United Internet

Ladies and gentlemen, welcome to the Analysts and Investors Conference of United Internet for the half-year figures 25. My name is Dominik Grossmann. I'm very happy to be able to welcome you here personally at Sofitel in Frankfurt. I also like to welcome everybody who is participating online and allow me to take you through the agenda today. We'll start with Dr. Mahmood presenting the development of the first half of the year, giving a focus on the second half of the year, and following that, Carson Farrer is going to explain the figures in detail. You will, after our presentation, have opportunity to place your questions in our Q&A session. That's it from my behalf, and I pass on the stage to Mr. Dr. Mahmood. Thank you. Thank you, Mr. Grossman. Welcome, ladies and gentlemen. As announced, I will present the development of the company in the first half of the year and a forecast on the rest of the year, and then my colleague, Mr. Toya, will give you the details on the figures of the first half of the year. You know our business. We work in a team with about 10,800 employees, 4,000 of them in product management, development, and data centers. We run a powerful infrastructure with fiber optic networks, a mobile network, and computer centers with over 100,000 servers worldwide. We have the access business and applications, and these, again, are in offers for consumers and business customers. Our products are offered in a number of brands. In the consumer business, the main brand is Einzelheims, and we have discount brands from the merger in 2017. In the business access, we are active with Einzelheims Versatil. Application for consumers are TMX, WebDA mainly, and internet media. Application for business customers are provided by AOMOS with different subsidiaries like and acquired like OPL in Poland, Austria, England and so on and a number of minority partners. Let me start with the consumer access. In the first half of 2025, you know our business Our consumer assets business is organized in 1&1. Again, they are stock listed 3.89 million broadband customers and 12.44 million customers. Contracts, we are operating the first open run business and we are migrating the existing customers from the wholesale contracts to this open run business. At the end of the year, we had 16.33 million customer attacks. Mobile broadband hasn't changed and the broadband has reduced by 60,000. Our service revenue could increase slightly to 1.647 billion euros. The general development... minus 13.12, 130.6 million euros included in this is the build-up of the mobile networks. 1.1 reports two segments, one segment of success, minus 3.5% due to the change of the roaming partner with higher roaming costs as expected before, and then the mobile network with... 130.6 billion euros coming from 111. Business Access, a one-on-one versatile, operates one of the largest German fiber optic networks. We operate the access network transport networks on 67,000 kilometers. We are available in over 350 cities in Germany, including the 25 largest cities And over 28,000 buildings are directly connected. We have increased 287.3. This is the accumulated figures. Our own optic fiber is growing much more. We have a decline in the voice business where earlier customers paid per minute. for voice, and they don't accept this anymore. This is why we are losing non-recurring revenue, but the recurring revenue is growing. That is the lines, for example. So we'll see this development over a couple of years still. The ABTR has startup costs Without these thoughts, of course, the ABDR would have been at 92 million. The margin is a bit higher than last year with 38%. Looking at the applications, I have said so. The consumer area is GMX, WebDE, Mail.com, online office, cloud service, cloud storage. And our differentiation here is German data protection and data security. We had 41.75 million active consumer accounts at the end of the year, and that is free accounts, which are funded by advertising, 38.7 million, minus 360,000, and... We have 3.8 million pay accounts, which are much better for us than the advertising accounts. There's some seasonal figures. That's why we have a difference here between the end of the year and the middle of the year. This is a bit misleading, but if we look at the year to date, we see a plus of 90,000 coming from... 41.66 million. We see this in revenue as well, a plus of 3.1%, 248 million, and the result is not brilliant. We expect that to rise with the revenue as well, but we expect a change. We have a high business region, 36.2% EBITDA, and we don't need many servers to have that business running. Business applications, IONOS, they published figures today as well as the leading digitalization market for small and medium-sized companies. The cloud enabler active in Europe and in the U.S., raw product portfolio ranging from digital solutions, websites, e-shops, marketing tools, right to virtual servers, dedicated servers, cloud infrastructure as a service, all of these are the active figures. A very good growth in the first half of the year, 310,000 new contracts, 9.8 million as a total. Also from abroad, but our main market in Germany, 80,000 plus contracts reaching 4.71 million. The revenue has grown strongly, 19% to nearly €900 million. That is due to customer growth and better up and cost selling of additional products and a strong growth in the art tech segment. The total EBITDA, even better growth, 24.6% plus to 258% in the first half of the margin, now at 28.9%. So a very strong margin business here. The figures again in the overview, the total of 290,000 new customer contracts and pay services reaching 29.31 million contracts, a plus of 4.3 in revenues, EBITDA plus 2%. EBIT is dropping due to investments and the antennas, the computer centers and so on, which are being added and activated. So a drop here and a result of minus 3.3%. So included in this, as I've said, is the 130 million ramp-up costs. As I said, and if you take these 18.4 on the EBIT, you will get a growth of, I'd say, around 5%, a little bit less. What is the forecast? How are we going to carry on? We confirm our forecast. We're expecting the forecast to fulfill. 6.545 billion. The EBITDA is about 1.35 billion. We've just explained this 20 million less EBITDA due to the change of the National Role-Making Partner to Vodafone. We had deactivated components before that increased the EBITDA. Vodafone doesn't do this and EBITDA has no impact. So if we add this difference to the 1.535, we would end up at 1.7, which would be 5.5% of growth, something in that range, which is quite reasonable. CapEx will end up at about 800 million this year, a bit higher than last year. We are still investing into the optical fiber network, in the mobile network, and also in the cloud infrastructure. So, thank you for your attention so far, and I would like to ask Mr. Torja to present the figures.

