Quarterly Report • Nov 13, 2019
Quarterly Report
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Interim Statement Q3 2019
| Sept. 30, 2019 (IFRS 16) |
Sept. 30, 2018 (IFRS 15) |
Change | |
|---|---|---|---|
| NET INCOME (in € million) | |||
| Sales | 3,880.8 | 3,815.9 | + 1.7% |
| EBITDA | 944.0 | 874.6 | + 7.9% |
| EBIT | 587.6 | 582.8 | + 0.8% |
| EBT(1) | 550.1 | 548.0 | + 0.4% |
| EPS (in €)(1) | 1.50 | 1.37 | + 9.5% |
| EPS before PPA writedowns (in €)(1) | 1.87 | 1.77 | + 5.5% |
| BALANCE SHEET (in € million) | |||
| Current assets | 1,405.9 | 1,172.2 | + 19.9% |
| Non-current assets | 7,896.1 | 6,897.1 | + 14.5% |
| Equity | 4,801.0 | 4,500.9 | + 6.7% |
| Equity ratio | 51.6% | 55.8% | |
| Total assets | 9,302.0 | 8,069.3 | + 15.3% |
| CASH FLOW (in € million) | |||
| Operative cash flow | 725.8 | 659.3 | + 10.1% |
| Cash flow from operating activities | 476.0 | 326.7 | + 45.7% |
| Cash flow from investing activities | - 69.6 | - 268.9 | |
| Free cash flow(2) | 398.7 | 181.7 | + 119.4% |
| EMPLOYEES (HEADCOUNT) | |||
| Total as of September 30 | 9,241 | 9,032 | + 2.3% |
| thereof Germany | 7,627 | 7,526 | + 1.3% |
| thereof abroad | 1,614 | 1,506 | + 7.2% |
| SHARE (in €) | |||
| Share price as of September 30 (Xetra) | 32.73 | 40.75 | - 19.7% |
| CUSTOMER CONTRACTS (in million) | |||
| Consumer Access, total contracts | 14.12 | 13.26 | + 0.86 |
| thereof mobile internet | 9.78 | 8.93 | + 0.85 |
| thereof broadband connections | 4.34 | 4.33 | + 0.01 |
| Consumer Applications, total accounts | 39.27 | 38.42 | + 0.85 |
| thereof with Premium Mail subscription (contracts) | 1.54 | 1.53 | + 0.01 |
| thereof with Value-Added subscription (contracts) | 0.72 | 0.71 | + 0.01 |
| thereof free accounts | 37.01 | 36.17 | + 0.84 |
| Business Applications, total contracts | 8.13 | 8.07 | + 0.06 |
| thereof Germany | 3.88 | 3.81 | + 0.07 |
| thereof abroad | 4.25 | 4.26 | - 0.01 |
| Fee-based customer contracts, total | 24.51 | 23.58 | + 0.93 |
(1) EBT and EPS 2018 without Tele Columbus impairment charges (EBT effect: € -216.2 million; EPS effect: € -1.08);
EBT and EPS 2019 without Tele Columbus impairment charges (EBT effect: € -30.9 million; EPS effect: € -0.15) (2) Free cash flow 2018 without consideration of a tax payment from fiscal year 2016 (free cash flow effect: € -34.7 million); free cash flow 2019 without consideration of a capital gains tax payment (free cash flow effect: € -56.2 million) as well as tax payments from fiscal year 2017 and previous years (free cash flow effect: € -27.2 million)
4
United Internet AG can look back on a successful first nine months of 2019. In the highly competitive environment of our Consumer Access segment, we once again succeeded in visibly increasing our high-margin service revenues. The same applies to our Business Access segment, where we were able to achieve significant growth in revenue and earnings and increasingly exploit the potential of our own fiber-optic network.
At the same time, we continued to drive forward the repositioning of our portals and the establishment of data-driven business models in the Consumer Applications segment, as well as the rebranding program of "1&1 Internet" in the Business Applications segment via the transitional brands "1&1 IONOS" and currently "IONOS by 1&1" – thus taking a further step toward the targeted IPO. Following a transition phase, the IPO is then to be held in future under the independent "IONOS" brand.
In addition, we made strong investments in new customer contracts and the expansion of our existing customer relationships in the first nine months of 2019. In total, we increased the number of fee-based customer contracts by 660,000 to 24.51 million contracts. Of this total, 580,000 contracts were added in the Consumer Access segment. A further 10,000 and 70,000 contracts resulted from the Consumer Applications and Business Applications segments, respectively.
Consolidated sales grew by 1.7% in the first nine months of 2019, from € 3,815.9 million in the previous year to € 3,880.8 million. This at first glance only moderate growth was due in particular to fluctuations during the year in (low-margin) hardware sales (€ -38.1 million compared to the previous year), as well as sales effects from increased demand for LTE mobile tariffs among existing customers (sales reduced by € -38.7 million due to lower basic prices in the first year of the contract; prior year: € -10.6 million) in the Consumer Access segment. In addition, there is the reduction in ad space started in April 2018 as part of a repositioning in the Consumer Applications segment (€ -17.2 million; prior year: € -9.7 million).
Earnings before interest, taxes, depreciation and amortization (EBITDA) were positively influenced by the initial application of IFRS 16 (€ +65.3 million) in the first nine months of 2019. In addition to the one-off expenses already announced (€ -3.8 million; prior year: € -12.4 million), the regulatory decision to increase subscriber line charges (€ -4.4 million), and initial costs for our 5G mobile communications network (€ -2.5 million), there were opposing effects in the Consumer Access segment in particular from additional costs (€ -59.0 million) for wholesale purchases after the time-limited adjustment mechanism of a wholesale agreement expired at the end of 2018.
Contrary to our original expectations, the expired arrangement was not compensated for by a price reduction during the reporting period. However, the corresponding wholesale prices are the subject of several arbitration proceedings initiated by our subsidiary 1&1 Drillisch which we expect to result in binding decisions on the requested permanent price adjustments. On October 24, 2019, 1&1 Drillisch received the draft arbitration report on the first price adjustment proceedings (Price Review 1), initiated with effect from September 2017, which rejected 1&1 Drillisch's application for the retroactive reduction of wholesale prices as of this date. The final expert opinion on Price Review 1 is expected to be issued in the course of November. The consequence of the draft arbitration report is that the financial figures for 2017 and – at least for the time being – the 2018 and 2019 results of 1&1 Drillisch will not be improved by price reductions. Moreover, the aforementioned price increase will remain valid – at least for the time being – due to the expiry of the contractual adjustment mechanism (total impact of approx. € 85 million in
In addition to these additional costs, our future investments (implemented as planned), such as the repositioning of the Consumer Applications segment (€ -16.8 million; prior year: € -9.9 million) and increased marketing expenses in the Business Applications segment (€ -26.7 million), had an initial negative effect on earnings. Increased marketing expenses included a one-off amount of € -15.1 million for rebranding measures (prior year: one-offs of € -8.2 million for integration projects). All in all, EBITDA rose by 7.9% in the first nine months of 2019, from € 874.6 million to € 944.0 million (according to IFRS 16). The comparable growth according to IFRS 15 amounted to 0.5%.
2019) and will now be the subject of further price reviews.
Earnings before interest and taxes (EBIT) were virtually unaffected by IFRS 16 accounting and rose by 0.8%, from € 582.8 million to € 587.6 million. EBIT also includes the above mentioned burdens on earnings and one-offs.
Earnings per share (EPS) rose from € 0.29 to € 1.35. Both of these EPS figures were burdened by non-cash impairment charges on shares held in Tele Columbus (EPS effect: € -1.08 in the previous year and € -0.15 in the current reporting period) as a result of closing-date effects. Adjusted for these impairment charges, operating EPS amounted to € 1.50 – an increase of 9.5% over the comparable figure of € 1.37 in the previous year. Operating EPS before PPA writedowns rose from € 1.77 to € 1.87.
In addition to our operating business, we successfully participated – via 1&1 Drillisch – in the 5G spectrum auction ending on June 12, 2019 and purchased two frequency blocks of 2 x 5 MHz in the 2 GHz band and five frequency blocks of 10 MHz in the 3.6 GHz band. The total auction price amounted to around € 1.07 billion. The frequency blocks in the 3.6 GHz band are available immediately and the frequency blocks in the 2 GHz band will be available as of January 1, 2026. Up to this time, 1&1 Drillisch has the possibility to rent frequencies in the amount of 2x10 MHz in the 2.6 GHz band from Telefónica Germany on the basis of the commitments given by Telefónica Germany as part of the EU's clearance of its merger with E-Plus. This spectrum will be available until December 31, 2025. By acquiring these frequencies, we have laid the foundation for our successful and permanent positioning of 1&1 Drillisch AG as Germany's fourth mobile network provider and intend to establish a powerful mobile communications network.
6
On September 5, 2019, 1&1 Drillisch also signed an agreement with the German Federal Ministry of Transport and Digital Infrastructure (BMVI) and the German Federal Ministry of Finance (BMF) regarding the construction of mobile communication sites in so-called "not-spots". 1&1 Drillisch is thus helping to close existing supply gaps and improve the provision of mobile communications in rural regions by building hundreds of base stations. In return, 1&1 Drillisch benefits from an agreement to pay for the acquired 5G spectrum in installments. As a result, the license fees which were originally to be paid to the German government in 2019 and 2024 can now be spread over the period up to 2030 in installments. The credit line of originally € 2.8 billion arranged to finance the highest bids of the spectrum auction, among other things, was thus no longer required and has already been returned. The agreement with the BMVI and BMF is in line with 1&1 Drillisch's long-term financing strategy, which is geared toward paying the major share of expenses for the construction of a modern 5G network from current revenue.
