United Internet (UTDI) Q3 2024 earnings summary

Executive summary

• Customer contracts increased by 420,000 to 28.87 million in the first nine months of 2024, with growth across all segments.

• Revenue rose 2.0% year-over-year to €4,660.7 million, driven by service revenue growth but offset by declines in hardware and after-market sales.

• EBITDA declined 1.4% to €978.4 million, impacted by higher network rollout expenses and out-of-period costs.

• EBIT dropped 11.2% to €529.5 million due to increased depreciation and amortization from network investments.

• EPS fell from €1.22 to €0.82, mainly due to lower EBIT and higher interest expenses.

Financial highlights

• Free cash flow after leasing was negative at €-63.8 million, reflecting higher capex, network investments, and a €260 million contingent payment.

• Net bank liabilities increased 11.4% to €2,714.7 million; equity ratio decreased to 47.5%.

• CapEx for the period was €441.9 million, down from €460 million last year, with a significant portion expected in Q4.

• Gross margin decreased from 33.8% to 32.8%; operating EBITDA margin fell to 21.0%.

• EBT was €397.8 million, down 19.0% year-over-year.

Outlook and guidance

• 2024 sales guidance updated to approximately €6.35 billion (previous: €6.4 billion); EBITDA expected at €1.38–1.39 billion.

• Cash capex forecasted to be 15–25% above 2023, mainly for mobile and fiber network expansion.

• Guidance is contingent on successful compensation negotiations for network outage damages.

• Management remains confident in achieving updated sales and earnings targets.