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

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

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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

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9M 2018 with Outlook

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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

  • bligation to publish the information on which these assessments and statements are based or to

publish any revisions of this information. 1&1 Drillisch AG Investor Relations Wilhelm-Roentgen-Strasse 1-5 D–63477 Maintal Contact Telefon: +49 61 81 / 412 218 Internet: www.1und1-drillisch.de E-Mail: ir@1und1-drillisch.de

Disclaimer and Contact

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Agenda

  • Business development 9M 2018
  • Outlook

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Major Performance Indicators 9M 2018

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 %

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Germanys leading MVNO and largest alternative DSL provider

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4.34m 4.37m 4.38m 4.40m 8.30m 8.54m 8.73m 8.93m

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Mobile

12.91m 13.11m 13.33m Q1/18 Q2/18 Q3/18

Landline

Q4/17 12.64m

Net Adds mobile Q4/17: +240k Q1/18: +240k Q2/18: +190k Q3/18: +200k Net Adds landline Q4/17: +10k Q1/18: +30k Q2/18: +10k Q3/18: +20k

  • 690k Net Adds in 9M 2018 and 940k Net Adds LTM

Development of customer contracts

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Revenue

9M 2018 9M 2017 9M 2017 Pro-Forma (1&1 and Drillisch)

Revenue (in €m)

  • 9M 2018:

IFRS 15 effect of +€202.2m (+8.0 %) included

  • Increase in revenue +12.7 % or

+€306.0m (Pro-Forma)

  • Revenue decline from Q2 to Q3 (from

€914.7m to €900.4m) resulting from ca. €20m lower low-margin hardware revenue

250 500 750 1.000 1.250 1.500 1.750 2.000 2.250 2.500 2.750 3.000 2,719.4 1,992.0 2,413.4 +306.0 (+12.7 %)

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EBITDA

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9M 2017 9M 2017 Pro-Forma (1&1 and Drillisch) 9M 2018

EBITDA (in €m)

  • 9M 2018:

IFRS 15 Effekt of + €198.9m included, offset

  • €198.9m for additional

smartphone invest Furthermore:

  • €12.4m (- 2.4%) One-Offs for

integrations projects

50 100 150 200 250 300 350 400 450 500 550 600 524.8 352.7 452.2 +72.6 (+16.1 %)

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(in €m) Q1/18 (IFRS 15) Q2/18 (IFRS 15) Q3/18 (IFRS 15) Change Q3/ Q2 9M 2018 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

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Profitability Q3/18 vs. Q2/18 vs. Q1/18 and 9M 2018

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Balance sheet (in €m)

31 March 2018 30 September 2018 ASSETS LIABILITIES ASSETS LIABILITIES

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30 June 2018 ASSETS LIABILITIES

Equity ratio: 31/03/18: 80.5% Equity ratio: 30/06/18: 80.0% Equity ratio: 30/09/18: 80.8% Shareholders’ equity Long-term liabilities Short-term liabilities Fixed assets Cash Short-term assets

4.475,7 4.261,2 35,7 492,1 779,2 537,3 4.309,4 4.074,2 5,4 328,8 779,5 691,3 4.262,6 4.175,8 3,9 377,2 901,9 615,4

5,168.5 5,168.5 5,290.6 5,290.6 5,094.3 5,094.3

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Cash Flow

(in €m) Q1/18 Q2/18 Q3/18 9M 2018 Remarks Net inflow of funds from operating activities

  • 27.6

72.2 76.5 121.1

  • Q3/18
  • 45.4m increase in contract assets

+44.4m reduction in inventories

  • 80.2m increase other working capital

Cash flow from investment activities

  • 10.2
  • 2.5
  • 12.9
  • 25.6
  • Q3/18
  • 12.7m Capex

(thereof 10m for an already acquired trademark in 2016) Cash flow from financing activities

  • 76.1
  • 100.0
  • 65.1
  • 241.2
  • Q3/18

+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 investments in intangible and tangible assets plus incoming payments from disposals of intangible and tangible assets.

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Bridge EBITDA to FCF (in €m)

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165.5

  • 89.9
  • 48.0
  • 12.2
  • 43.0
  • 1.9
  • 29.5

174.5

  • 68.4
  • 16.7

+17.5

  • 34.8
  • 2.6

+69.7 184.8

  • 40.5

+44.4

  • 80.2
  • 31.9
  • 12.7

+63.8

Q1 Q2 Q3

524,8

  • 198,8
  • 20,3
  • 74,9
  • 109,7
  • 17,2

103,9

EBITDA 9M 2018 Contract Assets + Liabilities Inventories

  • ther working

capital Taxes Capex FCF 9M 2018

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614,0 703,0 764,5 809,9 66,0 64,9 59,1 61,1 159,0 180,1 196,9 206,9

Contract Asset Contract Liability

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IFRS 15 – Impact on Balance Sheet (in €m)

Deferred tax liabilities

  • Growth in contract assets results

primarily from the investment in subscriber growth and retention

  • f subscribers
  • Hardware investment and other

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 01.01.2018 31.03.2018 30.06.2018 30.09.2018

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Outlook

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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

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Outlook 2018

  • Customers
  • Approx. 1 million contracts to 13.64 million
  • Revenue
  • Approx. €3.7 billion
  • EBITDA
  • Approx. €750 million

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Our Success Story Continues!