A final word on our guidance: we did not include any decrease in wholesale prices for the Consumer Access segment in our 2019 guidance. However, given the current environment of constantly falling market prices for mobile data usage, we did expect to be able to avert the price increase effective as of January 2019 following the expiry of an adjustment mechanism. According to the current draft of the expert opinion on Price Review 1 (regarding September 2017), this was not successful and will now be the subject of further price reviews. Decisions in the three further price reviews initiated by 1&1 Drillisch (with retroactive effect as of July 2018 (Price Review 2), January 2019 (Price Review 3), and July 2019 (Price Review 4)) are expected to be announced in 2020. These are separate proceedings which will be decided on the basis of their respective effective dates and the prevailing market conditions. Subject to possible changes in the final arbitration report, we now expect the price increase to incur additional costs of around € 85 million in fiscal year 2019 – at least until a possible clarification is achieved in the course of further price reviews. Against this backdrop, we issued an ad-hoc disclosure on October 24, 2019, in which we downgraded our EBITDA guidance for the current fiscal year by approx. € 85 million and now expect EBITDA of around € 1,250 million. We still expect sales adjusted for low-margin hardware business to rise by approx. 3% and total sales including hardware by approx. 2%.
We are well prepared for the next steps in our company's development and upbeat about our prospects for the remaining months of the fiscal year. In view of the successful first nine months, we would like to express our particular gratitude to all employees for their dedicated efforts as well as to our shareholders and business associates for the trust they continue to place in United Internet AG.
Montabaur, November 12, 2019
Ralph Dommermuth
8
On January 13, 2016, the International Accounting Standards Board (IASB) published IFRS 16, a new standard for lease accounting. The new standard is to be applied in fiscal years beginning on or after January 1, 2019 – and thus also for this quarterly statement (Q3 2019).
United Internet is mainly a lessee. The majority of the Group's leases are for renting network infrastructures, buildings, technical equipment and vehicles.
According to IFRS 16, leases are no longer regarded as classic rental agreements but as financing transactions: the lessee acquires a right to use the leased asset and finances it via the lease installments. Consequently, the lessee must recognize an asset for the right to use the leased asset and a liability for the payments due for the leased asset in the balance sheet. In this way, every lease and rental relationship is stated in the balance sheet. Only lease or rental agreements with terms of up to twelve months and contracts with low-value assets are excluded from this obligation to be stated in the balance sheet.
On initial application of IFRS 16, United Internet opted to recognize the asset for the right of use granted at the value of the related lease liability as of January 1, 2019 and not to apply the standard retrospectively for each previous reporting period.
Application of the new standard led to an increase in non-current assets (for right-of-use assets) in the consolidated balance sheet of United Internet, and at the same time to an increase in financial liabilities (due to the payment obligation). In the income statement, this resulted in a reduction in rental payments, an increase in depreciation and interest expenses, and thus to a rise in EBITDA. However, other financial performance indicators "below" EBITDA, such as EBIT, EBT or EPS, are either not affected by the new accounting standard, or only to a minor extent.
Specifically, the initial application of IFRS 16 in the first nine months of 2019 had a positive impact on consolidated EBITDA of around € 65.3 million. The EBITDA effects were mostly in the Business Access (€ +44.6 million) and Business Applications (€ +10.5 million) segments.
The number of fee-based contracts in the Consumer Access segment rose by 580,000 contracts to 14.12 million. While broadband connections remained steady at 4.34 million, 580,000 customer contracts were added in the mobile internet business – raising the total number of contracts to 9.78 million.
| Sept. 30, 2019 | Dec. 31, 2018 | Change | |
|---|---|---|---|
| Consumer Access, total contracts | 14.12 | 13.54 | + 0.58 |
| thereof mobile internet | 9.78 | 9.20 | + 0.58 |
| thereof broadband connections | 4.34 | 4.34 | +/- 0.00 |
| Sept. 30, 2019 | June 30, 2019 | Change | |
|---|---|---|---|
| Consumer Access, total contracts | 14.12 | 13.92 | + 0.20 |
| thereof mobile internet | 9.78 | 9.58 | + 0.20 |
| thereof broadband connections | 4.34 | 4.34 | +/- 0.00 |
Sales of the Consumer Access segment rose moderately by 1.3% in the first nine months of 2019, from € 2,698.9 million in the previous year to € 2,734.9 million.
Despite a highly competitive environment, high-margin service revenues – which represent the core business of the segment – improved by 3.4% from € 2,151.9 million to € 2,226.0 million. Without consideration of sales effects from increased demand for LTE mobile tariffs among existing customers (sales reduced by € -38.7 million due to lower basic prices in the first year of the contract; prior year: € -10.6 million), adjusted service revenues rose by 4.7%.
In addition to the aforementioned sales reductions, this at first glance only moderate overall sales growth was due to fluctuations during the year in (low-margin) hardware sales (€ -38.1 million compared to the previous year). Such hardware sales (especially from the use of smartphones which customers acquire for no or only small one-off charges on signing new contracts and which are paid for via higher tariff prices over the contractual term) fluctuate seasonally and depend on the appeal of new devices and the model cycles of hardware manufacturers. Consequently, this effect may be reversed in the future. If this is not the case, however, it would have no significant impact on the segment's EBITDA trend.
At € 508.6 million, segment EBITDA fell short of the prior-year figure (€ 521.8 million). This decline is mainly due to additional costs for wholesale mobile telecommunications purchases (€ -59.0 million) after the time-limited adjustment mechanism of a wholesale agreement expired at the end of 2018. Contrary to original expectations, the expired arrangement was not compensated for by a price reduction during the reporting period.
However, the corresponding wholesale prices are the subject of several arbitration proceedings initiated by 1&1 Drillisch which it expects to result in binding decisions on the requested permanent price adjustments. On October 24, 2019, 1&1 Drillisch received the draft arbitration report on the first price adjustment proceedings (Price Review 1), initiated with effect from September 2017, which rejected 1&1 Drillisch's application for the retroactive reduction of wholesale prices as of this date. The final expert opinion on Price Review 1 is expected to be issued in the course of November. The consequence of the draft arbitration report is that the financial figures for 2017 and – at least for the time being – the 2018 and 2019 results of 1&1 Drillisch will not be improved by price reductions. Moreover, the aforementioned price increase will remain valid – at least for the time being – due to the expiry of the contractual adjustment mechanism and will now be the subject of further price reviews.
EBITDA also contains one-off expenses (€ -3.8 million; prior year: €-12.4 million) for current integration projects, the increase in regulated subscriber line charges as of July 2019 (€ -4.4 million), and initial costs in connection with the planning and preparation of the 5G mobile communications network (€ -2.5 million). On a like-for-like basis without consideration of the above mentioned effects and a positive IFRS 16 effect (€ +4.3 million), comparable EBITDA would have risen by 7.5% over the previous year.
Segment EBIT of € 396.6 million was virtually unaffected by IFRS 16 accounting and also fell short of the prior-year figure (€ 401.1 million). EBIT also includes the above mentioned burdens on earnings and one-off expenses.
(1) Hardware sales incl. small amount of other sales
(2) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -3.8 million)
(3) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -12.4 million)
| Q4 2018 (IFRS 15) |
Q1 2019 (IFRS 16) |
Q2 2019 (IFRS 16) |
Q3 2019 (IFRS 16) |
Q3 2018 (IFRS 15) |
Change | |
|---|---|---|---|---|---|---|
| Sales | 929.8 | 905.0 | 907.1 | 922.8 | 893.2 | + 3.3% |
| thereof service sales | 730.4 | 730.4 | 740.7 | 754.9 | 728.6 | + 3.6% |
| thereof hardware sales(1) | 199.4 | 174.6 | 166.4 | 167.9 | 164.6 | + 2.0% |
| EBITDA | 197.5(2) | 168.5(3) | 171.9(4) | 168.2(5) | 181.6(6) | - 7.4% |
| EBIT | 159.5(2) | 130.6(3) | 134.1(4) | 132.0(5) | 141.6(6) | - 6.8% |
(1) Hardware sales incl. small amount of other sales
(2) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -12.7 million)
(3) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -2.1 million)
(4) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -0.2 million)
(5) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -1.5 million)
(6) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -4.7 million)
9M 2019 (IFRS 16) 9M 2018 (IFRS 15)
9M 2019
| Multi-period overview(1): Development of key sales and earnings figures (in € million) | |||||
|---|---|---|---|---|---|
| 9M 2016 | 9M 2017 | 9M 2018 | |||
| (IFRS 16) | |||
|---|---|---|---|
| 1,790.7 | 1,975.8 | 2,698.9 | 2,734.9 |
| 1,721.1 | 1,882.7 | 2,151.9 | 2,226.0 |
| 69.6 | 93.1 | 547.0(3) | 508.9 |
| 288.3 | 361.9 | 521.8(4) | 508.6(5) |
| 16.1% | 18.3% | 19.3% | 18.6% |
| 280.3 | 339.3 | 401.1(4) | 396.6(5) |
| 15.7% | 17.2% | 14.9% | 14.5% |
| (IAS 18) | (IAS 18) | (IFRS 15) |
(1) As the new segmentation was only introduced in the course of preparing the annual financial statements for 2018, the usual 5-year multi-period overview is limited to the financial years 2016-2019
(2) Hardware sales incl. small amount of other sales
(3) Increase due in particular to conversion effects from initial accounting acc. to IFRS 15
(4) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -12.4 million)
(5) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -3.8 million)
In addition to its operating business, United Internet successfully participated – via 1&1 Drillisch – in the 5G spectrum auction ending on June 12, 2019 and purchased two frequency blocks of 2 x 5 MHz in the 2 GHz band and five frequency blocks of 10 MHz in the 3.6 GHz band. The total auction price amounted to around € 1.07 billion – payable in installments until 2030. The frequency blocks in the 3.6 GHz band are available immediately and the frequency blocks in the 2 GHz band will be available as of January 1, 2026. Up to this time, 1&1 Drillisch has the possibility to rent frequencies in the amount of 2x10 MHz in the 2.6 GHz band from Telefónica Germany on the basis of the commitments given by Telefónica Germany as part of the EU's clearance of its merger with E-Plus. This spectrum will be available until December 31, 2025. By acquiring these frequencies, the foundation was laid for a successful and permanent positioning of the 1&1 Drillisch Group as Germany's fourth mobile network provider. The company intends to use this basis to establish a powerful mobile communications network.
