Interim Statement Q3 2019

Interim Statement Q3 2019

2

SELECTED KEY FIGURES Sept. 30, 2019 (IFRS 16)

Sept. 30, 2018 (IFRS 15)

Change

3,880.8

3,815.9

+ 1.7%

NET INCOME (in € million) Sales EBITDA

944.0

874.6

+ 7.9%

EBIT

587.6

582.8

+ 0.8%

EBT(1)

550.1

548.0

+ 0.4%

1.50

1.37

+ 9.5%

1.87

1.77

+ 5.5%

1,405.9

1,172.2

+ 19.9%

7,896.1

6,897.1

+ 14.5%

4,801.0

4,500.9

+ 6.7%

EPS (in €)(1) EPS before PPA writedowns (in €)

(1)

BALANCE SHEET (in € million) Current assets Non-current assets Equity Equity ratio

51.6%

55.8%

Total assets

9,302.0

8,069.3

Operative cash flow

725.8

659.3

+ 10.1%

Cash flow from operating activities

476.0

326.7

+ 45.7%

Cash flow from investing activities

- 69.6

- 268.9

Free cash flow

398.7

181.7

+ 119.4%

Total as of September 30

9,241

9,032

+ 2.3%

thereof Germany

7,627

7,526

+ 1.3%

thereof abroad

1,614

1,506

+ 7.2%

32.73

40.75

- 19.7%

14.12

13.26

+ 0.86

+ 15.3%

CASH FLOW (in € million)

(2)

EMPLOYEES (HEADCOUNT)

SHARE (in €) Share price as of September 30 (Xetra) CUSTOMER CONTRACTS (in million) Consumer Access, total contracts thereof mobile internet

9.78

8.93

+ 0.85

thereof broadband connections

4.34

4.33

+ 0.01

39.27

38.42

+ 0.85

1.54

1.53

+ 0.01

Consumer Applications, total accounts

thereof with Premium Mail subscription (contracts) thereof with Value-Added subscription (contracts) thereof free accounts Business Applications, total contracts

0.72

0.71

+ 0.01

37.01

36.17

+ 0.84

8.13

8.07

+ 0.06

thereof Germany

3.88

3.81

+ 0.07

thereof abroad

4.25

4.26

- 0.01

24.51

23.58

+ 0.93

Fee-based customer contracts, total

(1) EBT and EPS 2018 without Tele Columbus impairment charges (EBT effect: € -216.2 million; EPS effect: € -1.08); EBT and EPS 2019 without Tele Columbus impairment charges (EBT effect: € -30.9 million; EPS effect: € -0.15) (2) Free cash flow 2018 without consideration of a tax payment from fiscal year 2016 (free cash flow effect: € -34.7 million); free cash flow 2019 without consideration of a capital gains tax payment (free cash flow effect: € -56.2 million) as well as tax payments from fiscal year 2017 and previous years (free cash flow effect: € -27.2 million)

3

CONTENT 8 FOREWORD OF CEO 8 INTERIM GROUP MANAGEMENT REPORT FOR THE FIRST NINE MONTHS OF 2019 8 Initial application of IFRS 16 9 Business development 16 Position of the Group 23 Subsequent events 24 Risk and opportunity report 25 Forecast report 26 NOTES ON THE QUARTERLY STATEMENT 29 INTERIM FINANCIAL STATEMENTS FOR THE FIRST NINE MONTHS OF 2019 30 Balance sheet 32 Net income 34 Cash flow 36 Changes in shareholders’ equity 38 Segment reporting 41 FINANCIAL CALENDAR / IMPRINT

4

Dear shareholders, employees, and business associates of United Internet, United Internet AG can look back on a successful first nine months of 2019. In the highly competitive environment of our Consumer Access segment, we once again succeeded in visibly increasing our high-margin service revenues. The same applies to our Business Access segment, where we were able to achieve significant growth in revenue and earnings and increasingly exploit the potential of our own fiber-optic network. At the same time, we continued to drive forward the repositioning of our portals and the establishment of data-driven business models in the Consumer Applications segment, as well as the rebranding program of “1&1 Internet” in the Business Applications segment via the transitional brands “1&1 IONOS” and currently “IONOS by 1&1” – thus taking a further step toward the targeted IPO. Following a transition phase, the IPO is then to be held in future under the independent “IONOS” brand. In addition, we made strong investments in new customer contracts and the expansion of our existing customer relationships in the first nine months of 2019. In total, we increased the number of fee-based customer contracts by 660,000 to 24.51 million contracts. Of this total, 580,000 contracts were added in the Consumer Access segment. A further 10,000 and 70,000 contracts resulted from the Consumer Applications and Business Applications segments, respectively. Consolidated sales grew by 1.7% in the first nine months of 2019, from € 3,815.9 million in the previous year to € 3,880.8 million. This at first glance only moderate growth was due in particular to fluctuations during the year in (low-margin) hardware sales (€ -38.1 million compared to the previous year), as well as sales effects from increased demand for LTE mobile tariffs among existing customers (sales reduced by € -38.7 million due to lower basic prices in the first year of the contract; prior year: € -10.6 million) in the Consumer Access segment. In addition, there is the reduction in ad space started in April 2018 as part of a repositioning in the Consumer Applications segment (€ -17.2 million; prior year: € -9.7 million). Earnings before interest, taxes, depreciation and amortization (EBITDA) were positively influenced by the initial application of IFRS 16 (€ +65.3 million) in the first nine months of 2019. In addition to the one-off expenses already announced (€ -3.8 million; prior year: € -12.4 million), the regulatory decision to increase subscriber line charges (€ -4.4 million), and initial costs for our 5G mobile communications network (€ -2.5 million), there were opposing effects in the Consumer Access segment in particular from additional costs (€ -59.0 million) for wholesale purchases after the time-limited adjustment mechanism of a wholesale agreement expired at the end of 2018.

interim management report

interim financial statements

financial calendar / imprint

foreword

Contrary to our original expectations, the expired arrangement was not compensated for by a price reduction during the reporting period. However, the corresponding wholesale prices are the subject of several arbitration proceedings initiated by our subsidiary 1&1 Drillisch which we expect to result in binding decisions on the requested permanent price adjustments. On October 24, 2019, 1&1 Drillisch received the draft arbitration report on the first price adjustment proceedings (Price Review 1), initiated with effect from September 2017, which rejected 1&1 Drillisch’s application for the retroactive reduction of wholesale prices as of this date. The final expert opinion on Price Review 1 is expected to be issued in the course of November. The consequence of the draft arbitration report is that the financial figures for 2017 and – at least for the time being – the 2018 and 2019 results of 1&1 Drillisch will not be improved by price reductions. Moreover, the aforementioned price increase will remain valid – at least for the time being – due to the expiry of the contractual adjustment mechanism (total impact of approx. € 85 million in 2019) and will now be the subject of further price reviews. In addition to these additional costs, our future investments (implemented as planned), such as the repositioning of the Consumer Applications segment (€ -16.8 million; prior year: € -9.9 million) and increased marketing expenses in the Business Applications segment (€ -26.7 million), had an initial negative effect on earnings. Increased marketing expenses included a one-off amount of € -15.1 million for rebranding measures (prior year: one-offs of € -8.2 million for integration projects). All in all, EBITDA rose by 7.9% in the first nine months of 2019, from € 874.6 million to € 944.0 million (according to IFRS 16). The comparable growth according to IFRS 15 amounted to 0.5%. Earnings before interest and taxes (EBIT) were virtually unaffected by IFRS 16 accounting and rose by 0.8%, from € 582.8 million to € 587.6 million. EBIT also includes the above mentioned burdens on earnings and one-offs. Earnings per share (EPS) rose from € 0.29 to € 1.35. Both of these EPS figures were burdened by non-cash impairment charges on shares held in Tele Columbus (EPS effect: € -1.08 in the previous year and € -0.15 in the current reporting period) as a result of closing-date effects. Adjusted for these impairment charges, operating EPS amounted to € 1.50 – an increase of 9.5% over the comparable figure of € 1.37 in the previous year. Operating EPS before PPA writedowns rose from € 1.77 to € 1.87.

5

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In addition to our operating business, we successfully participated – via 1&1 Drillisch – in the 5G spectrum auction ending on June 12, 2019 and purchased two frequency blocks of 2 x 5 MHz in the 2 GHz band and five frequency blocks of 10 MHz in the 3.6 GHz band. The total auction price amounted to around € 1.07 billion. The frequency blocks in the 3.6 GHz band are available immediately and the frequency blocks in the 2 GHz band will be available as of January 1, 2026. Up to this time, 1&1 Drillisch has the possibility to rent frequencies in the amount of 2x10 MHz in the 2.6 GHz band from Telefónica Germany on the basis of the commitments given by Telefónica Germany as part of the EU’s clearance of its merger with E-Plus. This spectrum will be available until December 31, 2025. By acquiring these frequencies, we have laid the foundation for our successful and permanent positioning of 1&1 Drillisch AG as Germany’s fourth mobile network provider and intend to establish a powerful mobile communications network. On September 5, 2019, 1&1 Drillisch also signed an agreement with the German Federal Ministry of Transport and Digital Infrastructure (BMVI) and the German Federal Ministry of Finance (BMF) regarding the construction of mobile communication sites in so-called “not-spots”. 1&1 Drillisch is thus helping to close existing supply gaps and improve the provision of mobile communications in rural regions by building hundreds of base stations. In return, 1&1 Drillisch benefits from an agreement to pay for the acquired 5G spectrum in installments. As a result, the license fees which were originally to be paid to the German government in 2019 and 2024 can now be spread over the period up to 2030 in installments. The credit line of originally € 2.8 billion arranged to finance the highest bids of the spectrum auction, among other things, was thus no longer required and has already been returned. The agreement with the BMVI and BMF is in line with 1&1 Drillisch’s long-term financing strategy, which is geared toward paying the major share of expenses for the construction of a modern 5G network from current revenue. A final word on our guidance: we did not include any decrease in wholesale prices for the Consumer Access segment in our 2019 guidance. However, given the current environment of constantly falling market prices for mobile data usage, we did expect to be able to avert the price increase effective as of January 2019 following the expiry of an adjustment mechanism. According to the current draft of the expert opinion on Price Review 1 (regarding September 2017), this was not successful and will now be the subject of further price reviews. Decisions in the three further price reviews initiated by 1&1 Drillisch (with retroactive effect as of July 2018 (Price Review 2), January 2019 (Price Review 3), and July 2019 (Price Review 4)) are expected to be announced in 2020. These are separate proceedings which will be decided on the basis of their respective effective dates and the prevailing market conditions. Subject to possible changes in the final arbitration report, we now expect the price increase to incur additional costs of around € 85 million in fiscal year 2019 – at least until a possible clarification is achieved in the course of further price reviews. Against this backdrop, we issued an ad-hoc disclosure on October 24, 2019, in which we downgraded our EBITDA guidance for the current fiscal year by approx. € 85 million and now expect EBITDA of around € 1,250 million. We still expect sales adjusted for low-margin hardware business to rise by approx. 3% and total sales including hardware by approx. 2%.




