REPORT OF THE SUPERVISORY BOARD

Dear shareholders,

In the following, I would like to inform you about the work of the Supervisory Board in the fiscal year 2021.

In fiscal year 2021, the Supervisory Board of United Internet AG fulfilled its legal and statutory duties to regularly advise the Management Board and monitor its management of the Company. The Supervisory Board was directly involved in all decisions of fundamental significance for the Company. The Management Board provided the Supervisory Board (and as of May 2021 also the Audit and Risk Committee) with regular and comprehensive reports, both written and oral, and also between meetings, about all relevant questions concerning corporate strategy and planning, as well as the associated risks and opportunities, the development and progress of business, planned and current investments, the status of the Company, its exposure to risk, the risk management system, and issues of compliance. The Management Board discussed the Company’s strategic alignment with the Supervisory Board and presented it with a comprehensive report every quarter about the state of business, the development of sales and earnings, and the position of the Company and its business policy. This also included information about deviations between planned and actual figures. With regard to both content and scope, these reports met all statutory requirements, the standards of good corporate governance, and the criteria set by the Supervisory Board. The Management Board’s reports were made available to all members of the Supervisory Board. The Chairman of the Supervisory Board was also kept regularly informed by the Management Board on all business activities, also between the meetings, and gave advice on questions of business policy. The Supervisory Board examined the plausibility of the reports provided by the Management Board, discussed their content in detail, and gave a critical assessment.

The Supervisory Board, and as of May 2021 also the Audit and Risk Committee, were regularly informed by the Management Board about the internal control system, the Group-wide risk management system, the Internal Audit system, and the Compliance Management System which it had introduced. On the basis of its own reviews, the Supervisory Board came to the conclusion that the internal control system, the Group-wide risk management system, the internal audit system, and the Compliance Management System are fully functional and effective.

The members of the Supervisory Board complete the training and further education measures required for their tasks on their own. The members of the Supervisory Board receive appropriate support from the Company with regard to their appointment and their training and development. In particular, a tailored introduction to the activities of the Supervisory Board of United Internet AG takes place upon taking office. All necessary documents are made available, practical and legal principles are explained and specific questions of stock corporation law (AktG) are addressed.

Personnel changes of the Supervisory Board

The long-serving Supervisory Board member Mr. Michael Scheeren, who was also Deputy Chairman of the Supervisory Board, retired from the Supervisory Board on expiry of the balance sheet meeting on March 24, 2021. Due to the short period of time between the day of his departure and the day of the Annual Shareholders’ Meeting on May 27, 2021, the Supervisory Board decided not to have a successor appointed by the court, but rather to leave the mandate vacant until the Annual Shareholders’ Meeting and have a new member elected there by the shareholders.

The long-serving Chairman of the Supervisory Board, Mr. Kurt Dobitsch, also decided to retire from the Supervisory Board with effect from the end of the Annual Shareholders' Meeting on May 27, 2021.

Following a prior internal discussion about its future composition, the Supervisory Board proposed to the Annual Shareholders' Meeting the election of Mr. Stefan Rasch and Prof. Dr. Andreas Söffing as new members of the Supervisory Board. At the Annual Shareholders' Meeting of May 27, 2021 both men were elected to the Supervisory Board with majorities of 95.77% (Mr. Stefan Rasch) and 95.96% (Prof. Dr. Andreas Söffing).

A meeting of the (partially newly elected) Supervisory Board was held directly after the Annual Shareholders' Meeting on May 27, 2021. In the course of this Supervisory Board meeting, it was unanimously decided to elect Mr. Philipp von Bismarck as Chairman of the Supervisory Board and Dr. Manuel Cubero as Deputy Chairman of the Supervisory Board, who both accepted office.

None of the Supervisory Board members holds any executive body or advisory positions with enterprises which the Company regards as its major competitors. There was no indication of any conflicts of interest involving members of the Supervisory Board or Management Board.

