers only. More carve-outs to come. We are, obviously, working on Czech and Slovakia, and our operational performance has been fairly good. People may not recognize it, but we have [ Nutanix ] deliver the largest B2C program in Europe over the last 3 years. We have built 5,000 towers. We have third parties with 25% revenue share on our towers. This is industry leading. And why are we there? Because we focus on this since 2017. We haven't hired Bruno Jacobfeuerborn because he was a CTIO of Deutsche Telekom for his technical skills. But everybody who knows Bruno knows that he's certainly one of the best CMOs that we have in the telco sector. And like in Holland, our cost focus has led us to achieve 60% EBITDA margins. On the other hand, also, let me say this, we have an unfair advantage, and our unfair advantage is Tim. You cannot build 5,000 towers if the CEO of Deutsche Telekom doesn't give you a helping hand on this. So now look at this famous slide here. What can I say about this? I think it creates a lot of questions and excitement. But as you know us, we try and test a lot before we come to conclusions. We have been, can I say that, soul-searching of how to retain the unique value creation that towers present. We saw this coming early as we experience a different market structure in the U.S. where no MNO owns the towers. We saw the high tower valuations, and we reviewed how to best participate. We looked at an IPO, partially monetizing our asset. We reviewed driving tower consolidation ourselves, but this is obviously against leverage guard rates. Moreover, there are clearly benefits of running an independent telco. I think in due course, our patients will pay off. Multiples have related to U.S. levels, and most importantly, M&A terms have moved significantly, protecting us as the anchor tenant on pricing and allowing to preserve network leadership. The market is moving into the final phase where Tier 1 operators may consider their tower operations. And Real Madrid, Cellnex, Manchester City, Vodafone, PSG, TOTEM and Bayer Munich, us, as well as some Americans at the gate may play out the Champions League over the next 2 years. I think the time is right to review our options and use our asset as a key maker asset in the European consolidation. We have 4 major criteria. We want to have a premium valuation for a premium portfolio. We want to create balance sheet headroom. We want to have a favorable MLA. And ideally, we continue to be exposed to this asset class. However, let me say this, there is no artificial deadline, and we will deliver when we think the time is right. Let me move on to the final 2 slides. Going back to 2018, if you recall, I said I want to be measured by [ Magenta Bas ]. My commitment is to increase asset value. T-Mo US is a $70 stock, was a free option if the deal is approved. And I showed you my Bundesliga, my league table, and you can guess where I'm going with this. This is us today. We have created a lot of value. T-Mo US, unprecedented transaction, massive value creation, and I think a lot of further upside. Holland, spectacular turnaround, more upside. DT Towers, valuation doubled, MLA have improved. And our little company, DT Capital Partners, generated EUR 0.5 billion in capital gains, stellar IRS. And based on that is successful in getting further funding. But we did not get everything right, and we learned from our failures. At BT, as I said at the last Capital Markets Day, we got our timing wrong. We thought hard about selling it. But like you, we saw some value. So we remain patient as holders. And as you can see in the U.K., the stars are aligning for a much better performance of our investment in the U.K. marketplace. That's my final slide. And here's my pitch to you. My pitch is DT is a EUR 20-plus stock. I know it's difficult to trust me on this. In 2006, a long time ago, I was preparing a meeting between my former employer, Blackstone and the German Finance Ministry, which was called the Road to [ EUR 20 ].Today, 15 years later, we are at [ EUR 70 ]. So however, let me try at least to pitch my case. On EPS growth alone, we will get there, but it may take some time. You know that we've traded between 13 to 15x PE. And given the industry hiccups with cash flow warnings, CapEx warnings, reverse of big acquisitions, I understand your attitude or the attitude by investors. Seeing is believing. So how can we bridge the time gap? As some of you have picked up, our sum of the parts does not stack up. The value of our stake in T-Mo US and the value that analysts subscribe to DFMG and T-Mobile Holland leaves Germany and Europe valued almost for free. We don't need a hedge fund to tell us this. This is another reason to review our ownership in those assets as seeing is believing. Let me summarize my presentation. Please remember what I said upfront, there are 3 reasons why we are different. Number one, we have an attractive portfolio. It's well balanced and it delivers industry-leading EPS growth. We have, based on our strong portfolio, strategic optionality, and we want to exploit this to bridge the time gap for share price appreciation. And finally, you can trust us as a team. We have aligned interest, we do care about share price and shareholder remuneration. So I even made it now in 30 minutes in my time. I wore the jacket. I got 2 beers, and now I'm looking forward to the usual literature on a Friday afternoon, which you see [ Patelco ], summary of events in the telco industry, which we sometimes need because we are in this industry together, and it need sometimes a little bit of a funny moment, given that it's a tricky one. It's unpredictable at times, and a hard one for investors. Thank you very much. Have a great weekend.