foreword

We are well prepared for the next steps in our company’s development and upbeat about our prospects for the remaining months of the fiscal year. In view of the successful first nine months, we would like to express our particular gratitude to all employees for their dedicated efforts as well as to our shareholders and business associates for the trust they continue to place in United Internet AG. Montabaur, November 12, 2019

Ralph Dommermuth

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INTERIM GROUP MANAGEMENT REPORT FOR THE FIRST NINE MONTHS OF 2019 Initial application of IFRS 16 On January 13, 2016, the International Accounting Standards Board (IASB) published IFRS 16, a new standard for lease accounting. The new standard is to be applied in fiscal years beginning on or after January 1, 2019 – and thus also for this quarterly statement (Q3 2019). United Internet is mainly a lessee. The majority of the Group’s leases are for renting network infrastructures, buildings, technical equipment and vehicles. According to IFRS 16, leases are no longer regarded as classic rental agreements but as financing transactions: the lessee acquires a right to use the leased asset and finances it via the lease installments. Consequently, the lessee must recognize an asset for the right to use the leased asset and a liability for the payments due for the leased asset in the balance sheet. In this way, every lease and rental relationship is stated in the balance sheet. Only lease or rental agreements with terms of up to twelve months and contracts with low-value assets are excluded from this obligation to be stated in the balance sheet. On initial application of IFRS 16, United Internet opted to recognize the asset for the right of use granted at the value of the related lease liability as of January 1, 2019 and not to apply the standard retrospectively for each previous reporting period. Application of the new standard led to an increase in non-current assets (for right-of-use assets) in the consolidated balance sheet of United Internet, and at the same time to an increase in financial liabilities (due to the payment obligation). In the income statement, this resulted in a reduction in rental payments, an increase in depreciation and interest expenses, and thus to a rise in EBITDA. However, other financial performance indicators “below” EBITDA, such as EBIT, EBT or EPS, are either not affected by the new accounting standard, or only to a minor extent. Specifically, the initial application of IFRS 16 in the first nine months of 2019 had a positive impact on consolidated EBITDA of around € 65.3 million. The EBITDA effects were mostly in the Business Access (€ +44.6 million) and Business Applications (€ +10.5 million) segments.

foreword


interim financial statements interim management report

Business development of the Group Development of the Consumer Access segment The number of fee-based contracts in the Consumer Access segment rose by 580,000 contracts to 14.12 million. While broadband connections remained steady at 4.34 million, 580,000 customer contracts were added in the mobile internet business – raising the total number of contracts to 9.78 million. Development of Consumer Access contracts in the first nine months of 2019 (in million)

Consumer Access, total contracts

Sept. 30, 2019

Dec. 31, 2018

Change + 0.58

14.12

13.54

thereof mobile internet

9.78

9.20

+ 0.58


4.34

4.34

+/- 0.00

Sept. 30, 2019

June 30, 2019

Change

14.12

13.92

+ 0.20

thereof mobile internet

9.78

9.58

+ 0.20


4.34

4.34

+/- 0.00

Development of Consumer Access contracts in the third quarter of 2019 (in million)

Consumer Access, total contracts

Sales of the Consumer Access segment rose moderately by 1.3% in the first nine months of 2019, from € 2,698.9 million in the previous year to € 2,734.9 million. Despite a highly competitive environment, high-margin service revenues – which represent the core business of the segment – improved by 3.4% from € 2,151.9 million to € 2,226.0 million. Without consideration of sales effects from increased demand for LTE mobile tariffs among existing customers (sales reduced by € -38.7 million due to lower basic prices in the first year of the contract; prior year: € -10.6 million), adjusted service revenues rose by 4.7%. In addition to the aforementioned sales reductions, this at first glance only moderate overall sales growth was due to fluctuations during the year in (low-margin) hardware sales (€ -38.1 million compared to the previous year). Such hardware sales (especially from the use of smartphones which customers acquire for no or only small one-off charges on signing new contracts and which are paid for via higher tariff prices over the contractual term) fluctuate seasonally and depend on the appeal of new devices and the model cycles of hardware manufacturers. Consequently, this effect may be reversed in the future. If this is not the case, however, it would have no significant impact on the segment’s EBITDA trend. At € 508.6 million, segment EBITDA fell short of the prior-year figure (€ 521.8 million). This decline is mainly due to additional costs for wholesale mobile telecommunications purchases (€ -59.0 million) after the time-limited adjustment mechanism of a wholesale agreement expired at the end of 2018. Contrary to original expectations, the expired arrangement was not compensated for by a price reduction during the reporting period.

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10

However, the corresponding wholesale prices are the subject of several arbitration proceedings initiated by 1&1 Drillisch which it expects to result in binding decisions on the requested permanent price adjustments. On October 24, 2019, 1&1 Drillisch received the draft arbitration report on the first price adjustment proceedings (Price Review 1), initiated with effect from September 2017, which rejected 1&1 Drillisch’s application for the retroactive reduction of wholesale prices as of this date. The final expert opinion on Price Review 1 is expected to be issued in the course of November. The consequence of the draft arbitration report is that the financial figures for 2017 and – at least for the time being – the 2018 and 2019 results of 1&1 Drillisch will not be improved by price reductions. Moreover, the aforementioned price increase will remain valid – at least for the time being – due to the expiry of the contractual adjustment mechanism and will now be the subject of further price reviews. EBITDA also contains one-off expenses (€ -3.8 million; prior year: €-12.4 million) for current integration projects, the increase in regulated subscriber line charges as of July 2019 (€ -4.4 million), and initial costs in connection with the planning and preparation of the 5G mobile communications network (€ -2.5 million). On a like-for-like basis without consideration of the above mentioned effects and a positive IFRS 16 effect (€ +4.3 million), comparable EBITDA would have risen by 7.5% over the previous year. Segment EBIT of € 396.6 million was virtually unaffected by IFRS 16 accounting and also fell short of the prior-year figure (€ 401.1 million). EBIT also includes the above mentioned burdens on earnings and one-off expenses. Key sales and earnings figures in the Consumer Access segment (in € million) 9M 2019 (IFRS 16)

2,734.9

Sales

2,698.9

9M 2018 (IFRS 15)

t hereof service sales thereof hardware sales (1)

EBITDA

EBIT

2,226.0

+ 1.3% + 3.4%

2,151.9 508.9 547.0

- 7.0%

508.6 (2) 521.8 (3)

- 2.5%

396.6 (2)

- 1.1%

401.1 (3)

(1) Hardware sales incl. small amount of other sales (2) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -3.8 million) (3) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -12.4 million)

Quarterly development (in € million); change over prior-year quarter Q4 2018 (IFRS 15)

Q1 2019 (IFRS 16)

Q2 2019 (IFRS 16)

Q3 2019 (IFRS 16)

Q3 2018 (IFRS 15)

Change

Sales

929.8

905.0

907.1

922.8

893.2

+ 3.3%

thereof service sales

730.4

730.4

740.7

754.9

728.6

+ 3.6%

199.4

174.6

166.4

167.9

164.6

+ 2.0%

EBITDA

197.5(2)

168.5(3)

171.9(4)

168.2(5)

181.6(6)

- 7.4%

EBIT

159.5(2)

130.6(3)

134.1 (4)

132.0 (5)

141.6(6)

- 6.8%

thereof hardware sales(1)

(1) Hardware sales incl. small amount of other sales (2) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -12.7 million) (3) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -2.1 million) (4) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -0.2 million) (5) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -1.5 million) (6) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -4.7 million)

foreword




Multi-period overview(1): Development of key sales and earnings figures (in € million) 9M 2016 (IAS 18)

9M 2017 (IAS 18)

9M 2018 (IFRS 15)

9M 2019 (IFRS 16)

Sales

1,790.7

1,975.8

2,698.9

2,734.9

thereof service sales

1,721.1

1,882.7

2,151.9

2,226.0

69.6

93.1

547.0 (3)

508.9

EBITDA

288.3

361.9

521.8(4)

508.6(5)

EBITDA margin

16.1%

18.3%

19.3%

18.6%

EBIT

280.3

339.3

401.1(4)

396.6(5)

