Earnings call transcript: United Internet Q2 2025 sees stock rise despite EPS miss

United Internet AG reported its second-quarter earnings for 2025, revealing a slight miss in earnings per share (EPS) but a stock price increase following the announcement. The company’s EPS came in at €0.28, below the forecasted €0.2966, representing a 5.6% negative surprise. Despite this, the company’s stock rose by 2.78% in pre-market trading. With a market capitalization of €5.2 billion, United Internet’s Q2 revenue was €1.61 billion, and the company continues to invest heavily in its fiber optic and mobile networks. According to InvestingPro data, analysts expect the company to return to profitability this year, with a projected EPS of €1.65 for FY2025.

Key Takeaways

• United Internet’s EPS missed expectations by 5.6%.
• The stock rose 2.78% in pre-market trading.
• Revenue for the quarter was reported at €1.61 billion.
• Significant investments in network expansion and AI initiatives were highlighted.
• The company maintains a strong market position in Germany’s telecommunications sector.

Company Performance

United Internet continues to demonstrate a robust performance in the German telecommunications market, despite a slight miss in EPS expectations. The company’s focus on expanding its fiber optic network and mobile network rollout is part of its strategy to maintain its competitive edge. The company also emphasized growth in its cloud infrastructure and AI initiatives, which are expected to drive future revenue streams.

Financial Highlights

• Revenue: €1.61 billion for Q2 2025.
• EPS: €0.28, below the forecast of €0.2966.
• EBITDA: €1.35 billion forecasted.
• Revenue growth: 4.3% year-over-year.
• Cash flow from operating activities increased by 557.9%.
• Free cash flow: €25.1 million.
• Equity ratio: 41.9%.

Earnings vs. Forecast

United Internet’s EPS of €0.28 fell short of the €0.2966 forecast, marking a 5.6% negative surprise. This miss contrasts with the company’s historical trend of meeting or exceeding earnings expectations. The revenue of €1.61 billion, however, aligns with the company’s growth objectives.

Market Reaction

Despite the EPS miss, United Internet’s stock rose by 2.78% in pre-market trading, closing at €25.88. This increase reflects investor confidence in the company’s long-term growth strategies and its strong market position. The stock’s current price is near its 52-week high of €25.94, indicating positive market sentiment.

Outlook & Guidance

Looking ahead, United Internet plans significant investments, including an expected €800 million in capital expenditures. The company is also considering a substantial investment in an AI Gigafactory, potentially ranging from €3 to €5 billion. These initiatives underscore the company’s commitment to digital sovereignty and expanding its independent cloud solutions.

Executive Commentary

Ralf Dammelmucht, a key executive, emphasized the company’s stable portfolio and its strategic investments in AI and cloud infrastructure. He stated, "AI will penetrate all walks of life... and determine what the prices are, who can get what services." This highlights the company’s focus on leveraging AI to enhance its service offerings and market position.

Risks and Challenges

• Potential delays in network expansion projects.
• Competitive pressures in the hosting and cloud services market.
• Economic uncertainties affecting consumer spending.
• Regulatory changes impacting telecommunications operations.
• Technological advancements by competitors.

Q&A

During the earnings call, analysts inquired about the company’s strategy for AI and cloud infrastructure, contingent payments with Deutsche Telekom, and the value of premium versus free subscribers. Executives confirmed there are no plans to sell any business units, reaffirming their focus on long-term growth through strategic investments.

Full transcript - United Internet AG NA (UTDI) Q2 2025:

Ralf Dammelmucht, Executive/Management, United Internet: Ladies and gentlemen, dear guests, ladies and gentlemen, welcome to the Analysts and Investors Conference of United Internet for the half year figures ’25. My name is Dominic Grossmann. I’m very happy to be able to welcome you here personally at Zofiechallen Frankfurt. I also like to welcome everybody who is participating online. And allow me to take you through the agenda today.

We’ll start with Ralf Damamut presenting the development of the first half of the year, giving a focus on the second half of the year. And following that, Carsten Torre is going to explain the figures in detail. You will, after our presentation, have opportunity to place your questions in our Q and A session. That’s it from my behalf, and I pass on the stage to Mr. Dammelmucht.

Thank you. Thank you, Mr. Grossmann. Welcome, ladies and gentlemen. As announced, I will present the development of the company in the first half of the year and a forecast on the rest of the year.

