United Internet

Ladies and gentlemen, dear guests, welcome to the Analyst and Investor Conference of United Internet. I'm very happy to be able to welcome you personally here in Frankfurt again and I would like to welcome the webcast participants as well. I'm happy to take you through the agenda first by will hear the company development of the first half of the year and he'll also give us an outlook and then Carsten Theurer will explain us the financials in detail. After this, you will have the option of asking questions in a Q&A session. That's all I have to say, so I can give the floor to Mr. Dommermuth. Give the floor. Well, thank you very much, Mr. Grossman. Welcome, ladies and gentlemen. As far as we haven't seen earlier, I will give you the company development of the first half of 2026 of United Internet and give you an outlook to the second half of the year as well. Since the 1st of January, we have been distinguishing three different segments of the company in our reports. One segment is called 1&1. That's about internet access, main brand 1&1, then versatile for business, for B2B, and then the discount brands. Then we have the IONOS segments. The main brand is IONOS. The other brands are subsidiaries of IONOS. from purchases that we've made in Germany and Europe. And then the third segment, Mail and Media, with our brands, gmxweb.de, mail.com, and the United Internet Media for our advertising areas. Let me start with the 101 segment. This is where we address consumers and small businesses, but also institutional customers and authorities. Let me start with the consumers and small businesses. We have 12.33 million mobile contracts. We have broadband market approach. Then we have the fixed line business, just under 4 million broadband connections, mostly VDSL. and FTTH packages that we generate with our fiber optic network with last mile provided by Deutsche Telekom and regional carriers and our largest FTTH footprint in Germany. We have the largest FTTH footprint in Germany, 77% of households are connected. Then we have The segment Enterprises and Networks. Within a one-on-one, we reach 34% of households. It was 27 at the end of last year. Then we have the fixed line business with more than 70,000 kilometers of fiber optic network available in over 350 cities, 30,000 directly connected sites, for instance, of major companies, institutions, and authorities. Customer contracts in this segment have decreased by 140,000. I mentioned it earlier. 150,000 fewer contracts for mobile internet contracts and an added 10,000 broadband connections. The loss of customers is due largely to discontinuation of particularly low-cost tariffs and reducing the data allowances included in the high-performance tariffs. and then 10,000 new broadband customers. Revenue has increased by 1.6%. Service revenues decreased by 1.1%. That's now at 1.805 billion euro. Other revenues have increased by 13.5%, now to 464.8 million euro. The EBITDA has increased by 5.1% to 382.7 million euro, 16.9 EBITDA margin. The second segment is IONAS, just like 1&1, it is stock listed. It is Europe's leading digitalization partner for freelancers, small and medium-sized businesses, as well as a reliable cloud enabler. We're active in 14 European countries, as well as in the US, Canada and Mexico. We have a really broad product portfolio, domains, websites, e-shops, online marketing tools, Office packages, business email, online storage, AI assistance, target to the needs for small and medium-sized companies, and a secure cloud infrastructure. created an additional 500,000 customer contracts in the first half of the year, 5.57 million abroad and 4.98 million domestic. Overall revenues increased to 7.1 million euro, increasing by 6.9%. It would have been 8.2% if adjusted for foreign exchange. The EBITDA increased by 2.6% to €232.6 million. For an exchange adjusted, it would have been 4.2%, significantly higher marketing expenses compared to a The first half of 2025, and the EBITDA margin is 33.2%, a little bit lower than last year, but we're on the right track, as IONOS has confirmed. Then mail and media, we cover data protection and Everything is according to European legislation. We have now 50,000 accounts less than last year. Overall we have 240,000 fewer free accounts, but the positive thing is 190,000 additional pay accounts. We're converting free accounts into pay accounts, which is working ever better. We now have 3.54 million pay accounts, and if you look at revenue, you can see that the revenue of the pay accounts is already is slightly higher than, just nearly as high, sorry, as free accounts. In the past, we only had free accounts, but we're managing to shift this. And we are also improving in terms of cloud storage. For instance, if you store your photos, that's a good thing. That is an ongoing trend that we pay more and more, sell more and more of these pay accounts. You can see it also with revenue. We have €161.4 million revenue plus 8.4% due to increased monetization of free accounts and strong growth in pay accounts. Then EBITDA is increased by 16.7% to €62.9 million, 32.9% EBITDA margin. More than last year. That is going very well. Of course, you could always imagine things going better than that, but we can't really complain. Business is developing quite nicely. Now, what's the outlook? We confirm the guidance for The revenue is approximately to reach €6.25 billion. The EBITDA is to reach approximately €1.45 billion. And the cash capex is to reach €650 million. So we're doing fairly well. The first half of the year has panned out very positively. And we're looking ahead quite positively into the second half of the year. And I would like to ask Mr. Theurer now to give you details on the financials.

