United Internet (UTDI) Q2 2024 earnings summary

Executive summary

• Sales/revenue increased by 2.8% year-over-year to €3,099.9 million in H1 2024, with 330,000 new customer contracts, totaling 28.78 million.

• EBITDA declined by 1% to €662.3 million, mainly due to higher network rollout costs and €14.3 million in out-of-period expenses.

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

• EPS dropped to €0.61, mainly due to lower EBIT, at-equity results, higher interest rates, and a non-cash writedown on the Kublai/Tele Columbus investment.

• Adjusted full-year revenue guidance to approx. €6.4 billion and EBITDA to €1.38–1.39 billion, both slightly below previous forecasts.

Financial highlights

• Consumer Access: Sales up 1.1% to €2,015.9 million; EBITDA down 7.2% to €326.6 million, impacted by €111 million in mobile network expansion costs.

• Business Access: Sales up 4.6% to €283.2 million; EBITDA up 1.9% to €78.7 million, margin at 27.8%.

• Consumer Applications: Revenue up 13.6% to €144.4 million; EBITDA up 16.4% to €53.9 million, margin at 37.3%.

• Business Applications: Revenue up 6.1% to €751.6 million; EBITDA up 7.9% to €207.4 million, margin at 27.6%.

• Free cash flow after leasing at €-185.8 million, impacted by capex and phasing effects.

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.

• CapEx expected to be 15–25% higher than previous year, mainly due to network inventory buildup.

• Free cash flow expected to remain negative in 2024 as investments continue; transition year anticipated.

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

• CapEx for 1&1 guided at €460 million in 2024, €360 million in 2025 (excluding passive infrastructure).