EU COMMUNICATIONS: COMMUNICATIONS: Deutsche Telekom Posts Strong Q3 With Leverage Back On Target

DT          Baa1[P]/BBB+/BBB+

Strong results with slight beats on revenue and EBITDAal and stronger beats on CapEx and FCF helping to move leverage back below the <2.75x target range.

• Q3 revenue +3.4% YoY (Service rev +3.7% YoY, domestic +6.1% YoY, international +2.6% YoY) was +0.4% vs. BBG cons. 9M24 +2.7% YoY.
• Adj-EBTIDAal +5.8% YoY (+0.4% vs. cons) for a margin of 38.9% vs. 38% last year. 9M24 margin of 38.2% from 36.9% in 9M23.
• CFO +11.5% YoY for 9M24 +7.5% YoY with Cash CapEx (ex. Spectrum) -11.4% YoY for 9M24 -9.8% YoY (-1.1% vs. cons). FCFal +32% YoY for 9M24 +28.3% YoY (+9.4% vs. BBG cons).
• Leverage of 2.64x from 2.81x at Q2 and 2.94x at Q323. KPIs look healthy.
• EBITDAal guidance raised; EUR ~43bn vs. EUR ~42.9bn before (BBG cons is EUR 42.91bn)