And then my colleague, Mr. Toure, will give you the details on the figures of the first half of the year. You know our business. We work in a team with about 10,800 employees, 4,000 of them in product management, development and data centers. We run a powerful Infinite structure with fiber optic networks, a mobile network and computer centers with over 100,000 servers worldwide.

We have the access business and applications. And these again split up in offers for consumers and business customers. Our products are offered in a number of brands in the consumer business. The main brand is Einz Nights and we have discount brands from the merger in 2017. In the business access, we are active in with Einstein’s Versatile application for consumers are GMX, WebDA mainly and Internet media.

Application for business customers are provided by EONOS with different subsidiaries like and acquired like Opel and Strom in Poland, Austria, England and so on, and a number of minority partners. Let me start with the consumer access. In the 2025, you know our business our consumer access business is organized in Einzeneins AG. They are stock listed as 3,890,000 Broadband customers and 12,440,000 customers contracts. We are operating the first open run business and we are migrating the existing customers from the wholesale contracts to this open run.

At the end of the year, we had 16,330,000 customer contracts. Mobile chain broadband hasn’t changed and the broadband has reduced by €60,000 Our service revenue could increase slightly to 1,647,000,000 The general development minus €13,100,000 to €130,600,000 Included in this is the buildup of the mobile network. Einsenrein reports two segments: one segment of success, 3.5% due to the change of the roaming partner with higher roaming costs as expected before and then the mobile network with €130,600,000,000 coming from €111,000,000,000 Business access, one on one Versatile operates one of the largest German fiber optic networks. We operate the access network transport networks on the 67,000 kilometers. We are available in over three fifty cities in Germany, including the 25 largest.

And 28 over 28,000 buildings are directly connected. We have increased 287.3%. This is the accumulated figures. Our own optic fiber is growing much more. We have a decline in the voice business where earlier customers paid per minute for voice and they don’t accept this anymore.

This is why we are losing nonrecurring revenue, but the recurring revenue is growing. That is the lines, for example. So we’ll see this development over a couple of years. Still, the EBITDA has start up costs. Without these start up costs, the EBITDA would have been at €92,000,000 The margin is a bit higher than last year with 28%.

Looking at the applications, I have said so the consumer area is GMx, webde, mail.com, online office, cloud servers, cloud storage. And our differentiation here is German data protection and data security. We had 41,750,000 active consumer accounts at the end of the year, and that is free accounts, which are funded by advertising, €38,700,000 minus €360,000 And we have €3,800,000 pay accounts, which are much better for us than the advertising accounts. There’s some seasonal figures. That’s why we have a difference here towards between the end of the year and the middle of the year.

This is a bit misleading, but if we look at the year to date, we see a plus of €90,000 coming from €41,660,000 We see this in revenue as well, a plus of 3.1% to €148,000,000 And the result is not brilliant. We expect that to rise with the revenue as well, but we expect a change. We have a high business region, 36.2 EBITA, and we don’t need many servers to have that business running. Business Applications, Aeonis, they published figures today as well as they’re leading digitization market for small and medium sized companies. They’re cloud enabler active in Europe and in The U.

S. Broad product portfolio reaching from digital solutions, websites, e shops, marketing tools, right to virtual servers, dedicated servers, cloud infrastructure as a service, all of these are the active figures. A very good growth in the first half of the year, 210,000 new contracts, 9,800,000.0 as a total, also from abroad, but our main market in Germany, 80,000 plus contracts reaching €4,710,000 The revenue have grown strongly 19% to nearly €900,000,000 That is due to customer growth and better up and cross selling of additional products and a strong growth in the AdTech segment. As a total EBITDA, even better growth, 24.6% plus to 258% in the first half, the margin now at 28.9%. So a very strong margin business here.

The figures again in the overview, a total of 290,000 new customer contracts and pay services reaching 29,310,000 contracts, a plus of 3.440.3% in revenues, EBIT plus EBITDA plus 2% EBIT is dropping due to the investments and the antennas, the computer centers and so on, which are being abated, being added and activated. So a drop here and a result of minus 3.3%. So included in this, as I have said, is the €130,000,000 ramp up costs, as I’ve said. And if you take this 18.4% on the EBIT, you will get a growth of, I’d say, around 5%, a little bit less. What is the forecast?