Thank you, Thorsten. Thank you, Thorsten, and thank you to also wrap up in time for [ Patelco ]. So that's good. Now you're right, seeing is believing, but you have shown us a lot, right? So I think it's a good time to start believing. And the next guy who is going to show us a lot is Christian, our CFO, who holds it all together. And he will show us how this translates into numbers, and you better believe it. Christian?

I really like the presentation so far. I think we have shown a very high level of ambition, both on the commercial side, but also on the financial side. But now it's time to basically roll it out to consolidated figures. And I will use the same approach as my calls have done, have a quick review on the past 3.5 years and then give you the outlook for the coming years. So let's start with the messages. Message number one, I think we will prove the promise what we committed to at the Capital Markets Day in 2018. And Thorsten used that phrase. Even on the critical metrics being CapEx or being cost reduction, you can trust, we deliver what we produce. Second point is if we're looking forward, we see a lot of growth. We're seeing top line growth. We've seen big service revenue growth. But when it comes to bottom line growth, that's even higher. And I will get to this when it comes to EPS or free cash flow growth. And it will happen across all segments. So we're not only relying on one segment. It's basically broadly adopted by all segments going forward. Third topic on cost, look, we're in an industry where efficiency is at the center of our activities. And therefore, we announced another EUR 1.2 billion cost reduction program for the European operations. And I think the U.S. team has shown yesterday how they basically increase their efficiency by faster and accelerated synergy utilization. First topic on leverage. Look, after the introduction of IFRS 16, we changed the quarter to 2.25 to 2.75. We stay in that. We will have a return back into the comfort zone by end of 2024. And that delay, and I will get to this later on, is purely explained by the shareholder remuneration program, which has been announced by the U.S. but also our clear ambition to achieve the majority in the U.S. was 15.1%. On dividend and on shareholders, look, we are committed to stay a reliable dividend player. Our dividend policy will remain being determined by adjusted EPS. We keep the floor, which we introduced in 2019 at EUR 0.60, but we're moving away from EPS growth into a payout corridor of 40% to 60%. Given the financial plans, I think dividends will be progressive in the upcoming years. And finally, on the sixth point is we are reliable to debt holders. We have a very strong liquidity position and we are committed to have unrestricted access to credible credit markets. So let's start in reviewing the past 3.5 years. And let me start with EBITDA guidance, IDC guidance and cash CapEx guidance. And what you can see on the chart is we promised an adjusted EBITDA growth of 2% to 4%, and the prediction until the end of the year is basically saying 4.4% on adjusted EBITDA. If you just focus on core EBITDA, it's even higher at 6.4%. So we met that target. On the business ex U.S., meaning on our operations in Europe, we basically guided at 2% to 3%. We will end up having a 3%. The 3% EBITDA growth is very much driven by the IDC reduction in the past 3 years. Going forward, we expect a more balanced contribution coming from net margin and cost reduction. Second point is on IDC reductions. You may recall, as we reviewed at the Capital Markets Day in '18, how we were at cost reductions. We missed on that point. So we renewed our commitment to another EUR 1.5 billion net cost reduction indirect cost. And we're happy to say that we will beat that target by about EUR 200 million to EUR 1.7 billion. And on cash CapEx, that was also a highly debated figure. We said peak is going to be in 2018. And from there onwards, we have a stable development going forward. And actually, I have to report back, that holds true. So let me move to the IDC development and how it all breaks down. I said we're beating our target of EUR 1.5 billion by about EUR 200 million. And where does that come from? So first of all, EUR 1 billion of the cost reduction is coming from the German operations, meaning GHS and Germany. Another EUR 400 million is coming from Europe. Dominique said yesterday, we achieved already EUR 320 million, and they will continue to reduce costs in Europe by another almost EUR 100 million throughout the year. And EUR 300 million was delivered by T-Systems. If you take a look at how you can assess this, whether this is recurring cost or not recurring costs, I would like to basically draw your attention to that picture here on the FTE reduction in Germany, and that excludes T-Systems. We will reduce the headcount by 17,000 people over the course of 2017 to 2021. And that reduction happens almost without any noise. It's a well-established rhythm, which our people -- our colleagues from HR are doing with the social partner. If you multiply these 17,000 people with average salary of EUR 70,000, that gets you to a EUR 1.2 billion gross savings only coming from personnel in Germany. Second point where you see that cost is really going out of the system as real estate. We expect that we're going to reduce real estate cost by about EUR 300 million over the course of the time from '17 to '21. That's coming from less space requirements. It's also coming from a renewal of our service provider contract, which we did with another company. Let's move over to free cash flow and EPS. So at the Capital Markets Day in '18, we said we wanted to deliver greater EUR 8 billion of free cash flow by end of 2021. We assume that the adjusted EPS is around EUR 1.20 of stock. And in case the merger is going to be approved, that was right after the signing, if you may recall this. Obviously, there will be dilutive effects on both sides on free cash flow as well as on EPS over the course of 3 years. So what are we going to achieve? We're going to achieve actually something which is at the upper level of the merger scenario. So we expect greater EUR 8 billion free cash flow at the end of the year, and we adopted our guidance last week. So EUR 3.6 billion is coming from European operations and other EUR 4.5 billion is coming from T-Mobile US. That compares to a EUR 5.5 billion free cash flow in 2017. Same is true for the