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DGAP-Adhoc: 1&1 Drillisch AG - Success in HY1 2019

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DGAP-Ad-hoc: 1&1 Drillisch Aktiengesellschaft / Key word(s): Half Year
1&1 Drillisch AG - Success in HY1 2019

14-Aug-2019 / 20:50 CET/CEST
Disclosure of an inside information acc. to Article 17 MAR of the Regulation
(EU) No 596/2014, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

*1&1 Drillisch AG - Success in HY1 2019*

*- *Number of customer contracts grows by 380,000 to 13.92 million, plus
880,000 compared to previous year

- Revenues increase by 0.4% to EUR1.826 billion, service revenues by 3.4% to
EUR1.471 billion

- EBITDA plus 0.1% to EUR340.4 million

Maintal, 14 August 2019 - 1&1 Drillisch AG (ISIN DE 0005545503) can look
back on a successful first half of 2019. The Company was able to increase
the number of customers, revenues and the operating profit figures.

During HY1 2019, 1&1 Drillisch continued to invest in new customer contracts
as well as in increased value of current customer relationships to secure
sustained growth in profits. The number of customer contracts in the current
product lines rose by 380,000 to 13.92 million contracts (31/12/2018: 13.54
million) during the first six months. The new contracts were acquired in the
mobile internet business where the number of customers rose to 9.58 million
(31/12/2018: 9.20 million). Broadband lines of 4.34 million customer
contracts remained constant during the first half of the year. In comparison
with 30/06/2018, the number of customer contracts increased in total by
880,000 (6.7%).

Revenues grew in the first half of 2019 by 0.4% from EUR1,819.0 million in
the same period of the previous year to EUR1,825.6 million. The high-margin
service revenues increased as planned by 3.4% to EUR1,471.1 million (HY1
2018: EUR1,423.3 million). 1&1 Drillisch focuses on these earnings because
they are sustainable and determine the profit. Besides the new customers,
more and more of our current customers who have previously used rate plans
in the Vodafone mobile network are displaying an interest in changing to
fast LTE rate. Since LTE rate plans are offered at reduced prices during the
first contract year, growth in the service revenue in the first half of the
year declined by 1.3% - otherwise, it would have amounted to 4.7%.

The disclosed earnings before interest, taxes, and depreciation and
amortisation (EBITDA) rose to EUR340.4 million (HY1 2018: EUR340.1 million).
This small increase results from a contractual adjustment mechanism for
certain advance service prices not being extended again at the end of 2018.
This led to temporary additional costs in the amount of about EUR37.1
million during the first half of 2019. Contrary to original expectations, a
replacement or compensation for the expired regulation has not been decided.
However, the corresponding advance service prices are currently the subject
of arbitration proceedings, and we expect a binding decision about the
nature and amount of a permanent price adjustment that will lead to
retroactively lower advance service prices in October of this year.

If the effects from IFRS 16 (HY1 2019: EUR+2.3 million; HY1 2018: EUR0
million), the expenditures for integration projects (HY1 2019: EUR-2.3
million; HY1 2018: EUR-7.7million) and the aforementioned temporary price
increase for advance services are excluded, the comparable EBITDA would have
risen by 8.6% from EUR347.8 million in the previous year to EUR377.5 million
in the first half of 2019.

Consolidated EBIT (earnings before interest and taxes) in the first half of
2019 amounted to EUR261.1 million (previous year: EUR262.7 million).