EBIT margin

15.7%

17.2%

14.9%

14.5%

thereof hardware sales(2)

(1) As the new segmentation was only introduced in the course of preparing the annual financial statements for 2018, the usual 5-year multi-period overview is limited to the financial years 2016-2019 (2) Hardware sales incl. small amount of other sales (3) Increase due in particular to conversion effects from initial accounting acc. to IFRS 15 (4) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -12.4 million) (5) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -3.8 million)

In addition to its operating business, United Internet successfully participated – via 1&1 Drillisch – in the 5G spectrum auction ending on June 12, 2019 and purchased two frequency blocks of 2 x 5 MHz in the 2 GHz band and five frequency blocks of 10 MHz in the 3.6 GHz band. The total auction price amounted to around € 1.07 billion – payable in installments until 2030. The frequency blocks in the 3.6 GHz band are available immediately and the frequency blocks in the 2 GHz band will be available as of January 1, 2026. Up to this time, 1&1 Drillisch has the possibility to rent frequencies in the amount of 2x10 MHz in the 2.6 GHz band from Telefónica Germany on the basis of the commitments given by Telefónica Germany as part of the EU’s clearance of its merger with E-Plus. This spectrum will be available until December 31, 2025. By acquiring these frequencies, the foundation was laid for a successful and permanent positioning of the 1&1 Drillisch Group as Germany’s fourth mobile network provider. The company intends to use this basis to establish a powerful mobile communications network. On September 5, 2019, 1&1 Drillisch also signed an agreement with the German Federal Ministry of Transport and Digital Infrastructure (BMVI) and the German Federal Ministry of Finance (BMF) regarding the construction of mobile communication sites in so-called “not-spots”. 1&1 Drillisch is thus helping to close existing supply gaps and improve the provision of mobile communications in rural regions by building hundreds of base stations. In return, 1&1 Drillisch benefits from an agreement to pay for the acquired 5G spectrum in installments. As a result, the license fees which were originally to be paid to the German government in 2019 and 2024 can now be spread over the period up to 2030 in installments. The credit line of originally € 2.8 billion arranged to finance the highest bids of the spectrum auction, among other things, was thus no longer required and has already been returned. The agreement with the BMVI and BMF is in line with 1&1 Drillisch’s long-term financing strategy, which is geared toward paying the major share of expenses for the construction of a modern 5G network from current revenue.

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12

Development of the Business Access segment Sales of the Business Access segment rose by 5.3% in the first nine months of 2019, from € 334.6 million in the previous year to € 352.5 million. Segment EBITDA improved by 140.8%, from € 43.6 million to € 105.0 million. In addition to the clearly positive business trend as reflected in sales, this increase was also attributable to effects from the initial application of IFRS 16 (€ +44.6 million). Without consideration of these effects, adjusted EBITDA rose by 38.5%. The strong increases in sales and EBITDA demonstrate that 1&1 Versatel is increasingly succeeding in exploiting the potential of its fiber-optic network to an ever greater extent. As a result of high depreciation charges in the field of network infrastructure due to customer growth and further Layer2 connections that will only be amortized in subsequent periods, segment EBIT amounted to € -43.0 million – compared to € -52.5 million in the previous year – and was virtually unaffected by IFRS 16 accounting.

Key sales and earnings figures in the Business Access segment (in € million) 9M 2019 (IFRS 16) 9M 2018 (IFRS 15)

352.5

Sales 105.0

EBITDA

EBIT

+ 5.3%

334.6

+ 140.8%

43.6 - 43.0 - 52.5


Q1 2019 (IFRS 16)

Q2 2019 (IFRS 16)

Q3 2019 (IFRS 16)

Q3 2018 (IFRS 15)

Change

Sales

131.3

119.3

115.0

118.2

112.4

+ 5.2%

EBITDA

29.0

35.7

34.4

34.9

17.9

+ 95.0%

EBIT

- 5.6

- 13.5

- 15.3

- 14.2

- 14.7

Multi-period overview(1): Development of key sales and earnings figures (in € million)

Sales EBITDA EBITDA margin EBIT EBIT margin

9M 2016(2) (IAS 18)

9M 2017(2) (IAS 18)

9M 2018 (IFRS 15)

9M 2019 (IFRS 16)

383.8

325.8

334.6

352.5

89.8

62.1

43.6

105.0

23.4%

19.1%

13.0%

29.8%

- 4.2

- 29.1

- 52.5

- 43.0

-

-

-

-

(1) As the new segmentation was only introduced in the course of preparing the annual financial statements for 2018, the usual 5-year multi-period overview is limited to the financial years 2016-2019 (2) 2016 and 2017 (partially) including the mass market business transferred to Consumer Access as of May 1, 2017

foreword



Development of the Consumer Applications segment The number of fee-based contracts rose by 10,000 to 2.26 million in the first nine months of 2019. Ad-financed free accounts remained stable at 37.00 million and were thus well above the seasonally comparable prior-year figure of 36.17 million as of September 30, 2018. Development of Consumer Applications accounts in the first nine months of 2019 (in million)

Consumer Applications, total accounts thereof with Premium Mail subscription thereof with Value-Added subscription thereof free accounts

Sept. 30, 2019

Dec. 31, 2018

Change

39.26

39.25

+ 0.01

1.54

1.54

+/- 0.00

0.72

0.71

+ 0.01

37.00

37.00

+/- 0.00

Sept. 30, 2019

June 30, 2019

Change

39.26

39.21

+ 0.05

Development of Consumer Applications accounts in the third quarter of 2019 (in million)

Consumer Applications, total accounts thereof with Premium Mail subscription

1.54

1.54

+/- 0.00

thereof with Value-Added subscription

0.72

0.72

+/- 0.00

37.00

36.95

+ 0.05

thereof free accounts

As already announced in the annual financial statements 2018, activities in the Consumer Applications segment continue to focus on the repositioning and reconstruction of the GMX und WEB.DE portals (incl. the related reduction in ad space) and the simultaneous establishment of data-driven business models. Initial successes are already emerging from this transformation, as reflected by a return to more stable user numbers for fee-based Premium Mail accounts and growth of 830,000 free accounts compared to September 30, 2018. In addition, around three million users (as of September 30, 2019) opted in for the Smart Inbox within the first four months of its launch. The first data-driven ad marketing products on this basis were presented at DMEXCO in September. As expected, the above mentioned measures had a negative impact on sales and earnings figures in the first nine months of 2019 and are due to gradually have a positive effect as of fiscal year 2020. Nevertheless, slight growth in adjusted sales and adjusted EBITDA at the prioryear level are already expected for the fourth quarter of 2019. Against this backdrop, and as expected, sales in the segment’s core business of fee-based accounts and the marketing of ad space on its own portals amounted to € 174.3 million in the first nine months of 2019 and thus fell short of the prior-year figure (€ 182.8 million). This decline in sales is mainly attributable to the ongoing repositioning started in the second quarter of 2018 and the associated reduction in ad space (sales effect: € -17.2 million), which only affected sales in the first nine months of the previous year to a limited extent (€ -9.7 million). At € 10.2 million, sales in the field of low-margin third-party marketing were well below the prior-year figure (€ 21.1 million). As a result, there was also an overall decline in total segment sales from € 203.9 million to € 184.5 million. Without consideration of the ad space reduction and the decline in third-party marketing, adjusted sales fell by -0.5%.

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14

Due to the reduction in ad space and investment in the expansion of data-driven business models(EBITDA and EBIT effect: € -16.8 million; prior year: € -9.9 million), segment EBITDA of € 70.6 million (prior year: € 79.9 million) was also down on the previous year. Without consideration of the ad space reduction and a positive IFRS 16 effect (€ +3.2 million), adjusted EBITDA declined by -6.2%. As a result, segment EBIT of € 58.2 million was also down on the previous year (prior year: € 70.8 million) and was virtually unaffected by IFRS 16 accounting.

Key sales and earnings figures in the Consumer Applications segment (in € million) 9M 2019 (IFRS 16) 9M 2018 (IFRS 15)

184.5

Sales

203.9

thereof pay accounts/ portal marketing thereof third-party marketing

174.3

- 9.5%

- 4.6%

182.8 10.2

- 51.7%

21,1 70.6 79.9

EBITDA

- 11.6%

58.2

EBIT

- 17.8%

70.8


Q1 2019 (IFRS 16)

Q2 2019 (IFRS 16)

Q3 2019 (IFRS 16)

Q3 2018 (IFRS 15)

Change

Sales

70.3

60.4

63.4

60.7

63.7

- 4.7%

thereof pay accounts/ portal marketing

67.8

57.9

58.6

57.8

58.5

- 1.2%

2.5

2.5

4.8

2.9

5.2

- 44.2%

thereof third-party marketing EBITDA

32.9

21.4

25.9

23.3

25.4

- 8.3%

EBIT

30.0

18.3

20.9

19.0

22.5

- 15.6%

Multi-period overview(1): Development of key sales and earnings figures (in € million)

Sales thereof pay accounts/ portal marketing thereof third-party marketing EBITDA EBITDA margin EBIT EBIT margin

9M 2016 (IAS 18)

9M 2017 (IAS 18)

9M 2018 (IFRS 15)

9M 2019 (IFRS 16)

205.8

201.8

203.9

184.5

195.1

189.2

182.8

174.3

10.7

12.6

21.1

10.2

88.5

84.7

79.9

70.6

43.0%

42.0%

39.2%

38.3%

79.1

76.0

70.8

58.2

38.4%

37.7%

34.7%

31.5%

(1) As the new segmentation was only introduced in the course of preparing the annual financial statements for 2018, the usual 5-year multi-period overview is limited to the financial years 2016-2019

foreword

15



Development of the Business Applications segment The number of fee-based Business Applications contracts grew organically by 70,000 contracts in the first nine months of 2019 to a total of 8.13 million contracts. Development of Business Applications contracts in the first nine months of 2019 (in million) Sept. 30, 2019

Dec. 31, 2018

Change

Business Applications, total contracts

8.13

8.06

+ 0.07

thereof in Germany

3.88

3.82

+ 0.06

thereof abroad

4.25

4.24

+ 0.01

Sept. 30, 2019

June 30, 2019

Change

Business Applications, total contracts

8.13

8.11

+ 0.02

thereof in Germany

3.88

3.86

+ 0.02

thereof abroad

4.25

4.25

+/- 0.00

Development of Business Applications contracts in the third quarter of 2019 (in million)

In the Business Applications segment, activities in the reporting period focused on driving the rebranding of “1&1 Internet” via the transitional brands “1&1 IONOS” and currently “IONOS by 1&1” – thus taking a further step toward the targeted IPO. Following a transition phase, the IPO is then to be held in future under the independent “IONOS” brand. Sales of the Business Applications segment rose by 4.9% in the first nine months of 2019, from € 634.7 million in the previous year to € 665.7 million.