On September 5, 2019, 1&1 Drillisch also signed an agreement with the German Federal Ministry of Transport and Digital Infrastructure (BMVI) and the German Federal Ministry of Finance (BMF) regarding the construction of mobile communication sites in so-called "not-spots". 1&1 Drillisch is thus helping to close existing supply gaps and improve the provision of mobile communications in rural regions by building hundreds of base stations. In return, 1&1 Drillisch benefits from an agreement to pay for the acquired 5G spectrum in installments. As a result, the license fees which were originally to be paid to the German government in 2019 and 2024 can now be spread over the period up to 2030 in installments. The credit line of originally € 2.8 billion arranged to finance the highest bids of the spectrum auction, among other things, was thus no longer required and has already been returned. The agreement with the BMVI and BMF is in line with 1&1 Drillisch's long-term financing strategy, which is geared toward paying the major share of expenses for the construction of a modern 5G network from current revenue.
Sales of the Business Access segment rose by 5.3% in the first nine months of 2019, from € 334.6 million in the previous year to € 352.5 million.
Segment EBITDA improved by 140.8%, from € 43.6 million to € 105.0 million. In addition to the clearly positive business trend as reflected in sales, this increase was also attributable to effects from the initial application of IFRS 16 (€ +44.6 million). Without consideration of these effects, adjusted EBITDA rose by 38.5%.
The strong increases in sales and EBITDA demonstrate that 1&1 Versatel is increasingly succeeding in exploiting the potential of its fiber-optic network to an ever greater extent.
As a result of high depreciation charges in the field of network infrastructure due to customer growth and further Layer2 connections that will only be amortized in subsequent periods, segment EBIT amounted to € -43.0 million – compared to € -52.5 million in the previous year – and was virtually unaffected by IFRS 16 accounting.
| Q4 2018 (IFRS 15) |
Q1 2019 (IFRS 16) |
Q2 2019 (IFRS 16) |
Q3 2019 (IFRS 16) |
Q3 2018 (IFRS 15) |
Change | |
|---|---|---|---|---|---|---|
| Sales | 131.3 | 119.3 | 115.0 | 118.2 | 112.4 | + 5.2% |
| EBITDA | 29.0 | 35.7 | 34.4 | 34.9 | 17.9 | + 95.0% |
| EBIT | - 5.6 | - 13.5 | - 15.3 | - 14.2 | - 14.7 |
| 9M 2016(2) (IAS 18) |
9M 2017(2) (IAS 18) |
9M 2018 (IFRS 15) |
9M 2019 (IFRS 16) |
|
|---|---|---|---|---|
| Sales | 383.8 | 325.8 | 334.6 | 352.5 |
| EBITDA | 89.8 | 62.1 | 43.6 | 105.0 |
| EBITDA margin | 23.4% | 19.1% | 13.0% | 29.8% |
| EBIT | - 4.2 | - 29.1 | - 52.5 | - 43.0 |
| EBIT margin | - | - | - | - |
(1) As the new segmentation was only introduced in the course of preparing the annual financial statements for 2018, the usual 5-year multi-period overview is limited to the financial years 2016-2019
(2) 2016 and 2017 (partially) including the mass market business transferred to Consumer Access as of May 1, 2017
9M 2019 (IFRS 16) 9M 2018 (IFRS 15)
The number of fee-based contracts rose by 10,000 to 2.26 million in the first nine months of 2019. Ad-financed free accounts remained stable at 37.00 million and were thus well above the seasonally comparable prior-year figure of 36.17 million as of September 30, 2018.
| Sept. 30, 2019 | Dec. 31, 2018 | Change | |
|---|---|---|---|
| Consumer Applications, total accounts | 39.26 | 39.25 | + 0.01 |
| thereof with Premium Mail subscription | 1.54 | 1.54 | +/- 0.00 |
| thereof with Value-Added subscription | 0.72 | 0.71 | + 0.01 |
| thereof free accounts | 37.00 | 37.00 | +/- 0.00 |
| Sept. 30, 2019 | June 30, 2019 | Change | |
|---|---|---|---|
| Consumer Applications, total accounts | 39.26 | 39.21 | + 0.05 |
| thereof with Premium Mail subscription | 1.54 | 1.54 | +/- 0.00 |
| thereof with Value-Added subscription | 0.72 | 0.72 | +/- 0.00 |
| thereof free accounts | 37.00 | 36.95 | + 0.05 |
As already announced in the annual financial statements 2018, activities in the Consumer Applications segment continue to focus on the repositioning and reconstruction of the GMX und WEB.DE portals (incl. the related reduction in ad space) and the simultaneous establishment of data-driven business models. Initial successes are already emerging from this transformation, as reflected by a return to more stable user numbers for fee-based Premium Mail accounts and growth of 830,000 free accounts compared to September 30, 2018. In addition, around three million users (as of September 30, 2019) opted in for the Smart Inbox within the first four months of its launch. The first data-driven ad marketing products on this basis were presented at DMEXCO in September. As expected, the above mentioned measures had a negative impact on sales and earnings figures in the first nine months of 2019 and are due to gradually have a positive effect as of fiscal year 2020. Nevertheless, slight growth in adjusted sales and adjusted EBITDA at the prioryear level are already expected for the fourth quarter of 2019.
Against this backdrop, and as expected, sales in the segment's core business of fee-based accounts and the marketing of ad space on its own portals amounted to € 174.3 million in the first nine months of 2019 and thus fell short of the prior-year figure (€ 182.8 million). This decline in sales is mainly attributable to the ongoing repositioning started in the second quarter of 2018 and the associated reduction in ad space (sales effect: € -17.2 million), which only affected sales in the first nine months of the previous year to a limited extent (€ -9.7 million).
At € 10.2 million, sales in the field of low-margin third-party marketing were well below the prior-year figure (€ 21.1 million).
As a result, there was also an overall decline in total segment sales from € 203.9 million to € 184.5 million. Without consideration of the ad space reduction and the decline in third-party marketing, adjusted sales fell by -0.5%.
Due to the reduction in ad space and investment in the expansion of data-driven business models(EBITDA and EBIT effect: € -16.8 million; prior year: € -9.9 million), segment EBITDA of € 70.6 million (prior year: € 79.9 million) was also down on the previous year. Without consideration of the ad space reduction and a positive IFRS 16 effect (€ +3.2 million), adjusted EBITDA declined by -6.2%.
As a result, segment EBIT of € 58.2 million was also down on the previous year (prior year: € 70.8 million) and was virtually unaffected by IFRS 16 accounting.
| Q4 2018 (IFRS 15) |
Q1 2019 (IFRS 16) |
Q2 2019 (IFRS 16) |
Q3 2019 (IFRS 16) |
Q3 2018 (IFRS 15) |
Change | |
|---|---|---|---|---|---|---|
| Sales | 70.3 | 60.4 | 63.4 | 60.7 | 63.7 | - 4.7% |
| thereof pay accounts/ portal marketing |
67.8 | 57.9 | 58.6 | 57.8 | 58.5 | - 1.2% |
| thereof third-party marketing |
2.5 | 2.5 | 4.8 | 2.9 | 5.2 | - 44.2% |
| EBITDA | 32.9 | 21.4 | 25.9 | 23.3 | 25.4 | - 8.3% |
| EBIT | 30.0 | 18.3 | 20.9 | 19.0 | 22.5 | - 15.6% |
| 9M 2016 (IAS 18) |
9M 2017 (IAS 18) |
9M 2018 (IFRS 15) |
9M 2019 (IFRS 16) |
|
|---|---|---|---|---|
| Sales | 205.8 | 201.8 | 203.9 | 184.5 |
| thereof pay accounts/ portal marketing |
195.1 | 189.2 | 182.8 | 174.3 |
| thereof third-party marketing |
10.7 | 12.6 | 21.1 | 10.2 |
| EBITDA | 88.5 | 84.7 | 79.9 | 70.6 |
| EBITDA margin | 43.0% | 42.0% | 39.2% | 38.3% |
| EBIT | 79.1 | 76.0 | 70.8 | 58.2 |
| EBIT margin | 38.4% | 37.7% | 34.7% | 31.5% |
(1) As the new segmentation was only introduced in the course of preparing the annual financial statements for 2018, the usual 5-year multi-period overview is limited to the financial years 2016-2019
The number of fee-based Business Applications contracts grew organically by 70,000 contracts in the first nine months of 2019 to a total of 8.13 million contracts.
| Sept. 30, 2019 | Dec. 31, 2018 | Change | |
|---|---|---|---|
| Business Applications, total contracts | 8.13 | 8.06 | + 0.07 |
| thereof in Germany | 3.88 | 3.82 | + 0.06 |
| thereof abroad | 4.25 | 4.24 | + 0.01 |
| Sept. 30, 2019 | June 30, 2019 | Change | |
|---|---|---|---|
| Business Applications, total contracts | 8.13 | 8.11 | + 0.02 |
| thereof in Germany | 3.88 | 3.86 | + 0.02 |
| thereof abroad | 4.25 | 4.25 | +/- 0.00 |
In the Business Applications segment, activities in the reporting period focused on driving the rebranding of "1&1 Internet" via the transitional brands "1&1 IONOS" and currently "IONOS by 1&1" – thus taking a further step toward the targeted IPO. Following a transition phase, the IPO is then to be held in future under the independent "IONOS" brand.
Sales of the Business Applications segment rose by 4.9% in the first nine months of 2019, from € 634.7 million in the previous year to € 665.7 million.
Despite increased marketing expenses (€ -26.7 million, including one-offs for rebranding measures of € -15.1 million (prior year: one-offs for integration projects of € -8.8 million)), segment EBITDA of € 236.8 million was 1.2% up on the previous year (€ 233.9 million). The strong increase in marketing expenses was opposed by positive effects from the initial application of IFRS 16 (€ +10.5 million). On a like-for-like basis without consideration of the above mentioned effects, comparable EBITDA would have risen by 4.2% over the previous year.
