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United Internet AG

Quarterly Report May 9, 2007

449_10-q_2007-05-09_9296549e-6036-445d-8a0c-691c3555f824.pdf

Quarterly Report

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3-Month-Report 2007

Dear shareholders, employees and friends of United Internet!

United Internet AG can look back on a successful start to its fiscal year 2007. Compared with the same period last year, we once again succeeded in achieving strong growth in our sales and earnings figures: consolidated sales of United Internet AG grew by 29.4 % from C 260.4 million (comparable prior-year figure after sale and deconsolidation of twenty4help) to C 336.9 million. Pre-tax earnings (EBT) rose by 27.8 % from C 39.2 million (comparable prior-year figure) to C 50.1 million. Despite increased costs for the penetration of new business fields, the EBT margin amounted to 14.9 %.

This result reflects the positive development of our two remaining business segments, "Products" and "Online Marketing":

In the Product sector, with our brands GMX, WEB.DE, 1&1, InterNetX and Fasthosts, sales grew by 30.7 % over the previous year to C 287.5 million and EBT by 26.6 % to C 44.7 million. Compared with March 31, 2006, the number of paying customer contracts increased by 1.33 million to 6.63 million. There was strong growth in all product lines: in Webhosting we made particularly strong progress in our foreign markets and raised the number of contracts by over 660,000 to 1.37 million. Including Germany, we held a total of some 3.00 million webhosting contracts as of March 31, 2007 — an increase of 750,000 compared with March 31, 2006. In the field of Information Management, we added 110,000 new contracts to reach 1.12 million and 520,000 DSL contracts to reach 2.36 million. In addition to the acquisition of new customers and the launch of innovative products, such as 4DSL, the main focus of our DSL business was placed on raising customer loyalty and expanding business with our client base. Compared with March 31, 2006, we were able to raise the number of our telephony customers by 670,000 to 1.37 million. At the same time, the number of telephone minutes completed per month grew from 480 million to 780 million. The number of our own DSL connection customers also improved strongly by 740,000 to 1.97 million. This means that 83.5% (prior year: 66.8%) of our DSL access customers receive both their internet

access and DSL connection from us and 58.1 % (prior year: 38.0 %) of our DSL access customers also use our internet telephony product in addition to pure access.

In the Online Marketing segment, our brands AdLINK, affilinet and Sedo are benefiting from the positive development of the online advertising market. Compared with the same period last year, sales in this segment grew by 21.8 % to C 49.2 million. EBT improved by 16.7 % to C 5.6 million.

Our former third segment, Outsourcing, is no longer separately disclosed since the sale of the twenty4help group to Teleperformance S.A. The consolidated figures for the previous year have been adjusted accordingly and now only comprise continued operations. The remaining Outsourcing brand InterNetX was integrated into the Product segment.

We are also optimistic for the remaining months of the current fiscal year: 4DSL is enjoying strong market demand, our international expansion in Webhosting is making good progress, all lights are set to green in online advertising amid continued market growth and the roll-out of new business fields in Germany and abroad is in full swing.

Montabaur, May 9, 2007

Ralph Dommermuth CEO

Selected Key Figures acc. to IFRS

(continued operations)

Q1 2007 Q1 2006
Sales t million 336.9 260.4
Earnings before interest, taxes, depreciation and amortization (EBITDA) t million 63.4 50.8
Earnings before taxes (EBT) t million 50.1 39.2
Employees number 3,430 2,879
Share price as of end of March (XETRA) t 14.55 13.27
Earnings per share t 0.13 0.09
Quarterly development Q2/2006
t million
Q3/2006
t million
Q4/2006
t million
Q1/2007
t million
Q1/2006
t million
Sales 288.7 295.1 329.9 336.9 260.4
EBITDA 60.3 66.1 44.0 63.4 50.8
EBT 48.1 53.1 30.8 50.1 39.2

Shareholdings (units)

March 31,2007
Management board
Ralph Dommermuth 88,000,000
Norbert Lang 576,128
Supervisory board
Kurt Dobitsch (Chairman) -
Bernhard Dorn -
Michael Scheeren 800,000