EPS. Look, or let me draw on the free cash flow for a second. Look, what we predicted on the European business was actually EUR 4 billion. So we are falling a bit short on the free cash flow coming out of the European operations. But this can be explained by nonoperational effects. So BT suspended the dividend, which accounts for EUR 200 million. Obviously, since the merger has closed, we don't get kind of a margin from refinancing some of the T-Mobile US loans. And IFRS 16 also costed us EUR 200 million of EBIT -- of free cash flow in that equation. So adjusted EPS, you see we're developing from EUR 0.90 to greater EUR 1.10. I think that is both of those figures are at the upper end of what we expect in our merger scenario. So what we also did when it comes to dividend and total shareholder return, in 2018 at the Capital Markets Day, we changed the dividend policy. You may recall, historically, we were coming from future -- from free cash flow growth. We now basically took adjusted EPS as the key metric. We said dividend will orient itself on adjusted EPS growth, and we basically put on the floor of EUR 0.50. Thorsten just mentioned the rollercoaster ride on the closing process of Sprint. And I recall, back in November 2019, where we're just about the federal states jury or discussion or trial, sorry, I was looking for that. We had complete uncertainty on what's going to happen. Therefore, we decided to basically make a call on the dividend, independent whether we get a positive or a negative result. And then we declared EUR 0.60, and we announced a new floor of EUR 0.60. Look, if you take a look at what we have delivered over the past years, we are a reliable dividend payer. Our payout was in between EUR 0.60 to EUR 0.70 over the course of the past 3.5 years. And we will be a reliable dividend payer. If you combine our liability on the dividend payout with our operational outperformance, this gives you the outperformance on the total shareholder return. You see us with a 41% increase since the last Capital Market Day. Tim was basically comparing us against Vodafone, Telefónica and Orange. This is a comparison against the Euro stocks index. And also, we beat the DAX Factor 2. So what you see here right now is reliability and operational performance really pays off and is being appreciated. So let's go back -- let's go and move forward to leverage. So again, I'm always comparing what we said in 2018 and where we're standing to now -- up until now. In 2018, we said, if we get the deal approved, we will basically need about 3 years to get back into the comfort zone of our leverage. Secondly, we said, what is the comfort zone? It was pre-IFRS 16, 2 to 2.5. And we're basically committed to have a rating in between A minus to BBB. So in the meantime, quite a bit of things happened. First, we got the introduction of IFRS 16, and that basically led to an increase of the comfort zone by 0.25 point. And to be honest, that was conservative. Because if you take a look at the current impact of the leasing liabilities, they're not 0.25 points, they're 0.4 points. So that was a very, very conservative perspective on this one. Second one is the merger closing was delayed until April 2020. And what we didn't foresee at the Capital Markets Day is obviously the tower deal with American Towers and the C-band auction. If you collapse everything together, we still -- given our current financial plan, would be able to return back into the comfort zone by end of 2023. So let's see how we're moving forward, and that is basically the guidance. Look, we are confident about the future. Our performance in 2020 has carried on into the first quarter. We had a deliberate discussion, what we expect from the remainder of the year. That led to that guidance increase of EUR 200 million in EBITDA and EUR 200 million of free cash flow. And let me repeat again, it's been equally split between the contribution in the U.S. and ex U.S. So therefore, I think we have a very strong performance in the history and also are positive about the future. And let's finally get into the scorecard. And what you see on the scorecard is, on the left-hand side, you see our ambition. On the middle column, you see our achievement spend of 2020. And the traffic lights basically in -- what we expect by the end of the year. I recall this is almost green scorecard, except for the shortfall in the free cash flow ex U.S. And I think we touched the dividend policy in 2019. These are the reasons why we basically put this in yellow. So, so much about the past, so much about the past performance, let's go and look forward. And let me get to my favorite chart. This is my favorite chart. What you're going to see is what is our prediction on free cash flow growth, adjusted EPS growth and ROCE growth over the upcoming years until end of 2024. Free cash flow is expected to grow from EUR 6.3 billion at the end of 2020 to north of being EUR 8 billion this year to be greater than EUR 18 billion in 2024. That translates to a CAGR of 30%. Obviously, the breakdown, I've referred that yesterday, is very much driven by T-Mobile US by contributing more than EUR 14 billion to this overall result. But also, we see in free cash flow growth coming out of the European business. What are the key drivers? Obviously, that is service revenue growth coming from the U.S., that synergy realization. But there are also 3 supporting arguments driving the free cash flow. One is obviously the shift from handset lease to EIP, which improves our operating working capital. And we will also expect CapEx to come down once the merger synergies are achieved and lower special factors over time. From the U.S. -- from Europe, you can expect a constant support driven by EBITDA growth and IDC savings. So let me dwell on this a second and do a little bit of a fast forward. Let's assume we're in the year 2024 and we have achieved the majority with 50.1%. And then out of these EUR 18 billion, half of the EUR 14 billion belong to DT. Plus roughly out of the EUR 4 billion, if you exclude the minorities, another EUR 3.5 billion from the European operations. So EUR 10.5 billion would be allocated to DT shareholders. This is more than EUR 2 per share and an increase of more than 100%. The second one on adjusted EPS. Look, we expect that adjusted EPS is growing from EUR 1.20 to greater than EUR 1.75, and that translates to a 10% growth. There's going to be a small dip, and this is