1.3 Control systems

The internal control systems help management steer and monitor the Group and its segments. The systems consist of planning, actual situation, and forecast calculations based on the Group’s annually revised strategic planning. Particular attention is paid to market developments, technological developments, and trends, as well as their impact on the Group’s own products and services, and the Group’s financial possibilities. The corporate control system’s aim is the continuous and sustainable development of United Internet and its subsidiaries.

The Group’s reporting system comprises the monthly profit calculations and quarterly IFRS-compliant reports for all consolidated subsidiaries. It presents the financial position and performance of the Group and all divisions. Financial reporting also includes other detailed information which is required for the assessment and control of the operating business.

The key performance indicators of the United Internet Group for chief corporate management are presented in “Segment reporting” under point 5 of the Notes to the Consolidated Financial Statements.

Quarterly reports on significant risks for the Company represent a further component of the control systems.

The above mentioned reports are discussed at meetings of the Management Board and Supervisory Board and provide the fundamental basis for assessments and decisions.

In order to steer the Group’s performance, United Internet AG uses in particular the key figures of the income statement (sales, EBITDA, EBIT, EPS), of the statement of cash flows (free cash flow), and of the statement of financial position (asset items, financial liabilities). The Company also employs non-financial key figures, in particular the number and growth of fee-based customer contracts, as well as ad-financed free accounts. The use and definition of the relevant key financial figures is shown in section 2.2 “Business Development”.

The key performance indicators (KPIs) used by management are sales and EBITDA. These figures are also used in forecast reporting.

A comparison of the KPIs stated in the forecast and the actual figures is provided in this Management Report in 2.2 “Business Development” in the section “Actual and Forecast Development” as well as in 2.3 “Position of the Group”.

The number of customer contracts, the gross and net sales figures, and the related customer acquisition costs in particular – compared to the Company’s plans and forecast calculations – serve as an early warning system.