DGAP-Ad-hoc: United Internet AG / Key word(s): Half Year Results/Share Buyback
- Customer contracts: + 440,000 to 24.29 million contracts
- Sales: + 1.1% to EUR 2.576 billion
- EBITDA: + 11.4% to EUR 630.0 million acc. to IFRS 16 (prior year: EUR 565.5 million acc. to IFRS 15); comparable growth acc. to IFRS 15: + 3.6%
- EBIT: + 4.5% to EUR 390.8 million
- EPS: EUR 0.84, without Tele Columbus impairment EUR 1.01 EUR (+ 11.0%)
- EPS before PPA and without Tele Columbus impairment: EUR 1.25 (+ 7.8%)
- 2019 guidance concretized
- Share buyback program decided
In the first six months of 2019, United Internet made further investments in new customer contracts and the expansion of its existing customer relationships, and thus in sustainable growth. All in all, the number of fee-based customer contracts was raised by 440,000 to 24.29 million contracts. Of this total, 380,000 contracts were added in the Consumer Access segment. A further 10,000 and 50,000 contracts resulted from the Consumer Applications and Business Applications segments, respectively.
Consolidated sales grew by 1.1% in the first half of 2019, from EUR 2,548.9 million in the previous year to EUR 2,575.8 million. This at first glance only moderate growth was due in particular to fluctuations during the year in (low-margin) hardware sales (EUR -41.4 million compared to the previous year), as well as sales effects from increased demand for LTE mobile tariffs among existing customers (sales reduced by EUR -23.1 million due to lower basic prices in the first year of the contract; prior year: EUR -4.5 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 (EUR -11.2 million; prior year: EUR -4.7 million).
Earnings before interest, taxes, depreciation and amortization (EBITDA) were positively influenced by the initial application of IFRS 16 (EUR +44.3 million) in the first half of 2019. In addition to one-off expenses already announced (EUR -2.3 million; prior year: EUR -7.7 million), there were opposing effects in the Consumer Access segment from preliminary additional costs (EUR -37.1 million) for wholesale purchases after the time-limited adjustment mechanism of a wholesale agreement expired at the end of 2018. Contrary to original expectations, no decision has been taken yet regarding a replacement or compensation for the expired arrangement. However, the corresponding wholesale prices are currently the subject of arbitration proceedings, in the course of which a binding decision on the type and amount of a permanent price adjustment will now be made by the end of October 2019. The company expects this expert decision to result in lower wholesale prices with a retrospective effect. Furthermore, future investments (implemented as planned), such as the repositioning of the Consumer Applications segment (EUR -9.9 million; prior year: EUR -5.1 million) and an increase in marketing expenses in the Business Applications segment (EUR -26.8 million), had an initial negative effect on earnings. Increased marketing expenses included a one-off amount of EUR -13.7 million for rebranding measures (prior year: one-offs of EUR -6.2 million for integration projects).
All in all, EBITDA of the United Internet Group rose by 11.4% in the first half of 2019, from EUR 565.5 million (acc. to IFRS 15) to EUR 630.0 million (acc. to IFRS 16). The comparable growth according to IFRS 15 amounted to 3.6%.
Earnings before interest and taxes (EBIT) were virtually unaffected by IFRS 16 accounting and rose by 4.5%, from EUR 373.8 million to EUR 390.8 million. EBIT also includes the above mentioned burdens on earnings and one-offs.
Earnings per share (EPS) fell from EUR 0.91 to EUR 0.84. This was due to non-cash impairment charges on shares held in Tele Columbus of EUR -34.2 million as a result of closing-date effects. An amount of EUR -43.1 million was recognized for this item in the first quarter and the amount is to be updated during the year depending on the share price. Without consideration of impairment charges (EPS effect: EUR -0.17), operating EPS for the first six months of 2019 amounted to EUR 1.01 - corresponding to year-on-year growth of 11.0%. EPS before PPA writedowns rose from EUR 1.16 to EUR 1.25.
Due to the revision of subscriber line charges after planning for 2019 was completed (increase as of July 2019 by approx. EUR -10 million) and initial costs in connection with planning and preparations for the 5G mobile network (approx. EUR -5 million), the Management Board is updating its EBITDA guidance to growth of approx. 11% instead of previously approx. 12% (or approx. 7% instead of previously approx. 8% according to IFRS 15).
Share buyback program decided
United Internet AG is thus utilizing the authorization issued by the company's Annual Shareholders' Meeting of May 18, 2017 to buy back treasury shares representing up to 10% of the company's capital stock at the time of the resolution or, if the amount is lower, at the time of exercising the authorization. The authorization was issued for the period up to September 18, 2020 and has not been utilized so far. The company currently holds 4,702,990 treasury shares from previous share buyback programs, corresponding to approx. 2.29% of capital stock.
Treasury shares can be used for all purposes permitted by the authorization of the Annual Shareholders' Meeting of May 18, 2017. The shares may also be cancelled.
The share buyback will be based on the provisions of Regulation (EU) No. 596/2014 of April 16, 2014, as last amended on June 23, 2016, and the Commission Delegated Regulation (EU) 2016/1052 of March 8, 2016. Further details will be published before the start of the share buyback program. United Internet AG reserves the right to cancel the program at any time.
United Internet AG
Tel: +49 2602 96-1616
14-Aug-2019 CET/CEST The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
|Company:||United Internet AG|
|Elgendorfer Straße 57|
|Phone:||+49 (0)2602 / 96 - 1100|
|Fax:||+49 (0)2602 / 96 - 1013|
|Listed:||Regulated Market in Berlin, Frankfurt (Prime Standard); Regulated Unofficial Market in Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange|
|EQS News ID:||857941|
|End of Announcement||DGAP News Service|
857941 14-Aug-2019 CET/CEST