basically between 2020 and '21. This is basically -- can be explained by the positive impact which we had on the fixed price option in 2020. But what we're going to see is we're going to see a constant increase of EBITDA growth and a constant decrease of depreciation, which basically gives you an indication that this growth is not back-end loaded. It is coming with steady growth starting from 2020 to onwards. So therefore, I think, again, this is a greater EUR 1.75 prediction, and it's coming more in a linear curve rather than a back-end loaded curve. Third one is ROCE. So you've seen our ROCE being 4.6% end of 2020, and we expect it to grow at north of 6.5% in '24. Bear in mind, our ROCE definitely is a very strict one. It's after tax. It does include all special factors. It does include all working capital changes on the NOA, all lease liabilities and all impairments. So once we get there, we will have a significant distance versus our average cost of capital, which is right now around about 4.5%. What is the key driver between that ROCE? Obviously, our NOPAT has significantly grown faster than the NOA. So let's move over to the U.S. and go quickly through this. And you've seen that numbers already. The U.S. is supposed to grow from EUR 21 billion in EBITDA to EUR 27 billion or EUR 28 billion. That is basically a 7% growth. And if you just exclude the handset leasing for a second, the core EBITDA will grow at 10%. The cash CapEx is actually peaking in '21. And you've heard Peter saying yesterday that he's expecting the '24 level, which is EUR 8 billion to EUR 9 billion, already in '23. And also, we talked about the massive free cash flow, which is coming from the U.S. So on CapEx, as I said, the peak is in 2021, and we will return back to normal levels starting from '23 onwards. Let's move over to the European business and take a look how this will evolve going forward. So what we're going to see in the European business is a steady growth of EBITDA, growing from EUR 14 billion in 2020 to EUR 15.3 billion in 2024. And that relates basically to a 2% to 3% CAGR growth. What you also see is that this EBITDA growth is supporting our larger CapEx envelope of EUR 8.2 billion by 2024 in the European business will still allow us to grow free cash flow. What we're also betting on is that the EBITDA development will be more balanced coming from net margin growth as well as cost reductions. So on cash flow, guys, we always had that question we also had yesterday in the discussion. Look, we kept our promise on the cash flow over the past 3 years, and we will keep our promise also what we're indicating here. So we keep the EUR 8.2 billion, and you shouldn't be afraid about that we basically have to exceed this. And that will support the build-out plan, which Srini and Dominique presented yesterday, both on the fiber and the 5G rollout side. So being committed to that envelope is important, and we will apply, as we have done in the past year, a very strict allocation policy on where and how we want to spend CapEx. Next topic is digitization. As you see on the chart, we are taking a fairly holistic view on the digitization within DT. And we're basically taking a look at all relevant parts of the business, be it in the front end or in the back end. And we're continuously optimizing and digitizing as we move forward. We have a program right now across the most elaborate activities been defined between Germany and Europe. We track it from 2020 to '24 onwards. And we have a consistent review process on how we're making progress on these key initiatives. And let me pick out 2 examples, which have been mentioned yesterday by Claudia and Srini already. The first one is e-sales share. Obviously, you can take a look at e-sales share. This is a great measure to reduce sales costs -- questions for intermediaries and so forth. But -- numerous reasons why we're doing digitalization. Cost reduction is one of them. But the other one is the e-sales share, as we go in and develop it further on, will allow you to give you more personalized, ideally, a person-specific offer based on your needs. So digitalization for me is always a combination of lowering costs but also improved customer experience. And same holds true for the IP migration. If I summarize the IP migration in one word, I would say you get a better product, you allow our service organization to better serve you and it allows us to reduce cost because we are reducing energy costs and reducing all platforms. I think that's the way how we're thinking about digitization. And we assess the EBITDA impact by '24 of more than EUR 300 million, supporting our European businesses. But there's also just, I would say, classical IDC cost reduction besides digitization. And the EUR 1.2 billion additional cost reduction program I was alluding to breaks down into the German segment by EUR 700 million, Europe by another EUR 300 million and T-Systems by another EUR 200 million, which brings our indirect cost down from EUR 17.5 billion into EUR 16.3 billion. What are the key levers? The key levers is fairly tactical to what we've done in the past. So real estate will be a big one. So we have a range here of EUR 100 million to EUR 200 million, I expect it to be at the upper end. Claudia was talking about retiring older IT systems and simplify the IT landscape, which is going to give you anther EUR 100 million to EUR 200 million. Obviously, we rely on the leverage effects, which we are achieving through our joint venture buy-in, which gives you another EUR 100 million to EUR 200 million. And the next one is obviously people-oriented. We will have a very, very strong focus on over structures and to make their life easier, but also to let FTS go where we basically bet on a EUR 500 million to EUR 600 million. And the rest has gone over the other cost categories and saving discretionary costs. So all up, it's a EUR 1.2 billion program. And I think it is here, it looks a little bit smaller than the EUR 1.5 billion, which we called out in '18. But bear in mind, a, our baseline is lower. And b, we need a certain fraction of people for the network build out, both on fiber and 5G, which allows us to basically reduce cost at a lower level. Let's move over to the finance strategy. Look, Tim often said, a strategy is a strategy is a strategy. And same holds true for our finance strategy framework. We stay committed to be a reliable dividend payer and to have undisputed