EBIT also includes the above mentioned burdens on earnings and one-offs. In addition, there was an increase in depreciation (due in part to World4You and the expansion of the server parks). Against this backdrop, segment EBIT of € 156.8 million also fell short of the prior-year figure (€ 168.4 million) and was virtually unaffected by IFRS 16 accounting.
| Sales | 665.7 634.7 |
+ 4.9% | |
|---|---|---|---|
| EBITDA | 236.8(1) 233.9(2) |
+ 1.2% | |
| EBIT | 156.8(1) 168.4(2) |
- 6.9% |
(1) Including one-off expenses for integration and rebranding projects (EBITDA and EBIT effect: € -15.1 million) (2) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -8.8 million)
| Q4 2018 (IFRS 15) |
Q1 2019 (IFRS 16) |
Q2 2019 (IFRS 16) |
Q3 2019 (IFRS 16) |
Q3 2018 (IFRS 15) |
Change | |
|---|---|---|---|---|---|---|
| Sales | 207.1 | 220.2 | 223.1 | 222.4 | 215.4 | + 3.2% |
| EBITDA | 56.5(1) | 73.7(2) | 74.6(3) | 88.5(4) | 85.0(5) | + 4.1% |
| EBIT | 33.7(1) | 45.7(2) | 49.5(3) | 61.6(4) | 61.0(5) | + 1.0% |
(1) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -7.8 million)
(2) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -7.0 million)
(3) Including one-off expenses for integration and rebranding projects (EBITDA and EBIT effect: € -6.7 million) (4) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -1.4 million)
(5) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -2.6 million)
| 9M 2016 (IAS 18) |
9M 2017 (IAS 18) |
9M 2018 (IFRS 15) |
9M 2019 (IFRS 16) |
|
|---|---|---|---|---|
| Sales | 479.2 | 557.2 | 634.7 | 665.7 |
| EBITDA | 145.4 | 186.4 | 233.9(2) | 236.8(3) |
| EBITDA margin | 30.3% | 33.5% | 36.9% | 35.6% |
| EBIT | 113.2 | 143.7 | 168.4(2) | 156.8(3) |
| EBIT margin | 23.6% | 25.8% | 26.5% | 23.6% |
(1) As the new segmentation was only introduced in the course of preparing the annual financial statements for 2018, the usual 5-year
multi-period overview is limited to the financial years 2016-2019 (2) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -8.8 million)
(3) Including one-off expenses for integration and rebranding projects (EBITDA and EBIT effect: € -15.1 million)
In the first nine months of 2019, the total number of fee-based customer contracts in the United Internet Group was raised by 660,000 to 24.51 million contracts. Ad-financed free accounts were unchanged at 37.00 million.
Consolidated sales grew by 1.7% in the first nine months of 2019, from € 3,815.9 million in the previous year to € 3,880.8 million. This at first glance only moderate growth was due in particular to fluctuations during the year in (low-margin) hardware sales (€ -38.1 million compared to the previous year), as well as sales effects from increased demand for LTE mobile tariffs among existing customers (sales reduced by € -38.7 million due to lower basic prices in the first year of the contract; prior year: € -10.6 million) in the Consumer Access segment. Sales were also influenced by the ad space reduction initiated in April 2018 as part of a repositioning of the Consumer Applications segment (€ -17.2 million; prior year: € -9.7 million). Sales abroad improved by 7.7% from € 299.2 million to € 322.2 million.
Due to additional costs for wholesale purchases, the cost of sales rose from € 2,521.9 million (66.1% of sales) in the previous year to € 2,567.6 million (66.2% of sales). There was a corresponding decrease in the gross margin from 33.9% to 33.8%. This resulted in a 1.5% increase in gross profit from € 1,294.0 million to € 1,313.2 million.
Largely as a result of increased marketing expenses in connection with rebranding in the Business Applications segment, there was a disproportionate rise in sales and marketing expenses from € 510.6 million (13.4% of sales) in the previous year to € 543.9 million (14.0% of sales). Administrative expenses also rose slightly faster than sales from € 163.1 million in the previous
year (4.3% of sales) to € 172.4 million (4.4% of sales).
| 9M 2015 (IAS 18) |
9M 2016 (IAS 18) |
9M 2017 (IAS 18) |
9M 2018 (IFRS 15) |
9M 2019 (IFRS 16) |
|
|---|---|---|---|---|---|
| Cost of sales | 1,834.6 | 1,847.0 | 1,924.5 | 2,521.9 | 2,567.6 |
| Cost of sales ratio | 66.6% | 65.3% | 64.0% | 66.1% | 66.2% |
| Gross margin | 33.4% | 34.7% | 36.0% | 33.9% | 33.8% |
| Selling expenses | 423.0 | 392.5 | 433.8 | 510.6 | 543.9 |
| Selling expenses ratio | 15.4% | 13.9% | 14.4% | 13.4% | 14.0% |
| Administrative expenses | 129.5 | 135.8 | 131.8 | 163.1 | 172.4 |
| Administrative expenses ratio | 4.7% | 4.8% | 4.4% | 4.3% | 4.4% |
Consolidated EBITDA was positively influenced by the initial application of IFRS 16 (€ +65.3 million) in the first nine months of 2019. In addition to the one-off expenses already announced (€ -3.8 million; prior year: € -12.4 million), the regulatory decision to increase subscriber line charges (€ -4.4 million), and initial costs for the 5G mobile communications network (€ -2.5 million), there were opposing effects in the Consumer Access segment in particular from additional costs (€ -59.0 million) for wholesale purchases after the time-limited adjustment mechanism of a wholesale agreement expired at the end of 2018.
Contrary to original expectations, the expired arrangement was not compensated for by a price reduction during the reporting period. However, the corresponding wholesale prices are the subject of several arbitration proceedings initiated by 1&1 Drillisch which it expects to result in binding decisions on the requested permanent price adjustments. On October 24, 2019, 1&1 Drillisch received the draft arbitration report on the first price adjustment proceedings (Price Review 1), initiated with effect from September 2017, which rejected 1&1 Drillisch's application for the retroactive reduction of wholesale prices as of this date. The final expert opinion on Price Review 1 is expected to be issued in the course of November. The consequence of the draft arbitration report is that the financial figures for 2017 and – at least for the time being – the 2018 and 2019 results of 1&1 Drillisch will not be improved by price reductions. Moreover, the aforementioned price increase will remain valid – at least for the time being – due to the expiry of the contractual adjustment mechanism and will now be the subject of further price reviews.
In addition to these additional costs, future investments (implemented as planned), such as the repositioning of the Consumer Applications segment (€ -16.8 million; prior year: € -9.9 million) and increased marketing expenses in the Business Applications segment (€ -26.7 million), had an initial negative effect on earnings. Increased marketing expenses included a one-off amount of € -15.1 million for rebranding measures (prior year: one-offs of € -8.2 million for integration projects). All in all, EBITDA rose by 7.9% in the first nine months of 2019, from € 874.6 million to € 944.0 million (according to IFRS 16). The comparable growth according to IFRS 15 amounted to 0.5%.
Consolidated EBIT was virtually unaffected by IFRS 16 accounting and rose by 0.8%, from € 582.8 million to € 587.6 million. EBIT also includes the above mentioned burdens on earnings and one-offs.
Earnings before taxes (EBT) increased from € 331.8 million to € 519.2 million. EBT in the first nine months of 2018 and EBT in the current reporting period were both burdened by non-cash impairment charges on shares held in Tele Columbus (EBT effect: € -216.2 million in the previous year and € -30.9 million in the current reporting period) as a result of closing-date effects. Adjusted for these impairment charges, operating EBT of € 550.1 million was slightly up on the previous year (€ 548.0 million).
Earnings per share (EPS) rose from € 0.29 to € 1.35. Both of these EPS figures were burdened by the aforementioned non-cash impairment charges (EPS effect: € -1.08 in the previous year and € -0.15 in the current reporting period) as a result of closing-date effects. Adjusted for these impairment charges, operating EPS amounted to € 1.50 – an increase of 9.5% over the comparable figure of € 1.37 in the previous year. Operating EPS before PPA writedowns rose from € 1.77 to € 1.87.
| Sales | 3,880.8 3,815.9 |
+ 1.7% | |
|---|---|---|---|
| EBITDA | 944.0(1) 874.6(2) |
+ 7.9% | |
| EBIT | 587.6(1) 582.8(2) |
+ 0.8% |
(1) Including one-off expenses for integration and rebranding projects (EBITDA and EBIT effect: € -18.9 million) (2) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -21.2 million)
| Q4 2018 (IFRS 15) |
Q1 2019 (IFRS 16) |
Q2 2019 (IFRS 16) |
Q3 2019 (IFRS 16) |
Q3 2018 (IFRS 15) |
Change | |
|---|---|---|---|---|---|---|
| Sales | 1,314.9 | 1,286.1 | 1,289.7 | 1,305.0 | 1,267.0 | + 3.0% |
| EBITDA | 326.7(1) | 299.7(2) | 330.3(3) | 314.0(4) | 309.1(5) | + 1.6% |
| EBIT | 228.2(1) | 181.1(2) | 209.7(3) | 196.8(4) | 209.0(5) | - 5.8% |
(1) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -20.5 million)
(2) Including one-off expenses for integration and rebranding projects (EBITDA and EBIT effect: € -9.1 million)
(3) Including one-off expenses for integration and rebranding projects (EBITDA and EBIT effect: € -6.9 million)
(4) Including one-off expenses for integration and rebranding projects (EBITDA and EBIT effect: € -2.9 million)
(5) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -7.3 million)
| 9M 2015 (IAS 18) |
9M 2016 (IAS 18) |
9M 2017 (IAS 18) |
9M 2018 (IFRS 15) |
9M 2019 (IFRS 16) |
|
|---|---|---|---|---|---|
| Sales | 2,754.8 | 2,828.1 | 3,008.2 | 3,815.9 | 3,880.8 |
| EBITDA | 541.0(1) | 610.6 | 684.1(2) | 874.6(3) | 944.0(4) |
| EBITDA margin | 19.6% | 21.6% | 22.7% | 22.9% | 24.3% |
| EBIT | 378.0(1) | 466.0 | 511.2(2) | 582.8(3) | 587.6(4) |
| EBIT margin | 13.7% | 16.5% | 17.0% | 15.3% | 15.1% |
(1) Without one-off income from sale of Goldbach shares and part of stake in virtual minds (EBITDA and EBIT effect: € +14.0 million)
(2) Without extraordinary income from revaluation of Drillisch shares (EBITDA and EBIT effect: € +303.0 million) and revaluation of ProfitBricks shares (EBITDA and EBIT effect: € +16.1 million), as well as without M&A transaction costs (EBITDA and EBIT effect: € -15.2 million)
(3) Including one-off expenses for current integration projects (EBITDA and EBIT effect: € -21.2 million)
(4) Including one-off expenses for integration and rebranding projects (EBITDA and EBIT effect: € -18.9 million)
Thanks to the positive trend in operating earnings, operative cash flow rose from € 659.3 million in the previous year to € 725.8 million in the first nine months of 2019.