Meetings and main topics:

In addition to the regular statutory reports and the special topics mentioned further below, the Supervisory Board discussed and reviewed the following issues in greater detail:

The Annual Financial Statements and Consolidated Financial Statements for fiscal year 2020
The Report of the Supervisory Board to the Annual Shareholders’ Meeting for fiscal year 2020
The Sustainability Report 2020
The adoption of planning for fiscal year 2021
Determining the Management Board’s target achievement for fiscal year 2020 and approving the payment of variable compensation components, as well as agreeing new targets for the Management Board for fiscal year 2021
The invitation to the Annual Shareholders’ Meeting 2021 together with the agenda and motions for resolutions, as well as the resolutions to conduct it as a virtual Annual Shareholders’ Meeting
Examining the independence of the proposed auditor of the Annual Financial Statements for the fiscal year 2021 (Ernst & Young) and adopting the corresponding resolution proposal
The dividend proposal for the Annual Shareholders’ Meeting 2021
The examination of material risks for the United Internet Group as part of the establishment of the Audit and Risk Committee, as a component of the initial risk analysis
The quarterly reports on risk management and the risk management strategy
The Compliance Report 2020
Audit planning and the quarterly reports of the Internal Audit department
Corporate governance topics in the United Internet Group
The new remuneration system for the Management Board and the Supervisory Board
The election of Mr. Philipp von Bismarck as Chairman of the Supervisory Board and Dr. Manuel Cubero as Deputy Chairman of the Supervisory Board
The election of members and the Chairman of the Audit and Risk Committee
Amendments to the Rules of Procedure for the Supervisory Board of United Internet AG
Amendments to the Rules of Procedure for the Audit and Risk Committee
The approval of important leases
The process for the legally required change of auditor of United Internet AG for the fiscal year 2022 as part of a formal tender procedure
The development of the proportion of women and the implementation status of the agreed targets
The strategic alignment of United Internet AG and the respective strategic alignment of the subsidiaries
The placing of a promissory note loan with a total amount of EUR 750 million in July 2021 for general company funding
The launch of a share buyback program for up to EUR 160 million on August 6, 2021
The termination on September 13, 2021 of the share buyback program launched in August
The development of the Company during the year
The effects of the coronavirus pandemic on the Group
Significant changes in investments, especially the purchase of further shares in 1&1 AG, the purchase of further shares in IONOS TopCo SE, and the approval to implement the public takeover offer of Tele Columbus AG submitted by Morgan Stanley Infrastructure Partners and the related investment in Kublai GmbH
The preparation and implementation of the tender procedure for the appointment of a new auditor by the Annual Shareholders' Meeting for the fiscal year 2022
Approval of the 5G intercompany agreement between 1&1 Versatel Deutschland GmbH and 1&1 Mobilfunk GmbH
The updates to the Declaration of Conformity with the German Corporate Governance Code on March 16, 2021, May 27, 2021, and December 21, 2021
The realignment of United Internet Corporate Services GmbH
The adoption of planning for fiscal year 2022
The dates for future meetings and the financial calendars for the fiscal year 2023

The Supervisory Board held seven ordinary meetings during fiscal year 2021 during which the Management Board presented detailed information about the business situation and the development of the Company and Group, as well as about significant business events. The Supervisory Board has decided that some of its meetings should be held regularly without the presence of the Management Board. Mr. Scheeren was absent from the Supervisory Board meeting on March 16, 2021. All other Supervisory Board meetings were attended by all members, whereby some meetings of the full Supervisory Board were held as conference calls, via telephone or video, due to the effects of the coronavirus pandemic.

In addition to the ordinary meetings of the Supervisory Board, there were also extraordinary meetings of the Supervisory Board at which matters were discussed and decided which could not wait until the next ordinary Supervisory Board meeting. In some cases, resolutions were also adopted by means of circular written consent or via video conferences on the basis of written decision proposals submitted by the Management Board.

Due to the fact that the Supervisory Board was partially reconstituted in the fiscal year 2021 and that additional members of the Supervisory Board were elected to the Supervisory Board in mid-2020, it should be emphasized that the Supervisory Board decided not to conduct a self-assessment of the Supervisory Board in 2021, but rather to hold a special meeting of the Supervisory Board without the participation of the Management Board instead of this self-assessment, at which the cooperation between individual members of the Supervisory Board and the cooperation between the Supervisory Board and the Management Board were to be discussed. This meeting took place in July 2021.

At the ordinary meeting of the Supervisory Board in August 2021, the division and allocation of responsibilities between the Supervisory Board and the Management Board with regard to the Group management and supervisory function was discussed in detail together with the Management Board in relation to the Company’s subsidiaries, most of which have established their own supervisory boards and some of which are themselves listed on the stock exchange.

Work in the Audit and Risk Committee

At its meeting in December 2020, the Supervisory Board resolved to set up an Audit and Risk Committee. At its subsequent meeting in March 2021, the Supervisory Board resolved on the necessary changes to the Supervisory Board’s rules of procedure, determined the tasks of the Audit and Risk Committee, and adopted the corresponding rules of procedure for the Audit and Risk Committee.

