Press release BoxID: 462536 (United Internet AG)
  • United Internet AG
  • Elgendorfer Straße 57
  • 56410 Montabaur
  • Contact person
  • Marcus Schaps
  • +49 (2602) 96-1076

United Internet continues successful course in first 9 months of 2011

(PresseBox) (Montabaur, ) .
- Sales up 9.1% to all-time high of EUR 1.537 billion
- Earnings before taxes grow by 15.7% to EUR 210.2 million
- Earnings per share up 30.2% to EUR 0.69
- Growth of 610,000 new customer contracts to 10.37 million
- Full-year "customer growth" guidance raised once again

United Internet AG, Europe's leading internet specialist with brands such as 1&1, GMX and WEB.DE, continues to grow and improve earnings. In the first nine months of 2011, sales rose 9.1% to EUR 1.537 billion (prior year: EUR 1.409 billion). The company's ongoing investments in the growth markets Mobile Internet and Cloud Computing, and international expansion are now paying off: United Internet added 610,000 new fee-based customer contracts in the first nine months of 2011 - 180,000 more than in the same period last year. As a result, the total number of customer contracts rose to 10.37 million.

In September 2011, United Internet launched an extensive marketing campaign for the roll-out of the 1&1 Do-it-Yourself Homepage in the USA, the UK, Spain, Poland and Austria. The campaign is aimed at raising brand awareness of 1&1 in these markets, positioning 1&1 as a solutions provider for small companies, and further accelerating customer growth. A total of EUR 35 million has been budgeted for this campaign in the second half of 2011, of which EUR 9.3 million was expensed in the third quarter. The campaign had not yet impacted customer figures as of September 30, 2011, as customers ordering the 1&1 Do-it-Yourself Homepage are only registered as "genuine contractual customers" when their free 30-day trial is completed. "We expect a positive impact and a noticeable acceleration of customer growth during the fourth quarter of 2011," states Ralph Dommermuth, founder and CEO of United Internet.

Despite the costs for this campaign, heavy smartphone subsidizing in its Mobile Internet business, and heavy investment in the development of new products and further international expansion, United Internet succeeded in improving earnings. Earnings before interest, taxes, depreciation and amortization (EBITDA) grew by 5.6% to EUR 285.9 million (prior year: EUR 270.8 million), while earnings before interest and taxes (EBIT) reached year-on-year growth of 6.2% to EUR 223.6 million (prior year: EUR 210.6 million). Earnings before taxes (EBT) increased by 15.7% to EUR 210.2 million (prior year: EUR 181.6 million). These earnings include a positive net balance of EUR 16.3 million resulting from the sale of Versatel shares in the second quarter of 2011, the valuation of call options received in this connection, and the at-equity result of Versatel. The resulting positive earnings effect amounted to EUR 0.07 per share. Earnings per United Internet share (EPS) rose by 30.2% during the period under review to EUR 0.69 (prior year: EUR 0.53).

"We succeeded in raising sales and fee-based customer contracts to new all-time highs while improving earnings," says Ralph Dommermuth in his assessment of the nine-month figures. "Our company is excellently placed for the next steps in its development and we are optimistic about the challenges ahead," states Dommermuth.

The growth in customer contracts had a significant impact on sales in the company's "Access" segment: in the first nine months of 2011, revenue increased by 10.4% to EUR 1.008 billion (prior year: EUR 913.0 million). The number of fee-based contracts grew in total by 280,000 contracts in the first nine months of 2011 to reach 3.91 million - due mainly to strong demand for 1&1 Mobile Internet products. Despite a significant increase in costs for new customer acquisition, especially for smartphone subsidizing in the Mobile Internet business, there was year-on-year growth in segment EBITDA of 6.3% to EUR 109.1 million (prior year: EUR 102.6 million), while segment EBIT rose by 5.3% to EUR 87.2 million (prior year: EUR 82.8 million).

In the "Applications" segment, the number of fee-based contracts rose by 330,000 to 6.46 million in the first nine months of 2011. The high non-German proportion (2.63 million contracts) underlines the growing international presence of United Internet. Ad-financed accounts increased by 2.4 million to 30.4 million - whereby the 1.5 million free accounts of were included for the first time. Compared to the first nine months of 2010, sales of the "Applications" segment grew strongly by 6.7% to EUR 528.7 million (EUR 495.5 million). Adjusted for currency effects, segment growth amounted to 8%. Business outside Germany grew by 9.8% and contributed a total of EUR 161.9 million (prior year: EUR 147.4 million) to segment sales. Key earnings figures in this segment comprise high expenditure for the development of new Cloud products, the cost of international expansion, and greatly increased marketing expenses - especially for the marketing of the 1&1 Do-it-Yourself Homepage. In the third quarter of 2011 alone, EUR 9.3 million was expensed of the total marketing campaign budget of EUR 35 million. Against this backdrop, there was an expected year-on-year decline in segment EBITDA to EUR 153.0 million (prior year: EUR 172.8 million) and in segment EBIT to EUR 112.7 million (prior year: EUR 132.5 million).

In view of its successful performance in the first nine months of 2011, United Internet can confirm its guidance for fiscal year 2011. To be precise, the company expects consolidated sales of around EUR 2.050 billion, EBITDA of approx. EUR 350 million, EBT of approx. EUR 250 million and an EPS figure of around EUR 0.80. On publication of its half-yearly figures, United Internet raised its guidance for customer growth from 700,000 new contracts to 840,000. Following the roll-out of its foreign marketing campaign for the 1&1 Do-it-Yourself Homepage, the company has once again raised its guidance and now expects growth of around 900,000 contracts (comparable prior-year figures: 440,000 contracts in 2009, 610,000 contracts in 2010).

United Internet AG

With over 10 million fee-based customer contracts and over 30 million ad-financed free accounts, United Internet AG is Europe's leading internet specialist. At the heart of United Internet is a high-performance "Internet Factory" with over 5,400 employees, of which more than 1,300 are engaged in product management, development and data centers. In addition to the high sales strength of its established brands (1&1, GMX, WEB.DE, united-domains, fasthosts, InterNetX, Sedo and affilinet) and distribution channels (some of which are exclusive), United Internet stands for outstanding operational excellence with over 40 million customer accounts worldwide. United Internet also holds equity interests in listed companies, such as freenet, Hi-media or the Goldbach Group, and owns numerous other investments in young internet companies.