2008: Sales + 10.9%; EBIT + 8.3%. Earnings burdened by EUR 275.4 million write-downs on investments

(PresseBox) ( Montabaur, )
The Management Board of United Internet AG today announced the Group's audited results according to IFRS for the fiscal year 2008. The figures reveal a positive development in the Group's operating business (sales: + 10.9%; EBIT: + 8.3%), but also high non-cash write-downs (EUR -275.4 million) on investments. Operative cash flow grew slightly to EUR 210.5 million. In view of the balance sheet loss caused by these high write-downs in the annual financial statements of the parent company, United Internet AG, no dividend will be paid for the fiscal year 2008.

Thanks to a business model based mostly on electronic subscriptions, the dominant "Product" segment - with the brands 1&1, GMX, WEB.DE, Fasthosts and InterNetX - succeeded in posting further growth. In the field of portal marketing, however, there was a noticeable decline in the spending of advertising customers in the second half of the year, and above all in the 4th quarter.

In the "Online Marketing" segment, sales and earnings had already been burdened from the beginning of the 2nd quarter by the problematic development in the field of domain marketing. Changes in the policy and algorithms of the most important partner in the field of search engines have been hampering the development of this segment, which in 2007 still boasted very high margins. In the second half of the year, segment sales and earnings were also burdened by the marked global decline in advertising spending and by falling prices and margins as a result of fierce competition for the remaining budgets.

All in all, consolidated sales of United Internet AG grew by 10.9% in fiscal year 2008, from EUR 1,487.4 million to EUR 1,649.6 million (currency adjusted: + 12.4% to EUR 1,671.6 million). Earnings before interest, taxes, depreciation and amortization (EBITDA) rose by 3.2% from EUR 308.8 million to EUR 318.8 million. Earnings before interest and taxes (EBIT) increased by 8.3% from EUR 236.9 million to EUR 256.6 million.

Against the backdrop of a steep decline in the share prices of strategic investments in freenet (via MSP Holding), Versatel, Drillisch and Goldbach Media in 2008, the Management Board and Supervisory Board decided to make non-cash write-downs on the carrying values of the aforementioned companies to their share prices as of December 31, 2008. In addition, non-cash write-downs were also made on the carrying values of non-listed investments. The resulting negative special item of EUR 275.4 million resulted in net income of EUR -121.5 million and an EPS of EUR -0.52.

United Internet got off to a good start in the new year. A slight increase in Group sales is expected for 2009. The company aims to maintain its record EBITDA and EBIT figures of 2008 also in 2009 - despite the expected ongoing weakness of the online advertising market.
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