United Internet raises customer growth forecast to 900,000

10 Nov 2011

United Internet, which provides internet access under the brand name 1&1, has reported that consolidated revenue for the first nine months of 2011 grew 9.1% year-on-year to EUR1.537 billion (USD2.1 billion). Earnings before interest, tax, depreciation and amortisation (EBITDA) totalled EUR285.9 million for the nine-month period, an increase of 5.6% compared to EUR270.8 million in 9M 2010, and earnings before tax (EBT) grew 15.7% to EUR210.2 million, despite heavy investment in the development of new products and further international expansion. The earnings figures include a positive net balance of EUR16.3 million from the sale of Versatel shares in the second quarter of 2011. ‘We succeeded in raising sales and fee-based customer contracts to new all-time highs while improving earnings,’ commented CEO Ralph Dommermuth, adding: ‘Our company is excellently placed for the next steps in its development and we are optimistic about the challenges ahead.’

United Internet’s internet access segment saw sales rise 10.4% year-on-year to EUR1.008 billion (compared to EUR913 million in 9M 2010), driven by a rise in the number of fee-based contracts from 3.55 million at 30 September 2010 to 3.91 million a year later, due mainly to strong demand for 1&1 mobile internet products. Of that total, 2.45 million were DSL customers on ‘complete’ packages (up from 2.21 million a year earlier), 610,000 were mobile internet users (170,000) and the remaining 850,000 were narrowband and T-DSL/R-DSL subscribers (down from 1.17 million). The internet access segment saw EBITDA rise 6.3% year-on-year to EUR109.1 million (9M10: EUR102.6 million), despite a significant increase in costs for new customer acquisition, especially for smartphone subsidising in the mobile internet business.

United Internet has confirmed its sales guidance for full year 2011, with the operator expecting record consolidated sales of around EUR2.050 billion in FY 2011. At the same time, it has raised its customer growth forecast for 2011 from 840,000 contracts in the access and applications segments to 900,000. Despite strongly increased sales and marketing budgets, United Internet expects EBITDA to reach approximately EUR350 million and has upheld its EBT guidance of around EUR250 million.

Germany, United Internet (1&1)