EQS-Adhoc: 1&1 publishes preliminary results 2024: Strong earnings growth in operating business, higher-than-planned start-up costs for 1&1 mobile network have a negative impact on the group result

1&1 publishes preliminary results 2024: Strong earnings growth in operating business, higher-than-planned start-up costs for 1&1 mobile network have a negative impact on the group result

Montabaur, 13 February 2025. 1&1 AG (ISIN DE 0005545503) publishes preliminary figures for the 2024 fiscal year.

In fiscal year 2024, 1&1 AG increased the number of customer contracts by 130,000 to 16.39 million contracts. This growth was based on 190,000 new mobile internet contracts, which amounted to 12.44 million at the end of the 2024 fiscal year. At the same time, the number of broadband connections declined by 60,000 to 3.95 million.

In the fiscal year 2024, high-margin service revenue grew by 1.8% to €3,30 million (FY 2023: €3,243.2 million), while low-margin hardware revenues fell to €761.2 million (FY 2023: €853.5 million). Overall, revenues declined by 0.8 % to €4,064.3 million (FY 2023: €4,096.7 million).

Revenue and earnings were unexpectedly burdened by the impact of a temporary outage of the new 1&1 mobile network in May 2024 and the associated increase in churn. As a result, there was an increase in churn, which mainly took effect between June and August 2024. In addition, the planned migration of existing customers to the 1&1 mobile network was temporarily severely restricted due to the unexpected undersizing of individual network components and could only be resumed on a significant scale in the fourth quarter of 2024. As a result, the expected savings from the migration of existing customer contracts (on a wholesale basis) to the 1&1 mobile network could only be partially realized to a small extent in fiscal year 2024. In addition, there were temporarily higher expenses for the subsequent elimination of capacity bottlenecks identified as a result of the network outage.

The negotiations with the partner responsible for the outage and the undersizing, which should lead to compensation payments, could not yet been completed. From today’s perspective, the negotiations are expected to take some time, and an agreement will presumably not be reached before the publication of the 2024 fiscal results scheduled for 27 March 2025.

Whilst the EBITDA in the Access operating segment in the 2024 fiscal year increased as planned by 8.9% to €856.1 million (FY 2023: €786.2 million), the start-up costs of the 1&1 mobile network (including the aforementioned negative impact on earnings) increased at a higher rate than expected to -€265.3 million (FY 2023: -€132.4 million) due to the aforementioned negative impact on earnings and higher than expected increases in expenses for the expansion of the mobile network. Of this amount, approximately €14 million are out-of-period expenses for additional services in 2022 and 2023 from subsequent invoices for network expansion. Overall, EBITDA in the 2024 fiscal year fell significantly to €590.8 million, or, excluding expenses related to other periods, to €604.8 million (FY 2023: €653.8 million).

The investment volume before leasing (capex) was significantly lower than planned and amounted due to phasing effects to €353.4 million in 2024. Of this, €290.6 million was recognised as a cash item in the 2024 fiscal year due to delays in billing (cash capex FY 2023: €295.6 million).

Preliminary key figures according to IFRS – comparison FY 2023 vs. FY 2024

The full report will be available on the company's homepage from 27 March 2025. https://www.1und1.ag/investor-relations-en#e-tabs-id-reports

Montabaur, 13 February 2025

1&1 AG

The Management Board

About 1&1 AG

1&1 AG is a listed telecommunications provider domiciled in Montabaur. The Company is a member of the United Internet AG corporate group.

1&1 is the first network operator in Europe to operate a fully virtualised mobile network based on innovative Open RAN technology. In addition to a comprehensive mobile communications portfolio, broadband connections are offered which are mostly based on 1&1 Versatel's Germany-wide fibre-optic transport network and on regional networks of city carriers and Deutsche Telekom.

While the 1&1 brand addresses value and premium segments, the Group's discount brands appeal to price-conscious target groups.
Note:

Fiscal performance indicators such as EBITDA, EBITDA margin, EBIT, EBIT margin or free cash flow are used in addition to the disclosures required by the International Fiscal Reporting Standards (IFRS) in the annual and interim fiscal statements of 1&1 AG and in ad hoc reports pursuant to Art. 17 MAR to ensure a clear and transparent presentation of 1&1 AG business development. Information about the use, definition and calculation of these performance indicators is provided on pages 59, 60 of the Annual Report 2023 of 1&1 AG.