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DGAP-Adhoc: United Internet with successful first -2-

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DJ DGAP-Adhoc: United Internet with successful first half-year 2019 / share buyback program decided



DGAP-Ad-hoc: United Internet AG / Key word(s): Half Year Results/Share
Buyback
United Internet with successful first half-year 2019 / share buyback program
decided

14-Aug-2019 / 20:51 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.

*- *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

*Montabaur, August 14, 2019.* United Internet AG can look back on a
successful first six months of 2019. In the highly competitive environment
of its Consumer Access segment, the company once again succeeded in visibly
increasing its high-margin service revenues. The same applies to the
Business Access segment, which achieved significant growth in revenue and
earnings and is increasingly exploiting the potential of its fiber-optic
network. At the same time, the Consumer Applications segment continued to
drive forward the repositioning of its portals and the establishment of
data-driven business models, while the Business Applications segment focused
on its rebranding program with the new "1&1 IONOS" brand (formerly: "1&1") -
thus taking a further step toward the targeted IPO. Following a transition
phase, the latter will take place under the future independent "IONOS"
brand.

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.

*Outlook 2019*
Due in particular to weaker sales in the company's (low-margin) hardware
business and increased demand for LTE mobile tariffs among existing
customers during the year, United Internet's Management Board is updating
its sales guidance for the fiscal year 2019. Adjusted for hardware, sales
are now expected to rise by approx. 3%. Including hardware sales, total
sales are expected to increase by approx. 2% (previously: approx. 4%). As a
result of the low earnings contribution of the hardware business and the
advantageous LTE purchasing model, this will have no significant impact on
EBITDA.

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 *
With the approval of the Supervisory Board, the Management Board of United
Internet AG today resolved to launch a new share buyback program. In the
course of this share buyback program, up to 6 million company shares
(corresponding to approx. 2.93% of the capital stock of EUR 205,000,000) are
to be bought back. The volume of the share buyback program amounts to EUR
192.0 million in total. The program is to be launched on August 16, 2019 and
will be completed by March 31, 2020 by buying shares back via the stock
exchange.

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.

An overview of all key figures and the half-year financial report 2019 are
available online (as of August 15, 2019) at www.united-internet.de [1].

*Note *
In the interests of clear and transparent reporting, the annual financial
statements and interim statements of United Internet AG, as well as its
ad-hoc announcements pursuant to Art. 17 MAR, contain additional financial
performance indicators to those required under International Financial
Reporting Standards (IFRS), such as EBITDA, EBITDA margin, EBIT, EBIT margin
and free cash flow. Information on the use, definition and calculation of
these performance measures is provided in the Annual Report 2018 of United
Internet AG from page 52 onwards.

*Contact partner*
United Internet AG
Mathias Brandes
Tel: +49 2602 96-1616
presse@united-internet.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: United Internet AG
Elgendorfer Straße 57
56410 Montabaur
Germany
Phone: +49 (0)2602 / 96 - 1100
Fax: +49 (0)2602 / 96 - 1013
E-mail: info@united-internet.de
Internet: www.united-internet.de
ISIN: DE0005089031
WKN: 508903
Indices: MDAX, TecDAX
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



(MORE TO FOLLOW) Dow Jones Newswires

August 14, 2019 14:51 ET ( 18:51 GMT)


1: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=90dd04dfa53c00d4eba64e358fb540df&application_id=857941&site_id=vwd&application_name=news


(END) Dow Jones Newswires

August 14, 2019 14:51 ET ( 18:51 GMT)
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