Development of the Group

Strong growth in sales and earnings

In the first quarter of 2007, consolidated sales revenues of the United Internet Group grew by 29.4 % to C 336.9 million (comparable prior-year figure after sale and deconsolidation of twenty4help: C 260.4 million). Earnings before interest, taxes, depreciation and amortization (EBITDA) grew by 24.8 % to C 63.4 million (comparable prior-year figure: C 50.8 million), while earnings before taxes (EBT) were up by 27.8 % to C 50.1 million (comparable prior-year figure: C 39.2 million). Despite increased costs for the penetration of new business fields, we therefore achieved an EBT margin of 14.9 %.

Successful international expansion

In comparison with March 31, 2006 we succeeded in adding 520,000 new DSL customer contracts, bringing the total to approximately 2.36 million as of March 31, 2007 (prior year: 1.84 million). In addition to the acquisition of new customers and the launch of our allinclusive package 4DSL, the main focus of our DSL business was placed on raising customer loyalty and expanding business with our client base. Compared with March 31, 2006, we were able to raise the number of our telephony customers by 670,000 to 1.37 million. At the same time, the number of telephone minutes completed per month grew from 480 million to 780 million. The number of our own DSL connection customers also improved strongly by 740,000 to 1.97 million. This means that 83.5 % (prior year: 66.8 %) of our DSL access customers receive both their internet access and DSL connection from us and 58.1 % (prior year: 38.0 %) also use our internet telephony product.

Successful international expansion

International expansion in our core markets continued to make strong progress: in the period under review, sales outside Germany accounted for C 58.1 million of total consolidated revenues (prior year: C 37.7 million). In our Product business we added 660,000 new hosting contracts abroad, compared with the same period last year. Following the successful establishment of our business in the UK, the USA, France and Austria, we will launch our hosting products in Spain in the course of the current year.

Sale of twenty4help

On March 13, 2007 we completed the sale of the United Internet Group subsidiary twenty4help Knowledge Service AG to Teleperformance. The Group's Outsourcing segment, of which twenty4help accounted for around 90%, will no longer be separately disclosed in future. The remaining Outsourcing brand InterNetX was integrated into the Product segment. The sale resulted in extraordinary income of around C 65.8 million, which is disclosed in the quarterly report as Discontinued Operations in accordance with IFRS 5.

In accordance with IFRS 5, the prior-year figures of the income statement have to be adjusted as follows: Revenues and expenses of the discontinued operations are no longer included in the respective items and the segment earnings after tax figure is disclosed in a separate line of the income statement. The prior-year figures of the balance sheet as at December 31, 2006 and of the cash flow statement are shown unadjusted.

Revenues of the sold business segment amounted to C 23.2 million in the first quarter of 2007 and C 25.2 million in the same period last year. Earnings after tax of the discontinued operations amounted to C 2.5 million (prior year: C 1.8 million). In accordance with IFRS 5, scheduled depreciation and amortization of intangible assets and property, plant and equipment was terminated in the first quarter of 2007.

Cash flow / bank balances / securities

Depreciation of tangible and intangible assets grew from C 12.8 million last year to C 13.0 million in the period under review. Our investments in tangible and intangible assets amounted to C 9.3 million (prior year: C 9.0 million). Cash flow from operating activities grew to C 47.6 million (prior year: C 38.7 million). As of March 31, 2007 the aggregate total of bank balances and bank liabilities amounted to C 1.0 million, compared with C -86 million as of December 31, 2006. In addition, we held around 13 million treasury shares as of March 31, 2007.

Employees

Following the sale of twenty4help, United Internet employed a total of 3,430 people at the end of March 2007 (December 31, 2006: 6,347), of which 734 (December 31, 2006: 2,364) were employed outside Germany.

IFRS accounting

The accounting and valuation standards used in this report correspond to the standards applied in the annual financial statements for the fiscal year 2006.