Despite increased marketing expenses (€ -26.7 million, including one-offs for rebranding measures of € -15.1 million (prior year: one-offs for integration projects of € -8.8 million)), segment EBITDA of € 236.8 million was 1.2% up on the previous year (€ 233.9 million). The strong increase in marketing expenses was opposed by positive effects from the initial application of IFRS 16 (€ +10.5 million). On a like-for-like basis without consideration of the above mentioned effects, comparable EBITDA would have risen by 4.2% over the previous year. EBIT also includes the above mentioned burdens on earnings and one-offs. In addition, there was an increase in depreciation (due in part to World4You and the expansion of the server parks). Against this backdrop, segment EBIT of € 156.8 million also fell short of the prior-year figure (€ 168.4 million) and was virtually unaffected by IFRS 16 accounting. Key sales and earnings figures in the Business Applications segment (in € million) 665.7

Sales

634.7 236.8 (1) 233.9 (2)

EBITDA

EBIT

156.8 (1) 168.4 (2)

(1) Including one-off expenses for integration and rebranding projects (EBITDA and EBIT effect: € -15.1 million) (2) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -8.8 million)

+ 4.9%

+ 1.2%

- 6.9%

16


Q1 2019 (IFRS 16)

Sales

Q2 2019 (IFRS 16)

Q3 2019 (IFRS 16)

Q3 2018 (IFRS 15)

Change + 3.2%

207.1

220.2

223.1

222.4

215.4

EBITDA

56.5(1)

73.7(2)

74.6(3)

88.5(4)

85.0 (5)

+ 4.1%

EBIT

33.7(1)

45.7(2)

49.5(3)

61.6(4)

61.0 (5)

+ 1.0%

(1) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -7.8 million) (2) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -7.0 million) (3) Including one-off expenses for integration and rebranding projects (EBITDA and EBIT effect: € -6.7 million) (4) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -1.4 million) (5) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -2.6 million)

Multi-period overview(1): Development of key sales and earnings figures (in € million) 9M 2016 (IAS 18)

9M 2017 (IAS 18)

Sales

479.2

557.2

634.7

665.7

EBITDA

145.4

186.4

233.9(2)

236.8(3)

30.3%

33.5%

36.9%

35.6%

113.2

143.7

168.4(2)

156.8(3)

23.6%

25.8%

26.5%

23.6%

EBITDA margin EBIT EBIT margin

9M 2018 (IFRS 15)

9M 2019 (IFRS 16)

(1) As the new segmentation was only introduced in the course of preparing the annual financial statements for 2018, the usual 5-year multi-period overview is limited to the financial years 2016-2019 (2) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -8.8 million) (3) Including one-off expenses for integration and rebranding projects (EBITDA and EBIT effect: € -15.1 million)

Position of the Group Earnings position In the first nine months of 2019, the total number of fee-based customer contracts in the United Internet Group was raised by 660,000 to 24.51 million contracts. Ad-financed free accounts were unchanged at 37.00 million. Consolidated sales grew by 1.7% in the first nine months of 2019, from € 3,815.9 million in the previous year to € 3,880.8 million. This at first glance only moderate growth was due in particular to fluctuations during the year in (low-margin) hardware sales (€ -38.1 million compared to the previous year), as well as sales effects from increased demand for LTE mobile tariffs among existing customers (sales reduced by € -38.7 million due to lower basic prices in the first year of the contract; prior year: € -10.6 million) in the Consumer Access segment. Sales were also influenced by the ad space reduction initiated in April 2018 as part of a repositioning of the Consumer Applications segment (€ -17.2 million; prior year: € -9.7 million). Sales abroad improved by 7.7% from € 299.2 million to € 322.2 million. Due to additional costs for wholesale purchases, the cost of sales rose from € 2,521.9 million (66.1% of sales) in the previous year to € 2,567.6 million (66.2% of sales). There was a corresponding decrease in the gross margin from 33.9% to 33.8%. This resulted in a 1.5% increase in gross profit from € 1,294.0 million to € 1,313.2 million.

foreword


17



Largely as a result of increased marketing expenses in connection with rebranding in the Business Applications segment, there was a disproportionate rise in sales and marketing expenses from € 510.6 million (13.4% of sales) in the previous year to € 543.9 million (14.0% of sales). Administrative expenses also rose slightly faster than sales from € 163.1 million in the previous year (4.3% of sales) to € 172.4 million (4.4% of sales). Multi-period overview: Development of key cost items (in € million)

Cost of sales

9M 2015 (IAS 18)

9M 2016 (IAS 18)

9M 2017 (IAS 18)

9M 2018 (IFRS 15)

9M 2019 (IFRS 16)

1,834.6

1,847.0

1,924.5

2,521.9

2,567.6

Cost of sales ratio

66.6%

65.3%

64.0%

66.1%

66.2%

Gross margin

33.4%

34.7%

36.0%

33.9%

33.8%

Selling expenses

423.0

392.5

433.8

510.6

543.9

Selling expenses ratio

15.4%

13.9%

14.4%

13.4%

14.0%

Administrative expenses

129.5

135.8

131.8

163.1

172.4

Administrative expenses ratio

4.7%

4.8%

4.4%

4.3%

4.4%

Consolidated EBITDA was positively influenced by the initial application of IFRS 16 (€ +65.3 million) in the first nine months of 2019. In addition to the one-off expenses already announced (€ -3.8 million; prior year: € -12.4 million), the regulatory decision to increase subscriber line charges (€ -4.4 million), and initial costs for the 5G mobile communications network (€ -2.5 million), there were opposing effects in the Consumer Access segment in particular from additional costs (€ -59.0 million) for wholesale purchases after the time-limited adjustment mechanism of a wholesale agreement expired at the end of 2018. Contrary to original expectations, the expired arrangement was not compensated for by a price reduction during the reporting period. However, the corresponding wholesale prices are the subject of several arbitration proceedings initiated by 1&1 Drillisch which it expects to result in binding decisions on the requested permanent price adjustments. On October 24, 2019, 1&1 Drillisch received the draft arbitration report on the first price adjustment proceedings (Price Review 1), initiated with effect from September 2017, which rejected 1&1 Drillisch’s application for the retroactive reduction of wholesale prices as of this date. The final expert opinion on Price Review 1 is expected to be issued in the course of November. The consequence of the draft arbitration report is that the financial figures for 2017 and – at least for the time being – the 2018 and 2019 results of 1&1 Drillisch will not be improved by price reductions. Moreover, the aforementioned price increase will remain valid – at least for the time being – due to the expiry of the contractual adjustment mechanism and will now be the subject of further price reviews. In addition to these additional costs, future investments (implemented as planned), such as the repositioning of the Consumer Applications segment (€ -16.8 million; prior year: € -9.9 million) and increased marketing expenses in the Business Applications segment (€ -26.7 million), had an initial negative effect on earnings. Increased marketing expenses included a one-off amount of € -15.1 million for rebranding measures (prior year: one-offs of € -8.2 million for integration projects). All in all, EBITDA rose by 7.9% in the first nine months of 2019, from € 874.6 million to € 944.0 million (according to IFRS 16). The comparable growth according to IFRS 15 amounted to 0.5%. Consolidated EBIT was virtually unaffected by IFRS 16 accounting and rose by 0.8%, from € 582.8 million to € 587.6 million. EBIT also includes the above mentioned burdens on earnings and one-offs.