Cash flow from operating activities in the first nine months of 2019 rose strongly from € 326.7 million in the previous year to € 476.0 million. This increase was mainly due to high prepayments to pre-service providers and a simultaneously strong increase in inventories in the previous year.
Cash flow from investing activities amounted to € 69.6 million in the reporting period (prior year: € 268.9 million). This resulted mainly from disbursements of € 165.9 million for capital expenditures (prior year: € 184.7 million). There was an opposing effect from the sale of associated companies (mainly from concluding the sale of Virtual Minds shares already prepared in 2018) amounting to € 35.6 million (of which gain on disposal: € 21.5 million). In addition to the aforementioned capital expenditures, cash flow from investing activities in the previous year was also shaped by the purchase of shares in affiliated companies (World4You), as well as a subsequent cash outflow from the sale of yourfone Shop GmbH.
As a result of the strong increase in cash flow from operating activities and lower capital expenditures, free cash flow (i.e. cash flow from operating activities, less capital expenditures, plus payments from disposals of intangible assets and property, plant and equipment) rose from € 181.7 million (without consideration of a tax payment of € 34.7 million from fiscal year 2016) to € 398.7 million (without consideration of a capital gains tax payment of € 56.2 million and tax payments from fiscal year 2017 and previous years of € 27.2 million). With the initial application of the accounting standard IFRS 16, the redemption share of lease liabilities is disclosed in cash flow from financing activities as of fiscal year 2019.
Cash flow from financing activities in the first nine months of 2019 was dominated by the net repayment of loans totaling € 199.2 million (prior year: net borrowing of € 21.7 million), payments of € 98.4 million to minority shareholders especially in connection with the increased stake in 1&1 Drillisch (prior year: € 0), the redemption of lease liabilities of € 75.0 million (prior year: € 11.9 million), which increased strongly as a result of IFRS 16 accounting, as well as the purchase of treasury shares amounting to € 30.4 million (prior year: € 0).
Cash and cash equivalents amounted to € 49.5 million as of September 30, 2019 – compared to € 61.3 million on the same date last year.
| 9M 2015 (IAS 18) |
9M 2016 (IAS 18) |
9M 2017 (IAS 18) |
9M 2018 (IFRS 15) |
9M 2019 (IFRS 16) |
|
|---|---|---|---|---|---|
| Operative cash flow | 394.2 | 461.8 | 461.1 | 659.3 | 725.8 |
| Cash flow from operating activities | 394.7(2) | 433.2(3) | 503.5(4) | 326.7 | 476.0 |
| Cash flow from investing activities | - 535.2 | - 370.7 | - 805.0 | - 268.9 | - 69.6 |
| Free cash flow(1) | 305.2(2) | 320.1(3) | 352.1(4) | 181.7(5) | 398.7(6) |
| Cash flow from financing activities | - 152.1 | 49.3 | 269.5 | - 235.5 | - 415.6 |
| Cash and cash equivalents on September 30 |
85.2 | 87.7 | 134.7 | 61.3 | 49.5 |
(1) Free cash flow is defined as cash flow from operating activities, less capital expenditures, plus payments from disposals of intangible assets and property, plant and equipment
(2) Without capital gains tax refund of € 326.0 million
(3) Without income tax payment of around € 100.0 million
(4) Without capital gains tax refund of € 70.3 million
(5) Without tax payment of € 34.7 million from fiscal year 2016 (6) Without capital gains tax payment of € 56.2 million as well as tax payments from fiscal year 2017 and previous years of € -27.2 million
In the fiscal year 2018, United Internet carried out a detailed impact assessment on accounting pursuant to IFRS 16. In summary, the effects as of January 1, 2019 from the initial application of IFRS 16 with respect to lessee contracts previously accounted for as operating leases are as follows: the Group's balance sheet total increased by approximately € 275 million as of January 1, 2019. The capitalization of right-of-use assets amounting to approximately € 275 million is opposed by the recognition of lease liabilities in almost the same amount, which were offset against deferred prepayments for leases.
The balance sheet total rose in total from € 8.174 billion as of December 31, 2018 to € 9.302 billion on September 30, 2019. This increase is mainly due to the initial recognition of the acquired 5G spectrum, resulting in intangible assets of € 1,029.0 million and other financial liabilities of € 1,029.9 million as of September 30, 2019. Under IFRS regulations, the intangible assets and other financial liabilities resulting from the acquisition are to be carried at fair or present value.
Current assets increased from € 1,364.7 million as of December 31, 2018 to € 1,405.9 million on September 30, 2019. Cash and cash equivalents disclosed under current assets decreased from € 58.1 million to € 49.5 million due to closing-date effects. Trade accounts receivable rose slightly from € 351.4 million to € 366.2 million. Inventories decreased from € 89.6 million to € 69.8 million. The item contract assets rose from € 427.0 million to € 498.9 million and includes current claims against customers due to accelerated revenue recognition from the application of IFRS 15. Current prepaid expenses rose from € 224.8 million to € 235.6 million and mainly comprise the short-term portion of expenses relating to contract acquisition and contract fulfillment according to IFRS 15. Other financial assets decreased from € 72.8 million to € 52.4 million and income tax claims from € 129.6 million to € 125.8 million.
Non-current assets increased strongly from € 6,809.2 million as of December 31, 2018 to € 7,896.0 million on September 30, 2019. Due in particular to the Tele Columbus impairment charges, shares in associated companies decreased from € 206.9 million to € 161.1 million. Despite the positive subsequent valuation of investments following the sale of shares in Rocket Internet, other financial assets fell from € 348.0 million to € 341.5 million. Largely as a result of the initial application of IFRS 16, property, plant and equipment increased from € 818.0 million to € 1,098.9 million. Intangible assets rose strongly from € 1,244.6 million to € 2,138.0 million due to the above mentioned initial recognition of the acquired 5G spectrum. Goodwill remained almost unchanged at € 3,611.6 million. The item contract assets was also virtually unchanged at € 166.9 million and includes non-current claims against customers due to accelerated revenue recognition from the application of IFRS 15. Prepaid expenses decreased from € 341.2 million to € 311.7 million and mainly include the long-term portion of expenses relating to contract acquisition and contract fulfillment, as well as prepayments in connection with long-term purchasing agreements. Deferred tax assets of € 12.3 million were largely unchanged.
Current liabilities fell from € 1,299.7 million as of December 31, 2018 to € 1,248.1 million on September 30, 2019. Due to closing-date effects, current trade accounts payable decreased from € 557.7 million to € 414.4 million. Short-term bank liabilities rose from € 206.2 million to € 257.7 million as a result of reclassifications. Income tax liabilities decreased from € 187.9 million to € 101.7 million. The item current contract liabilities was largely unchanged at € 151.5 million and mainly includes payments received from customer contracts for which the performance has not yet been completely rendered. The increase in current other financial liabilities from € 124.1 million to € 250.1 million results mainly from the initial application of IFRS 16.
Non-current liabilities increased from € 2,352.6 million as of December 31, 2018 to € 3,252.9 million on September 30, 2019. Long-term bank liabilities fell strongly from € 1,733.0 million to € 1,482.2 million. Deferred tax liabilities decreased from € 389.8 million to € 375.6 million. The item non-current contract liabilities was virtually unchanged at € 31.8 million and mainly includes payments received from customer contracts for which the performance has not yet been completely rendered. The increase in non-current other financial liabilities from € 87.0 million to € 1,259.2 million resulted mainly from the above mentioned initial recognition of the acquired 5G spectrum as well as from initial application of IFRS 16.
The Group's equity capital rose from € 4,521.5 million as of December 31, 2018 to € 4,801.0 million on September 30, 2019. Due to the even stronger increase in the balance sheet total, however, the equity ratio declined from 55.3% to 51.6%.
On August 14, 2019, the Management Board of United Internet AG resolved to launch a new share buyback program. The decision was approved by the Supervisory Board. In the course of this share buyback program, up to 6,000,000 company shares (corresponding to approx. 2.93% of the capital stock of € 205,000,000) are to be bought back. The volume of the share buyback program amounts to € 192.0 million in total. The program was launched on August 16, 2019 and is to be completed by March 31, 2020 at the latest by buying shares back via the stock exchange. As of September 30, 2019, a total of 1,031,957 United Internet shares had been acquired within the share buyback program for a total of € 30.4 million. As a result, United Internet held a total of 5,734,947 treasury shares at the end of the reporting period (December 31, 2018: 4,702,990).
On September 5, 2019, United Internet subsidiary 1&1 Drillisch signed an agreement with the German Federal Ministry of Transport and Digital Infrastructure (BMVI) and the German Federal Ministry of Finance (BMF) regarding the construction of mobile communication sites in so-called "not-spots". The company is thus helping to close existing supply gaps and improve the provision of mobile communications in rural regions by building hundreds of base stations. In return, 1&1 Drillisch benefits from an agreement to pay for the acquired 5G spectrum in installments. As a result, the license fees which were originally to be paid to the German government in 2019 and 2024 can now be spread over the period up to 2030 in installments. The credit line of originally € 2.8 billion arranged to finance the highest bids of the spectrum auction, among other things, was thus no longer required and has already been returned. The agreement with the BMVI and BMF is in line with 1&1 Drillisch's long-term financing strategy, which is geared toward paying the major share of expenses for the construction of a modern 5G network from current revenue.
