9M 2018 with Outlook 1 Disclaimer and Contact This presentation - PowerPoint PPT Presentation

9M 2018 with Outlook 1

Disclaimer and Contact This presentation contains statements and forecasts related to future developments; they express the current assessments of the 1&1 Drillisch AG management. These assessments and statements may be subject to changes and/or uncertain general conditions which, in the majority of cases, are difficult to predict and are beyond the control of 1&1 Drillisch AG. In the event of changes in these general conditions, 1&1 Drillisch AG does not assume any obligation to publish the information on which these assessments and statements are based or to publish any revisions of this information. 1&1 Drillisch AG Contact Investor Relations Telefon: +49 61 81 / 412 218 Wilhelm-Roentgen-Strasse 1-5 Internet: www.1und1-drillisch.de D – 63477 Maintal E-Mail: ir@1und1-drillisch.de 2

Agenda  Business development 9M 2018  Outlook 3

Major Performance Indicators 9M 2018 Germanys leading MVNO and largest alternative DSL provider 9M 2017 (IAS 18) 9M 2018 (IFRS 15) Change Subscribers in current product lines (in m) 12.39 13.33 +7.6 % - thereof Mobile Internet 8.06 8.93 +10.8 % - thereof DSL / VDSL 4.33 4.40 +1.6 % Revenues (in € m) 1,992.0 2,719.4 +36.5 % EBITDA (in € m) 352.7 524.8 +48.8 % Margin 17.7 % 19.3 % EBIT (in € m) 328.9 409.1 +24.4 % Margin 16.5 % 15.0 % 4

Development of customer contracts 13.33m Net Adds mobile 13.11m 12.91m 12.64m Q4/17: +240k Q1/18: +240k Q2/18: +190k 8.93m 8.73m 8.54m 8.30m Q3/18: +200k Net Adds landline Q4/17: +10k Q1/18: +30k 4.34m 4.37m 4.38m 4.40m Q2/18: +10k Q3/18: +20k Q4/17 Q1/18 Q2/18 Q3/18 Landline Mobile  690k Net Adds in 9M 2018 and 940k Net Adds LTM 5

Revenue  9M 2018: Revenue (in € m) IFRS 15 effect of 3.000 2,719.4 2.750 + € 202.2m (+8.0 %) included +306.0 2,413.4 2.500 (+12.7 %) 2.250 1,992.0 2.000  Increase in revenue +12.7 % or 1.750 1.500 1.250 + € 306.0m (Pro-Forma) 1.000 750 500  Revenue decline from Q2 to Q3 (from 250 0 € 914.7m to € 900.4m) resulting from ca. 9M 9M 9M 2017 2017 2018 Pro-Forma € 20m lower low-margin hardware revenue (1&1 and Drillisch) 6

EBITDA  9M 2018: EBITDA (in € m) 600 IFRS 15 Effekt of 550 524.8 500 452.2 450 + € 198.9m included, offset 400 352.7 350 +72.6 (+16.1 %) - € 198.9m for additional 300 250 200 smartphone invest 150 100 50 Furthermore: 0 9M 9M 9M - € 12.4m (- 2.4%) One-Offs for 2017 2017 2018 Pro-Forma (1&1 and Drillisch) integrations projects 7

Profitability Q3/18 vs. Q2/18 vs. Q1/18 and 9M 2018 Q1/18 Q2/18 Q3/18 Change (in € m) 9M 2018 (IFRS 15) (IFRS 15) (IFRS 15) Q3/ Q2 Revenues 904.3 914.7 900.4 -1.6 % 2,719.4 Cost of sales -640.8 -646.8 -620.2 -4.1 % -1,907.9 Gross profit from turnover 263.5 267.9 280.2 +4.6 % 811.5 Distribution costs -104.5 -100.2 -98.9 -1.3 % -303.7 Administration costs -21.8 -23.4 -22.1 -5.6 % -67.2 Other operating expenses -20.8 -20.7 -25.5 +23.1 % -66.9 Other operating income 10.6 12.1 12.7 +5.2 % 35.4 Profit/loss from operating activities 127.0 135.7 146.4 +7.9 % 409.1 Financial result 0.0 -0.2 -1.1 -1.3 Profit before taxes 127.0 135.5 145.3 +7.2 % 407.7 Tax expenses -42.3 -40.9 -44.5 +8.8 % -127.7 Consolidated results 84.7 94.6 100.8 +6.5 % 280.1 EBITDA 165.5 174.5 184.8 +5.5 % 524.8 8