18

Earnings before taxes (EBT) increased from € 331.8 million to € 519.2 million. EBT in the first nine months of 2018 and EBT in the current reporting period were both burdened by non-cash impairment charges on shares held in Tele Columbus (EBT effect: € -216.2 million in the previous year and € -30.9 million in the current reporting period) as a result of closing-date effects. Adjusted for these impairment charges, operating EBT of € 550.1 million was slightly up on the previous year (€ 548.0 million). Earnings per share (EPS) rose from € 0.29 to € 1.35. Both of these EPS figures were burdened by the aforementioned non-cash impairment charges (EPS effect: € -1.08 in the previous year and € -0.15 in the current reporting period) as a result of closing-date effects. Adjusted for these impairment charges, operating EPS amounted to € 1.50 – an increase of 9.5% over the comparable figure of € 1.37 in the previous year. Operating EPS before PPA writedowns rose from € 1.77 to € 1.87. Key sales and earnings figures of the Group (in € million) 9M 2019 (IFRS 16) 9M 2018 (IFRS 15)

3,880.8

Sales

3,815.9 944.0 (1) 874.6 (2)

EBITDA

+ 7.9%

587.6 (1)

EBIT

+ 1.7%

+ 0.8%

582.8 (2)

(1) Including one-off expenses for integration and rebranding projects (EBITDA and EBIT effect: € -18.9 million) (2) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -21.2 million)


Q1 2019 (IFRS 16)

Q2 2019 (IFRS 16)

Q3 2019 (IFRS 16)

Q3 2018 (IFRS 15)

Change

Sales

1,314.9

1,286.1

1,289.7

1,305.0

1,267.0

+ 3.0%

EBITDA

326.7

299.7

330.3

314.0

309.1

EBIT

228.2(1)

(1)

(2)

181.1 (2)

(3)

209.7(3)

(4)

196.8(4)

(5)

+ 1.6%

209.0 (5)

- 5.8%

(1) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -20.5 million) (2) Including one-off expenses for integration and rebranding projects (EBITDA and EBIT effect: € -9.1 million) (3) Including one-off expenses for integration and rebranding projects (EBITDA and EBIT effect: € -6.9 million) (4) Including one-off expenses for integration and rebranding projects (EBITDA and EBIT effect: € -2.9 million) (5) Including one-off expenses for integration projects (EBITDA and EBIT effect: € -7.3 million)

Multi-period overview: Development of key sales and earnings figures (in € million)

Sales EBITDA EBITDA margin EBIT EBIT margin

9M 2015 (IAS 18)

9M 2016 (IAS 18)

9M 2017 (IAS 18)

9M 2018 (IFRS 15)

9M 2019 (IFRS 16)

2,754.8

2,828.1

3,008.2

3,815.9

3,880.8

541.0 (1)

610.6

684.1 (2)

874.6(3)

944.0 (4)

19.6%

21.6%

22.7%

22.9%

24.3%

378.0 (1)

466.0

511.2(2)

582.8(3)

587.6(4)

13.7%

16.5%

17.0%

15.3%

15.1%

(1) Without one-off income from sale of Goldbach shares and part of stake in virtual minds (EBITDA and EBIT effect: € +14.0 million) (2) Without extraordinary income from revaluation of Drillisch shares (EBITDA and EBIT effect: € +303.0 million) and revaluation of ProfitBricks shares (EBITDA and EBIT effect: € +16.1 million), as well as without M&A transaction costs (EBITDA and EBIT effect: € -15.2 million) (3) Including one-off expenses for current integration projects (EBITDA and EBIT effect: € -21.2 million) (4) Including one-off expenses for integration and rebranding projects (EBITDA and EBIT effect: € -18.9 million)

foreword




Financial position Thanks to the positive trend in operating earnings, operative cash flow rose from € 659.3 million in the previous year to € 725.8 million in the first nine months of 2019. Cash flow from operating activities in the first nine months of 2019 rose strongly from € 326.7 million in the previous year to € 476.0 million. This increase was mainly due to high prepayments to pre-service providers and a simultaneously strong increase in inventories in the previous year. Cash flow from investing activities amounted to € 69.6 million in the reporting period (prior year: € 268.9 million). This resulted mainly from disbursements of € 165.9 million for capital expenditures (prior year: € 184.7 million). There was an opposing effect from the sale of associated companies (mainly from concluding the sale of Virtual Minds shares already prepared in 2018) amounting to € 35.6 million (of which gain on disposal: € 21.5 million). In addition to the aforementioned capital expenditures, cash flow from investing activities in the previous year was also shaped by the purchase of shares in affiliated companies (World4You), as well as a subsequent cash outflow from the sale of yourfone Shop GmbH. As a result of the strong increase in cash flow from operating activities and lower capital expenditures, free cash flow (i.e. cash flow from operating activities, less capital expenditures, plus payments from disposals of intangible assets and property, plant and equipment) rose from € 181.7 million (without consideration of a tax payment of € 34.7 million from fiscal year 2016) to € 398.7 million (without consideration of a capital gains tax payment of € 56.2 million and tax payments from fiscal year 2017 and previous years of € 27.2 million). With the initial application of the accounting standard IFRS 16, the redemption share of lease liabilities is disclosed in cash flow from financing activities as of fiscal year 2019. Cash flow from financing activities in the first nine months of 2019 was dominated by the net repayment of loans totaling € 199.2 million (prior year: net borrowing of € 21.7 million), payments of € 98.4 million to minority shareholders especially in connection with the increased stake in 1&1 Drillisch (prior year: € 0), the redemption of lease liabilities of € 75.0 million (prior year: € 11.9 million), which increased strongly as a result of IFRS 16 accounting, as well as the purchase of treasury shares amounting to € 30.4 million (prior year: € 0). Cash and cash equivalents amounted to € 49.5 million as of September 30, 2019 – compared to € 61.3 million on the same date last year.

19

20

Multi-period overview: Development of key cash flow figures (in € million) 9M 2015 (IAS 18) Operative cash flow

9M 2016 (IAS 18)

9M 2017 (IAS 18)

9M 2018 (IFRS 15)

9M 2019 (IFRS 16)

394.2

461.8

461.1

659.3

725.8


394.7(2)

433.2(3)

503.5(4)

326.7

476.0

Cash flow from investing activities

- 535.2

- 370.7

- 805.0

- 268.9

- 69.6

Free cash flow(1)

305.2(2)

320.1 (3)

352.1 (4)

181.7(5)

398.7(6)

- 152.1

49.3

269.5

- 235.5

- 415.6

85.2

87.7

134.7

61.3

49.5

Cash flow from financing activities Cash and cash equivalents on September 30

(1) Free cash flow is defined as cash flow from operating activities, less capital expenditures, plus payments from disposals of intangible assets and property, plant and equipment (2) Without capital gains tax refund of € 326.0 million (3) Without income tax payment of around € 100.0 million (4) Without capital gains tax refund of € 70.3 million (5) Without tax payment of € 34.7 million from fiscal year 2016 (6) Without capital gains tax payment of € 56.2 million as well as tax payments from fiscal year 2017 and previous years of € -27.2 million

Asset position In the fiscal year 2018, United Internet carried out a detailed impact assessment on accounting pursuant to IFRS 16. In summary, the effects as of January 1, 2019 from the initial application of IFRS 16 with respect to lessee contracts previously accounted for as operating leases are as follows: the Group‘s balance sheet total increased by approximately € 275 million as of January 1, 2019. The capitalization of right-of-use assets amounting to approximately € 275 million is opposed by the recognition of lease liabilities in almost the same amount, which were offset against deferred prepayments for leases. The balance sheet total rose in total from € 8.174 billion as of December 31, 2018 to € 9.302 billion on September 30, 2019. This increase is mainly due to the initial recognition of the acquired 5G spectrum, resulting in intangible assets of € 1,029.0 million and other financial liabilities of € 1,029.9 million as of September 30, 2019. Under IFRS regulations, the intangible assets and other financial liabilities resulting from the acquisition are to be carried at fair or present value. Current assets increased from € 1,364.7 million as of December 31, 2018 to € 1,405.9 million on September 30, 2019. Cash and cash equivalents disclosed under current assets decreased from € 58.1 million to € 49.5 million due to closing-date effects. Trade accounts receivable rose slightly from € 351.4 million to € 366.2 million. Inventories decreased from € 89.6 million to € 69.8 million. The item contract assets rose from € 427.0 million to € 498.9 million and includes current claims against customers due to accelerated revenue recognition from the application of IFRS 15. Current prepaid expenses rose from € 224.8 million to € 235.6 million and mainly comprise the short-term portion of expenses relating to contract acquisition and contract fulfillment according to IFRS 15. Other financial assets decreased from € 72.8 million to € 52.4 million and income tax claims from € 129.6 million to € 125.8 million.

foreword




Non-current assets increased strongly from € 6,809.2 million as of December 31, 2018 to € 7,896.0 million on September 30, 2019. Due in particular to the Tele Columbus impairment charges, shares in associated companies decreased from € 206.9 million to € 161.1 million. Despite the positive subsequent valuation of investments following the sale of shares in Rocket Internet, other financial assets fell from € 348.0 million to € 341.5 million. Largely as a result of the initial application of IFRS 16, property, plant and equipment increased from € 818.0 million to € 1,098.9 million. Intangible assets rose strongly from € 1,244.6 million to € 2,138.0 million due to the above mentioned initial recognition of the acquired 5G spectrum. Goodwill remained almost unchanged at € 3,611.6 million. The item contract assets was also virtually unchanged at € 166.9 million and includes non-current claims against customers due to accelerated revenue recognition from the application of IFRS 15. Prepaid expenses decreased from € 341.2 million to € 311.7 million and mainly include the long-term portion of expenses relating to contract acquisition and contract fulfillment, as well as prepayments in connection with long-term purchasing agreements. Deferred tax assets of € 12.3 million were largely unchanged. Current liabilities fell from € 1,299.7 million as of December 31, 2018 to € 1,248.1 million on September 30, 2019. Due to closing-date effects, current trade accounts payable decreased from € 557.7 million to € 414.4 million. Short-term bank liabilities rose from € 206.2 million to € 257.7 million as a result of reclassifications. Income tax liabilities decreased from € 187.9 million to € 101.7 million. The item current contract liabilities was largely unchanged at € 151.5 million and mainly includes payments received from customer contracts for which the performance has not yet been completely rendered. The increase in current other financial liabilities from € 124.1 million to € 250.1 million results mainly from the initial application of IFRS 16. Non-current liabilities increased from € 2,352.6 million as of December 31, 2018 to € 3,252.9 million on September 30, 2019. Long-term bank liabilities fell strongly from € 1,733.0 million to € 1,482.2 million. Deferred tax liabilities decreased from € 389.8 million to € 375.6 million. The item non-current contract liabilities was virtually unchanged at € 31.8 million and mainly includes payments received from customer contracts for which the performance has not yet been completely rendered. The increase in non-current other financial liabilities from € 87.0 million to € 1,259.2 million resulted mainly from the above mentioned initial recognition of the acquired 5G spectrum as well as from initial application of IFRS 16. The Group’s equity capital rose from € 4,521.5 million as of December 31, 2018 to € 4,801.0 million on September 30, 2019. Due to the even stronger increase in the balance sheet total, however, the equity ratio declined from 55.3% to 51.6%. On August 14, 2019, the Management Board of United Internet AG resolved to launch a new share buyback program. The decision was approved by the Supervisory Board. In the course of this share buyback program, up to 6,000,000 company shares (corresponding to approx. 2.93% of the capital stock of € 205,000,000) are to be bought back. The volume of the share buyback program amounts to € 192.0 million in total. The program was launched on August 16, 2019 and is to be completed by March 31, 2020 at the latest by buying shares back via the stock exchange. As of September 30, 2019, a total of 1,031,957 United Internet shares had been acquired within the share buyback program for a total of € 30.4 million. As a result, United Internet held a total of 5,734,947 treasury shares at the end of the reporting period (December 31, 2018: 4,702,990).