Parent company results

Pre-tax earnings of the parent company, United Internet AG, amounted to C -0.9 million (prior-year: C -0.8 million). As of March 31, 2007 the company had an equity ratio of 81.5%.

Share

During the period under review, the United Internet share grew by 16.1% – from C 12.53 as of December 31, 2006 to C 14.55 as of March 31, 2007. On May 23, 2006, the Management Board of United Internet AG resolved to buy back up to 8,000,000 (adjusted for the share split) of the company's shares (around 3.21% of capital

stock). After fully exhausting this resolution, the Management Board of United Internet AG resolved on August 15, 2006 to buy back up to 5,000,000 further shares in the company (representing approx. 2.00 % of capital stock) via the stock exchange. As of March 31, 2007 a total of 12,990,000 treasury shares had been bought back at an average price of C 11.16 and a total of around C 145.0 million. The Management Board and Supervisory Board will propose a dividend of 18 cents per share for the fiscal year 2006 (prior year: 6.25 cents adjusted for the share split) at the Annual Shareholders' Meeting to be held on May 30, 2007.

Outlook

In light of the positive development of the first quarter of 2007, we are also optimistic for the year as a whole. There is strong global demand for our products, all our target markets are displaying sustained growth and the launch of new product fields, such as MailXchange or "unddu.de", offers a wide variety of growth opportunities.

Product segment

GMX targets the mass market with e-mail and messaging products. 8 million active users per month make GMX one of Germany's leading portals. In addition to its free e-mail accounts, GMX also offers fee-based, value-added services.

With over 11 million active internet users per month, WEB.DE is the No. 2 on the German portal market. WEB.DE also offers free basic services as well as fee-based products and services, including the WEB. DE Club.

1&1 is the right address for discerning private users, SoHos and SMEs looking for Information Management, Webhosting and Access solutions. 1&1 is No. 2 in Germany's DSL sector and the world's leading hosting company, active in 5 countries.

InterNetX and Fasthosts represent the reselling business of the United Internet Group. The brands market our webhosting products as white-label packages to other ISPs, which in turn market them under their own name and for their own account. InterNetX operates in Germany and Fasthosts in the UK.

Online Marketing segment

In our display marketing segment, AdLINK Media stands for branding, image and response. This business is based on an advertising network of top-quality websites with 7.6 billion page impressions per month.

Affiliate marketing is one of the strongest growth drivers in online marketing. This market is served by our brand affilinet. The affiliate network currently comprises 390,000 active publisher sites and over 1,200 affiliate programs.

The Sedo brand stands for our domain marketing business field. There are currently 6.9 million domains for sale on our domain trading platform www.sedo.com. Sedo markets some of these domains to advertisers.

Product segment

United Internet offers a wide range of innovative internet products in its Product segment. Our customers generally sign subscription contracts with us based on fixed monthly fees.

We differentiate between 3 product lines:

  • Information Management with e-mail solutions, messaging, address management, Pocket Web and 0700 numbers
  • Webhosting with domains, home pages, dedicated and virtual servers and e-shops
  • Internet Access with DSL connections (including telephony and video-on-demand) and narrowband connections.

These products are marketed directly under our brand names GMX, WEB.DE and 1&1, as well as by InterNetX and Fasthosts in our reseller business. This enables us to cover most mass market needs while differentiating between varying target groups. GMX and WEB.DE target mainly consumers, while 1&1 focuses on ambitious private users, small offices and companies. And our reseller brands InterNetX and Fasthosts market our webhosting products as white-label packages to other ISPs, who in turn market them under their own name and for their own account.

As of March 31, 2007 we had a total of 6.63 million feebased customer contracts (March 31, 2006: 5.30 million). Of this total, the Information Management product line accounted for 1.12 million contracts, our Webhosting business for 3.00 million and Internet Access for 2.51 million contracts, of which 2.36 million were DSL accounts.