The Group's net bank liabilities (i.e. the balance of bank liabilities and cash and cash equivalents) fell strongly from € 1,881.1 million as of December 31, 2018 to € 1,690.5 million on September 30, 2019.
| Dec. 31, 2015 (IAS 18) |
Dec. 31, 2016 (IAS 18) |
Dec. 31, 2017 (IAS 18) |
Dec. 31, 2018 (IFRS 15) |
Sept. 30, 2019 (IFRS 16) |
|
|---|---|---|---|---|---|
| Total assets | 3,885.4 | 4,073.7 | 7,605.2 | 8,173.8 | 9,302.0 |
| Cash and cash equivalents | 84.3 | 101.7 | 238.5 | 58.1 | 49.5 |
| Shares in associated companies | 468.4 | 755.5(1) | 418.0(1) | 206.9(1) | 161.1(1) |
| Other financial assets | 449.0 | 287.7(2) | 333.7(2) | 348.1(2) | 341.5(2) |
| Property, plant and equipment | 665.2 | 655.0 | 747.4(3) | 818.0 | 1,098.9(3) |
| Intangible assets | 389.5 | 369.5 | 1,408.4(3) | 1,244.6 | 2,138.0(4) |
| Goodwill | 1,100.1 | 1,087.7 | 3,564.1(5) | 3,612.6(5) | 3,611.6 |
| Liabilities due to banks | 1,536.5 | 1,760.7(6) | 1,955.8(6) | 1,939.1 | 1,739.9 |
| Capital stock | 205.0 | 205.0 | 205.0 | 205.0 | 205.0 |
| Equity | 1,149.8 | 1,197.8 | 4,048.7(7) | 4,521.5(7) | 4,801.0 |
| Equity ratio | 29.6% | 29.4% | 53.2% | 55.3% | 51.6% |
(1) Increase due to investment in Tele Columbus (2016); decrease due to takeover and consolidation of ProfitBricks and Drillisch (2017); decrease due to Tele Columbus impairment charges (2018); decrease due to Tele Columbus impairment charges (2019)
(2) Decrease due to subsequent valuation of shares in listed companies (2016); increase due to subsequent valuation of shares in listed companies (2017); increase due to subsequent valuation of shares in listed companies (2018); decrease despite positive subsequent valuation of investments due to sale of Rocket Internet shares (2019)
(3) Increase due to Strato, ProfitBricks and Drillisch takeovers (2017); increase due to initial application of IFRS 16 (2019)
(4) Increase due to initial recognition of acquired 5G frequencies (2019)
(5) Increase due to Strato, ProfitBricks and Drillisch takeovers (2017); increase due to World4You takeover (2018)
(6) Increase due to Tele Columbus investment (2016); increase due to Strato takeover and increased stakes in Drillisch and Tele Columbus (2017) (7) Increase due to consolidation effects in connection with the investment of Warburg Pincus in the Business Applications segment and takeover of
Strato (2017); transitional effects from initial application of IFRS 15 (2018)
On October 24, 2019, 1&1 Drillisch received the draft arbitration report on the first price adjustment proceedings (Price Review 1), initiated with effect from September 2017, which rejected 1&1 Drillisch's application for the retroactive reduction of wholesale prices as of this date. The final expert opinion on Price Review 1 is expected to be issued in the course of November. The consequence of the draft arbitration report is that the financial figures for 2017 and – at least for the time being – the 2018 and 2019 results of 1&1 Drillisch will not be improved by price reductions. Moreover, a price increase will remain valid – at least for the time being – due to the expiry of the contractual adjustment mechanism (impact of approx. € 85 million in 2019).
1&1 Drillisch did not include any decrease in wholesale prices in its 2019 guidance. However, given the current environment of constantly falling market prices for mobile data usage, it did expect to be able to avert the price increase effective as of January 2019 following the expiry of an adjustment mechanism. According to the current draft of the expert opinion on Price Review 1 (regarding September 2017), this was not successful and will now be the subject of further price reviews.
Decisions in the three further price reviews initiated by 1&1 Drillisch (with retroactive effect as of July 2018 (Price Review 2), January 2019 (Price Review 3), and July 2019 (Price Review 4)) are expected to be announced in 2020. These are separate proceedings which will be decided on the basis of their respective effective dates and the prevailing market conditions.
Subject to possible changes in the final arbitration report, 1&1 Drillisch now expects the price increase to incur additional costs of around € 85 million in fiscal year 2019 – at least until a possible clarification is achieved in the course of further price reviews.
Against this backdrop, United Internet issued an ad-hoc disclosure on October 24, 2019, in which it downgraded its EBITDA guidance for the current fiscal year by approx. € 85 million and now expects EBITDA of around € 1,250 million.
In parallel to the price reviews, the justification of a price increase requested by the wholesale service provider in December 2018, with reference to the 2015 spectrum auction, is also being reviewed in separate arbitration proceedings. The requested price increase amounts to approx. € 12 million per year for a five-year service period from July 2015 to June 2020. A decision on this matter is also expected in 2020. 1&1 Drillisch does not consider the request justified.
Apart from the above, there were no other significant events subsequent to the reporting date of September 30, 2019 which had a material effect on the financial position and performance of the company or the Group nor affected its accounting and reporting.
The risk and opportunity policy of United Internet AG is based on the objective of maintaining and sustainably enhancing the company's value by utilizing opportunities while at the same time recognizing and managing risks from an early stage in their development. The risk and opportunity management system regulates the responsible handling of those uncertainties which are always involved with economic activity.
Management Board's overall assessment of the Group's risk and opportunity position
The assessment of the overall level of risk is based on a consolidated view of all significant risk fields and individual risks, also taking account of their interdependencies.
There were no recognizable risks which directly jeopardized the United Internet Group as a going concern during the reporting period nor at the time of preparing this Interim Statement, neither from individual risk positions nor from the overall risk situation.
The main challenge is the risk field "Litigation", whose risk assessment was raised in the first quarter of 2019. During the third quarter of 2019, the risk assessment of the risk field "Business Development and Innovations" was lowered and the risk assessment of the risk field "Tax Risks" was raised. The further expansion of its risk management system enables United Internet to limit these and other risks to a minimum, where sensible, by implementing specific measures.
Compared with reporting on risks and opportunities in the Annual Financial Statements 2018, the other risk assessments remained unchanged in the first nine months of 2019.
Forecast for the fiscal year 2019
On October 24, 2019, 1&1 Drillisch received the draft arbitration report on the first price adjustment proceedings (Price Review 1), initiated with effect from September 2017, which rejected 1&1 Drillisch's application for the retroactive reduction of wholesale prices as of this date. The final expert opinion on Price Review 1 is expected to be issued in the course of November. The consequence of the draft arbitration report is that the financial figures for 2017 and – at least for the time being – the 2018 and 2019 results of 1&1 Drillisch will not be improved by price reductions. Moreover, a price increase will remain valid – at least for the time being – due to the expiry of the contractual adjustment mechanism (impact of approx. € 85 million in 2019).
United Internet did not include any decrease in wholesale prices for the Consumer Access segment in its 2019 guidance. However, given the current environment of constantly falling market prices for mobile data usage, it did expect to be able to avert the price increase effective as of January 2019 following the expiry of an adjustment mechanism. According to the current draft of the expert opinion on Price Review 1 (regarding September 2017), this was not successful and will now be the subject of further price reviews. Decisions in the three further price reviews initiated by 1&1 Drillisch (with retroactive effect as of July 2018 (Price Review 2), January 2019 (Price Review 3) and July 2019 (Price Review 4)) are expected to be announced in 2020. These are separate proceedings which will be decided on the basis of their respective effective dates and the prevailing market conditions.
Subject to possible changes in the final arbitration report, 1&1 Drillisch now expects the price increase to incur additional costs of around € 85 million in fiscal year 2019 – at least until a possible clarification is achieved in the course of further price reviews. Against this backdrop, United Internet issued an ad-hoc disclosure on October 24, 2019, in which it downgraded its EBITDA guidance for the current fiscal year by approx. € 85 million and now expects EBITDA of around € 1,250 million. Sales adjusted for hardware are still expected to rise by approx. 3% and total sales including hardware by approx. 2%.
This Interim Statement contains forward-looking statements based on current expectations, assumptions, and projections of the Management Board of United Internet AG and currently available information. These forward-looking statements are subject to various risks and uncertainties and are based upon expectations, assumptions, and projections that may not prove to be accurate. United Internet AG does not guarantee that these forward-looking statements will prove to be accurate and does not accept any obligation, nor have the intention, to adjust or update the forward-looking statements contained in this interim report.
United Internet AG ("United Internet") is a service company operating in the telecommunication and information technology sector with registered offices at Elgendorfer Strasse 57, 56410 Montabaur, Germany. The company is registered at the district court of Montabaur under HRB 5762.
As was the case with the Consolidated Financial Statements as of December 31, 2018, the Interim Statement of United Internet AG as of September 30, 2019 was prepared in compliance with the International Financial Reporting Standards (IFRS) as applicable in the European Union (EU).
The Interim Statement does not constitute interim reporting as defined by IAS 34. With the exception of the mandatory new standards, the accounting and valuation principles applied in this Interim Statement comply with the methods applied in the previous year and should be read in conjunction with the Consolidated Financial Statements as of December 31, 2018.
