United Internet sees sales, EBITDA rise in Q3 after acquisitions

Tuesday 14 November 2017 | 12:22 CET | News

Germany’s United Internet posted improvements in third-quarter results, driven by recent acquisitions. Sales increased 11.3 percent to EUR 1.054 billion, helped by the consolidation of the Strato and ProfitBricks acquisitions (EUR 32.8 million) and successful closing of the merger with Drillisch (EUR 54.6 million) in September. This was partly offset by negative currency effects (EUR -2.6 million) and the negative effects of changes in regulations like the end of roaming fees in the EU (EUR -12.7 million). 

United Internet’s EBITDA for Q3 rose 19.6 percent to EUR 254.2 million, compared to EUR 212.5 million for the same quarter in 2016. Earnings contributions from Start and ProfitBricks (EUR 12.3 million) and Drillisch (EUR 13.0 million) both had a positive impact. The increase in EBITDA for Q3 was partially offset by negative currency effects (EUR -1.1 million) as well as negative effects of regulation and the costs for the Telefonica DSL migration (EUR -9.3 million).

The company also booked a net one-time gain of EUR 303.9 million in the first nine months of 2017 as valuation gains on the takeovers. This drove an increase in net earnings for the nine-month period to EUR 2.88 per share from EUR 1.53. 

United Internet updated its full-year guidance to account for the Drillisch merger. The companies have been operating with a coordinated procurement strategy for mobile services since November, and the next steps are to synchronize branding and customer targeting, United Internet said. 

The takeovers will lead to an estimated 6.1 million new contracts this year, including 1.87 million from Strato and 3.35 million at Drillisch. In the first nine months, United Internet already added 5.83 million new contracts, for a total 22.62 million at the end of September. The growth included 3.35 million from Drillisch, 1.87 million from Strato and 0.61 million from organic growth.  

Drillisch reported separately 12.39 million customers on access contracts at the end of September, up 49.3 percent from a year earlier following its merger with United Internet's subsidiary 1&1. That included 8.06 million mobile internet customers and 4.33 million (V)DSL subscribers. 

Consolidated sales at United Internet are forecast at around EUR 4.2 billion in 2017, and EBITDA (including regulation effects, costs for the Telefonica DSL migration, and currency effects) will total between EUR 970 million and EUR 1 billion. That compares to results of EUR 3.008 billion and EUR 684 million (excluding the one-time gains) in the first nine months of 2017. 

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