How are we going to carry on? We confirm our forecast. We are expecting the forecast to fulfill 6,545,000,000 The EBITA is about 1,350,000,000.00 We’ve just explained this €20,000,000 less EBITDA due to the change of the national roaming partner from to Vodafone. We had deactivated components before that increased the EBITDA. Vodafone doesn’t do this and EBIT, there’s no impact, however.

So if we add this difference to the €1.535 we would end up at 1,700,000,000.0 which would be 5.5% of growth, something in that range, which is quite reasonable. CapEx will end up at about €800,000,000 this year, a bit higher than last year. We are still investing into the optical fiber network, in the mobile network and also in the cloud infrastructure. So thank you for your attention so far. And I would like to ask Mr.

Torrej to present the figures.

Carsten Torre, Financial Executive, United Internet: Welcome again Benjamin. I’ll have the honor of taking you through the figures in detail, giving you a summary from the overall view and into the balance sheet. First of all, why do we have different figures here? Mr. Dover would mention it.

We have the comparison like for like, I. E, the key figures as of thirtieth June twenty twenty five compared to thirtieth June twenty twenty four. And you can see that the fee based customer contracts actually grew by more than €05,000,000 in this period of time. If we take a look at the ad finance free accounts, we have a decrease with €180,000 But at the same time, we were able to get paying customers, which are in the first figure I indicated. So we have actually plus 270,000

Ralf Dammelmucht, Executive/Management, United Internet: customers.

Carsten Torre, Financial Executive, United Internet: Revenue growth, 4.3%. As I mentioned, EBITDA, as we can see here again with the 2% despite the €19,600,000 higher costs for the rollout of the one on one mobile network. The EBIT, say, a larger impact of the effect we’d mentioned already shown in the EBIT, but not in the EBITDA. In the EBIT, we see the 39,000,000 higher depreciation in connection with the network expansion, 12,000,000 for Versatile, so that we have an overall decrease of 8.5% of the EBIT. Let’s speak about the cash flow.

In the first half of the year, we have an increase from 557.9% to five and seventy eight point nine Cash flow from operating activities, see strong growth here. Why? Well, last year, the contingent payment the last contingent payment of €260,000,000 was paid to Deutsche Telekom for the last time, and we benefit from this now. So we don’t have this payment anymore, and that has this positive effect here, the increase of operating activities. In investments, we can see the impact of the CapEx, which is more or less at last year’s level, 13,000,000 higher than last year.

The and for financing, we have two effects, a 15.4% positive last year, and we’re minus €211,000,000 this year. There’s two effects. There’s dividend payments of €426,000,000 that have an impact, but also the catch up dividends for last year, just under €240,000,000 We have an effect of the one on one shares, that’s 100 and EUR160 million that we bought in April. And we have a repurchasing program of EUR36 million that is reflected here. So we have this overall change of EUR46.3 million.

So quite true, it’s EUR $326,000,000. Sorry, the figure is wrong here. Let’s speak about the EBITDA bridge, the cash flow. Starting with EBITDA, euros 675,600,000.0. Then we can see the CapEx, which is a little bit different from what we saw before because there’s €2,000,000 investment removal, then the phasing effects, payments made in the first quarter that actually were for quarter twenty four, but that’s led to a decrease of money than the tax, 51,200,000.0, then working capital and others, reduction of our payments due to our liabilities.

Then free cash flow arrives at 105,800,000.0 and then €80,700,000 worth of leasing costs. So the free cash flow after leasing for the first half of the year twenty twenty five, twenty five point one million. Look at the balance sheet. What can we see? Let’s start at the bottom line.

We have a slight decrease of the balance sheet total from €11,935,000 down to €11,863,000 whereas a common not from assets from property assets, that’s pretty much the same. Goodwill financial assets are pretty much at the same level. Accounts receivable is a little bit higher. Contract assets are a bit lower with the decrease of contract assets due to lower customer growth and lower hardware sales. The inventories are at the same level, slight increase due to rental and pre service provider payments and then the income tax claims a little bit lower than as per the end of the year.

Same goes for cash and cash equivalents. So that leads to a slight decrease in the balance sheet. Now let’s look at the liabilities. We have a little bit more movement in equity here, and I’ll tell you a little bit more about why. Maybe we’ll speak about this effect.