Year-on-year comparison of customer contracts by product line

Customer contracts
(million)
31.03.2006 31.03.2007 Difference
Information
Management 1.01 1.12 + 0.11
Webhosting 2.25 3.00 + 0.75
thereof abroad 0.71 1.37 + 0.66
Internet Access 2.04 2.51 + 0.47
thereof DSL 1.84 2.36 + 0.52
Total 5.30 6.63 + 1.33

Quarter-on-quarter comparison of customer contracts by product line

Customer contracts
(million)
31.12.2006 31.03.2007 Difference
Information
Management 1.09 1.12 + 0.03
Webhosting 2.86 3.00 + 0.14
thereof abroad 1.26 1.37 + 0.11
Internet Access 2.44 2.51 + 0.07
thereof DSL 2.27 2.36 + 0.09
Total 6.39 6.63 + 0.24

Information Management: excluding test contracts

Internet Access and DSL: excluding provider-independent VoIP flat rate contracts

Our brands not only generate revenues from subscriptions; an increasing proportion of income also results from our online advertising and e-commerce activities. United Internet Media, the marketing company for our GMX, WEB.DE and 1&1 portals and our shopping portal SmartShopping.de, provides advertisers and agencies in Germany with a reach of over 50 % of all German internet users, as well as high-quality, targeted marketing and innovative advertising instruments. Our family of brands provides unique market coverage in Germany.

Compared with the same period last year, total Product segment sales grew by 30.7 % to C 287.5 million, while EBT was up 26.6 % to C 44.7 million.

In our Product segment we are confident that the company's international expansion strategy will continue to make good progress and that we can maintain our dynamic growth. Thanks to product innovations such as 4DSL and our attractive price/performance ratio, we also see good opportunities for DSL connections and DSL telephony. In total, we expect dynamic growth in all product lines. Owing to the tremendous reach of its portals, its innovative advertising technology and the expected market growth, our portal marketing company United Internet Media can also look forward to continued success in fiscal 2007.

GMX

GMX targets private users with its Information Management products. 7.8 million internet users and 180 million visits per month make GMX one of Germany's leading portals. In addition to its free

e-mail accounts, GMX also offers fee-based valueadded services.

In the period under review GMX focused on the development of a multi-messenger as well as a new webmailer. The new webmailer relies on AJAX technology, which enables the creation of dynamic pages and the continual background refreshing of content.

WEB.DE

With 11.1 million internet users per month, WEB.DE is No. 2 in Germany's portal sector. WEB.DE also offers free basic services and fee-based products, including the WEB.DE Club.

In the period under review, WEB.DE expanded its entertainment section with the addition of ringtones, a ticket shop and music videos. SmartFax is a new solution which allows Club customers to fax files from all major applications. The company also focused on the development of its social and personal network "unddu.de".

1&1

1&1 is the right address for discerning private users and small offices requiring Information Management, Webhosting and Access solutions. 1&1 is No. 2 in Germany's DSL sector and the world's leading hosting company, active in 5 countries.

During the period under review, the main focus in the German DSL segment was the launch of 4DSL, while in the Webhosting segment the first open source software-as-a-service for business customers, MailXchange, was presented. Outside Germany, the main activity was the launch of our new data center in the USA. In addition, preparations were made for the product rollout of 1&1 in Spain.

Quarterly development in C million

Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q1 2006
Sales 244.5 257.4 279.2 287.5 219.9
EBITDA 56.7 64.3 32.1 57.9 46.9
EBT 44.2 51.4 19.4 44.7 35.3

InterNetX

United Internet's reselling activities in Germany are all conducted through InterNetX. The company's hosting products are marketed by InterNetX to other ISPs and multimedia agencies (resellers), who in turn market them under their own name and for their own account.

In the period under review, InterNetX focused on expanding its reseller network. InterNetX currently serves 16,700 resellers (prior year: 14,900) for which it hosts over 1.8 million domains and over 650 servers.

Fasthosts

Fasthosts is our reseller brand in the UK. Similar to InterNetX, Fasthosts markets hosting products to ISPs and multimedia agencies (resellers), who market them under their own name. Fasthosts is also active in the direct marketing of products to consumers and companies.