access to the debt market. What does that mean on the equity side? Obviously, we're committed to be a dividend player and I get to the details of the new policy in a minute. Second one, we got approval on the AGM to basically have the allowance until '26 to buy our own shares back. Do I expect this to be very likely in the upcoming 2 to 3 years? No, I don't, but still, we have the opportunity. We talked about the ROCE. Our ambition is that the ROCE will be higher back starting on from 2022 onwards. And on the debt side, not a lot of changes. We keep the comfort zone, we keep the equity ratio. And also on our liquidity reserve, we keep the policy that liquidity at least has to cover 24 months of maturities. Let's move over to the dividend policy. So as I said, in '18, we introduced adjusted EPS as the key metric, and we said it should orient -- the dividend payout should orient itself according to that growth. And we had a floor of EUR 0.50 a share. We basically moved that up to EUR 0.60. We have paid out dividends in the vicinity of EUR 0.60 to EUR 0.70 over the past 4 years. And what we're going to do with the dividend policy going forward is that we're going to keep the EPS as the key metric. That we're going to keep the minimum payout to give you a guarantee on the payout. But we're moving away from EPS growth to a payout ratio. Given the EPS growth, which you have seen, which was about 10%, you can assume that this dividend will be accretive and grow over time. Let's move over to the debt side. Again, what we said is we remain within our comfort zone, which is 2.25 to 2.75. And we said at the Capital Markets Day, we will be back into the comfort zone after 3 years. This assessment excluded basically 2 things: the shareholder remuneration in the U.S. and also our ambition to achieve 50.1%. And if we are doing this with the shareholder remuneration and the 50.1%, that will obviously slow down the deleveraging impact. And therefore, we will basically will be back in the comfort zone by end of 2024. The peak of the leverage is expected to be this year, and then it will gradually go down. And bear in mind, if we are getting into the comfort zone in 2024, by the end of 2024, the share buyback in the U.S. officially continues into 2025. And you heard Peter saying, it will not stop after 2025 either. When it comes to our maturity profile, you see that actually, the average maturities that we're going to have over the next 4 years is EUR 3.6 billion. So it's very balanced. You don't see any spikes. By the way, that holds true for the maturities also beyond 2024. We will receive another USD 4.7 billion coming out of the U.S. And the first chunk is coming in, in 2022, with almost being half of it. And you see that we have a very strong liquidity position. And that liquidity position, which was EUR 17 billion at the end of last year, on an average, will be around EUR 14 billion to EUR 15 billion, covers our maturities over the next 24 months really well. So before I basically wrap it up, let me just talk a little bit about ESG. And what is our contribution to ESG? It's basically around about 4 points. One is on procurement. We already have a policy in place that suppliers have to sign a strict supplier code of conduct, and this is going to be monitored on a regular basis. We will increase the importance of ESG as a criteria in the vendor selection process. We don't have a final number yet, but there's a clear commitment that we're going to do this. And we're working jointly with external and internal resources on tracking where the Scope 3 emissions are being reduced within our vendorscape. Secondly is we will introduce sustainability-linked bonds into our bond framework. Thirdly, we will become more -- even more transparent on the CR reporting. Look, we received a lot of prices on the CR reporting, but I think there is reporting standards coming from TSFD and SASB, which we have to adhere to and which where going to do. And the last one is even our DT Trust is geared to what ESG investing. Actually, the pension fund started to do this in 2013, and the trust has moved into that direction in 2019. So after that short excursion, let me conclude on our finance strategy. Look, if you see that wheel, as I said, we will see a massive bottom line growth on free cash flow with a 30% growth on EPS, with the 10% CAGR and also by an increased ROCE, which improves by another 2 points. That massive free cash flow growth will allow to pay shareholder returns from T-Mobile US over the course of '23 to '25, which accounts in total for up to $60 billion. Those planned shareholder buybacks will be a significant lever for us to achieve that 50%. But you also heard Thorsten saying, we don't have to decide this tomorrow. We have time in order to get there. Which allows us as DT to take part on the long-term growth of T-Mobile U.S. And as those shareholder returns will not stop after '24, will also allow us to faster deleverage our business in the years beyond 2024 or give you a higher return as a shareholder. I was talking about the equity side and the dividend policy that we're moving to a payout ratio. I was also talking about the net debt -- the debt side, sorry. So let's wrap it up and take a look to the commitments which we put out there. So on -- is that chart on? Can I have the next slide, please? Can we move on with the chart, please? No? Okay. Very good. And you've provided it yesterday, Tim. So okay. So if we don't, it's coming. Come on. Let me just wrap it up. On revenue growth, we're a bit pretty much at 1% to 2%, which is comparable to the last Capital Markets Day. We also basically give a guidance out for service revenue growth, which is 3% to 4%, which is the new guidance. Adjusted EBITDA will be raised from 2% to 4% to 3.3% to 5%. Obviously, I talked about the free cash flow growth of 30% that relates to 10% in the past history. We have an accelerated EPS growth and accelerated ROCE growth, and we're committed to stick with the cash CapEx guidance at EUR 8.2 billion. Same was true that we are committed to reduce the IDC by EUR 1.2 billion over the course of the period until end of 2024. That is basically the commitment from the group side, and I will finish here. Look, you can be rest assured that this team is committed to deliver as we have done it before. And I learnt from Thorsten, whenever their ball is going through the middle, you're going to pick it up. Okay. Thank you.

