4.3 Forecast report

Expectations for the economy

In its global economic outlook published on January 30, 2023, the International Monetary Fund (IMF) updated its forecasts for the development of the global economies in 2023 and 2024. The IMF expects the global economy to withstand the impact of the Russian war of aggression in Ukraine and persistently high inflation somewhat better than initially feared. Nevertheless, in its global economic outlook for 2023, the Fund forecasts global growth of just 2.9% (compared with 3.4% in 2022), but regards the prospects as “less gloomy” than in October 2022. It does not therefore expect the global economy to slide into recession in 2023 – an option that the economists had not ruled out in the fall. For 2024, the IMF forecasts global economic growth of 3.1%.

However, the IMF report also lists a number of risks that would result in a deterioration of the economic situation: a further intensification of the coronavirus situation in China, an escalation of the Russian war of aggression and a debt crisis due to tight central bank monetary policy.

The latest IMF forecasts for United Internet’s target markets in North America (the USA, Canada, and Mexico) are as follows: the US economy is expected to grow by 1.4% in 2023 and 1.0% in 2024 (after 2.0% in 2022); in Canada, economic growth of 1.5% is anticipated for both 2023 and 2024 (after 3.5% in 2022); and the economy in Mexico is expected to grow by 1.7% in 2023 and 1.6% in 2024 (after 3.1% in 2022).

The IMF anticipates growth of 0.7% and 1.6% in the eurozone for 2023 and 2024 (after 3.5% in 2022).

Likewise, the IMF expects no more than minor economic growth in United Internet’s main European markets (France, Spain, and Italy): the economists anticipate growth of 0.7% in 2023 and 1.6% in 2024 for France (after 2.6% in 2022); growth in Spain is expected to reach 1.1% and 2.4% in 2023 and 2024 (after 5.2% in 2022); and for Italy, the IMF forecasts growth of 0.6% and 0.9% in 2023 and 2024 (after 3.9% in 2022).

For the non-EU country the UK, the IMF expects a recession of -0.6% in 2023 and growth of 0.9% in 2024 (after 4.1% in 2022).

For United Internet’s most important market, Germany, the IMF forecasts economic growth of 0.1% in 2023 and 1.4% in 2024 (after 1.9% in 2022). With expected growth of 0.1% and 1.4% for 2023 and 2024, the Fund is slightly below the German government’s own forecast of 0.2% growth in price-adjusted GDP in 2023 and 1.8% in 2024, as published in its Annual Economic Report 2023 on January 25, 2023.

The German government is thus slightly more upbeat in its assessment of the economic situation than it was just a few months ago and now expects slight growth in 2023 rather than a recession. According to the German government, the main reason for this modest upgrade in its forecast is the resilience of the German economy, which has proved stable despite supply chain bottlenecks, sanctions against Russia, and the suspension of Russian gas supplies.

Market forecast: GDP development of most important economies for United Internet












































Source: International Monetary Fund, World Economic Outlook (Update), January 2023

Sector/market expectations

Despite the challenges posed by war, supply bottlenecks, inflation and the shortage of skilled workers, the industry association Bitkom expects the German ICT market as a whole to grow by 3.8% (prior year: 4.0%) to € 203.4 billion in 2023 – thus passing the 200-billion-euro-mark for the first time.

As in the previous year, the IT market is expected to grow at an above-average rate in 2023 and will continue to increase its importance as the largest segment of the sector. According to Bitkom calculations, sales will grow by 6.3% (prior year: 6.6%) to € 126.4 billion in 2023. Driven in particular by its cloud business, software is likely to be the fastest-growing segment again with a strong increase of 9.3% (prior year: 9.4%) to € 38.8 billion. Sales of IT hardware are also expected to increase significantly by 5.3% (prior year: 5.4%) to € 39.7 billion. Stable growth of 4.7% (prior year: 5.5%) to € 47.8 billion is expected for the IT services business, which also includes IT consulting.

By contrast, the consumer electronics market will remain under pressure. According to a Bitkom forecast, sales are set to decline again in 2023 by an estimated -7.3% (prior year: -8.2%) to € 7.6 billion.

The most important ICT markets for United Internet’s business model are the German telecommunications market (broadband connections and mobile internet) for its mostly subscription-financed Access division, and the global cloud computing and German online advertising markets for its subscription- and ad-financed Applications division.

Telecommunications market in Germany

The industry association Bitkom expects that the moderate growth of the previous year will continue for the German telecommunications market. In 2023, the market as a whole is expected to grow by 0.9% (prior year: 1.3%) to € 69.5 billion. The strongest growth in this segment is expected to come from spending on telecommunications infrastructure, which is set to increase by 2.5% (prior year: 7.3%) to € 7.7 billion. Sales of end-user devices such as smartphones are likely to grow by 2.3% (prior year: 1.8%) to € 12.1 billion thanks to rising demand for high-quality devices in the premium segment and devices with 5G capabilities. By contrast, business with telecommunications services is stagnating, with sales of € 49.7 billion according to Bitkom calculations – corresponding to minimal growth of 0.1% (prior year: 0.3%). According to Bitkom estimates, sales of telecommunications services are unlikely to grow at present – despite higher bandwidths, more data volumes and rising usage – in view of the current fierce price competition.

