United Internet with successful Q1 2017
- Customer contracts up 190,000 to 17.16 million
- Sales growth of 2.1% to EUR 989.2 million
- EBITDA improves by 6.1% to EUR 215.0 million, EBIT up 8.8% to EUR 167.6 million
- Operating EPS increases by 10.0% to EUR 0.55
- EPS after Rocket Internet value adjustment: EUR 0.46
- Full-year guidance confirmed
Montabaur, May 12, 2017. United Internet AG continued its growth in the first quarter of 2017. The company once again posted improvements in its customer contract figures, sales revenues, and key earnings ratios based on operating activities. In addition, the investment of Warburg Pincus in the Business Applications division and the complete takeover of Strato as of April 1, 2017 were successfully closed during the reporting period.
In the first quarter of 2017, growth was driven by the company’s subscription business. The number of fee-based customer contracts was increased organically by 190,000 to 17.16 million contracts – mainly in the Access segment, in which United Internet generated 140,000 new Mobile Internet contracts and 10,000 DSL contracts. In the Applications segment, a further 40,000 pay contracts and 270,000 ad-financed free accounts were added during the reporting period.
Despite the burdens from regulation effects already explained in the annual financial statements 2016 (impact on sales: approx. -1.2%), consolidated sales rose by 2.1% to EUR 989.2 million in the first quarter of 2017 (prior year: EUR 968.6 million). Sales growth was also slowed by expected phasing effects in the project business of 1&1 Versatel. Moreover, advertising revenues in the portal business fell short of the budgeted figure and could not be compensated by the positive development of the company’s other business fields in line with expectations.
Earnings before interest, taxes, depreciation and amortization (EBITDA) improved by 6.1% to EUR 215.0 million (prior year: EUR 202.7 million). Earnings before interest and taxes (EBIT) increased by 8.8% to EUR 167.6 million (EUR 154.0 million).
| Group development (in EUR million) | Q1 2016 | Q1 2017 | Change |
|---|---|---|---|
| Sales | 968.6 | 989.2 | + 2.1 % |
| EBITDA | 202.7 | 215.0 | + 6.1 % |
| EBIT | 154.0 | 167.6 | + 8.8 % |
EPS / special items
Earnings per share from operating activities (operating EPS) improved by 10.0%, from EUR 0.50 (comparable prior-year figure) to EUR 0.55. Before amortization of purchase price allocations (PPA), EPS rose by 9.3% from EUR 0.54 (comparable prior-year figure) to EUR 0.59.
As in the first quarter of 2016, United Internet wrote down the value of shares held in Rocket Internet SE in its non-operating business in the first quarter of 2017. The impairment charges amounted to EUR 19.8 million. As a result, EPS for the first quarter of 2017 fell in total to EUR 0.46 and EPS before PPA to EUR 0.50. The impairment charges do not impact United Internet’s dividend policy nor its guidance for 2017, as these are based on results from operating activities (without special items).
Outlook 2017
Advertising revenues of United Internet’s portals in the second quarter so far are within the budgeted range. Against this backdrop, the company can confirm its full-year guidance for fiscal year 2017 and continues to expect an increase in consolidated sales of approx. 7%. EBITDA is still expected to rise by approx. 12%. At the same time, the number of fee-based customer contracts is likely to grow organically by approx. 800,000 contracts. The consolidation of Strato as of April 1, 2017 will add approx. 1.87 million fee-based contracts in the second quarter of 2017.
The Interim Statement for the First Quarter 2017 will be available on May 15, 2017.