First of all, we had the purchase offer for one on one shares. This goes beyond the June 30. So this total of the increase offer needs to be reflected here even though only €140,100,000 were spent on shares. So we have a deviation here, which is, however, required by us by IFRS. I find it a bit strange because it also has a serious impact on the equity ratio, which is 4.6% lower at 41.9%.

The right figure would be if we only accounted for the €140,000,000 then we’d be at 3.3 percentage points and 3043.3% equity ratio. What else do we have? We have the acquisition of the one on one shares with the €60,800,000 and the dividend payment accordingly of €328,400,000 Liabilities We can see our CapEx measures, acquisition of one on one shares, but also the dividend. Then trade accounts payable, we’ve seen already, the effect decrease of liabilities to $6.00 €3,000,000 and with contract liabilities were nearly at the same level.

And then, of course, the €300,000,000 that we had to reflect here from the offer to increase our number of shares. So this takes us through the figures, and now we have the possibility of taking your questions. So please get ready. Well, thank you very much so much on our presentation. We’ll start with a question and answer session now.

Please use the headsets the microphones that our colleagues make available for you. And please start by indicating your name and company. We’ll start on the left hand side.

Ben, Analyst, New Street Research: Hi, there. It’s Ben from New Street Research. I had two questions, please. The first question was on the DT contingent payments. You mentioned that you made the last payment last year and that you’re now seeing a benefit from that.

So should we now expect are you now receiving working capital inflows from that asset? And can you comment on the scale and the timing of the inflows you expect to see from that prepayment asset? And then second question on the consumer applications business. You’re seeing declining free subscriber numbers, but you’re growing the number of premium subscribers. I just wondered if you could talk a bit about the relative value of those subscribers.

So for example, what is a typical ARPU for a free subscriber and what is a typical ARPU for a premium subscriber? Thank you.

Ralf Dammelmucht, Executive/Management, United Internet: Yes. Let me start with the consumer contracts. The typical ARPU of a free subscriber is about €0.25 a bit more, let us say €0.25 to €0.30 and the paid customers is about €3.03 euros about. So that means the paid customer is 10 times as valuable as the free customers. And this is why we try to convert the customers wherever we can.

If we look at the business, the turnover composes of advertising fees and the fees of the paid customers, and we do more with them, and this is the goal to carry on with this. The time was ten years. The first four years were the high upfront payments ranging about €216,000,000 per year, which were secured and are being used over the years now. So a clear cash flow effect, which is probably not going to reflect in the result because we have accrued it. So we have taken it over the years and the cash effect that we have taken up in the first four years by the payments.

Maybe I can add a note for everybody who’s not so involved with this. In telecom, you can select when you get the want to use the optical fiber for the last mile, then you can select whether you want to pay upfront in the contingent model that will go over four years and that will give you a better price or whether you will not have the upfront payment and pay a higher price every year. And now, as in Einz and Einz, we fund and have a good funding. It was a good opportunity to do this upfront payment. So that means we paid about €1,000,000,000 over the four years and now we have the benefit that we don’t have to pay them for the next six years.

And that won’t help us in the result, but it will help us in the cash. Another question on the right hand side. I have

Analyst: a couple of questions, please. Firstly, in terms of your longer term strategy for the group, in terms of maybe the consumer applications business, for example, do you still see it as a core part of the group? Would you consider monetizing it? And then the same question for IONOS. How do you feel think about your stake in the business?

Would you consider increasing it? What are your thoughts on maybe disposing of parts of it to fund build up wines and ions? Just wondering how you’re thinking about the structure of the group and your strategy into the midterm? Thank you.

Ralf Dammelmucht, Executive/Management, United Internet: We do assume that the business as we have it will stay with us in the long run. We don’t plan to sell any of the business or sell shares of Vionos or Einz and Einz. We think we have a good portfolio. It’s balanced. And I understand that a shareholder doesn’t want a conglomerate saying, I could set up my own portfolio.

However, if you are a medium sized company, you will get more business models quite attractive because some things may not work out in the market as others as well as others. So we can compensate that. So I think we have a good and stable portfolio basing on a number of business models. Of course, that means the growth would be a bit smaller. If we had Ionis only, we would grow faster now.

But I can recall years where we didn’t have any growth at Ionis. So I think it’s good that we have the different business models and that they do compensate each others and we have no plans to change this. Okay. I don’t see any more questions. Maybe here on the backside, Mr.

