Letter to the shareholders

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

In the fiscal year 2024, United Internet invested in new customer contracts and the development of existing customer relationships – and thus in sustainable growth. All in all, we succeeded in raising the number of fee-based customer contracts by 590,000 to 29.02 million contracts. Of this amount, 130,000 contracts were added in the Consumer Access segment and 220,000 contracts in the Business Applications segment. A further 240,000 contracts were gained in the Consumer Applications segment.

Despite a decline in low-margin hardware revenues of € -92.3 million, sales rose by 1.9% to € 6,329.2 million (prior year: € 6,213.2 million). Adjusted for the Energy and De-Mail business fields, which are being sold or have been discontinued, sales rose from € 6,185.9 million to € 6,303.0 million.

In the fiscal year 2024, sales and earnings were unexpectedly burdened by the effects of a temporary outage of the new 1&1 mobile network in May 2024 and the associated increase in customer churn. Moreover, the planned migration of existing customers to the 1&1 mobile network was temporarily severely restricted due to the unforeseen undersizing of individual network components and could only be resumed extensively in the fourth quarter of 2024. As a result, 1&1 only partially achieved the savings it expected in fiscal year 2024 from the migration of existing customer contracts (on a wholesale basis) to the new 1&1 mobile network. In addition, there were temporarily higher expenses for the elimination of capacity bottlenecks identified as a result of the network outage.

EBITDA rose by 0.1% to € 1,294.0 million (prior year: € 1,292.1 million), despite an increase in expenses for the 1&1 mobile network of € -132.9 million.

In addition to network rollout costs and out-of-period expenses, EBIT was additionally burdened by increased depreciation of € -541.2 million (prior year: € -424.1 million) resulting in particular from investments in the expansion of 1&1 Versatel’s fiber-optic network and 1&1’s mobile network. As a consequence, it amounted to € 638.7 million (prior year: € 754.0 million).

Adjusted for the Energy and De-Mail business fields, EBITDA amounted to € 1,294.7 million (prior year: € 1,296.5 million) and EBIT to € 639.6 million (prior year: € 758.5 million).

EPS without special items declined from € 1.39 to € 1.01. Cash capex amounted to € 774.6 million in 2024 (prior year: € 756.0 million).

There were also numerous developments outside of our day-to-day business in the fiscal year 2024:

In the Consumer Access segment, for example, 1&1 began driving the gradual migration of its existing customers from third-party networks to the 1&1 mobile network in early 2024 and launched an exclusive national roaming partnership with Vodafone in late August 2024. 1&1 also made good progress in its key objective of expanding the 1&1 mobile network as quickly as possible and making OpenRAN technology available in an increasing number of areas.

In the Business Access segment, 1&1 Versatel continued to invest heavily in its fiber-optic infrastructure and further expanded its network coverage. The fiber-optic network operated by 1&1 Versatel is now over 66,000 km long.

With the slogan “E-mail made in Germany”, our consumer brands GMX and WEB.DE in the Consumer Applications segment consolidated their strong market position in 2024 with innovative cloud services and the increased use of artificial intelligence.

And in the Business Applications segment, IONOS is playing an increasingly important role for public sector companies with a crucial need for secure and independent cloud services. As a counterweight to US hyperscalers such as Google or Amazon, IONOS offers its customers 100% data protection-compliant storage and archiving of customer data in accordance with the German data protection laws and stored exclusively in European data centers. This focus on the security and technical performance of German-engineered cloud services is proving highly compelling. ITZBund, for example, the IT service provider for 200 administrative authorities in Germany, has commissioned IONOS to build a private enterprise cloud. IONOS is also the independent cloud partner for major public-sector agencies and institutions, such as the German Federal Employment Agency, the German Pension Insurance, and the German Social Accident Insurance – thus helping to strengthen the secure digitalization of Germany’s administration system.

On the basis of the figures for 2024, the Management Board and Supervisory Board of United Internet AG will propose a regular dividend of € 0.40 per share at the Annual Shareholders' Meeting on May 15, 2025. In addition, a one-off catch-up dividend of € 1.50 is to be distributed as compensation for the reduced dividend payments for the fiscal years 2018 to 2023.

In the past years, United Internet had assumed that Group subsidiary 1&1 would be able to acquire further spectrum by 2025 at the latest. Insofar as additional funds had been necessary, United Internet would have been called upon to provide these as 1&1’s main shareholder. Due to a decision taken by the German Federal Network Agency on March 24, 2025, however, the acquisition of spectrum has now been postponed for several years. In addition to investments in its network rollout, 1&1 expects to be able to fund the acquisition of further spectrum itself by this time.

As a result of the catch-up dividend, the dividend payments for the fiscal years 2018 to 2023 will increase in total to approximately 35% of adjusted net income after minority interests. As such, the dividend policy in place since 2013 will be subsequently met by a comfortable margin.

Adjusted for the Energy business field due to be sold, United Internet forecasts that sales will rise to approx. € 6.4 billion in fiscal year 2025 (2024: € 6.303 billion). EBITDA is expected to increase to approx. € 1.35 billion (2024: € 1.295 billion). This figure includes approx. € -20 million due to 1&1 changing its national roaming service provider. In the commercially equivalent national roaming agreement with Vodafone, the capacities used by 1&1 are fully recognized in EBITDA, whereas under the national roaming agreement with Telefónica they were previously capitalized in part and depreciated in scheduled amounts. Cash capex is expected to reach approx. € 800 million (2024: € 774.6 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 2025

The Management Board

Ralph Dommermuth

Carsten Theurer

Markus Huhn