United Internet with successful first half-year 2023

  • Customer contracts: + 490,000 to 27.95 million contracts
  • Sales: + 4.4% to EUR 3.028 billion
  • EBITDA: + 1.9% to EUR 670.1 million, despite strong increase in start-up costs for 1&1 mobile network
  • 2023 guidance confirmed

Montabaur, August 3, 2023. United Internet AG can look back on a successful first six months of 2023. In the first half of 2023, the company continued to make investments in new customer contracts and the expansion of existing customer relationships, and thus in sustainable growth. The total number of fee-based customer contracts was raised by 490,000 to 27.95 million contracts. Of this amount, 180,000 contracts were added in the Consumer Access segment and 210,000 contracts in the Business Applications segment. A further 100,000 contracts were gained in the Consumer Applications segment. Ad-financed free accounts were 790,000 down on December 31, 2022, due mainly to seasonal effects, and were also 240,000 down on June 30, 2022, due in particular to the conversion to fee-based customer relationships (160,000 new contracts since June 30, 2022).

Sales grew by 4.4% in the first half of 2023, from EUR 2,901.1 million in the prior-year period to EUR 3,028.1 million.

Earnings in both the first half of 2022 and the first half of 2023 were impacted by special items in the form of non-cash valuation effects from derivatives and the IPO costs of IONOS Group SE. The valuation effects from derivatives amounted to EUR +4.6 million in the prior-year period and EUR -4.4 million in the first half of 2023. For the IONOS IPO, costs of EUR -2.4 million were incurred in the prior-year period and EUR -1.6 million in the first half of 2023. At Group level, these IPO costs in 2023 include an opposing income amount from the contractually agreed prorated assumption of IPO costs by IONOS co-owner Warburg Pincus.

Without consideration of these special items, earnings developed as follows in the first half of 2023: EBITDA amounted to EUR 670.1 million and was thus 1.9% above the prior-year level (EUR 657.5 million). This figure includes strongly increased start-up costs for the rollout of 1&1’s mobile communications network (EUR -24.7 higher than in H1 2022). In addition, EBIT was burdened by an increase of EUR -31.8 million in depreciation, especially on investments in the expansion of 1&1 Versatel’s fiber-optic network and the rollout of 1&1’s mobile network. As a result, it fell by EUR -8.8 million (-2.1%) from EUR 417.3 million to EUR 408.5 million. The increase in depreciation – mainly due to the operational launch of 1&1’s mobile network – is expected to be offset by planned cost savings on advance services from Q4 2023.

In the first half of 2023, operating EPS declined from EUR 1.04 in the prior-year period to EUR 0.84. In addition to the decrease in EBIT (EPS effect: EUR -0.04), this was due to the lower result from associated companies (EPS effect: EUR -0.04), as well as the impact of increased interest rates on the financial result (EPS effect: EUR -0.12).

Outlook 2023

On completion of the first six months, United Internet can confirm its guidance for 2023 and continues to expect an increase in consolidated sales for the year as a whole to approx. EUR 6.2 billion (prior year: EUR 5.915 billion). EBITDA is likely to be on a par with the previous year (prior year: EUR 1.272 billion). This figure includes start-up costs of approx. EUR -120 million (prior year: EUR -52 million) for the rollout of 1&1’s mobile network. Due in particular to the construction of the mobile network and the expansion of the fiber-optic network to connect the 5G antennas as well as to provide coverage in additional expansion areas, capital expenditures (excluding possible M&A transactions) are expected to increase to approx. EUR 800 million (prior year: EUR 681 million).

Key figures Q2 2023