The following standards are mandatory in the EU for the first time for fiscal years beginning on or after January 1, 2019:
| Standard | Mandatory for fiscal years begin ning on or after |
Endorsed by EU Commission |
|
|---|---|---|---|
| IFRS 3, IFRS 11, IAS 12, IAS 23 |
Annual Improvements 2015 - 2017 | Jan. 1, 2019 | Yes |
| IFRS 16 | Leases | Jan. 1, 2019 | Yes |
| IFRS 9 | Amendment: Prepayment Features with Negative Compensation | Jan. 1, 2019 | Yes |
| IAS 19 | Amendment: Plan Amendment, Curtailment or Settlement | Jan. 1, 2019 | Yes |
| IAS 28 | Clarification on IAS 28 Investments in Associates and Joint Ventures |
Jan. 1, 2019 | Yes |
| IFRIC 23 | Uncertainty over Income Tax Treatments | Jan. 1, 2019 | Yes |
This Interim Statement already includes effects from the application of the new standards. The most significant effects result from the initial application of IFRS 16.
According to IFRS 16, leases are no longer regarded as classic rental agreements but as financing transactions: the lessee acquires a right to use the leased asset and finances it via the lease installments. Consequently, the lessee must recognize an asset for the right to use the leased asset and a liability for the payments due for the leased asset in the balance sheet. In this way, every lease and rental relationship is stated in the balance sheet. Only lease or rental agreements with terms of up to twelve months and contracts with low-value assets are excluded.
On initial application of IFRS 16, United Internet opted to recognize the asset for the right of use granted at the value of the related lease liability and not to apply it retrospectively for each previous reporting period.
The preparation of this Interim Statement requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of the reporting period. However, the uncertainty associated with these assumptions and estimates could lead to results which require material adjustments to the carrying amount of the asset or liability affected in future periods.
In order to ensure the clear and transparent presentation of United Internet's business trend, the company's annual and interim financial statements include key performance indicators (KPIs) – in addition to the disclosures required by International Financial Reporting Standards (IFRS) – such as EBITDA, the EBITDA margin, EBIT, the EBIT margin and free cash flow. Information on the use, definition and calculation of these KPIs is provided in the Annual Report 2018 of United Internet AG starting on page 52.
Insofar as required for clear and transparent presentation, the KPIs used by United Internet are adjusted for special items. Such special items usually refer solely to those effects capable of restricting the validity of the key financial performance indicators with regard to the company's financial and earnings performance – due to their nature, frequency and/or magnitude. All special items are presented and explained for the purpose of reconciliation with the unadjusted financial figures in the relevant section of the financial statements.
This Interim Statement includes all subsidiaries and associated companies.
The following companies were renamed in the reporting period:
The following companies were merged in the reporting period:
The following company was founded in the reporting period:
Strato Customer Service GmbH, Berlin
Shares in the following associated company were sold during the reporting period:
Virtual Minds AG, Freiburg
Otherwise, the consolidated group remained largely unchanged from that stated in the Consolidated Financial Statements as at December 31, 2018.
This Interim Statement was not audited according to Sec. 317 HGB nor reviewed by an auditor.
as of September 30, 2019 in €k
| September 30, 2019 | December 31, 2018 | |
|---|---|---|
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 49,490 | 58,066 |
| Trade accounts receivable | 366,216 | 351,427 |
| Inventories | 69,842 | 89,617 |
| Contract assets | 498,853 | 426,992 |
| Prepaid expenses | 235,633 | 224,840 |
| Other financial assets | 52,444 | 72,774 |
| Income tax claims | 125,829 | 129,611 |
| Other non-financial assets | 7,616 | 11,330 |
| 1,405,923 | 1,364,657 | |
| Non-current assets | ||
| Shares in associated companies | 161,099 | 206,856 |
| Other financial assets | 341,521 | 348,046 |
| Property, plant and equipment | 1,098,882 | 818,010 |
| Intangible assets | 2,137,973 | 1,244,578 |
| Goodwill | 3,611,553 | 3,612,634 |
| Trade accounts receivable | 54,084 | 58,229 |
| Contract assets | 166,935 | 168,792 |
| Prepaid expenses | 311,729 | 341,220 |
| Deferred tax assets | 12,265 | 10,797 |
| 7,896,042 | 6,809,162 | |
| Total assets | 9,301,965 | 8,173,819 |
September 30, 2019 December 31, 2018
| LIABILITIES AND EQUITY | ||
|---|---|---|
| Liabilities | ||
| Current liabilities | ||
| Trade accounts payable | 414,353 | 557,730 |
| Liabilities due to banks | 257,735 | 206,175 |
| Income taxes liabilities | 101,652 | 187,938 |
| Contract liabilities | 151,466 | 154,290 |
| Other accrued liabilities | 15,211 | 24,468 |
| Other financial liabilities | 250,090 | 124,092 |
| Other non-financial liabilities | 57,555 | 45,047 |
| 1,248,062 | 1,299,740 | |
| Non-current liabilities | ||
| Liabilities due to banks | 1,482,210 | 1,732,968 |
| Deferred tax liabilities | 375,572 | 389,829 |
| Trade accounts payable | 6,395 | 9,024 |
| Contract liabilities | 31,801 | 33,838 |
| Other accrued liabilities | 97,639 | 99,972 |
| Other financial liabilities | 1,259,245 | 86,976 |
| 3,252,862 | 2,352,607 | |
| Total liabilities | 4,500,924 | 3,652,347 |
| Equity | ||
| Capital stock | 205,000 | 205,000 |
| Capital reserves | 2,693,789 | 2,703,141 |
| Accumulated profit | 1,778,743 | 1,496,154 |
| Treasury stock | -205,214 | -174,858 |
| Revaluation reserves | 112,441 | 83,023 |
| Currency translation adjustment | -13,450 | -14,314 |
| Equity attributable to shareholders of the parent company | 4,571,309 | 4,298,146 |
| Non-controlling interests | 229,732 | 223,326 |
| Total equity | 4,801,040 | 4,521,472 |
Total liabilities and equity 9,301,965 8,173,819
from January 1 to September 30, 2019 in €k
| 2019 January – Sept. |
2018 January – Sept. |
|
|---|---|---|
| Sales | 3,880,821 | 3,815,859 |
| Cost of sales | -2,567,623 | -2,521,886 |
| Gross profit | 1,313,199 | 1,293,974 |
| Selling expenses | -543,858 | -510,584 |
| General and administrative expenses | -172,423 | -163,112 |
| Other operating expenses / income | 57,932 | 28,984 |
| Impairment of receivables and contract assets | -67,261 | -66,414 |
| Operating result | 587,589 | 582,847 |
| Financial result | -24,585 | -18,587 |
| Result from associated companies | -43,764 | -232,430 |
| Pre-tax result | 519,240 | 331,829 |
| Income taxes | -161,601 | -176,648 |
| Net income | 357,639 | 155,181 |
| Attributable to | ||
| non-controlling interests | 87,460 | 98,099 |
| shareholders of United Internet AG | 270,179 | 57,082 |
| 2019 January – Sept. |
2018 January – Sept. |
|
|---|---|---|
| Result per share of shareholders of United Internet AG (in €) | ||
| - basic | 1.35 | 0.29 |
| - diluted | 1.35 | 0.28 |
| Weighted average shares (in million units) | ||
| - basic | 200.18 | 200.12 |
| - diluted | 200.18 | 200.34 |
| Statement of comprehensive income | ||
| Net income | 357,639 | 155,181 |
| Items that may be reclassified subsequently to profit or loss | ||
| Currency translation adjustment - unrealized | 1,290 | 460 |
| Categories that are not reclassified subsequently to profit or loss | ||
| Market value changes of available-for-sale financial instruments before taxes |
51,558 | 84,609 |
| Tax effect | 0 | -72 |
| Share in other comprehensive income of associated companies | 285 | 150 |
| Other comprehensive income | 53,133 | 85,147 |
| Total comprehensive income | 410,771 | 240,328 |
| Attributable to | ||
| non-controlling interests | 87,885 | 99,683 |
| shareholders of United Internet AG | 322,886 | 140,646 |
from January 1 to September 30, 2019 in €k
| 2019 January – Sept. |
2018 January – Sept. |
|
|---|---|---|
| Cash flow from operating activities | ||
| Net income | 357,639 | 155,181 |
| Adjustments to reconcile net income to net cash provided by operating activities |
||
| Depreciation and amortization of intangible assets and property, plant and equipment |
218,709 | 142,167 |
| Amortization of intangible assets resulting from company acquisitions | 137,704 | 149,591 |
| Personnel expenses from employee stock option plans | 10,109 | 6,445 |
| Result from equity accounted investments | 43,764 | 232,430 |
| Income from the sale of associated companies | -21,512 | 0 |
| Change in deferred taxes | -15,725 | -32,673 |
| Other non-cash positions | -4,917 | 6,176 |
| Operative cash flow | 725,771 | 659,317 |
| Change in assets and liabilities | ||
| Change in receivables and other assets | 9,099 | 23,295 |
| Change in inventories | 19,775 | -20,334 |
| Change in contract assets | -70,004 | -182,932 |
| Change in income tax assets | 3,782 | -5,770 |
| Change in deferred expenses | 8,675 | -180,715 |
| Change in trade accounts payable | -141,920 | 62,051 |
| Change in other accrued liabilities | -11,590 | -7,567 |
| Change in liabilities income taxes | -30,130 | -6,524 |
| Change in other liabilities | 23,504 | -6,448 |
| Change in deferred income | -4,831 | -7,652 |
| Change in assets and liabilities, total | -193,638 | -332,597 |