The Audit and Risk Committee assists the Supervisory Board in its monitoring of accounting practices and the integrity of the accounting process, as well as in monitoring the effectiveness and functionality of the internal control system, the risk management system, the compliance system, and the internal auditing system. Moreover, it supports the Supervisory Board in monitoring the auditing of the financial statements, the services provided by the auditor, the auditing fees, and the additional services provided by the auditor.

The Audit and Risk Committee closely examines the Annual Financial Statements and Consolidated Financial Statements, the Combined Management Report for the Company and the Group, the non-financial statement and the non-financial Group statement, and the Management Board’s proposal for the appropriation of balance sheet profit.

It discusses with the Management Board and the auditors the audit reports, the audit process, the audit focus areas and methodology, as well as the audit results, also with regard to the internal control system relating to the accounting process, and makes recommendations to the Supervisory Board. It regularly assesses the quality of the audit. Prior to their publication, it discusses the quarterly statements and the half-year financial report with the Management Board.

In addition, the Audit and Risk Committee closely examines the internal control system, the Group-wide risk management system, the internal control system, and the compliance management system. In particular, its remit is to check the effectiveness and functionality of these systems.

The Audit and Risk Committee also prepares the negotiations and resolutions of the Supervisory Board for the election proposal of the auditor to the Annual Shareholders’ Meeting and decisions on corporate governance issues, as well as resolving on the approval of related party transactions in accordance with section 111b (1) AktG.

The Chairman of the Audit and Risk Committee regularly reports to the whole Supervisory Board on the activities of the Audit and Risk Committee. In the event of significant occurrences and findings by the Audit and Risk Committee, its chair must inform the Chairman of the Supervisory Board without delay.

At its meeting on May 27, 2021, the Supervisory Board elected Prof. Dr. Andreas Söffing as Chairman of the Audit and Risk Committee and Mr. Philipp von Bismarck and Mr. Stefan Rasch as members of the committee.

The Audit and Risk Committee commenced its work directly after the Supervisory Board meeting of May 27, 2021 and at its constituent meeting determined the allocation of topic responsibilities among the three members of the Audit and Risk Committee in accordance with their professional skills.

The Audit and Risk Committee held five ordinary meetings during fiscal year 2021, which were each attended by all three members. Due to the effects of the coronavirus pandemic, some of the meetings of the Audit and Risk Committee were held as conference calls, via telephone or video.

In addition to these ordinary meetings, there were numerous other meetings and workshops which individual committee members attended together with Company employees, according to their allocated topic fields, in order to be informed about the above mentioned control systems and thereby derive measures aimed at continuously improving these control systems.

One of the main tasks of the Audit and Risk Committee in the fiscal year 2021 was also to prepare the change of auditor by formal tender procedure and to present this to the Supervisory Board for examination and decision. In the course of preparing and conducting this tender procedure, numerous further extraordinary appointments and meetings of the Audit and Risk Committee were held.

Corporate Governance

The Supervisory Board once again discussed in detail the standards of good corporate governance in fiscal year 2021, and in this connection also the German Corporate Governance Code. The Management Board and Supervisory Board issued Declarations of Conformity pursuant to section 161 AktG on March 16, 2021, May 27, 2021, and December 21, 2021. The declarations are permanently available on the corporate website and in the Federal Gazette (Bundesanzeiger). Declarations of Conformity of previous years can also be viewed here. Further details on corporate governance are provided in the Declaration on Company Management for the fiscal year 2021.

Discussion of the Annual Financial Statements 2021 for the Company and the Group

The Annual Shareholders’ Meeting of United Internet AG on May 27, 2021 elected Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, based in Eschborn/Frankfurt am Main, as auditors for the fiscal year 2021. Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft audited the accounting system, the Annual Financial Statements of United Internet AG, the Consolidated Financial Statements according to IFRS and the Combined Management Report for United Internet AG and the Group for the fiscal year 2021. In the course of the audit, the auditor focused in particular on the key audit matters. For the Consolidated Financial Statements, these included the impairment of goodwill and spectrum licenses, revenue recognition, the recognition of contract initiation and fulfillment costs, and for the Annual Financial Statements of United Internet AG, the impairment of financial assets. The risk management system was also examined and analyzed as part of the audit of the Annual Financial Statements. The auditor did not detect any major weaknesses in the internal control system, Group-wide risk management system or internal audit system. Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft awarded an unqualified certificate in each case.

The Supervisory Board satisfied itself as to the independence of the auditors and received a written declaration to this effect. In addition, the Supervisory Board was informed about services rendered in the past fiscal year and the awarding of non-audit-related services.