Thank you very much and welcome on my behalf as well. I would like to take you through the figures as of 30th of June compared to the first half of last year. And we see what Mr. Dommermuth said. If we look at the customer contracts, we see just a million plus, 960,000. And in the ad find that Media, we only have lost 30,000. We didn't lose them, but we see a conversion rate there that 360,000 new pay customers joined. So the converting business with the pay accounts is developing very positively. Despite we were able to have the ad funding, MailerMedia Thank you very much. through all segments, and that is positive as well. Each segment provides its contribution. In EBITDA on group level, we get to 5.1% EBITDA growth, which continues in the EBIT growth. We have a 20% growth here. One special effect here, which is increased depreciation from the investments, and this year by the phase-out of the PPA, Thank you very much. in earnings. Cash flow wise, we see a positive development as well. Before the changing of the asset, we have an increase of 3%. The net pay of the operating activities, we see an increase of 22.7%, giving us to Capix is stable to the year before. The investment is stable. The net payoff is a little less than the year before, but on a similar level. And the net in and out pay for the funding is 207 million euros. to the level as of the year before. That means in total, bottom line, free flash flow after leasing, we end up 129.7, which is about 100 million increase to the year before. And I'd like to illustrate this with the Kasparov Bridge here. We start with the EBITDA, 667.77. 76 million and we see the EBITDA which is from ETEC although reporting white it is an ESF5 non-consolidated as we reported the cash flow still includes it with minus six as a negative capex net five million and this is the gross capex here with 280 million taxes, a lot less than the year before. That is what we had announced. The exact effect from selling Vesatil to 1&1 and the connection to the entities within 1&1 leads us to pay less taxes. We will see that in the balance sheet again in a minute. Working capital lower than the year before. leaving a free cash flow of 230 million, the leasing expensive with 83.5 million and that ends us to the free cash flow after lease of 129.7 million. Look at the balance sheet. We see a little increase in the total. We are a bit over 12 million, 93 million plus. What are the changes? Long and short-term assets. We have an increase of about 100 billion. That is material assets from the investments that we have been carrying on to the optical fiber and mobile networks. in the assets we see an increase of 104 million by selling and buying hardware. and we also see a tax decrease. Why? In 25 we had upfront payments which after sale of Vesatil have been turned back so we asked the tax office to pay back. This is why we see the better cash flow, less payment and of course the profit tax which drops. The liabilities, if we look at this, 90 million increase. Liabilities of performance land second half year. The bank liabilities have increased by 200 million to 3.5. So with the dividend payments, shares buyback from IONOS package in 26 as well with 84 million and the CAPEX which we funded a net debt of 3.4 billion, leverage of 2.57. and these are some of the things that you see here wouldn't appear in the second half so that the leverage there will be expected to go down south as we have forecast at the end of the year. Equity, 6.3 million plus. Total, the ratio is slightly dropping, 0.2 to a stable level of 43.4%, driven by the result on one hand, and this is opposed by the dividend and the purchase of buyback of shares. This is why it doesn't change. And that also already takes me to the end. and I would like to open the floor for questions. Okay, thank you for the presentation. We will start with the question and answer session. There are the microphones in the room and please give us your name and company, Jürgen Weiss from Deutsche Bank, to start.

I have a couple of questions, if I may. The first is on INOS. And again, you still hold a 64% stake in the company. You've previously said you still see a lot of value in INOS. Just happy to hear your thoughts on how you feel about your shareholding there. And also, INOS has announced a lot of high ARPU AI initiatives at the moment. How do you view those initiatives and INOS's position as a German player within Europe with data centers at their disposal? So maybe some color on the prospects there would be great. My second question is on mail and media. Some of the questions we're getting is, is there an advantage for having it within the United Internet portfolio? In other words, does it help you with your other businesses to own these sort of portals? Would you consider spinning out the business, listing it, looking at options going forward? And despite the loss of the free accounts that you described, are you still seeing good engagement on the website or is traffic also taking a hit which in turn affects the ad revenue on these portals? Some color there would be great. Thank you.