United Internet (UTDI) Q2 2024 earnings summary

Executive summary

• Revenue grew 2.8% year-over-year to €3,099.9 million in H1 2024, with 330,000 net new customer contracts, totaling 28.78 million.

• EBITDA declined 1.0% to €662.3 million, impacted by higher network rollout costs and €14.3 million in out-of-period expenses.

• EBIT fell 14.7% to €347.4 million, mainly due to increased depreciation and amortization from network investments.

• EPS dropped to €0.61, affected by lower EBIT, a non-cash writedown on the Kublai/Tele Columbus investment, and higher interest rates.

• Cash capex was €284.4 million, down from €301.3 million, with free cash flow after leasing at €-185.8 million.

Financial highlights

• Group revenues up 2.8% year-over-year to €3,099.9 million in H1 2024.

• EBITDA at €662.3 million, down 1.0% year-over-year, with €111.0 million in network rollout expenses.

• EBIT at €347.4 million, down 14.7% year-over-year, reflecting €257.9 million in D&A.

• Net income attributable to shareholders was €-68.1 million, compared to €139.0 million in H1 2023, due to the Kublai writedown.

• Equity ratio declined to 47.3% from 50.2% a year earlier, mainly due to the Kublai impairment.

Outlook and guidance

• Full-year 2024 revenue guidance lowered to approx. €6.4 billion (from €6.5 billion), with EBITDA expected at approx. €1.38–1.39 billion, including €-14.3 million out-of-period expenses.

• Cash capex is now forecast to be 15–25% above the prior year, reflecting higher investment in network components.

• Lower contract growth and service revenue are expected due to a temporary mobile network outage and increased contract terminations.

• Free cash flow expected to remain negative in 2024 as a transition year, with improvement anticipated as investments normalize.

• CapEx expected to decrease in 2025, with 1&1 CapEx at €360 million (excluding passive infrastructure).