Fasthosts also focused on the expansion of its reseller network in the first quarter of 2007. In addition, the company made preparations for its product launch in the USA. In the United States Fasthosts will focus exclusively on the reseller business.

Financial figures Product segment

Online Marketing segment

Our Online Marketing segment offers advertisers a variety of marketing and sales solutions: Display Marketing via AdLINK Media, Affiliate Marketing via affilinet and Domain Marketing via Sedo. Compared with the same period last year, the segment once again achieved strong growth: sales grew by 21.8 %, from C 40.4 million to C 49.2 million, while EBT improved by 16.7%, from C 4.8 million to C 5.6 million. Considering the sustained encouraging trend in this sector and the overall growth of the online advertising market, we expect a positive development in the remaining months of 2007.

AdLINK Media

AdLINK Media is one of Europe's largest independent marketers of online advertising. The company's business model is based on an online advertising network of high-reach websites, which it markets to advertisers.

In the period under review, the company focused mainly on the expansion of its advertising network. As a result, the number of page impressions generated by the network grew to 7.6 billion per month (prior year: 6.4 billion).

Sedo

Sedo operates the global domain trading platform "sedo.com", which currently trades 6.9 million domains. In its "domain parking" business, Sedo markets some of these domains to advertisers on behalf of the domain owners.

In the period under review, Sedo focused in particular on driving its international expansion – especially in

Quarterly development in C million

Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q1 2006
Sales 44.1 37.6 50.5 49.2 40.4
EBITDA 5.6 4.1 7.3 6.5 5.3
EBT 5.0 4.0 6.0 5.6 4.8

the USA and the UK. The number of marketable domains grew to over 2.9 million (prior year: 1.25 million).

affilinet

affilinet brings together suppliers of affiliate programs and website operators. affilinet profits from the contacts and sales initiated via the network on a purely performance-oriented basis.

In the period under review, affilinet focused on gaining new program suppliers and expanding its network: the number of affiliate programs grew to over 1,230 (prior year: 1,180) and the number of active websites reached over 390,000 (prior year: 360,000).

Financial figures Online Marketing segment

Consolidated Income Statement

from Januar 1 to March 31, 2007 in Ek

2007 2006
January - March January - March
Sales 336,885 100.0 % 260,408 100.0 %
Cost of sales -200,712 -59.6 % -148,382 -57.0 %
Gross profit 136,173 40.4 % 112,026 43.0 %
Selling expenses -61,361 -18.2 % -54,018 -20.7 %
General administrative expenses -18,771 -5.6 % -15,017 -5.8 %
Other operating income/expenses 52 0.0 % 1,413 0.5 %
Amortization of intangible assets resulting from
company acquisitions -5,624 -1.7 % -5,101 -2.0 %
Operating result 50,469 15.0 % 39,303 15.1 %
Interest and similar expenses -808 -0.2 % -310 -0.1 %
Result from equity investments 467 0.1 % 224 0.1 %
Pre-tax result 50,128 14.9 % 39,217 15.1 %
Income taxes -19,184 -5.7 % -15,578 -6.0 %
Net income before minority interests 30,944 9.2 % 23,639 9.1 %
Result from discontinued operations 68,248 20.3 % 1,794 0.6 %
Net income (after discontinued operations) 99,192 29.5 % 25,433 9.7 %
Minority interests -623 -0.2 % -1,348 -0.5 %
Net income attributable to shareholders
of United Internet AG 98,569 29.3 % 24,085 9.2 %
Result per share (in C)
- basic 0.41 0.10
- diluted 0.41 0.10
thereof result per share (in C)
from continued operations
- basic 0.13 0.09
- diluted 0.13 0.09
thereof result per share (in C)
from discontinued operations
- basic 0.28 0.01
- diluted 0.28 0.01
Weighted average shares
(in million units)
- basic 239.99 249.10
- diluted 241.59 251.67