Ralph Dommermuth, CEO of 1&1 Drillisch, summarised the outlook for 2019:
"Number of customers, revenue and profit developed well during HY1 2019. We
are expecting the number of customers to continue to grow throughout the
business year. Owing to the increased demand on the part of current
customers for LTE mobile rate plans, we are adjusting our revenue forecast
in that we now expect an increase by about 3% instead of growth of about 4%
in the service revenue for 2019 (2018: EUR2,882.3 million). Owing to the
advantageous LTE procurement model, this adjustment does not have any
negative impact on our profitability. On the contrary, a negative regulatory
effect of about EUR10 million (increase in subscriber connection line
charges from July 2019) and initial costs of about EUR5 million related to
planning and preparation of our 5G network have been newly incorporated into
our EBITDA projection. We currently expect EBITDA to grow by about 8% in
2019 instead of increasing by about 10% (2018: EUR721.9 million). After the
conclusion of the aforementioned assessment arbitration, we are planning to
issue an even more concrete forecast for the EBITDA."

*Performance indicators pursuant to IFRS - comparison HY1 2019 v. HY1 2018*

in EURm HY1 2019 HY1 2018 Change in %
Revenues 1,825.6 1,819.0 +0.4
Service revenue 1,471.1 1,423.3 +3.4
Service revenues excluding effects 1,494.2 1,427.8 +4.7
from changed relief split
(existing customers) focusing on
LTE mobile services contracts
EBITDA 340.4 340.1 +0.1
EBITDA margin in % 18.6 18.7
EBITDA excluding effects from IFRS 377.5 347.8 +8.6
16, one-offs from integration
projects and the lapse of the
limited-term price adjustment
mechanism of an advance service
EBIT without PPA write-offs 318.3 319.9 -0.5
EBIT 261.1 262.7 -0.6
EBIT margin in % 14.3 14.4
Profit per share in EUR without 1.24 1.24 0.0
PPA write-offs
Profit per share in EUR 1.01 1.01 0.0

Customer contracts in current 13.92 13.04 +6.7
product lines (million)
of which mobile internet 9.58 8.73 +9.7
of which broadband lines (VDSL, 4.34 4.31 +0.7

The report will become available on the Company's home page on 15 August
https://www.1und1-drillisch.de/investor-relations/reports [1]

Maintal, 14 August 2019

1&1 Drillisch AG
The Management Board

Financial performance indicators such as EBITDA, EBITDA margin, EBIT, EBIT
margin or free cash flow are used in addition to the disclosures required by
the International Financial Reporting Standards (IFRS) in the annual and
interim financial statements of 1&1 Drillisch AG and in ad hoc reports
pursuant to Art. 17 MAR to ensure a clear and transparent presentation of
1&1 Drillisch's business development. Information about the use, definition
and calculation of these performance indicators is available on pages 38 and
39 of the Annual Report 2018 of 1&1 Drillisch AG.

Disclaimer: This report contains statements regarding the future which are
based on the current assumptions and projections of the 1&1 Drillisch AG
management. Various risks, uncertainties and other factors, both known and
unknown, can cause actual developments, especially in the results, financial
position, and the business of our Company, to deviate substantially from the
projections about the future as they are shown here. The Company does not
undertake any obligation to update such future-oriented statements and to
adapt them to future events or developments.

Oliver Keil
Head of Investor Relations
Mail: ir@1und1-drillisch.de

14-Aug-2019 CET/CEST The DGAP Distribution Services include Regulatory
Announcements, Financial/Corporate News and Press Releases.
Archive at www.dgap.de
Language: English
Company: 1&1 Drillisch Aktiengesellschaft
Wilhelm-Röntgen-Straße 1-5
63477 Maintal
Phone: +49 (0) 6181 - 412 218
Fax: +49 (0) 6181 - 412 183
E-mail: ir@1und1-drillisch.de
Internet: www.1und1-drillisch.de
ISIN: DE0005545503
WKN: 554550
Indices: MDAX, TecDAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich,
Stuttgart, Tradegate Exchange
EQS News ID: 857943

End of Announcement DGAP News Service

857943 14-Aug-2019 CET/CEST

1: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=1395931dd0d45e6cb952d2fd9c80f1a8&application_id=857943&site_id=vwd&application_name=news

(END) Dow Jones Newswires

August 14, 2019 14:50 ET ( 18:50 GMT)

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