United Internet

Ladies and gentlemen, dear guests, welcome to the Analysts and Investors Conference of the United Interest Company. My name is Willi Grossmann, and I'm very happy to welcome you in person here to Sovitel in Frankfurt. I would also like to welcome all participants in the webcast. I'll be happy to take you through our agenda of the day. First, Mr. Damamuth will speak about the development of the fiscal year 2025 and give you an outlook on the current business fiscal year of 2026. After that, Carsten Teurer will give you the details of the financials. Ladies and gentlemen, after our presentation, as usual, you will have the opportunity of asking your questions in a Q&A session. So much by way of introduction. I'll give the floor to Mr. Dommelmuth.

Thank you, Mr. Grossman. I think we've all met before. Those of you who haven't been there, welcome on my behalf as well. Mr. Grossman has taken us through the agenda. I will start with the company development. Many of you know this. We work in the internet access and applications. We offer that for consumers and business customers. In the middle, you see our assets, our team, and our infrastructure. We have over 10,000 employees. Our optic fiber network is 86,000 kilometers long. We have a 5G mobile network, and we operate about 100,000 servers. We offer our products in different brands. In the consumers, mainly the 1&1 brand. Other brands, which we have taken over from Drillisch, and in the business customers, 1&1 and Versatel. And applications for the consumers we offer in GMX and WebDA and gmail.com. Applications for small, medium-sized companies are mainly driven by Aionos or the Aionos subsidiaries. You see them here on the chart. companies that we have acquired over the years, Stato in Germany, for example, Pastos in England, Asus in Spain, so on. And we have some minority shares companies that we cooperate with. Let me start with the access business. We have just heard in the one-on-one conference 3.8 million broadband connections, 12.5 million mobile contracts, our own open-run, fully virtual networks, reaching 27% of the household as per end of the year 2025, over-fulfilling the requirements of the authorities, high customer satisfaction in Internet access and also security. in the mobile range. First place in both competitions on the Connect customer range. Customer contracts, minus 17,000 in the access, minus 110,000 broadband accesses. I've just said that if we get a hold on this, the mobile contracts are is a bit dampened by the migrations of our customer in the last year. Our turnover revenue, 0.8% growth, service revenue stayed about the same. Others, especially selling smartphones, tablets, and so on, 3.7% plus. ABDA in the consumer access as a total, a minus of 11.7%. I'll reason this if we look at the individual segments. We have the segments 1&1 Mobilfunk with 265.3 million, the costs for the same figure as in 24. And in the segment EBITDA access, which is our end customer business, 8.1% less EBITDA with the change of the national roaming partner. And this is reasoned by Telefónica activating a part of the costs. Now we don't have this activation anymore. And it's the Vodafone network has grown slower in 25 than we had expected. Looking at the business access range, here we work with 1&1's Versatel. 68,450 kilometers of network, 350 biggest cities in Germany, and 29,000 directly connected customers to handover points, to antennas, or handover points to telecom or regional carriers. The turnover increased by 2.1 percent. Also, the EBITDA 2.1 better. $177 higher than before, despite the starting costs. Application business in the fiscal year, starting with consumer, GMX, WebDE, mail consumer, we offer abroad. consumer portfolio for information management, emails, calendars, online office, cloud storage as well for the photos on your cell phone, for example. We fund this by – we differentiate by the German data protection, German servers. Last year we won over more than 60,000 new accounts, 360,000 pay customers. Usually we start with a free account and step-by-step migrate the customer to a pay account. We did very well in that last year. We have 310,000 additional pay accounts. Free accounts also from the conversion is dropping due to the conversion. And we have increased the revenue by 8.1%. That's good. 322.6 million euros driven by the better monetization and the pay accounts. also due to advertising. Parallel to the revenue, the EBITDA grew a little bit more even, 8.7%, 223.1 million. This is a business that we've been doing long years, developing well, and we are optimistic for the year to carry on with good opportunities in the future, looking at AI which we implement in our services or offer as add-on to extend the business. Business applications, the last range I'd like to present here, driven by EONOS. Jonas subsidiaries. Jonas is the leading digitization partner for small and medium-sized companies in Europe. Cloud enabler, 14 European countries, and in the U.S., Canada, Mexico, a large product range, presence in the Internet. We need domains for that, a website for that, e-shops, online marketing tools, and so on. And also products concerning office organization, business email with opportunities to administer different accounts, office suits, online storage products. for example, to store your emails legally, correctly, or bigger data management, AI assistance, cloud infrastructure, a broad range, all at higher security standards developed in Germany and the EU all conform with the data protection laws. Customer contracts have increased here. driven mainly from growth abroad with 5.25 million. The domestic contracts, 4.8 million. Germany, good and still ahead, but the... international business growing stronger. We could compensate in the business applications the drop of the dollar. So the growth here Good. EBITDA 19.8%, well scaled to 464.1, 35.2 EBITDA margin. An overview to what I said, 700,000 new customer contracts, up to 29.72 contracts. Revenues grown by 1.2, 1.9, EBITDA 2.4, EBITDA due to the invest is a little less, 11.5 less. Due to the 42 million of depreciation, EPS 1 euro 23, a plus of 43% due to the difference in the taxation. What are we going to see in the future? This year, we want to increase our turnover to 6.25 billion. The EBITDA should end up at 1.45 billion, 170 million more compared to the year before. Cash capex we see at 600, 650 million. We've just said this at 101 before. We've invested a lot into decentral and regional data centers. That's going to slow down a bit. We have 350 already up and running, so the cash capex is a little lower here. What's going to change in 26 besides the figures? We are going to report by segments. We are going to use the access business after selling the one-on-one versatile, a new segment consumer access since January 26th. So when we meet next time on the quarter figures website, It will be set up anew, and it is then called 1&1 Mobilfunk, 1&1 mobile network will be taken out, and consumer access will then be called consumer and small business, showing that we address small businesses as well. There's going to be a new segment, which is then 1&1 Mobilfunk network together with Business Access, and it's going to be called Enterprise and Networks. With Versatel, we address large customers. And besides the Versatel network, we have the mobile network in this segment as well, because we think that is a clearer structure for you having the pure business. Let me call it resale business, consumer askers, consumers buy at enterprises and networks. Enterprises and networks is the wholesale business due to the networks that we have. So this is the idea of the new segmentation. Okay, and now I'd like to ask Mr. Theurer to explain the financial figures to us.