Consolidated Balance Sheet

as of March 31, 2007 in Ek

ASSETS March 31, 2007 December 31, 2006
Current assets
Cash and cash equivalents 34,540 4.3 % 32,723 4.0 %
Accounts receivable and other assets 89,058 11.2 % 120,920 14.8 %
Inventories 16,066 2.0 % 16,797 2.0 %
Prepaid expenses 17,160 2.2 % 19,522 2.4 %
Other assets 24,728 3.1 % 17,705 2.2 %
181,552 22.8 % 207,667 25.3 %
Non-current assets
Equity investments 23,973 3.0 % 11,006 1.3 %
Other financial assets 3,673 0.5 % 3,695 0.4 %
Property, plant and equipment 63,209 8.0 % 66,296 8.1 %
Intangible assets 138,484 17.4 % 147,370 18.0 %
Goodwill 376,004 47.3 % 373,687 45.6 %
Deferred tax asset 7,725 1.0 % 9,811 1.2 %
613,068 77.2 % 611,865 74.7 %
Total assets 794,620 100.0 % 819,532 100.0 %
LIABILITIES AND EQUITY
Liabilities
Current liabilities
Accounts payable, trade 172,814 21.7 % 163,330 19.9 %
Liabilities due to banks 31,031 3.9 % 16,140 2.0 %
Advance payments received 5,662 0.7 % 5,440 0.7 %
Accrued taxes 35,586 4.5 % 25,743 3.1 %
Deferred revenue 101,153 12.7 % 92,520 11.3 %
Other accrued liabilities 1,699 0.2 % 1,699 0.2 %
Other liabilities 51,378 6.5 % 50,510 6.2 %
399,323 50.2 % 355,382 43.4 %
Non-current liabilities
Convertible bonds 823 0.1 % 876 0.1 %
Liabilities to banks 2,511 0.3 % 102,579 12.5 %
Deferred tax liability 21,747 2.7 % 21,769 2.7 %
Deferred revenue 0 0.0 % 1,756 0.2 %
Other liabilities 2,155 0.3 % 2,155 0.3 %
27,236 3.4 % 129,135 15.8 %
Total liabilities 426,559 53.6 % 484,517 59.1 %
Equity
Capital stock 250,235 31.5 % 250,235 30.5 %
Additional paid-in capital 156,409 19.7 % 156,447 19.1 %
Accumulated profit/loss 92,555 11.6 % -6,014 -0.7 %
Treasury stock -145,018 -18.2 % -79,561 -9.7 %
Revaluation reserves 1,373 0.2 % 1,373 0.2 %
Currency translation adjustment 552 0.1 % 930 0.1 %
356,106 - 323,410 -
Minority interests 11,955 1.5 % 11,605 1.4 %
Total equity 368,061 46.4 % 335,015 40.9 %
Total liabilities and equity 794,620 100.0 % 819,532 100.0 %

Consolidated Statement of Changes in Shareholders' Equity

from January 1 to March 31, 2007 in Ek

Additional
paid-in
Accumulated
Capital stock
capital
profit/loss
Share kD kD kD
Balance as of December 31, 2005 62,275,201 62,275 238,506 -2,822
Exercise of conversion rights 1,134,372 1,134 1,391
Capital increase in return for stock 186,825,603 186,826 -85,928 -100,898
Employee stock ownership programme AdLINK 303
Employee stock ownership programme
United Internet 1,311
Revaluation surplus Afilias Ltd. / Dublin
Miscellaneous 864
Treasury stock
Dividend payment -15,569
Currency translation adjustment
Net income 2006 113,275
Dividend payments
Increase in shareholdings
Balance as of December 31, 2006 250,235,176 250,235 156,447 -6,014
Employee stock ownership programme AdLINK 61
Employee stock ownership programme
United Internet -99
Treasury stock
Currency translation adjustment
Net income 2007 98,569
Increase in shareholdings
Balance as of December 31, 2007 250,235,176 250,235 156,409 92,555
Total net income
Treasury
stock
Revaluation
reserve
Currency
translation
Total Minority
interests
Total
equity
attribut­able
to share­
hol­ders of
United
Internet AG
Minority
interests
kD kD kD kD kD kD kD kD
0 892 1,111 299,962 8,528 308,490 57,608 2,214
2,525 2,525
0 0
303 303
1,311 1,311
481 481 481 481
864 864
-79,561 -79,561 -79,561
-15,569 -15,569
-181 -181 -181 -181
113,275 6,954 120,229 113,275 6,954
180 180
-4,057 -4,057
-79,561 1,373 930 323,410 11,605 335,015 113,575 6,954
61 61
-99 -99
-65,457 -65,457 -65,457
-378 -378 -378 -378
98,569 623 99,192 98,569 623
-273 -273
-145,018 1,373 552 356,106 11,955 368,061 98,191 623