21

22

On September 5, 2019, United Internet subsidiary 1&1 Drillisch signed an agreement with the German Federal Ministry of Transport and Digital Infrastructure (BMVI) and the German Federal Ministry of Finance (BMF) regarding the construction of mobile communication sites in so-called “not-spots”. The company is thus helping to close existing supply gaps and improve the provision of mobile communications in rural regions by building hundreds of base stations. In return, 1&1 Drillisch benefits from an agreement to pay for the acquired 5G spectrum in installments. As a result, the license fees which were originally to be paid to the German government in 2019 and 2024 can now be spread over the period up to 2030 in installments. The credit line of originally € 2.8 billion arranged to finance the highest bids of the spectrum auction, among other things, was thus no longer required and has already been returned. The agreement with the BMVI and BMF is in line with 1&1 Drillisch’s long-term financing strategy, which is geared toward paying the major share of expenses for the construction of a modern 5G network from current revenue. The Group’s net bank liabilities (i.e. the balance of bank liabilities and cash and cash equivalents) fell strongly from € 1,881.1 million as of December 31, 2018 to € 1,690.5 million on September 30, 2019. Multi-period overview: Development of key balance sheet items (in € million) Dec. 31, 2015 (IAS 18)

Dec. 31, 2016 (IAS 18)

Dec. 31, 2017 (IAS 18)

Dec. 31, 2018 (IFRS 15)

Sept. 30, 2019 (IFRS 16)

3,885.4

4,073.7

7,605.2

8,173.8

9,302.0

84.3

101.7

238.5

58.1

49.5

Shares in associated companies

468.4

755.5(1)

418.0 (1)

206.9(1)

161.1 (1)

Other financial assets

449.0

287.7(2)

333.7(2)

Property, plant and equipment

665.2

655.0

Intangible assets

389.5

369.5

Total assets Cash and cash equivalents

Goodwill Liabilities due to banks Capital stock

348.1 (2)

341.5(2)

747.4

(3)

818.0

1,098.9(3)

1,408.4

(3)

1,244.6

2,138.0 (4)

1,100.1

1,087.7

3,564.1 (5)

3,612.6(5)

3,611.6

1,536.5

1,760.7(6)

1,955.8(6)

1,939.1

1,739.9

205.0

205.0

205.0

205.0

205.0

Equity

1,149.8

1,197.8

4,048.7(7)

4,521.5(7)

4,801.0

Equity ratio

29.6%

29.4%

53.2%

55.3%

51.6%

(1) Increase due to investment in Tele Columbus (2016); decrease due to takeover and consolidation of ProfitBricks and Drillisch (2017); decrease due to Tele Columbus impairment charges (2018); decrease due to Tele Columbus impairment charges (2019) (2) Decrease due to subsequent valuation of shares in listed companies (2016); increase due to subsequent valuation of shares in listed companies (2017); increase due to subsequent valuation of shares in listed companies (2018); decrease despite positive subsequent valuation of investments due to sale of Rocket Internet shares (2019) (3) Increase due to Strato, ProfitBricks and Drillisch takeovers (2017); increase due to initial application of IFRS 16 (2019) (4) Increase due to initial recognition of acquired 5G frequencies (2019) (5) Increase due to Strato, ProfitBricks and Drillisch takeovers (2017); increase due to World4You takeover (2018) (6) Increase due to Tele Columbus investment (2016); increase due to Strato takeover and increased stakes in Drillisch and Tele Columbus (2017) (7) Increase due to consolidation effects in connection with the investment of Warburg Pincus in the Business Applications segment and takeover of Strato (2017); transitional effects from initial application of IFRS 15 (2018)

foreword




Subsequent events On October 24, 2019, 1&1 Drillisch received the draft arbitration report on the first price adjustment proceedings (Price Review 1), initiated with effect from September 2017, which rejected 1&1 Drillisch’s application for the retroactive reduction of wholesale prices as of this date. The final expert opinion on Price Review 1 is expected to be issued in the course of November. The consequence of the draft arbitration report is that the financial figures for 2017 and – at least for the time being – the 2018 and 2019 results of 1&1 Drillisch will not be improved by price reductions. Moreover, a price increase will remain valid – at least for the time being – due to the expiry of the contractual adjustment mechanism (impact of approx. € 85 million in 2019). 1&1 Drillisch did not include any decrease in wholesale prices in its 2019 guidance. However, given the current environment of constantly falling market prices for mobile data usage, it did expect to be able to avert the price increase effective as of January 2019 following the expiry of an adjustment mechanism. According to the current draft of the expert opinion on Price Review 1 (regarding September 2017), this was not successful and will now be the subject of further price reviews. Decisions in the three further price reviews initiated by 1&1 Drillisch (with retroactive effect as of July 2018 (Price Review 2), January 2019 (Price Review 3), and July 2019 (Price Review 4)) are expected to be announced in 2020. These are separate proceedings which will be decided on the basis of their respective effective dates and the prevailing market conditions. Subject to possible changes in the final arbitration report, 1&1 Drillisch now expects the price increase to incur additional costs of around € 85 million in fiscal year 2019 – at least until a possible clarification is achieved in the course of further price reviews. Against this backdrop, United Internet issued an ad-hoc disclosure on October 24, 2019, in which it downgraded its EBITDA guidance for the current fiscal year by approx. € 85 million and now expects EBITDA of around € 1,250 million. In parallel to the price reviews, the justification of a price increase requested by the wholesale service provider in December 2018, with reference to the 2015 spectrum auction, is also being reviewed in separate arbitration proceedings. The requested price increase amounts to approx. € 12 million per year for a five-year service period from July 2015 to June 2020. A decision on this matter is also expected in 2020. 1&1 Drillisch does not consider the request justified. Apart from the above, there were no other significant events subsequent to the reporting date of September 30, 2019 which had a material effect on the financial position and performance of the company or the Group nor affected its accounting and reporting.

23

24

Risk and opportunity report The risk and opportunity policy of United Internet AG is based on the objective of maintaining and sustainably enhancing the company’s value by utilizing opportunities while at the same time recognizing and managing risks from an early stage in their development. The risk and opportunity management system regulates the responsible handling of those uncertainties which are always involved with economic activity.

Management Board’s overall assessment of the Group’s risk and opportunity position The assessment of the overall level of risk is based on a consolidated view of all significant risk fields and individual risks, also taking account of their interdependencies. There were no recognizable risks which directly jeopardized the United Internet Group as a going concern during the reporting period nor at the time of preparing this Interim Statement, neither from individual risk positions nor from the overall risk situation. The main challenge is the risk field “Litigation”, whose risk assessment was raised in the first quarter of 2019. During the third quarter of 2019, the risk assessment of the risk field “Business Development and Innovations” was lowered and the risk assessment of the risk field “Tax Risks” was raised. The further expansion of its risk management system enables United Internet to limit these and other risks to a minimum, where sensible, by implementing specific measures. Compared with reporting on risks and opportunities in the Annual Financial Statements 2018, the other risk assessments remained unchanged in the first nine months of 2019.

foreword




Forecast report Forecast for the fiscal year 2019 On October 24, 2019, 1&1 Drillisch received the draft arbitration report on the first price adjustment proceedings (Price Review 1), initiated with effect from September 2017, which rejected 1&1 Drillisch’s application for the retroactive reduction of wholesale prices as of this date. The final expert opinion on Price Review 1 is expected to be issued in the course of November. The consequence of the draft arbitration report is that the financial figures for 2017 and – at least for the time being – the 2018 and 2019 results of 1&1 Drillisch will not be improved by price reductions. Moreover, a price increase will remain valid – at least for the time being – due to the expiry of the contractual adjustment mechanism (impact of approx. € 85 million in 2019). United Internet did not include any decrease in wholesale prices for the Consumer Access segment in its 2019 guidance. However, given the current environment of constantly falling market prices for mobile data usage, it did expect to be able to avert the price increase effective as of January 2019 following the expiry of an adjustment mechanism. According to the current draft of the expert opinion on Price Review 1 (regarding September 2017), this was not successful and will now be the subject of further price reviews. Decisions in the three further price reviews initiated by 1&1 Drillisch (with retroactive effect as of July 2018 (Price Review 2), January 2019 (Price Review 3) and July 2019 (Price Review 4)) are expected to be announced in 2020. These are separate proceedings which will be decided on the basis of their respective effective dates and the prevailing market conditions. Subject to possible changes in the final arbitration report, 1&1 Drillisch now expects the price increase to incur additional costs of around € 85 million in fiscal year 2019 – at least until a possible clarification is achieved in the course of further price reviews. Against this backdrop, United Internet issued an ad-hoc disclosure on October 24, 2019, in which it downgraded its EBITDA guidance for the current fiscal year by approx. € 85 million and now expects EBITDA of around € 1,250 million. Sales adjusted for hardware are still expected to rise by approx. 3% and total sales including hardware by approx. 2%.