Very good, Christian. And so that brings us to the final Q&A. And the final Q&A will be with Christian, with Thorsten and with Tim. So I'll ask you to please join me here on this couch. And just maybe while they are coming, acceleration is the word. You've heard it or how Srini called it yesterday, beschleunigung, right? So it's about being reliable and beschleunigung, so acceleration. Here we go. So let's see if we have some questions. I've seen quite a few guys already on the screen. And we start with Akhil. Akhil, can we have you question, please?

Yes, of course. I've got one strategic one and then two, hopefully, very quick financial ones. I think in Thorsten's presentation, he talked through the fact that obviously one of the biggest value creation events for Deutsche in the last 5, 6 years has obviously been T-Mobile US and the decision to stay in that market and then merge with Sprint. I guess the question was if we look going forward, do you see any other transformational strategic decisions on the horizon that you're thinking through in terms of the Deutsche equity story? Or do you think the story going forward is much more operationally driven instead? So that was the first strategic one. And then the 2 financial ones is, Christian, in your presentation, you talked about the target of the 6.5% ROCE. I think in Srini's presentation, he talked about Germany going from 6% to 9%. The U.S., I assume, would have a very good return, given the high cash generation. Can you maybe help us bridge why the total is only 6.5% if Germany is 9% and I presume the U.S. is very good? And then the final bit was just on the dividend. I think there's no doubt the dividend growth is attractive, and I think it's very healthy. But I guess, even at the high end, the dividend is about a EUR 4 billion dividend whereas your guidance basis cash flow is EUR 18 billion, and that's about GBP 11 billion proportionate. So it's about 1/3 of your cash flow generation. So just if you can maybe comment on how you think about that in terms of what the residual cash would probably be useful to think about midterm and where your priorities would be? That's all.