The Audit and Risk Committee closely examined the Annual Financial Statements and Consolidated Financial Statements, the Combined Management Report for the Company and the Group, the non-financial statement and the non-financial Group statement, and the Management Board’s proposal for the appropriation of balance sheet profit. It discussed with the Management Board and the auditors the audit reports, the audit process, the audit focus areas and methodology, as well as the audit results.

The aforementioned Annual Financial Statement documents, the proposal for the appropriation of profit, and the auditor’s report were presented to all members of the Supervisory Board in due time. The chief auditor participated via video conference in the Supervisory Board’s balance sheet meeting held in physical attendance on March 16, 2022, where he reported on his audits and their results, elaborated on the audit report, and answered the Supervisory Board’s questions. Following its own inspection, the Supervisory Board came to the conclusion that the Annual Financial Statements, the Combined Management Report, the Consolidated Financial Statements and the auditor’s report gave no cause for objections. The Supervisory Board concurs with the auditor that there are no major weaknesses in the internal control and risk management system, especially with regard to the accounting process. With a resolution on March 16, 2022, the Supervisory Board approved the Annual Financial Statements of United Internet AG, as prepared by the Company on March 11, 2022, and the Consolidated Financial Statements according to IFRS for fiscal 2021, also prepared by the Company on March 11, 2022. The Annual Financial Statements are therefore adopted pursuant to section 172 AktG. The Supervisory Board supports the proposal of the Management Board concerning the appropriation of the balance sheet profit.

Audit of the Management Board’s report on relations with affiliated companies

The Management Board presented its report on relations with affiliated companies (Dependent Company Report) for fiscal year 2021 to the Supervisory Board and Audit Committee in good time.

The report prepared by the Management Board about relations with affiliated companies was also audited by the external auditors. The following certificate was awarded in this respect:

“On the basis of our statutory examination and evaluation, we can confirm that

the details made in the report are accurate,
the Company was compensated adequately for each transaction mentioned in the report,
in the case of those measures mentioned in the report, there is no evidence to suggest a significantly different assessment to that provided by the Management Board.”

The external auditors submitted the audit report to the Supervisory Board. The Dependent Company Report and Audit Report were made available to the Supervisory Board in good time. The Supervisory Board reviewed the Management Board’s Dependent Company Report and the audit report. The Supervisory Board performed the final review at its meeting held in physical attendance on March 16, 2022. The external auditors attended this meeting via video conference and reported on their audit of the Dependent Company Report and their main audit results, explained their audit report, and answered questions from members of the Supervisory Board. On the basis of our final examination, we concur with the Management Board’s Dependent Company Report and the audit report and have no objections to raise regarding the Management Board’s declaration at the end of the Dependent Company Report.

Reporting for the Sustainability Report

United Internet AG submitted a non-financial statement for fiscal year 2021, which will be published as part of a separate non-financial report (Sustainability Report).

The Supervisory Board of United Internet already discussed the Sustainability Report during the course of the year. As part of its own final review, the Supervisory Board dealt in detail with the non-financial statement in its entirety. The Supervisory Board scrutinized the contents of the non-financial statement and discussed it at length with the Management Board, whose members were on hand to answer additional questions and provide further information. Following its own review, the Supervisory Board came to the conclusion that the non-financial statement did not give rise to any objections.

The Supervisory Board thanks the Management Board and all employees for their outstanding commitment to the Company in fiscal year 2021.

Montabaur, April 1, 2022

For the Supervisory Board
Philipp von Bismarck

Members of the Supervisory Board

Philipp von Bismarck, Königstein im Taunus
Lawyer and partner at Wendelstein PartGmbB
Dr. Claudia Borgas-Herold, Kilchberg / Switzerland
Managing Director of borgas Advisory GmbH
Dr. Manuel Cubero, Munich
Self-employed supervisory board/advisory board member
Kurt Dobitsch, Markt Schwaben (until May 27, 2021)
Chairman of the Supervisory Board of United Internet AG
Stefan Rasch, Grünwald (since May 27, 2021)
Senior Advisor at The Boston Consulting Group GmbH
Michael Scheeren, Frankfurt am Main (until March 24, 2021)
Supervisory board member
Prof. Dr. Andreas Söffing, Frankfurt (since May 27, 2021)
Tax advisor and partner at Flick Gocke Schaumburg
Prof. Dr. Yasmin Weiß, Gauting
Professor at the Technical University of Nuremberg

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