Forward-looking statements This Interim Statement contains forward-looking statements based on current expectations, assumptions, and projections of the Management Board of United Internet AG and currently available information. These forward-looking statements are subject to various risks and uncertainties and are based upon expectations, assumptions, and projections that may not prove to be accurate. United Internet AG does not guarantee that these forward-looking statements will prove to be accurate and does not accept any obligation, nor have the intention, to adjust or update the forward-looking statements contained in this interim report.

25

26

NOTES ON THE QUARTERLY STATEMENT Information on the company United Internet AG (“United Internet”) is a service company operating in the telecommunication and information technology sector with registered offices at Elgendorfer Strasse 57, 56410 Montabaur, Germany. The company is registered at the district court of Montabaur under HRB 5762.

Significant accounting, valuation and consolidation principles As was the case with the Consolidated Financial Statements as of December 31, 2018, the Interim Statement of United Internet AG as of September 30, 2019 was prepared in compliance with the International Financial Reporting Standards (IFRS) as applicable in the European Union (EU). The Interim Statement does not constitute interim reporting as defined by IAS 34. With the exception of the mandatory new standards, the accounting and valuation principles applied in this Interim Statement comply with the methods applied in the previous year and should be read in conjunction with the Consolidated Financial Statements as of December 31, 2018.

Mandatory adoption of new accounting standards The following standards are mandatory in the EU for the first time for fiscal years beginning on or after January 1, 2019:

Standard

Mandatory for fiscal years beginning on or after

Endorsed by EU Commission

IFRS 3, IFRS 11, IAS 12, IAS 23

Annual Improvements 2015 - 2017

Jan. 1, 2019

Yes

IFRS 16

Leases

Jan. 1, 2019

Yes

IFRS 9

Amendment: Prepayment Features with Negative Compensation

Jan. 1, 2019

Yes

IAS 19

Amendment: Plan Amendment, Curtailment or Settlement

Jan. 1, 2019

Yes

IAS 28

Clarification on IAS 28 Investments in Associates and Joint Ventures

Jan. 1, 2019

Yes

IFRIC 23

Uncertainty over Income Tax Treatments

Jan. 1, 2019

Yes

This Interim Statement already includes effects from the application of the new standards. The most significant effects result from the initial application of IFRS 16.

foreword




According to IFRS 16, leases are no longer regarded as classic rental agreements but as financing transactions: the lessee acquires a right to use the leased asset and finances it via the lease installments. Consequently, the lessee must recognize an asset for the right to use the leased asset and a liability for the payments due for the leased asset in the balance sheet. In this way, every lease and rental relationship is stated in the balance sheet. Only lease or rental agreements with terms of up to twelve months and contracts with low-value assets are excluded. On initial application of IFRS 16, United Internet opted to recognize the asset for the right of use granted at the value of the related lease liability and not to apply it retrospectively for each previous reporting period.

Use of estimates and assumptions The preparation of this Interim Statement requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of the reporting period. However, the uncertainty associated with these assumptions and estimates could lead to results which require material adjustments to the carrying amount of the asset or liability affected in future periods.

Use of business-relevant key financial performance indicators In order to ensure the clear and transparent presentation of United Internet’s business trend, the company’s annual and interim financial statements include key performance indicators (KPIs) – in addition to the disclosures required by International Financial Reporting Standards (IFRS) – such as EBITDA, the EBITDA margin, EBIT, the EBIT margin and free cash flow. Information on the use, definition and calculation of these KPIs is provided in the Annual Report 2018 of United Internet AG starting on page 52. Insofar as required for clear and transparent presentation, the KPIs used by United Internet are adjusted for special items. Such special items usually refer solely to those effects capable of restricting the validity of the key financial performance indicators with regard to the company’s financial and earnings performance – due to their nature, frequency and/or magnitude. All special items are presented and explained for the purpose of reconciliation with the unadjusted financial figures in the relevant section of the financial statements.

27

28

Miscellaneous This Interim Statement includes all subsidiaries and associated companies. The following companies were renamed in the reporting period: 1&1 IONOS UK Holdings Ltd., Gloucester (formerly: 1&1 UK Holdings Ltd., Gloucester) 1&1 IONOS Ltd., Gloucester (formerly: 1&1 Internet Ltd., Gloucester) 1&1 IONOS España S.L.U., Madrid (formerly: 1&1 Internet España S.L.U., Madrid) The following companies were merged in the reporting period: Versatel Telecommunications GmbH, Düsseldorf (merged with 1&1 Versatel GmbH, Berlin) 1&1 IONOS Cloud GmbH, Berlin (merged with 1&1 IONOS SE, Montabaur) The following company was founded in the reporting period: Strato Customer Service GmbH, Berlin Shares in the following associated company were sold during the reporting period: Virtual Minds AG, Freiburg Otherwise, the consolidated group remained largely unchanged from that stated in the Consolidated Financial Statements as at December 31, 2018. This Interim Statement was not audited according to Sec. 317 HGB nor reviewed by an auditor.

foreword




INTERIM FINANCIAL STATEMENTS 30 Group balance sheet 32 Group net income 34 Group cash flow 36 Group changes in shareholders’ equity 38 Segment reporting

29

30

GROUP BALANCE SHEET as of September 30, 2019 in €k

September 30, 2019

December 31, 2018

Cash and cash equivalents

49,490

58,066

Trade accounts receivable

366,216

351,427

ASSETS Current assets

Inventories

69,842

89,617

Contract assets

498,853

426,992

Prepaid expenses

235,633

224,840

Other financial assets

52,444

72,774

Income tax claims

125,829

129,611

7,616

11,330

1,405,923

1,364,657

161,099

206,856

341,521

348,046

1,098,882

818,010

Other non-financial assets

Non-current assets Shares in associated companies Other financial assets Property, plant and equipment Intangible assets

2,137,973

1,244,578

Goodwill

3,611,553

3,612,634

Trade accounts receivable

54,084

58,229

Contract assets

166,935

168,792

Prepaid expenses

311,729

341,220

Deferred tax assets

12,265

10,797

7,896,042

6,809,162

9,301,965

8,173,819

Total assets

foreword


interim management report interim financial statements

September 30, 2019

December 31, 2018

Trade accounts payable

414,353

557,730

Liabilities due to banks

257,735

206,175

Income taxes liabilities

101,652

187,938

Contract liabilities

LIABILITIES AND EQUITY Liabilities Current liabilities

151,466

154,290

Other accrued liabilities

15,211

24,468

Other financial liabilities

250,090

124,092

57,555

45,047

1,248,062

1,299,740

1,482,210

1,732,968

375,572

389,829

6,395

9,024

Contract liabilities

31,801

33,838

Other accrued liabilities

97,639

99,972

Other non-financial liabilities

Non-current liabilities Liabilities due to banks Deferred tax liabilities Trade accounts payable

Other financial liabilities

Total liabilities

1,259,245

86,976

3,252,862

2,352,607

4,500,924

3,652,347

205,000

205,000

Equity Capital stock Capital reserves

2,693,789

2,703,141

Accumulated profit

1,778,743

1,496,154

Treasury stock

-205,214

-174,858

112,441

83,023

-13,450

-14,314

4,571,309

4,298,146

229,732

223,326

Total equity

4,801,040

4,521,472

Total liabilities and equity

9,301,965

8,173,819

Revaluation reserves Currency translation adjustment Equity attributable to shareholders of the parent company Non-controlling interests

31

32

GROUP NET INCOME from January 1 to September 30, 2019 in €k

2019 January – Sept. Sales

2018 January – Sept.

3,880,821

3,815,859

-2,567,623

-2,521,886

Gross profit

1,313,199

1,293,974

Selling expenses

-543,858

-510,584

-172,423

-163,112

Cost of sales

General and administrative expenses Other operating expenses / income

57,932

28,984

-67,261

-66,414

Operating result

587,589

582,847

Financial result

-24,585

-18,587

Result from associated companies

-43,764

-232,430

Pre-tax result

519,240

331,829

Income taxes

-161,601

-176,648

Net income

357,639

155,181

non-controlling interests

87,460

98,099

shareholders of United Internet AG

270,179

57,082

Impairment of receivables and contract assets

Attributable to

foreword

33





- basic

1.35

0.29

- diluted

1.35

0.28

- basic

200.18

200.12

- diluted

200.18

200.34

357,639

155,181

1,290

460

51,558

84,609

0

-72

285

150

Result per share of shareholders of United Internet AG (in €)

Weighted average shares (in million units)

Statement of comprehensive income Net income Items that may be reclassified subsequently to profit or loss Currency translation adjustment - unrealized Categories that are not reclassified subsequently to profit or loss Market value changes of available-for-sale financial instruments before taxes Tax effect Share in other comprehensive income of associated companies Other comprehensive income

53,133

85,147

Total comprehensive income

410,771

240,328

87,885

99,683

322,886

140,646

Attributable to non-controlling interests shareholders of United Internet AG

34

GROUP CASH FLOW from January 1 to September 30, 2019 in €k



357,639

155,181

Cash flow from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization of intangible assets and property, plant and equipment