Klaser? Yes, Fokker Klaser from MMPEM. The honest question has just been answered. And the other perspectives, we got some news as far as AI is concerned. We had this last year Gigafactory.

How do you assess this in the term of two, three, four, five years? What may be the perspective there? That will be the first part concerning Eonis. Well, I’m not in on the Board there. I’m in the Supervisory Board.

So I can’t talk for the company. I can only give the main shareholders’ view. We are satisfied with the relevant Ionis has taken. We took them over in ’eighty nine with 38 staff members and 25,000,000 marks, German marks turnover, which wasn’t occurred. So the prepayments weren’t occurred.

And that has developed greatly for us. We see many opportunities for the future as well. Where do they arise from? First of all, from the AI issue, because we do think that we think we have a good access to our customers and the investments in homepages and websites can be sold to small businesses and assistance agent functions that will facilitate business. That’s where we see business fields in the next years, but we’ll have to get into that.

We see opportunities in platform consolidation. I’ve shown that we have different companies founded by ourselves in different countries, Spain, U. S. And so on. And where we had opportunities, we bought the competitions.

And so these platforms have been integrated to a certain extent, but not completely yet. So we want to tap into synergy effects here, which as we did in the past years as well, accompanying our business development, increasing productivities, that’s going to be a driver for the EARNOS profit as well. And in addition to the business today with the websites and so on is growing about 8% per year. So growth in the core business, consolidating platforms and opportunities here by new products and artificial intelligence. These are growth opportunities for Aehanos.

And then we have the cloud business. We have our own cloud infrastructure developed over many years. It’s completely sovereign. No, we have a Huawei as in telecom or open source stack self built. So we do see that we can sell this well to public administrations and some big federal authorities are using it.

So we have to see on how far companies are willing to take this up to have an independent cloud. I think that discussion has just started. What is an independent cloud? Is it a cloud which I buy from Amazon or Google or Microsoft? Or will it be independent if they have a subsidiary in Germany or in Switzerland?

And is that independent enough? Or is independent only if it was done by a European company who developed it and understands it themselves and can change it. So that discussion is ongoing. And of course, we do hope that there’s going to be an increasing awareness and our positioning can be strengthened in the market here and we can grow on that base. So that’s the big fields that E.

ONOS sees opportunities in and that means we should stay invested. And what we also have to see is we have a good development of the shares. If you look at the normal development, well, let me explain. Over all the years that we bought smaller hosting companies in Europe, we had thirteen to fourteen days EBITDA. And if we look at the IONOS listing today, you see although it was listed so well, it just got there.

So the European market leadership, I. E. Ideas, cloud ideas, these small hostess didn’t have that. That’s not depicted in the share. So this is why I’m positive.

We have to do the business, of course, but I’m optimistic that we will be able to show that this has more to gain, that we can carry on and the market understands the business opportunities involved. And this is why I think we will stick to our position as we have it.

Carsten Torre, Financial Executive, United Internet: And if Jonas needs more capital for AI factory, will that be possible without having to increase your capital? No problem. We’re only talking of 3,000,000,000 to €5,000,000,000 there. Let me break it down. What you could read in the press was that your gigabit factory costs 3,000,000,000 to 5,000,000,000 Yes, that may be true, but you don’t build it in a day.

You build it in individual stages and you fill it in stages. As you increase your business, it doesn’t make sense to set up a huge number of computers and just keep them there if you don’t use them. So growth accompanies business. How will we finance this? You need some equity, of course.

I’ll get back to that. But the envelope of the data center, the passive infrastructure, you can do that with credit. You don’t need to do to use your own money for it. And software, we develop ourselves. The hardware has to be bought.

The cost of money, we buy it gradually, but we can also use the subsidies made available by the EU now that’s that will cover something of like 35% of the cost. That means that we have less of a financing need. We do it together with a partner that decreases the financing needs. And if you see that Ionis has net debt of less than €800,000,000 now of €530,000,000 dBA, you can see that we really could take up a credit line of 1,000,000,000 without any increase in equity. So if you take these aspects together, creditworthiness, the partner, also the availability of passive infrastructure credits plus the subsidies available by the EU, then this should be possible.