Welcome again by me. I'll have the honor of taking you through the figures in detail. giving you a summary from the overall view and into the balance sheet. First of all, why do we have different figures here? Mr. Drummond mentioned it. We have the comparison like for like, i.e. the key figures as of 30th of June 2025 compared to 30th of June 2024. And you can see that the fee-based customer contracts actually grew by more than half a million in this period of time. If we take a look at the ad finance free accounts, we have a decrease with 180,000. But at the same time, we were able to get paying customers, which are in the first figure indicated. So we have actually plus 270,000 customers. Revenue growth, 4.3%, as I mentioned. EBITDA, as we can see here again, with 2%, despite the 19.6 million higher costs for the rollout of the one-on-one mobile network. The EBIT, a larger impact of the effect we've mentioned already. shown in the EBIT, but not in the EBITDA. In the EBIT we see the 39 million higher depreciation in connection with the network expansion, 12 million for Versatil, so that we have an overall decrease of 8.5% of the EBIT. Let's speak about the cash flow. In the first half of the year we have a an increase from 557.9 to 578.9 cash flow from operating activities we see strong growth here why well last year the contingent payment the last contingent payment of 260 million euro was paid to Deutsche Telekom for the last time and we benefit from this now so we don't have this payment anymore and that has this positive effect here the increase of operating activities. In investments, we can see the impact of the CapEx, which is more or less at last year's level, 13 million higher than last year. And for financing, we have two effects, a 15.4 positive last year, and we're minus 211 this year. There's two effects. dividend payments of 426 million euro that have an impact but also the catch-up dividend for last year just so under 240 million euro we have an effect of the one-on-one shares that's 160 million that we bought in April and we have a re-personing program of €36 million that is reflected here. So we have this overall change of €426.3 million. It's not quite true. It's €326 million. Sorry, the figure is wrong here. Let's look at the EBITDA bridge, the cash flow, starting with EBITDA, €675.6 million. Then we can see the capex, which is a little bit different from what we saw before because there's a 2 million euro investment removal, then a phasing effect, payments made in the first quarter that actually were for quarter 24, but that led to a decrease of money. Then the tax, 51.2 million euro, then working capital and others. reduction of our payments due to our liabilities then free cash flow arrives at 105.8 and then 80.7 million euro worth of leasing costs so the free cash flow after leasing for the first half of the year 2025 25.1 million euro look at the balance sheet what can we see let's start at the bottom line we have a slight Decrease of the balance sheet total from $11.935 million down to $11.863 million, whereas the common, not from assets, from property assets, that's pretty much the same. Goodwill financial assets are pretty much at the same level, accounts receivable is a little bit higher contracts assets are a bit lower with the decrease of contract assets due to lower customer growth and lower hardware sales the inventories are at the same level slight increase due to rental and pre-service provider payments and then the income tax claims a little bit lower than as per the end of the year, same goes for cash and cash equivalents. That leads to a slight decrease in the balance sheet. Now let's look at the liabilities. We have a little bit more movement in equity here, and I'll tell you a little bit more about why. Maybe we'll speak about this effect. First of all, we had the purchase offer for one-on-one shares. This goes beyond the 30th of June. So this... total of the increase offer needs to be affected here even though only 140.1 mini euro were spent on shares so we have a deviation here which is however required by us by IFRS I find it a bit strange because it also has a serious impact on the equity ratio which is 4.6% lowered to 41.9%. The right figure would be if we only accounted for the 140 million, then we'd be at 3.3 percentage points and 43.3% equity ratio. What else do we have? We have the acquisition of the one-on-one shares with the 60.8 million and the dividend payment accordingly of 328.4 million euro. Liabilities have increased and we can see our CapEx measures acquisition of one-on-one shares but also the dividend then Trade accounts payable, we've seen it already with a decrease of liabilities to 603 million and with contract liabilities were nearly at the same level. And then of course the 300 million that we had to reflect here from the offer to increase our number of shares. So this takes us through the figures, and now we have the possibility of taking your questions, so please get ready. Well, thank you very much so much on our presentation. We'll start with the question and answer session now. Please use the headsets. with the microphones that our colleagues make available for you. And please start by indicating your name and company will start on the left-hand side.

Hi there. It's Ben from New Street Research. I had two questions, please. The first question was on the DT contingent payment. You mentioned that you made the last payment last year and that you're now seeing a benefit from that. So are you now receiving working capital inflows from that asset? And can you comment on the scale and the timing of the inflows you expect to see from that prepayment asset? And then the second question on the consumer applications business. You're seeing declining free subscriber numbers, but you're growing the number of premium subscribers. I just wondered if you could talk a bit about the relative value of those subscribers. So, for example, what is a typical ARPU for a free subscriber and what is a typical ARPU for a premium subscriber? Thank you.