218,709

142,167

Amortization of intangible assets resulting from company acquisitions

137,704

149,591

10,109

6,445

Result from equity accounted investments

43,764

232,430

Income from the sale of associated companies

-21,512

0

Change in deferred taxes

-15,725

-32,673

Other non-cash positions

-4,917

6,176

725,771

659,317

Personnel expenses from employee stock option plans

Operative cash flow Change in assets and liabilities Change in receivables and other assets

9,099

23,295

Change in inventories

19,775

-20,334

-70,004

-182,932

Change in contract assets Change in income tax assets

3,782

-5,770

Change in deferred expenses

8,675

-180,715 62,051

Change in trade accounts payable

-141,920

Change in other accrued liabilities

-11,590

-7,567

Change in liabilities income taxes

-30,130

-6,524

Change in other liabilities

23,504

-6,448

Change in deferred income

-4,831

-7,652

-193,638

-332,597

Cash flow from operating activities (before capital gains tax refund)

532,132

326,720

Capital gains tax payment

-56,156

0


475,976

326,720

Change in assets and liabilities, total

foreword

35





-165,916

-184,739

Cash flow from investing activities Capital expenditure for intangible assets and property, plant and equipment Payments from disposals of intangible assets and property, plant and equipment

5,200

5,029

0

-72,045

Purchase of shares in associated companies

-5,037

-7,910

Payments from disposal of subsidiaries

35,602

0

0

-8,300

Payments from loans granted

-2,500

-944

Payments from disposal of financial assets

62,500

0

Payments for company acquisitions less cash received

Payments in connection with corporate transactions

Refunding from other financial assets Cash flow from investing activities

525

0

-69,626

-268,910

Cash flow from financing activities Acquisition of treasury shares

-30,356

0

Repayment / taking out of loans

-199,199

21,700

Redemption of finance lease liabilities

-75,044

-11,872

Dividend payments

-10,015

-170,006

Profit distributions to non-controlling interests Payment to minorities Cash flow from financing activities

-2,557

-75,360

-98,384

0

-415,554

-235,538

Net decrease in cash and cash equivalents

-9,205

-177,728

Cash and cash equivalents at beginning of fiscal year

58,066

238,522

629

492

49,490

61,286

Currency translation adjustments of cash and cash equivalents Cash and cash equivalents at end of reporting period

36

GROUP CHANGES IN SHAREHOLDERS’ EQUITY in 2018 and 2019 in €k

Capital stock

Balance as of January 1, 2018

Capital reserves

Accumulated profit

Treasury stock

Share

€k

€k

€k

Share

€k

205,000,000

205,000

2,709,203

1,491,184

5,093,289

-189,384

-391,087

14,542

Net income

57,082

Other comprehensive income Total

57,082

Purchase of treasury shares

-14,542

Employee stock ownership program

4,691

Dividend payments

-170,006

Profit distributions Other transactions

10,588

Balance as of September 30, 2018

205,000,000

205,000

2,713,894

1,374,306

4,702,202

-174,842

Balance as of January 1, 2019

205,000,000

205,000

2,703,141

1,496,154

4,702,990

-174,858

1,031,957

-30,356

5,734,947

-205,214

Net income

270,179

Other comprehensive income Total comprehensive income

270,179

Purchase of treasury shares Disposal of financial assets at fair value through other comprehensive income

22,425

Employee stock ownership program

7,530

Dividend payments

-10,015

Profit distributions Transactions with shareholders Balance as of September 30, 2019

-16,882 205,000,000

205,000

2,693,789

1,778,743

foreword

37



Revaluation reserves

Currency translation adjustments

Equity a ttributable to shareholders of United Internet AG

Noncontrolling interests

Total equity

€k

€k

€k

€k

€k

97,209

-13,120

4,300,092

186,393

4,486,485

57,082

98,099

155,181

82,933

631

83,564

1,584

85,148

82,933

631

140,647

99,683

240,329

1,754

6,445

0 4,691

0

-170,006 0 36

-170,006 -75,360

-75,360

10,624

2,353

12,977

180,178

-12,489

4,286,048

214,823

4,500,870

83,023

-14,314

4,298,146

223,326

4,521,472

270,179

87,460

357,639

51,843

864

52,707

426

53,133

51,843

864

322,886

87,885

410,771

-22,425

-30,356

-30,356

0

0

7,530

2,579

-10,015

112,441

-13,450

10,109 -10,015

0

-2,557

-2,557

-16,882

-81,502

-98,384

4,571,309

229,732

4,801,040

38

SEGMENT REPORTING from January 1 to September 30, 2019 in €k

January - September 2019

Consumer Access segment

Business Access segment

€k

€k

Segment revenues

2,734,940

352,484

- thereof domestic

2,734,940

352,484

- thereof non-domestic

0

0

1,246

42,001

Segment revenue from contracts with customers

2,733,694

310,483

- thereof domestic

2,733,694

310,483

Segment revenue from transactions with other segments


0

0

508,622

105,028

396,613

-42,997

1,064,225

137,957

112,009

148,025

18,729

133,226

93,280

14,799

Number of employees

3,082

1,176

- thereof domestic - thereof non-domestic

3,082 0

1,176 0

Segment revenues

2,698,887

334,616

- thereof domestic

2,698,887

334,616

EBITDA EBIT Financial result Result from at-equity companies EBT Tax expense Net income Investments in intangible assets, property, plant and equipment (without goodwill) Amortization/depreciation - thereof intangible assets and property, plant and equipment - thereof assets capitalized during company acquisitions

January - September 2018


0

0

1,493

37,760

Segment revenue from contracts with customers

2,697,394

296,856

- thereof domestic

2,697,394

296,856

Segment revenue from transactions with other segments

- thereof non-domestic EBITDA EBIT

0

0

521,797

43,622

401,064

-52,462

7,855

122,320

120,733

96,084

27,453

70,368

93,280

25,716

Financial result Result from at-equity companies EBT Tax expense Net income Investments in intangible assets, property, plant and equipment (without goodwill) Amortization/depreciation - thereof intangible assets and property, plant and equipment - thereof assets capitalized during company acquisitions Number of employees

3,130

1,112

- thereof domestic - thereof non-domestic

3,130 0

1,112 0

foreword

39



Consumer Applica tions segment

Business Applica tions segment

Corporate segment

Reconciliation

United Internet Group

€k

€k

€k

€k

€k

184,466

665,710

830

-57,609

3,880,821

178,905

328,913

830

-57,609

3,538,463

6,019

341,691

0

-25,526

322,184

11,101

3,261

0

57,609

173,365

662,449

830

3,880,821

167,944

325,652

830

3,538,603

5,421

316,763

0

322,184

70,554

236,792

23,007

944,003

58,244

156,843

18,886

587,589 -24,585 -43,764 519,240 -161,601 357,639

30,161

50,268

16,296

-48,910

1,249,947

12,310

79,949

4,121

0

356,414

12,310

50,324

4,121

0

218,710

0

29,625

0

137,704

988

3,382

613

–

9,241

984 4

1,772 1,610

613 0

– –

7,627 1,614

203,877

634,651

1,387

-57,559

3,815,859

197,643

317,156

1,387

-33,064

3,516,625

6,234

317,495

0

-24,495

299,234

15,203

3,103

0

57,559

188,674

631,548

1,387

3,815,859

183,221

337,768

1,387

3,516,625

5,453

293,780

0

299,234

79,878

233,919

-4,611

874,605

70,847

168,370

-4,972

582,847 -18,587 -232,430 331,829 -176,648 155,181

7,804

42,657

7,325

–

187,961

9,031

65,549

361

–

291,758

9,003

34,982

361

–

142,167

28

30,567

0

–

149,591

928

3,331

531

–

9,032

924 4

1,829 1,502

531 0

– –

7,526 1,506

40

foreword


41

interim financial statements financial calendar / imprint

FINANCIAL CALENDAR March 28, 2019

Annual financial statements for fiscal year 2018 Press and analyst conference

May 15, 2019

Interim Statement for the first quarter 2019

May 23, 2019

Annual Shareholders’ Meeting, Alte Oper, Frankfurt/Main

August 15, 2019

6-Month Report 2019 Press and analyst conference

November 12, 2019 Interim Statement for the first 9 months 2019

IMPRINT Publisher and copyright © 2019 United Internet AG Elgendorfer Straße 57 56410 Montabaur Germany www.united-internet.com Contact Investor Relations Phone: +49(0) 2602 96-1100 Fax: +49(0) 2602 96-1013 E-mail: [email protected] November 2019 Registry court: Montabaur HRB 5762

Notice Due to calculation processes, tables and references may produce rounding differences from the mathematically exact values (monetary units, percentage statements, etc.). This Interim Statement is available in German and English. Both versions can also be downloaded from www.united-internet.de. In all cases of doubt, the German version shall prevail.

Disclaimer This Interim Statement contains certain forward-looking statements which reflect the current views of United Internet AG’s management with regard to future events. These forward looking statements are based on our currently valid plans, estimates and expectations. The forward-looking statements made in this Interim Statement are only based on those facts valid at the time when the statements were made. Such statements are subject to certain risks and uncertainties, as well as other factors which United Internet often cannot influence but which might cause our actual results to be materially different from any future results expressed or implied by these statements. Such risks, uncertainties and other factors are described in detail in the Risk Report section of the Annual Reports of United Internet AG. United Internet does not intend to revise or update any forward-looking statements set out in this Interim Statement.

United Internet AG Elgendorfer Straße 57 56410 Montabaur Germany www.united-internet.com

Interim Statement Q3 2019

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