But as I said, it doesn’t it isn’t done overnight. It has to be built, filled by the buy. By then, the conditions will be better. More cash flow have been generated. We don’t want to take any dividend out of this.

So we don’t see any need for an equity increase as per today. Now if you take a look at the demand so that you can use capacity, what year are we talking about? When will that be? Difficult to say. It depends on how product development progresses.

It depends on market demand. On the one hand, I’m very optimistic. On the other hand, I can also see that a lot of companies don’t appreciate, this issue of independence, of sovereignty enough, big companies. So we’ll take a Microsoft product at their subsidiaries located in Switzerland. And if we ask them like, what if they don’t make any update available anymore, how will you continue?

Or there’s no more update for this cloud anymore? Or if it gets more expensive, how will you handle this? Many haven’t thought about that yet. Also, a lot of those companies are locked into multiyear contracts. You booked so many capacities for the next five years or whatever, then you don’t need additional capacities anymore.

And it’s very difficult to implement. There’s always big major projects. So this won’t happen overnight. It’s very difficult to say that within three months, six months, five years. It also depends on our own performance.

We have to be good. We have to make enough capacity available. We’re only at the beginning here because we don’t have the ecosystem that Amazon or Microsoft can make available. But there’s an eightytwenty principle here as well. 80% of workload will cover only 20% of the workload, databases, backups, LLM models, ERP software.

I think we have a lot to offer here and we’ll do more going forward so that our offering will become ever more competitive, but it’s very difficult to predict. Then the complex of one and one is listed. Ioannos is listed. What about one and one Versatile? Are we peaking here and it’s going downhill beginning next year?

So you’re about EUR 600,000,000 revenue, 30% EBITDA margin. You said this is going down. Fiber Optic will go up. So when will this move back into a growth phase? Absolutely, in absolute terms.

I think you can see increasingly how the nonrecurring revenues are decreasing. So we have hit a bottom now that the nonrecurring is beginning to grow. We’ll see that over the next few years. Investments, we will have to continue to make. That’s positive because we’re increasing our footprint in commercial estates that cost money.

Every commercial estate we connect cost money. We have a bigger footprint because we connect to the one on one network. That increases our return because the contract has to be made, but we have to make an investment upfront. With a growing business, these investments will earn ever more money. I have a feeling maybe a year ago or so versus I’ll use to invest €400,000,000 have an EBIT of €160,000,000 and the rest was paid by United Internet.

This year, we still have some subsidy, but it’s less than it was. Next year, it will be it will breakeven. So we increasingly managed to generate cash through our own business that will be an improvement. So that has to be taken into consideration. A lot has to be invested by Versatile.

We completely renovated the fiber optic network, overhauling the entire technology. We’re very happy with the technology. Now we’re able to win tests, best network compared to network Telefonica, Vodafone. We invested a lot of money there. We invest into expansion of the network, and we can increasingly see that money is rolling in now.

And that is our view from the holdings point of view because 101 doesn’t cost us any money because it has its own money. Janos doesn’t cost any cash because they generate it. And all our further businesses generate their own cash. The only company that is costing us money, if you wish, is one on one Versatile, and that will end over the next couple of years. So we don’t need to look at cash too much here.

We’re doing we’re well underway. Last question. United Internet Group, what will it look like in the free cash flow basis that should turn around the beginning next year after this intensive phase of investments that you’ve had? Well, we have multiyear plan, and I don’t know the details of it now. It’s indicating basically that our debt ratio will decrease.

So we’re peaking in terms of debt now. If we don’t buy anything else, well, we took out another credit line because we bought one on one shares. Operatively speaking, our indebtedness will decrease by the buy even though we’re extending the mobile network investing into the cloud. But that is still excluding the AI Gigafactory, of course, I have to say that. We have to exclude that.

Now if we exclude that, then our indebtedness keeps going down year on year despite the other ongoing investments. Next question from the left side, Carsten Obliger. Yes, Carsten Obliger, DZ Bank. I have a question concerning Versatile. You indicated in your presentation that there’s a lot of CapEx for the mobile network included there.

Can you roughly indicate how we will when we will see that in the profit and loss statement? Will it be visible or will it be background noise basically? There’s an upfront payment for any connections between 101 to Versatile and then there’s a long relatively long period where we have this background noise, recurring revenues that will generate keep generating cash. So the margin will be at the level of the same level as the company is right now? Yes, that’s what we’re planning, yes.