Who wants to start strategic question, Thorsten, want to take one?

All right, look, 2 months ago, I would have said that for the next 5 years, this is all about operational improvement, performance, utilizing the best network in the 5G world and doing more of the same as in the past. We have the capacity, we have the speed, we have the quality and the network to exactly do what this fantastic team in the U.S. has done over the last 7 years. Over the last 2 months, Verizon and AT&T have shed media assets. And I'm asking myself as you may ask yourself, what does it mean for the future? Number one, certainly, it's a kind of recognition how strong we have become. So it's a focus on the wireless operations of these 2 big players in the U.S. market. So they take us very, very seriously. And second, which also underlines the value that we can bring to the table. The question lies on the table, what is the next kind of effort to differentiate in this market if it is not network, which is what we have. And here, we have learned a lot of lessons in the European marketplace. Convergence is one of the topics that may come up in the future. One of the reasons why we'd like to retain control because if anything happens in the future, you want to have a juicy control premium for shareholders. I said that, Akhil, I don't have a crystal ball. We started in 2013 as the smallest in mobile operator. And at the end, we were able to consolidate. And this great team in the U.S. is now challenging the #1 position in the marketplace. Who knows, maybe we get bigger. I have no answer on that. But certainly, it will be an interesting period of time. I think we will enjoy operational upsides and a wonderful network with a lot of capacity and then we'll see.

