Earnings Release • Nov 10, 2010
Earnings Release
Open in ViewerOpens in native device viewer
News Details
Ad-hoc | 10 November 2010 23:23
Successful first nine months 2010 for United Internet
United Internet AG / Key word(s): Quarter Results
10.11.2010 23:23
Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted
by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
Montabaur, November 10, 2010. The Management Board of United Internet AG
(ISIN DE0005089031) today announced the consolidated results according to
IFRS for the first nine months of 2010.
Group development
In the first nine months of 2010, consolidated sales of United Internet AG
grew by 15.0% from EUR 1,224.8 million last year to EUR 1,409.0 million.
Despite expenditure for the current DSL quality drive and high start-up
costs for new business fields - now totaling EUR 58.3 million - there was a
slight year-on-year increase in earnings before interest, taxes,
depreciation and amortization (EBITDA) to EUR 270.8 million (prior year:
EUR 269.1 million - without special items of EUR 50.2 million from the sale
of shares). Due in particular to scheduled depreciation of EUR 16.2 million
on freenet's DSL customer base acquired in late 2009, earnings before
interest and taxes (EBIT) fell as expected by 8.3% to EUR 210.6 million
(prior year: EUR 229.6 million). Earnings per share (EPS) fell accordingly
from EUR 0.57 (comparable prior-year figure) to EUR 0.53. Operative cash
flow rose by 7.6% from EUR 193.8 million last year to EUR 208.5 million.
In the third quarter, sales were up 16.9% on the previous year to EUR 478.2
million (prior year: EUR 409.1 million). In this quarter, United Internet
made a further significant increase in expenditure for the establishment
and development of new business fields - especially for the marketing of
new Mobile Internet products and the Do-it-Yourself Homepage. With total
expenditure of EUR 39.1 million, the company invested more than twice as
much as in the first two quarters together (EUR 8.7 million in Q1 and EUR
10.5 million in Q2). At the same time, negotiations concerning pre-service
invoices which had been queried were successfully concluded. The resulting
reimbursements for previous periods totaling EUR 19.3 million were used to
partially refinance the aforementioned expenses in new business fields. As
a result, EBITDA fell by just 6.9% to EUR 88.8 million in the third quarter
(prior year: EUR 95.4 million).
Group development Jan.-Sept. Jan.-Sept. Change
9-month comparison (in EUR million) 2009 2010
Sales 1,224.8 1,409.0 +15.0%
EBITDA* 269.1 270.8 + 0.6%
EBIT* 229.6 210.6 - 8.3%
* EBITDA and EBIT Jan.-Sept. 2009 without positive special items of EUR
50.2 million from sale of shares.
Segment development
'Access' segment
In the 'Access' segment, sales in the first nine months of 2010 grew by
21.2% to EUR 913.0 million. Despite an extensive DSL quality drive and
expenses incurred in the third quarter for the marketing launch of Mobile
Internet products, EBITDA improved slightly (by 0.3%) on the same period
last year to reach EUR 102.6 million. However, EBIT was down 16.9% on the
same prior-year period to EUR 82.8 million, due to scheduled depreciation
of EUR 16.2 million on the acquired freenet customer base.
Development of Access segment Jan.-Sept. Jan.-Sept. Change
9-month comparison (in EUR million) 2009 2010
Sales 753.2 913.0 +21.2%
EBITDA 102.3 102.6 +0.3%
EBIT 99.6 82.8 -16.9%
The number of fee-based contracts in the Access segment grew by 50,000
contracts, from 3.50 million contracts as of December 31, 2009 to 3.55
million. Marketing focused on the growth areas of Mobile Internet and
complete DSL packages. Accompanied by an extensive TV, print and online
marketing campaign, the launch of new Mobile Internet products on July 1,
2010 was well received by the market. A total of 80,000 new customer
contracts were concluded in this field during the third quarter. There was
also strong growth in complete DSL contracts (of particular importance for
United Internet), with the addition of a further 390,000 customer
relationships (200,000 in the third quarter). However, the number of
customer relationships for those business models gradually being phased out
(narrowband, T-DSL and R-DSL) continued to fall. 420,000 customer
relationships were lost or converted to complete DSL packages in the last
nine months (of which 230,000 in the third quarter).