Consolidated Cash Flow Statement

from January 1 to March 31, 2007 in Ek

2007 2006
January - March January - March
Cash flow from operating activities
Net income (from continued operations) 30,944 23,639
Net income (from discontinued operations) 68,248 1,794
Adjustments to reconcile net income to net cash
provided by operating activities
Amortization (from continued operations)
Depreciation and amortization 7,356 6,362
Amortization of intangible assets resulting
from company acquisitions 5,624 5,101
Amortization (from discontinued operations)
Depreciation and amortization 0 1,322
Compensation expenses from employee stock option plans -38 369
Results of associated companies consolidated using the equity method -467 -224
Income from deconsolidation of affiliated companies -65,794 0
Change in deferred taxes 1,744 340
Operative cash flow 47,617 38,703
Change in assets and liabilities
Change in receivables and other assets 5,736 -293
Change in inventories 126 788
Change in deferred expenses 1,168 -589
Change in accounts payable, trade 13,680 4,611
Change in advance payments received 222 217
Change in other accrued liabilities 0 82
Change in accrued taxes 11,102 5,137
Change in other liabilities -3,719 -13,374
Change in deferred income 10,300 7,130
Change in assets and liabilities, total 38,615 3,709
Cash flow from operating activities 86,232 42,412
Cash flow from investing activities
Capital expenditure for intangible assets and property, plant and
equipment -9,278 -8,979
Investments in other financial assets 0 -15
Payments of loans granted 22 1
Disposal of assets 91 187
Purchase of shares in associated companies -6,250 0
Purchase of further shares in affiliated companies -3,166 0
Proceeds from deconsolidation of affiliated companies 85,232 0
Cash flow from investment activities 66,651 -8,806
Cash flow from financing activities
Purchase of treasury stock
-65,457 0
Change in bank liabilities -85,178 2,311
Additional payments for the exercise of convertible bonds
Cash flow from financing activities
-53
-150,688
-9
2,302
Net increase/decrease in cash and cash equivalents 2,195 35,908
Cash and cash equivalents at beginning of fiscal year 32,723 36,177
Change in currency translation adjustments -378 67
Cash and cash equivalents at end of period 34,540 72,152

Consolidated Income Statement acc. to HGB

from January 1 to March 31, 2007 in Dk

2007 2006
January-March January-March
Sales 2,909 3,527
Other operating income 126 39
Cost of materials
Cost of purchased services -2,687 -3,331
Personnel expenses
a. Wages and salaries -465 -400
b. Social security contributions -39 -33
Amortisation and depreciation of intangible assets
and property, plant and equipment -23 -20
Other operating expenses -1,275 -1,056
Other interest and similar income 892 1,227
Interest and similar expenses -311 -705
Result before taxes -873 -752
Taxes on income -20 -79
Other taxes -3 -2
Net loss -896 -833