Market forecast: telecommunications market in Germany




+ 0.9%

in € billion




Source: Bitkom, January 2023

Global cloud computing market

Following the very strong growth of 2022 (18.8%), Gartner forecasts global growth for public cloud services of 20.7% from USD 490.33 billion to USD 591.79 billion in 2023.

Market forecast: global cloud computing

Global sales of public cloud services



+ 20.7%

thereof Application Infrastructure Services (PaaS)



+ 23.2%

thereof Application Services (SaaS)



+ 16.8%

thereof Business Process Services (BPaaS)



+ 8.3%

thereof Desktop as a Service (DaaS)



+ 22.0%

thereof Management and Security Services



+ 22.1%

thereof System Infrastructure Services (IaaS)



+ 29.8%

in $ billion




Source: Gartner, Public Cloud Services, Worldwide, 2020-2026, 3Q22 Update, October 2022

Online advertising market in Germany

After a 12.0% increase in online advertising in 2022, PricewaterhouseCoopers expects further growth in 2023 with an increase in total market volume (mobile advertising and desktop advertising) of 8.2% to € 14.53 billion.

Market forecast: total online advertising market in Germany (mobile advertising & desktop advertising) – acc. to PwC

Online advertising revenues



+ 8.2%

in € billion




Source: PricewaterhouseCoopers, German Entertainment and Media Outlook 2022 – 2026, August 2022

Expectations for the Company in 2023

Forecast for the fiscal year 2023

  • United Internet AG expects an increase in consolidated sales to approx. € 6.2 billion for its fiscal year 2023 (prior year: € 5.915 billion).
  • Operating EBITDA 2023 is likely to be on a par with the previous year (prior year: € 1.272 billion). EBITDA includes approx. € -120 million (prior year: € -52 million) for the rollout of 1&1’s mobile network.

Due in particular to the network rollout and the expansion of the fiber-optic network to connect the 5G antennas and provide coverage in additional expansion areas, capital expenditures (excluding possible M&A transactions) are expected to increase to approx.€ 800 million (prior year: € 681 million).

Due to its role as a holding company, the earnings of United Internet AG at parent company level are mainly influenced by its investment result (profit transfers and dividends) and the interest result. From the current perspective (subject to possible special items), the Management Board expects net income for fiscal year 2023 to be in the mid-double-digit million range (prior year: € 120.7 million). This is due in part to the (same-period) recognition in fiscal year 2022 of the 1&1 AG dividend for 2022, as well as increased interest rates.

United Internet AG intends to maintain its shareholder-friendly dividend policy based on continuity in the coming years. Dividend payouts will continue to represent approx. 20-40% of adjusted net income from continued operations after minority interests (adjusted net income attributable to “shareholders of United Internet AG” – according to the consolidated statement of comprehensive income) in the future. The prerequisite is that funds are not required for further Company development.

Management Board’s overall statement on the anticipated development

The Management Board of United Internet AG is upbeat about its prospects for the future. Thanks to a business model based predominantly on electronic subscriptions, United Internet believes it is largely stable enough to withstand cyclical influences. And with the investments made over the past few years in customer relationships, new business fields and further internationalization, as well as via acquisitions and investments, the Company has laid a broad foundation for further growth.

United Internet will continue to pursue this sustainable business policy in the coming years. In addition to the above mentioned investments in future-oriented topics in of 1&1 and 1&1 Versatel, the segments will focus on the following topics.

  • In addition to the construction of the Group’s own 5G mobile communications network, the Consumer Access segment will focus in particular on marketing mobile internet products and winning high-quality customer relationships in the fiscal year 2023.
  • In the Business Access segment, the Company’s own fiber-optic network is to be expanded in 2023 with the connection of further locations. In addition, the business customer and wholesale business will continue to be developed.
  • In fiscal year 2023, the key topics in the Consumer Applications segment will again be the further expansion of data-driven business models and a focus on fee-based premium products.
  • As well as raising brand awareness, the Business Applications segment will continue to focus on expanding business with existing customers and gaining new high-quality customer relationships in 2023. In addition, the segment will expand its cloud business in particular.

Following a successful start to the year (at the time of preparing this Management Report), the Company’s Management Board believes that the Company is on track to reach the forecast presented above in the section “Forecast for the fiscal year 2023”.

Forward-looking statements

This Management Report contains forward-looking statements based on current expectations, assumptions, and projections of the Management Board of United Internet AG and currently available information. These forward-looking statements are subject to various risks and uncertainties and are based upon expectations, assumptions, and projections that may not prove to be accurate. United Internet AG does not guarantee that these forward-looking statements will prove to be accurate and does not accept any obligation, nor have the intention, to adjust or update the forward-looking statements contained in this report.