Letter to the shareholders

Dear shareholders, employees, and business associates of United Internet,

In the fiscal year 2023, United Internet once again made significant investments in new customer contracts and the expansion of existing customer relationships – and thus in sustainable growth. All in all, we succeeded in raising the number of fee-based customer contracts by 1.03 million to 28.49 million contracts. Of this amount, 480,000 contracts were added in the Consumer Access segment and 350,000 contracts in the Business Applications segment. A further 200,000 contracts were gained in the Consumer Applications segment.

Sales grew by 5.0%, from € 5,915.1 million in the previous year to € 6,213.2 million in 2023.

Our earnings in both 2022 and 2023 were impacted by negative special items in the form of non-cash valuation effects from derivatives and the IPO costs of IONOS Group SE. Valuation effects from derivatives amounted to € -0.5 million in the previous year and € -6.3 million in the fiscal year 2023. For the IONOS IPO, costs of € -8.0 million were incurred in the previous year and € -1.7 million in 2023. At Group level, these IPO costs in 2023 include an opposing income amount from the contractually agreed prorated assumption of IPO costs by IONOS co-owner Warburg Pincus.

Without consideration of the aforementioned special items, earnings developed as follows in the fiscal year 2023: EBITDA amounted to € 1,300.1 million and was thus € 28.2 million (2.2%) above the prior-year level (€ 1,271.8 million). This figure includes a planned year-on-year increase of € -80.0 million in start-up costs for the rollout of 1&1’s mobile network. In addition, EBIT was burdened by a rise of € -71.3 million in depreciation, especially on investments in the expansion of 1&1 Versatel’s fiber-optic network and 1&1’s mobile network. As a result, it fell by € -28.7 million (-3.6%) from € 790.7 million to € 762.0 million. Since the beginning of 2024, this increased depreciation – due mainly to the operational launch of 1&1’s mobile network – is being offset by steadily rising cost savings on advance services.

In the fiscal year 2023, operating EPS declined from € 2.00 in the previous year to € 1.41. Apart from the decrease in EBIT (EPS effect: € -0.13), this was due to a lower result from associated companies (EPS effect: € -0.16), as well as the impact of increased interest rates on the financial result (EPS effect: € -0.30).

Besides our operating business, the main focus during the year was on preparations for the launch of mobile services in the 1&1 network in December 2023. Among other things, our network was connected with all national and international networks and the functionality of mobile services was checked with external customer groups.

In August 2023, 1&1 also agreed a long-term national roaming partnership with Vodafone. On the basis of this agreement, the national roaming services currently provided by Telefónica are to be gradually replaced from summer 2024. National roaming is required to provide coverage for our more than twelve million mobile customers during the construction phase of the 1&1 network in those areas where we do not yet have our own network coverage.

The 1&1 network is based on innovative Open RAN technology. Hardware, software and services from a variety of partner companies are used in the 1&1 O-RAN. This makes 1&1 independent of dominant manufacturers such as Huawei. And unlike conventional networks, the 1&1 network is operated in a private cloud that is spread across hundreds of far edge data centers throughout Germany. At the end of 2023, there were already 112 regional far edge data centers in operation, as well as 23 decentralized edge data centers and two core data centers. All network functions are controlled by software running on market-standard servers. Gigabit antennas are used at all locations and connected to the regional far edge data centers via fiber-optic cable. This architecture enables minimal latency, which is essential for future real-time applications.

We are also making good progress with the construction of our antenna locations: the initial backlog caused by delivery shortfalls of our main supplier is now being gradually made up in cooperation with additionally commissioned expansion partners. At the end of 2023, we had 1,062 antenna locations (passive architecture). By the end of 2024, this figure is set to rise to approx. 3,000 locations for the installation of our 5G high-performance antennas and connection to fiber-optic cable.

In addition, we worked hard on the IPO of our Group subsidiary IONOS Group SE at the beginning of the year and completed the IPO on February 8, 2023. We received gross proceeds of around € 292 million from the sale of shares, while the entire placement volume amounted to around € 389 million. Following the IPO, United Internet holds 63.8% and Warburg Pincus 21.2% of IONOS shares. 15.0% of shares are in free float.

On the basis of the figures for 2023, the Management Board and Supervisory Board of United Internet AG will propose a dividend payment of € 0.50 per share for the fiscal year 2023 (prior year: also € 0.50) at the Annual Shareholders' Meeting on May 17, 2024. Based on around 172.8 million shares with dividend entitlement at present , the total dividend payment for fiscal year 2023 would amount to approx. € 86 .4 million. This dividend payout would correspond to approx. 35.6% of adjusted consolidated net income for 2023 after minority interests (€ 243.0 million).

For the fiscal year 2024, we expect an increase in sales to approx. € 6.5 billion (2023: € 6.213 billion). EBITDA is expected to grow to approx. € 1.42 billion (2023: € 1.300 billion). Cash capex is expected to be 10 – 20% above the prior-year figure (2023: € 756 million).

We are well prepared for the next steps in our company’s development and upbeat about our future prospects. In view of the past year and the challenges that lie ahead, we would like to express our particular gratitude to all employees for their dedicated efforts as well as to our shareholders and business associates for the trust they continue to place in United Internet AG.

Montabaur, March 2024

The Management Board

Ralph Dommermuth

Ralf Hartings

Markus Huhn

“As a European internet specialist with around 11,000 employees and over 68 million customer accounts, our aim is to actively shape the digital future. We look forward to the future opportunities and challenges that digitalization presents.”


The Management Board


CEO (since 1988)

Ralph Dommermuth (born in 1963) laid the foundation for today’s United Internet AG with the formation of 1&1 EDV Marketing GmbH in 1988. He originally offered systemized marketing services for smaller software suppliers. He later developed additional marketing services for major clients, such as IBM, Compaq, and Deutsche Telekom. With the advent of the internet, Ralph Dommermuth gradually phased out these marketing services and began developing the company’s own internet services and direct customer relationships. In 1998, the qualified banker took 1&1 to the stock exchange. It was the first IPO of an internet company in Germany. In 2000, Ralph Dommermuth restructured the holding company 1&1 AG & Co. KGaA as United Internet AG and built the company into a leading European internet specialist.


CFO (since 2023)

Ralf Hartings (born in 1974) has been a member of the Management Board of United Internet AG since 2023 and is responsible for Finance and Controlling, Risk Management/ Internal Audit, Legal, Tax, M&A and Investment Management. Mr. Hartings has more than 20 years of international experience in the IT and telecommunications sector, working for companies such as Vodafone, Verizon Wireless, AOL and P&I AG. Most recently, Ralf Hartings held the position of CFO at 1&1 Mail & Media Applications SE within the United Internet Group, where he was responsible for Finance and HR from April 2021.


Management Board member for Shared Services (since 2023)

Markus Huhn (born in 1968) has been a member of the Management Board of United Internet AG since 2023 and is responsible for Shared Services. Mr. Huhn has been active within the United Internet Group since 1994 and, as Commercial Director, was responsible in particular for Controlling and Growth Strategy until 2007. Markus Huhn has been a CFO within the United Internet Group since 2008. As a member of the Management Board of 1&1 Telecommunication SE, he has been responsible for Finance and Human Resources in the Consumer Access segment since 2013. He has also been Chief Financial Officer of 1&1 AG since July 2019.