Customer contracts in Access segment Sept. 30, Dec. 31, Sept. 30,
(in million) 2009 2009 2010
Access, total 3.52 3.50 3.55
- of which DSL complete 1.69 1.82 2.21
- of which Mobile Internet 0.09 0.09 0.17
- of which narrowband / T-DSL / R-DSL 1.74 1.59 1.17
'Applications' segment
In the 'Applications' segment, significant investments were also made in
customer growth during the first nine months of 2010. As a result, the
number of fee-based contracts grew by 380,000 to 6.03 million. Although the
statistics were pruned of 40,000 foreign contracts following a change in
debt collection policy in the third quarter, there was growth of 35,000
contracts from the acquisition of the Mail.com brand. The number of
ad-financed accounts around the world grew organically from 26.3 million to
27.3 million. Growth in this segment, however, has slowed since the
contract conversion of a major customer of Sedo's subsidiary affilinet in
late 2009. As a result, the listed subsidiary Sedo Holding AG (formerly
AdLINK Internet Media AG) posted a fall in sales of 20.4% in the first nine
months of 2010 - whereas the rest of the segment enjoyed growth of 12.1%.
Against this backdrop, total segment sales grew by just 5.2% to EUR 495.5
million. Despite high development and pre-launch costs for new applications
and further international expansion, as well as a significant increase in
marketing expenses, EBITDA and EBIT in this segment grew by 6.3% to EUR
172.8 million, and by 5.3% to EUR 132.5 million, respectively.
Development of Applications segment Jan.-Sept. Jan.-Sept. Change
9-month comparison (in EUR million) 2009 2010
Sales 471.1 495.5 +5.2%
EBITDA 162.5 172.8 +6.3%
EBIT 125.8 132.5 +5.3%
The growth in customer contracts during the first nine months resulted from
the addition of 200,000 new Business Applications contracts (total: 4.21
million) and 180,000 new Consumer Applications contracts (total: 1.82
million). The number of customer contracts in foreign markets (UK, France,
USA, Spain, Austria, Switzerland) grew by 180,000 to 2.40 million
contracts.
Customer contracts in Applications Sept. 30, Dec. 31, Sept. 30,
segment (in million) 2009 2009 2010*
Total fee-based contracts 5.53 5.65 6.03
of which domestic 3.39 3.43 3.63
of which foreign 2.14 2.22 2.40
Ad-financed accounts 25.6 26.3 27.3
* In the third quarter of 2010, the statistics were pruned of 40,000
foreign contracts (change in debt collection policy), while there was
growth of 35,000 contracts from the acquisition of the Mail.com brand.
Outlook
In view of the successful course of business so far this year, United
Internet confirms its forecasts for 2010 and still expects consolidated
sales to grow by around 15% (approx. EUR 1.9 billion total sales) and
EBITDA to remain at the record level of the previous year (EUR 356.1
million without positive special items).
United Internet will continue to pursue its policy of sustainable growth in
2011. In order to utilize its wide range of opportunities, the company will
once again invest heavily in new business fields in the coming year. In the
'Access' segment, further growth is expected in the number of customer
contracts, especially for products enabling mobile internet usage. In the
'Applications' segment, the focus in 2011 will be on entering new foreign
markets for Business Applications. In the field of Consumer Applications,
United Internet will mainly drive the technical integration and subsequent
expansion of its newly acquired Mail.com service. As Germany's leading
email provider, the company also intends to make a strong entry into the
field of legally secure email communication. The respective legislative
procedure for the German 'De-Mail' system is expected to be completed in
the first quarter of 2011. Despite the high costs associated with these
projects for sustainable growth in customer subscriptions, initial planning
indicates that EBITDA in 2011 will reach a similar level to that of the
current year.
Marcus Schaps
Head of Press and Public Relations
United Internet AG
Elgendorfer Strasse 57
56410 Montabaur
Germany
Tel: +49 2602/96-1076
Fax: +49 2602/96-1013
E-mail: [email protected]
Internet: www.united-internet.de
10.11.2010 DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de
Language: English
Company: United Internet AG
Elgendorfer Straße 57
56410 Montabaur
Deutschland
Phone: +49 (0)2602 / 96 - 1100
Fax: +49 (0)2602 / 96 - 1013
E-mail: [email protected]
Internet: www.united-internet.de
ISIN: DE0005089031
WKN: 508903
Indices: TecDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard), Berlin;
Freiverkehr in Hamburg, München, Düsseldorf, Hannover,
Stuttgart
End of Announcement DGAP News-Service
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.