Balance Sheet acc. to HGB

as of March 31, 2007 in Dk

ASSETS March 31, 2007 December 31, 2006
FIXED ASSETS
Intangible assets
Concessions, industrial and similar rights and assets as well as licenses
as well as licenses in such rights and assets 12 1
12 1
Property, plant and equipment
Other equipment, operational and office equipment 332 317
332 317
Financial assets
Share in affiliated companies 289,701 286,536
Investments 7,906 7,906
297,607 294,442
297,951 294,760
CURRENT ASSETS
Accounts receivable and other assets
Accounts receivable, trade 1 0
Receivables due from affiliated companies 102,328 155,052
Receivables due from companies in which
an investment is held 3 3
Other assets 9,161 2,141
111,493 157,196
Securities
Treasury stock 145,018 79,561
145,018 79,561
Cash in hand and bank balances 1,898 7,846
258,409 244,603
Total 556,360 539,363
EQUITY AND LIABILITIES March 31, 2007 December 31, 2006
EQUITY
Capital stock 250,235 250,235
Capital reserves 56,665 56,665
Revenue reserves
Reserves for treasury stock 145,018 79,561
Retained earnings 1,290 67,643
453,208 454,104
ACCRUALS
Accrued taxes 15,223 15,805
Other accrued liabilities 1,534 2,027
16,757 17,832
LIABILITIES
Bonds 676 676
Liabilities due to banks 0 50,000
Accounts payable, trade 268 748
Liabilities due to affiliated companies 78,449 4,484
Other liabilities 7,002 11,519
86,395 64,427

United Internet subsidiaries

and shareholdings

Products
1&1 Internet AG (D)
1&1 Internet Inc. (USA)
1&1 Internet Ltd. (UK)
1&1 Internet S.A.R.L. (F)
1&1 Internet Service GmbH (D)
1&1 Internet Services Inc. (RP)
Fasthosts Internet Ltd. (UK)
GMX GmbH (D)
GMX Internet Services GmbH (D)
InterNetX GmbH (80 %, D)
United Internet Media AG (D)
WEB.DE GmbH (D)

Shareholdings:

fun communications GmbH 33.33 %
NT plus AG 40.23 %
Bigpoint GmbH 12.51 %

Management Board:

CEO: Ralph Dommermuth (43), qualified banker CFO: Norbert Lang (45), qualified banker

Supervisory Board:

Chairman: Kurt Dobitsch (52), self-employed entrepreneur Bernhard Dorn (66), self-employed business leader consultant Michael Scheeren (49), qualified banker

Online Marketing

AdLINK Internet Media AG (80.76 %, D)
AdLINK Internet Media AB (S)
AdLINK Internet Media B.V. (NL)
AdLINK Internet Media GmbH (D)
AdLINK Internet Media Ltd. (UK)
AdLINK Internet Media N.V. (B)
AdLINK Internet Media S.A. (F)
AdLINK Internet Media S.L.U. (E)
AdLINK Internet Media SrI (I)
affilinet GmbH (D)
affilinet Ltd. (UK)
CibleClick Performances S.A. (F)
Sedo GmbH (AdLINK share: 75.94 %, D)
Sedo LLC (USA)

Financial calendar  *

March 30, 2007 Annual financial statements for fiscal year 2006
March 30, 2007 Press and analyst's conference
May 9, 2007 Business figures for the 1st Quarter of 2007
May 30, 2007 Annual Shareholder's Meeting in Frankfurt am Main, Alte Oper
May 31, 2007 Dividend payment for fiscal year 2006
August 10, 2007 Business figures for the 2nd Quarter of 2007
August 10, 2007 Press and analyst's conference
November 7, 2007 Business figures for the 3rd Quarter of 2007

* Subject to prior change. Updates available at www.united-internet.com in the Investor Relations section, "Calendar".

Imprint

Publisher and copyright © 2007 United Internet AG Elgendorfer Straße 57 D-56410 Montabaur Germany www.united-internet.de

Contact

Investor Relations Phone: +49 26 02/96-16 31 Fax: +49 26 02/96-10 13 E-mail: [email protected]

May 2007 Registry court: Montabaur HRB 5762

This is available in German and English. Both versions can be downloaded from www.united-internet.de. In all cases of doubt, the German version shall prevail.

Disclaimer

This Report 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 Report 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 Reports of United Internet AG. United Internet does not intend to revise or update any forward-looking statements set out in this Report.

United Internet AG Elgendorfer Straße 57 56410 Montabaur Germany Phone +49 2602/  96-1100 Fax +49 2602/  96-1013 E-Mail [email protected]

www.united-internet.com

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