Okay, thanks. Next question is by Simon Stivik. Simon Stiebeck, Warburg Research. Thank you very much for your presentation. I have a couple of questions as well.

You have 10% of your own shares on the balance sheet. I would like to know what you’re planning to do with them because you could take the view that the holding is undervalued. In other words, you could be very satisfied because you could then buy Ionis very cheaply via the holding if you were to buy United Internet shares. So I’d like to know, you can’t buy back your own shares right now. What’s your plan here?

And then a number of short questions. You just mentioned the leverage, your balance sheet capacity. You said that you have a maximum leverage. Or what’s the maximum range you can imagine there? Then the refinancing ratio, what is it right now with you?

And then finally, the dividend for the next year, could you imagine that it goes up a bit? Than the €0.5 that you have been paying out excluding this year? Thank you. Well, we have about 10% own shares. We can buy more shares at any day.

We have a resolution by the Board. We would have to withdraw shares, but that can be done by the Board. We used to have $252,000,000 shares in United Internet, and we’re now at 173 shares floated. So EUR 60,000,000 have been already withdrawn over the years. So we could do the same again.

If we wanted to buy more shares, we could withdraw them and then buy more. But we feel very well with these own shares because we can use them to use them as a bar term currency or to make them a as a part of a payment for employees and they have no voting rights. But if we need to withdraw them because we need shares for tomorrow, we would have to first have them registered with the stock exchange, etcetera, so it’s easier to withdraw our own shares. Now concerning the dividend policy, we have a policy of paying out somewhere between 2540% of our profit. And what we’ve been paying out was not an obligatory dividend.

It’s just what we calculated. We had a catch up effect now because we paid less over the last few years and in one year, didn’t pay anything at all. So we that takes us to an average of 35%. And I think that is what we feel happy with. So the catch up dividend was €50 and previously it was 40%.

So we that was at the upper limit of the 30% limit. Leverage now with the increase program, the purchasing program, we have 2.5 leverage now. The threshold for us was three would be 3%. And if we calculate without leasing and frequency liabilities, if we calculate leverage then it is the limit would be three for us. And as Mr.

Dammelwitz said, to reduce the leverage with an increase in cash flow over the next three years to actually pay it back. It all depends on what we spend the money for. If we buy shares in companies, then it may make sense. If we invest into fiber optic cables into transmission towers, then we have an asset in return. So we are quite optimistic in terms of the 2.5 because it’s well underpinned.

But in the long term, we’d like to reduce it. We used to have a lower indebtedness, and we’d like to return to that in terms of the conditions that we get. So they’re still very favorable for us. The margins are somewhere between 0.8% and I think 1.4. So it’s still, in our view, a good access that we have to the financial markets.

We can finance ourselves very well. The overall interest rates have decreased again, so we feel quite well in this context. Are there any other questions? Fokker, Klausen again. Context of our economic environment, can you see anything where you do very well?

But you also participated in this March meeting with about 60 entrepreneurs. Do you have any optimism for things improving in this country? Or what’s your view? Well, that’s a good question. First of all, our business is more than resilient.

We’ve seen all sorts of things, financial crisis, COVID, etcetera. We never had any problems because we’re a provider. We provide e mail accounts, websites, access Internet access to our customers. And before people let go of that, a lot has to happen. Now concerning the overall economic development, I can’t say because on the one hand, I see some optimism because people say, okay, the government is well intended.

They want to do something. I won’t comment on whether it is sufficient or correct, but the trend is that they want to do something. We have the uncertainties, however, coming from, tariffs, etcetera. So I don’t know what comes out at the bottom line. A much bigger worry, whether we have 1% more or less, is the, question of digital sovereignty because AI will penetrate all walks of life, all, areas of the economy, all, products, and that determines if you determine, what the prices are, who can get what services will have enormous power.

And we have to say, and there’s China and America today as we talk about AI. And we’ll have to see whether Europe can catch up here or whether we fail to do so. And I think over the years, that will be the big game changer because it has ramifications everywhere. You can make the best product if you only have the third best AI, it won’t work. I don’t see any further questions here now at this stage.

So we would like to thank you for your keen interest and the many questions. I hereby close the conference. I would like to warmly invite you to a cup of coffee, and thank you very much. Stay home and see you next time.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.