Welcome again. Basically, everything has been said again. I can tell and explain it to you from a different perspective, from a cash flow view. So let's start with an overview of the key figures for the group. Mr. Doman Woods already said that we were able to increase our customer base. We have added 0.7 million users, mostly from consumer business, i.e., IONOS. with business applications with 460,000 and consumer applications. You can see that the pay accounts on the next line with 310,000 customers who we could convert from ad finance free accounts to pay accounts. That's why The ad finance free accounts are slightly decreasing because we converted them to pay accounts, which works very well and gives us a nice recurring revenue in this business model. Revenue overall increased by 1.9%. We had an EBITDA growth of 19.8%. That's a main driver on the group level. Sorry, EBITDA was 19.8%. That was a mistake. That refers to the next line, EBITDA growth. We see a growth here of 19.8% of business applications, where we have an increase of 2.4%. What's different here, as we heard with IONOS earlier, due to the IFS-5, We have a discontinued business unit, ZEDO, within the P&L that was disregarded. But in the balance sheet, it's included, and in the cash flow as well. So we see it in the cash bridge later on. Those are the rules of the IFRS 5. So the EBITDA, all figures without the segment EBITs. we can see the effect of the higher depreciations here. So we have a slight decrease of 1.9 percent compared to 2024. Cash flow, we have a positive trend and significantly increased cash flow by 70 million. This comes from cash flow from changes in business activities. We have a positive cash flow. This is due to our payment of Convergency payments. That is an a volume that we paid 200 million euro that we paid in advance and will be used up over time over the next few years. So that means that it's no longer a cash payment was made over the last five years already. The net cash inflows from operating activities. We see a net inflow through investments. We have a dividend, the catch-up dividend that we paid last year. We have the acquisition of the one-on-one shares with over 200 million euro that we managed in 2025. And we have a buyback program for our shares that started in the last business year and extended into this year with IONOS. That takes us to a free cash flow after lease, which has significantly increased by 18 million from 47 million in 2024 to 320 Point six in twenty twenty five cash flow bridge from EBITDA to free cash flow. You can see we have a slightly increased EBITDA compared to twenty twenty four and I'll focus on twenty twenty five now. Then we had ad tech added because it is necessary for cash flow considerations. We had a similar capex a little bit less than last year. You can see 730 million right now. Investments into the extension of our network mostly. And you can see the biggest difference here in taxes. What does that do to, well, you can see last year, 2024, we had a normal tax, as it were, by the end of, or at the beginning of 2025, backdating to beginning of 2024, we had Versatel integrated into the tech group. So we had an advance payment for this, these taxes that we didn't pay Back in 2024, but in 2025, the advance payments have a positive effect on the taxes in 2025, so we have a positive effect, and therefore we have this big discrepancy because these two figures, and we have the working capital pretty constant in 2025 compared to 2024 of $508 million. And minus leasing, that takes us to a free cash flow of €320 million, of just €270 million more than 2024. Now let's take a look at the balance sheets. I won't read out every detail here. Maybe the most important topics you can see that the fixed assets grow fast. We have 350 million euro added here, particularly through our investments in our fiber optic network. Then we had the contingent payments from telecom where using those up over the years. So we're activating those now. So nearly identical balance sheet sum despite increased intangible assets. Let's take a look at the liabilities and equity. And we can see that we've increased those by 350 million euro. Trade accounts are decreased. Liabilities due to banks have increased, particularly in order to finance the CapEx, but also due to the share buyback. And our dividend had a negative impact on our cash flow. So we have a net debt of 3.2 billion euro at the end of 2025 with a leverage of 2.48 at the end of 2025. The other financial liabilities have slightly increased, the leasing additions that we've seen, then lower frequency liabilities on the other end, and equity has slightly decreased, but the ratio is still at 43.6%, so that's still a pretty solid equity rate, equity ratio. So that takes us to the end of the financials here, and we're happy to take your questions if you wish to ask any. Okay, so much concerning the presentation. Let's start with the questions and answers. Please use the microphones so that everybody can hear you and also indicate your names and companies. First of all, on the left side. I have two questions concerning IONOS. First of all, concerning the data center that was planned since the beginning of last year or the summer of last year. Is there any news? We never heard anything about it. And the second question is concerning the revenue development. For cloud solutions, that's a bit behind schedule. Could you give us some reasons for this and maybe give an outlook for the next couple of years? What are the current plans? Well, we're not the IONOS board. I'm on the supervisory board, but I'll try to give you the best answer I can. If you speak of the plant data center, you're probably referring to the potential EU gigafactory. We're still waiting for the tender, which is being delayed again and again. The last thing I heard was end of March. And once we get the tender documents ready, then we or the IONOS management can determine whether it suits or not. Concerning cloud solutions, I can tell you very little about this as far as I can tell. The business is going very well so far, but I really can't say too much. Well, I might be able to give you some information there. We had some headwinds in the last couple of years. But this leads to tailwinds right now. So we've had a quite good start in the first quarter, and we're quite optimistic that we can grow by double digits, particularly in the public space. And so we're quite optimistic looking forward there. Next question, up front here.