United Internet gets off to successful start in fiscal year 2010

Montabaur, (PresseBox) - .
- Consolidated sales up 13% to € 462.8 million in first quarter
- Forecast confirmed: United Internet expects sales growth of around 15% for 2010 and stable EBITDA at record level of 2009.
- CEO Ralph Dommermuth "We got off to a successful start in fiscal year 2010 and are laying the foundation for further growth in the booming Mobile Internet and Cloud Computing markets".

United Internet AG, Europe's leading internet specialist with brands such as 1&1, GMX and WEB.DE got off to a good start in 2010 and is moving strongly into the growing Mobile Internet and Cloud Computing markets. In the first quarter of the current year, consolidated sales of United Internet AG grew by 13.0%, from € 409.4 million last year to € 462.8 million. Despite high expenses for the current DSL quality drive and development and prelaunch costs for new business fields, earnings before interest, taxes, depreciation and amortization (EBITDA) improved by 8.1%, from € 83.5 million to € 90.3 million.

Due in particular to scheduled higher depreciation following the acquisition of freenet's DSL customers, earnings before interest and taxes (EBIT) remained virtually unchanged at € 70.7 million (prior year: € 70.8 million). The acquisition of freenet's customers in late 2009 significantly enhanced the company's strategic position in the current consolidation of the DSL market. Earnings per share (EPS) improved slightly from € 0.16 last year to € 0.17.

In order to fully exploit the megatrends Mobile Internet and Cloud Computing, United Internet introduced a new segmentation for management and reporting purposes at the beginning of 2010: Access and Applications. "Access" combines the company's DSL and mobile internet business, while "Applications" comprises cloud applications and the online marketing business. "We got off to a successful start in the new year," states Ralph Dommermuth, CEO of United Internet AG. "With our business relations to millions of small firms and private users, we have an excellent opportunity to participate in these booming markets." The signing of an MVNO contract (Mobile Virtual Network Operator) with Vodafone in March 2010 represents an important milestone on this path. It will enable United Internet to move into the dynamically growing mobile internet market from summer 2010 onward.


In view of the successful start to fiscal 2010, management has confirmed its forecasts and expects consolidated sales to grow by around 15%. Despite high expenses for the current DSL quality drive and further increased development and marketing costs in the following quarters for investments in new business fields and further foreign expansion, EBITDA is expected to remain at the record level of the previous year (without positive special items).

Segment development

The strong increase in consolidated sales was driven by the "Access" segment. Sales in the first quarter of 2010 grew by 19.3% to € 300.8 million. EBITDA improved by 42.2% to € 31.7 million, while EBIT grew by 17.2% to € 25.2 million, despite scheduled writedowns on the acquired freenet DSL customer base. Compared to December 31, 2009, the number of feebased contracts in this segment remained stable at 3.50 million, thus continuing the positive trend of the previous quarters. A further 90,000 complete DSL contracts (of particular importance for customer retention) were added in the period under review.

In the "Applications" segment, United Internet invested heavily in customer growth and increased the number of feebased contracts by 180,000 to 5.83 million. Sales growth in this segment was slowed by the contract conversion of a major customer of AdLINK subsidiary affilinet in late 2009. As a result, listed subsidiary AdLINK Internet Media AG posted a fall in sales of 23.5% in the first quarter of 2010 - whereas the rest of the segment enjoyed growth of 11.2%. Total segment sales thus grew by 3.0% from € 157.1 million to € 161.8 million. Despite increased marketing expenses and high development and prelaunch costs for new applications, segment EBITDA and EBIT grew by 3.2% to € 60.5 million and by 1.3% to € 47.4 million, respectively. Customer contracts outside Germany grew to 2.30 million and accounted for 80,000 of total growth in customer contracts of 180,000. The number of adfinanced accounts increased from 26.3 million to over 27.0 million in the first quarter.

United Internet AG

With over 9 million feebased customer contracts and over 27 million adfinanced free accounts, United Internet AG is Europe's leading internet specialist. At the heart of United Internet is a highperformance "Internet Factory" with over 4,600 employees, of which more than 1,000 are engaged in product management, development and data centers. In addition to the high sales strength of its established brands (GMX, WEB.DE, 1&1, uniteddomains, fasthosts, InterNetX, Sedo and affilinet) and distribution channels (some of which are exclusive), United Internet stands for outstanding operational excellence with over 36 million customer accounts worldwide. United Internet also holds equity interests in listed companies, such as freenet or Versatel, and owns numerous other investments in young internet companies.

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