Balance sheet (in € m) 31 March 2018 30 June 2018 30 September 2018 A SSETS L IABILITIES A SSETS L IABILITIES A SSETS L IABILITIES 5,290.6 5,290.6 5,094.3 5,094.3 5,168.5 5,168.5 Short-term assets Short-term liabilities 537,3 779,2 779,5 615,4 691,3 901,9 Cash 492,1 35,7 5,4 Long-term liabilities 377,2 328,8 3,9 4.475,7 4.309,4 Shareholders’ equity Fixed assets 4.262,6 4.261,2 4.175,8 4.074,2 Equity ratio: 31/03/18: 80.5% Equity ratio: 30/06/18: 80.0% Equity ratio: 30/09/18: 80.8% 9

Cash Flow (in € m) Q1/18 Q2/18 Q3/18 9M 2018 Remarks  Q3/18 Net inflow of funds -45.4m increase in contract assets from operating -27.6 72.2 76.5 121.1 +44.4m reduction in inventories activities -80.2m increase other working capital  Q3/18 Cash flow from -10.2 -2.5 -12.9 -25.6 -12.7m Capex investment activities (thereof 10m for an already acquired trademark in 2016) Cash flow from  Q3/18 -76.1 -100.0 -65.1 -241.2 financing activities +65.0m net incurrence of cash at United Internet Free cash flow (1) -29.5 69.7 63.8 103.9 (1) Definition of free cash flow: Free cash flow is calculated as the net incoming payments from operating activities from continued operation (disclosed in the cash flow statement) less 10 investments in intangible and tangible assets plus incoming payments from disposals of intangible and tangible assets.

Bridge EBITDA to FCF (in € m) -198,8 -20,3 -74,9 524,8 -109,7 -17,2 103,9 EBITDA Contract Assets Inventories other working Taxes Capex FCF 9M 2018 + Liabilities capital 9M 2018 165.5 -89.9 -48.0 -12.2 -43.0 -1.9 -29.5 Q1 Q2 174.5 -68.4 -16.7 +17.5 -34.8 -2.6 +69.7 Q3 184.8 -40.5 +44.4 -80.2 -31.9 -12.7 +63.8 11

IFRS 15 – Impact on Balance Sheet (in € m) 01.01.2018 31.03.2018 30.06.2018 30.09.2018 206,9 Deferred tax liabilities 196,9 180,1 61,1 Contract Liability 59,1 159,0 64,9 66,0  Growth in contract assets results primarily from the investment in subscriber growth and retention of subscribers 809,9 Contract Asset 764,5 703,0  Hardware investment and other 614,0 customer acquisition costs as well as non recurring income in connection with the conclusion of a contract are allocated over the term of the minimum contract period 12

Outlook 13

Roadmap 2018  Increased smartphone use for new and current customers (returns form higher rate plan prices) => realised  Unified management team => started work already  Merger of the organisations previously operating seperately => ongoing process  Tightening of the trademark portfolio => ongoing process  Expansion of current customer marketing => ongoing process  Improvement in the retention process for discount brands => proven 1&1 process established 14

Outlook 2018  Customers  Approx. 1 million contracts to 13.64 million  Revenue  Approx. € 3.7 billion  EBITDA  Approx. € 750 million 15

Our Success Story Continues!