Board of Management and Supervisory Board proposed dividend for 2009

Deutsche Telekom: Board of Management and Supervisory Board approve shareholder remuneration policy for 2010 through 2012 and proposed dividend for 2009.

Information of Deutsche Telekom AG in Accordance with § 15 WpHG

 

• Unchanged total dividend payment of EUR 3.4 billion per year consisting of a dividend of at least EUR 0.70 per share and share buy-backs for the remainder for 2010 through 2012.
• Board of Management and Supervisory Board propose unchanged dividend of EUR 0.78 per share for 2009.

 

Dividend policy for 2010 through 2012

The Board of Management and Supervisory Board of Deutsche Telekom are expecting continued sound balance sheet figures and high free cash flow in the current and subsequent two financial years on the basis of mid-term planning, including the investments required to expand business. Therefore the Board of Management and Supervisory Board of Deutsche Telekom decided at today's Supervisory Board meeting to pursue a shareholder remuneration policy for the 2010 through 2012 financial years that consists of the payment of an annual dividend of at least EUR 0.70 per share and the buy-back of shares with the remaining amount up to an unchanged total payment of around EUR 3.4 billion.

 

Implementation of this policy is subject to the requisite unappropriated net income being posted in the single-entity financial statements of Deutsche Telekom AG for the financial year in question and the ability to establish the necessary reserves for the share buy-back. It is also contingent upon the executive bodies adopting resolutions to this effect taking account of the company's situation at the time.

 

Dividend proposal for 2009

The Board of Management and Supervisory Board will propose a dividend of EUR 0.78 per share for the 2009 financial year to the shareholders' meeting on May 3, 2010. Based on the current 4.34 billion shares carrying dividend rights, this represents a total payment of around EUR 3.4 billion, i.e., the planned amount for the coming three years.

 

Deutsche Telekom is planning to make payments of some EUR 10 billion to its shareholders from 2010 through 2012. This makes Deutsche Telekom the first DAX company to communicate a minimum dividend for 3 years in conjunction with a share buy-back also over 3 years. The Board of Management and Supervisory Board are underscoring their faith in the positive development of Deutsche Telekom, in particular future free cash flow and sound balance sheet figures. In addition, the Group intends to continue investing substantially in its infrastructure in 2010.

 

The policy is to pay a dividend of at least EUR 0.70 per share in each financial year from 2010 to 2012. Share buy-backs are also to be carried out within the same period. In total, dividend payments and share buy-backs should lead to an unchanged total payment of EUR 3.4 billion a year to shareholders.

 

Profit distribution consisting of a dividend payment and share buy-backs is aimed at positively supporting the performance of the share price in addition to providing cash remuneration for shareholders through dividends. The share buy-back will improve KPIs, such as earnings per share and free cash flow per share, that have a major effect on the share rating. Based on the minimum dividend stated and total payment planned, the share buy-backs would result in around 130 million shares at the current share price. This would improve earnings per share and free cash flow per share by around 3.3 percent each. The final purchase price for the share buy-back depends on the timing of the buy-back, the buy-back price and the number of dividend rights-bearing shares. The current share price was taken as a basis for this press release.