Look, on the ROCE, Akhil. First of all, we're predicting a ROCE larger than 6.5%, not [ 0.65% ]. But I think yes, the number in Germany is right, but you also heard Dominique that she will continuously take time in order to move its ROCE up. And don't underestimate the investment level coming from the U.S. We just added another EUR 8 billion of spectrum. There is a massive build-out. So that burdens the NOA. So it will take some time until the U.S. is actually progressing in those levels as well. So I think it's a composition of different pieces, but you're right. The German figure is already at 6% and will further grow. On the divi, look, the divi, as I said, you can expect that the divi will increase given the EPS growth. And what we have consciously discussed in the team is that we wanted to have some flexibility on the divi payout. And this is why we came up with a payout ratio of 40% to 60%, by the way, which is well-established in other industries as well. Because we don't know whether we actually have the flexibility to pay out more, which is towards 60%, or whether we have to stay strict because we haven't secured the 50.1% in the U.S. yet. And therefore, we basically came up with that solution. And the third one is, look, even if we get to the 50.1%, we also have to think about our leverage. And we said that we are getting back into the comfort zone end of 2024. But again, this is another delay by a year. And therefore, I think that was all factored into our dividend discussion.

It really is about the balance, isn't it. And we'll strike the right balance. And the other point, I think that you rightly pointed out, it's nice to have these choices because your free cash flow per share is over EUR 2 in a few years, right? So that's good. Next question is from George at Citi, please.

A couple of questions from me, mostly focused on towers. The first question is to just give an understanding of how you are thinking about your tower value crystallization. Price not being the determining factor, let's say, similar price, would you have a preference for a clean exit or to still maintain exposure in any deal you're [ agreeing ]? And my second question is linked to that is whether you believe any market synergies within towers and particularly German because there are some limitations, perhaps that don't exist in some of the other countries. And then my second question, again on towers, is a bit more of a long-term question about your overall network infrastructure. You spoke yesterday about cloud-native networks. I think Srini also mentioned the importance that telcos could play in edge cloud. So I'm just trying to understand whether you believe these investments are better than from a tower perspective or from an operator level and how that could change your view of the strategic importance of towers versus the edge cloud?

I think the first one is for Thorsten and the...

I take the first one?

Yes.

All right.

And you can get for the second one.

Preference for a clean exit or to main exposure in a deal and whether we believe in market synergies. Look, first of all, we have learned a lot over the last 3 years. We've teamed up with Cellnex for the Sunrise Towers in Switzerland. What did we learn? We learned a lot about that the Cellnex management team is certainly one of the smartest I have met in this sector. Second, how you make money in this game. And it's all about build-to-suit, especially for the #3 and #4 in the market. But this also becomes build-to-suit for the #1 or #2 in the market in the future. Second, of course, in-market consolidation of assets that you own is something that creates a lot of value for [ tower co ]. Cross-border synergies are limited, as we all know, also in the tower sector, but this is not to say that the management team was a smart headquarter and a very smart M&A head is able to add a lot of value. I think Cellnex speaks for itself of how rolling up towers in different countries can create a lot of value for investors. Second, in terms of the preference, I don't have any preference, neither has this management right now. We are just saying we are open to a lot of options. We've looked at a lot of stuff. We know what the pitfalls are and what the pros and cons are. And as Tim is always saying, let's attack and see, and I like that. I was thinking about just putting my cellphone number in front of the page and said we are now open for business. We are in a different state than 2 or 3 years ago -- or over the last 2 and 3 years because we've recognized that the valuations have moved to a place where it makes sense for us to engage. And most importantly, where the M&A structures provide enough protection for us to further differentiate. And that is a key thing for us because we also see the tower model in the U.S. Keep in mind, we sold our towers or part of our towers in 2013 to Crown Castle. And we know how it is to deal with tower companies in the U.S. We know what we have to avoid and therefore, we are open for business now. And there will be -- yes, I'm excited to what may happen over the next, call it, 1.5 to 2 years until the next Capital Markets Day.

I think the next one is for you. It's, I guess, it plays to networks of networks and have we orchestrate that? Well, I think it does -- so let me answer it because that's because I think it is in the context of what Tim presented yesterday, the networks of networks. We have the capability to orchestrate this, and we will not always be the owner of this network in every place, but we'll put it together in the best possible way for our customers. So I think -- yes.