2.4 Position of the Company
Earnings of United Internet AG
As a pure holding company, the earnings position of United Internet AG is usually dominated by its investment and financial result. In the fiscal year 2023, sales of the parent company amounted to € 1.1 million (prior year: € 0.7 million) and result mainly from services rendered to the Group’s subsidiaries.
Other operating income amounted to € 221.4 million (prior year: € 4.2 million). In addition to minimal income from internal charges to Group companies and the release of accruals, this mainly resulted from the disposal of financial investments of € 219.1 million from the sale of shares in Group subsidiary IONOS Group SE in the course of the IONOS IPO.
Other operating expenses amounted to € 31.3 million (prior year: € 20.2 million) and mainly include expenses relating to internal charges for services rendered to Group companies, legal, auditing, and consulting fees, as well as non-period expenses.
Income from profit transfer agreements of € 101.9 million (prior year: € 90.6 million) resulted from profit transfers of 1&1 Mail & Media Applications SE amounting to € 98.9 million (prior year: € 87.1 million), United Internet Corporate Services GmbH amounting to € 2.8 million (prior year: € 3.4 million), and United Internet Service SE amounting to € 0.1 million (prior year: € 0.1 million).
Income from investments amounted to € 0 (prior year: € 13.8 million). In the previous year, this item mainly comprised the dividends of 1&1 AG for 2021 and – due to the requirement at the time for same-period profit recognition – for 2022.
Expenses for loss assumptions of € 19.2 million (prior year: € 6.2 million) related to the compensation expense of United Internet Investments Holding SE, United Internet Management Holding SE, and United Internet Corporate Holding SE.
Including the special items from the above mentioned sale of IONOS shares, t he parent company’s result before taxes amounted to € 318.1 million (prior year: € 170.4 million).
Income taxes amounted to € 44.1 million (prior year: € 49.7 million).
Net income in the separate financial statements of United Internet AG for the fiscal year 2023 – including special items (IONOS IPO) – amounted to € 274.0 million (prior year: € 120.7 million).
Assets and financial position of United Internet AG
The parent company’s balance sheet total decreased from € 6,563.9 million as of December 31, 2022 to € 5,865.6 million on December 31, 2023.
Non-current assets of the parent company amounting to € 4,832.2 million (prior year: € 5,816.9 million) were dominated by financial assets . Due to the sale of IONOS shares, shares in affiliated companies fell to € 4,132.2 million (prior year: € 4,221.9 million). Loans to affiliated companies declined to € 700.0 million (prior year: € 1,595.0 million), due in particular to the partial refinancing of the existing shareholder loan between United Internet AG and IONOS by means of a syndicated loan amounting to € 800 million. After consideration of further repayments during the fiscal year 2023 totaling € 95 million, the outstanding loan as at December 31, 2023 amounted to € 350 million.
Current assets of the parent company amounting to € 1,033.4 million (prior year: € 746.9 million) comprise receivables due from affiliated companies and other assets. The receivables due from affiliated companies increased to € 1,010.6 million (prior year: € 724.8 million). Contrary to the previous year (comparable amount: € 618.0 million), these receivables are disclosed net in the balance sheet as of the fiscal year 2023. They mainly comprise receivables from sales tax grouping as part of the cash management system, as well as from profit transfer agreements. The rise in receivables due from affiliated companies is mainly the result of receivables due from the subsidiary 1&1 Versatel GmbH from cash management and reflects the company’s increased investments in the fiber-optic network. Other assets amounting to € 22.7 million (prior year: € 19.3 million) consist mainly of receivables due from the tax office relating to audits of previous years.
Shareholders’ equity of the parent company amounted to € 3,517.4 million as of December 31, 2023 (prior year: € 3,621.7 million). The decrease in equity during the reporting period is mainly due to the dividend payout of € 86.4 million and the purchase of treasury shares amounting to € 291.9 million, which are deducted from equity. There was an opposing effect from net income of € 274.0 million. The equity ratio rose from 55.2% in the previous year to 60.0 % as of December 31, 2023.
The parent company’s accruals of € 7.7 million (prior year: € 8.1 million) mainly comprise accrued taxes amounting to € 5.0 million (prior year: € 3.8 million), as well as other accrued liabilities for employee stock ownership plans, legal, auditing and consulting fees, bonuses, and other items totaling € 2.6 million (prior year: € 4.3 million).
The liabilities of the parent company are shaped in particular by liabilities due to banks and to affiliated companies. In the fiscal year 2023, liabilities to banks decreased to € 1,668.3 million (prior year: € 2,157.2 million). Bank liabilities mainly comprise three promissory note loans totaling € 1,162 million, syndicated loans totaling € 150 million, drawings from bilateral credit agreements of € 50 million, drawings from bilateral credit facilities of € 295 million, and interest of € 11.4 million. Liabilities to affiliated companies fell to € 564.0 million (prior year: € 757.6 million). As of the fiscal year 2023, these liabilities are disclosed net in the balance sheet. They mainly comprise liabilities from balances within the United Internet Group’s cash pooling system, from sales tax grouping, and from profit and loss transfer agreements. Other liabilities of € 89.8 million (prior year: € 3.4 million) are mainly sales tax liabilities.
Cash flow of the parent company’s financial statements is dominated by cash flows from the profit transfer agreements, as well as the dividends of investments.
Management Board’s overall assessment of the current business situation of the parent company
Due to its role as the Group’s holding company, the economic position of United Internet AG at parent company level is mainly influenced by its investment and financial result. The above statements on the Group’s economic position therefore also apply qualitatively for United Internet AG itself.