| Cash flow from operating activities (before capital gains tax refund) | 532,132 | 326,720 |
| Capital gains tax payment | -56,156 | 0 |
| Cash flow from operating activities | 475,976 | 326,720 |
| 2019 January – Sept. |
2018 January – Sept. |
||
|---|---|---|---|
| Cash flow from investing activities | |||
| Capital expenditure for intangible assets and property, plant and equipment | -165,916 | -184,739 | |
| Payments from disposals of intangible assets and property, plant and equipment |
5,200 | 5,029 | |
| Payments for company acquisitions less cash received | 0 | -72,045 | |
| Purchase of shares in associated companies | -5,037 | -7,910 | |
| Payments from disposal of subsidiaries | 35,602 | 0 | |
| Payments in connection with corporate transactions | 0 | -8,300 | |
| Payments from loans granted | -2,500 | -944 | |
| Payments from disposal of financial assets | 62,500 | 0 | |
| Refunding from other financial assets | 525 | 0 | |
| Cash flow from investing activities | -69,626 | -268,910 | |
| Cash flow from financing activities | |||
| Acquisition of treasury shares | -30,356 | 0 | |
| Repayment / taking out of loans | -199,199 | 21,700 | |
| Redemption of finance lease liabilities | -75,044 | -11,872 | |
| Dividend payments | -10,015 | -170,006 | |
| Profit distributions to non-controlling interests | -2,557 | -75,360 | |
| Payment to minorities | -98,384 | 0 | |
| Cash flow from financing activities | -415,554 | -235,538 | |
| Net decrease in cash and cash equivalents | -9,205 | -177,728 | |
| Cash and cash equivalents at beginning of fiscal year | 58,066 | 238,522 | |
| Currency translation adjustments of cash and cash equivalents | 629 | 492 | |
| Cash and cash equivalents at end of reporting period | 49,490 | 61,286 |
in 2018 and 2019 in €k
| Capital stock | Capital reserves |
Accumulated profit |
Treasury stock | |||
|---|---|---|---|---|---|---|
| Share | €k | €k | €k | Share | €k | |
| Balance as of January 1, 2018 | 205,000,000 | 205,000 | 2,709,203 | 1,491,184 | 5,093,289 | -189,384 |
| Net income | 57,082 | |||||
| Other comprehensive income | ||||||
| Total | 57,082 | |||||
| Purchase of treasury shares | -14,542 | -391,087 | 14,542 | |||
| Employee stock ownership program | 4,691 | |||||
| Dividend payments | -170,006 | |||||
| Profit distributions | ||||||
| Other transactions | 10,588 | |||||
| Balance as of September 30, 2018 | 205,000,000 | 205,000 | 2,713,894 | 1,374,306 | 4,702,202 | -174,842 |
| Balance as of January 1, 2019 | 205,000,000 | 205,000 | 2,703,141 | 1,496,154 | 4,702,990 | -174,858 |
| Net income | 270,179 | |||||
| Other comprehensive income | ||||||
| Total comprehensive income | 270,179 | |||||
| Purchase of treasury shares | 1,031,957 | -30,356 | ||||
| Disposal of financial assets at fair value through other comprehensive income |
22,425 | |||||
| Employee stock ownership program | 7,530 | |||||
| Dividend payments | -10,015 | |||||
| Profit distributions | ||||||
| Transactions with shareholders | -16,882 | |||||
| Balance as of September 30, 2019 | 205,000,000 | 205,000 | 2,693,789 | 1,778,743 | 5,734,947 | -205,214 |
Non-
Currency
| Total equity |
controlling interests |
to shareholders of United Internet AG |
translation adjustments |
Revaluation reserves |
|---|---|---|---|---|
| €k | €k | €k | €k | €k |
| 4,486,485 | 186,393 | 4,300,092 | -13,120 | 97,209 |
| 155,181 | 98,099 | 57,082 | ||
| 85,148 | 1,584 | 83,564 | 631 | 82,933 |
| 240,329 | 99,683 | 140,647 | 631 | 82,933 |
| 0 | ||||
| 6,445 | 1,754 | 4,691 | ||
| -170,006 | -170,006 | |||
| -75,360 | -75,360 | 0 | ||
| 12,977 | 2,353 | 10,624 | 36 | |
| 4,500,870 | 214,823 | 4,286,048 | -12,489 | 180,178 |
| 4,521,472 | 223,326 | 4,298,146 | -14,314 | 83,023 |
| 357,639 | 87,460 | 270,179 | ||
| 53,133 | 426 | 52,707 | 864 | 51,843 |
| 410,771 | 87,885 | 322,886 | 864 | 51,843 |
| -30,356 | -30,356 | |||
| 0 | -22,425 | |||
| 2,579 | 7,530 | |||
| -10,015 | -10,015 | |||
| -2,557 | 0 | |||
| -98,384 | -81,502 | -16,882 | ||
| 4,801,040 | 229,732 | 4,571,309 | -13,450 | 112,441 |
Equity attributable
from January 1 to September 30, 2019 in €k
| Consumer Access | Business Access | |
|---|---|---|
| segment | segment | |
| January - September 2019 | €k | €k |
| Segment revenues | 2,734,940 | 352,484 |
| - thereof domestic | 2,734,940 | 352,484 |
| - thereof non-domestic | 0 | 0 |
| Segment revenue from transactions with other segments | 1,246 | 42,001 |
| Segment revenue from contracts with customers | 2,733,694 | 310,483 |
| - thereof domestic | 2,733,694 | 310,483 |
| - thereof non-domestic | 0 | 0 |
| EBITDA | 508,622 | 105,028 |
| EBIT | 396,613 | -42,997 |
| Financial result | ||
| Result from at-equity companies | ||
| EBT | ||
| Tax expense | ||
| Net income | ||
| Investments in intangible assets, property, plant and equipment | ||
| (without goodwill) | 1,064,225 | 137,957 |
| Amortization/depreciation | 112,009 | 148,025 |
| - thereof intangible assets and property, plant | ||
| and equipment - thereof assets capitalized during company |
18,729 | 133,226 |
| acquisitions | 93,280 | 14,799 |
| Number of employees | 3,082 | 1,176 |
| - thereof domestic | 3,082 | 1,176 |
| - thereof non-domestic | 0 | 0 |
| January - September 2018 | ||
| Segment revenues | 2,698,887 | 334,616 |
| - thereof domestic | 2,698,887 | 334,616 |
| - thereof non-domestic | 0 | 0 |
| Segment revenue from transactions with other segments | 1,493 | 37,760 |
| Segment revenue from contracts with customers | 2,697,394 | 296,856 |
| - thereof domestic | 2,697,394 | 296,856 |
| - thereof non-domestic | 0 | 0 |
| EBITDA | 521,797 | 43,622 |
| EBIT | 401,064 | -52,462 |
| Financial result | ||
| Result from at-equity companies | ||
| EBT | ||
| Tax expense | ||
| Net income | ||
| Investments in intangible assets, property, plant and equipment (without goodwill) |
7,855 | 122,320 |
| Amortization/depreciation | 120,733 | 96,084 |
| - thereof intangible assets and property, plant | ||
| and equipment | 27,453 | 70,368 |
| - thereof assets capitalized during company | ||
| acquisitions | 93,280 | 25,716 |
| Number of employees | 3,130 | 1,112 |
| - thereof domestic | 3,130 | 1,112 |
| - thereof non-domestic | 0 | 0 |
| Business Applica Corporate |
Consumer Applica |
|---|---|
| tions segment tions segment segment Reconciliation €k €k €k |
|
| 184,466 665,710 830 |
|
| 178,905 328,913 830 |
|
| 6,019 341,691 0 |
|
| 11,101 3,261 0 |
|
| 173,365 662,449 830 |
|
| 167,944 325,652 830 |
|
| 5,421 316,763 0 |
|
| 70,554 236,792 23,007 |
|
| 58,244 156,843 18,886 |
|
| 30,161 50,268 16,296 |
|
| 12,310 79,949 4,121 |
|
| 12,310 50,324 4,121 |
|
| 0 29,625 0 |
|
| 3,815,859 | -57,559 | 1,387 | 634,651 | 203,877 |
|---|---|---|---|---|
| 3,516,625 | -33,064 | 1,387 | 317,156 | 197,643 |
| 299,234 | -24,495 | 0 | 317,495 | 6,234 |
| 57,559 | 0 | 3,103 | 15,203 | |
| 3,815,859 | 1,387 | 631,548 | 188,674 | |
| 3,516,625 | 1,387 | 337,768 | 183,221 | |
| 299,234 | 0 | 293,780 | 5,453 | |
| 874,605 | -4,611 | 233,919 | 79,878 | |
| 582,847 | -4,972 | 168,370 | 70,847 | |
| -18,587 | ||||
| -232,430 | ||||
| 331,829 | ||||
| -176,648 | ||||
| 155,181 | ||||
| 187,961 | – | 7,325 | 42,657 | 7,804 |
| 291,758 | – | 361 | 65,549 | 9,031 |
| 142,167 | – | 361 | 34,982 | 9,003 |
| 149,591 | – | 0 | 30,567 | 28 |
| 9,032 | – | 531 | 3,331 | 928 |
| 7,526 | – | 531 | 1,829 | 924 |
| 1,506 | – | 0 | 1,502 | 4 |
| March 28, 2019 | Annual financial statements for fiscal year 2018 Press and analyst conference |
|---|---|
| May 15, 2019 | Interim Statement for the first quarter 2019 |
| May 23, 2019 | Annual Shareholders' Meeting, Alte Oper, Frankfurt/Main |
| August 15, 2019 | 6-Month Report 2019 Press and analyst conference |
| November 12, 2019 | Interim Statement for the first 9 months 2019 |
Publisher and copyright © 2019 United Internet AG Elgendorfer Straße 57 56410 Montabaur Germany www.united-internet.com
Investor Relations Phone: +49(0) 2602 96-1100 Fax: +49(0) 2602 96-1013 E-mail: [email protected]
November 2019 Registry court: Montabaur HRB 5762
Due to calculation processes, tables and references may produce rounding differences from the mathematically exact values (monetary units, percentage statements, etc.).
This Interim Statement is available in German and English. Both versions can also be downloaded from www.united-internet.de. In all cases of doubt, the German version shall prevail.
This Interim Statement contains certain forward-looking statements which reflect the current views of United Internet AG's management with regard to future events. These forward looking statements are based on our currently valid plans, estimates and expectations. The forward-looking statements made in this Interim Statement are only based on those facts valid at the time when the statements were made. Such statements are subject to certain risks and uncertainties, as well as other factors which United Internet often cannot influence but which might cause our actual results to be materially different from any future results expressed or implied by these statements. Such risks, uncertainties and other factors are described in detail in the Risk Report section of the Annual Reports of United Internet AG. United Internet does not intend to revise or update any forward-looking statements set out in this Interim Statement.
Elgendorfer Straße 57 56410 Montabaur Germany
www.united-internet.com
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