1&1 Drillisch Aktie

Welcome to everybody. Good morning, ladies and gentlemen. On behalf of the Executive Board of 1&1, I would like to warmly welcome you to our first quarter conference call. During this call, our CFO, Sascha D'Avis, will present the results of the first 3 months of fiscal '26, followed by the outlook. Afterwards, following the presentation, we will be happy to answer your questions as usual. Thank you very much.

I'd now like to turn the floor over to Sascha.

Thank you, Oliver. Good morning, everyone. This is Sascha D'Avis, CFO of 1&1 AG. Welcome to our call today. I will give you a quick update on our performance in the first quarter of 2026 and walk you through our financial results at end of March. I will then wrap up with a brief outlook on how we see the rest of the year developing as well as our expectations for 2027 and 2028. To start off, I will give you a brief overview of our new segment structure.

In the Consumer and Small Business segment, former Access segment, we serve around 3.8 million broadband connections in our fixed line business, offering high-performance VDSL and fiber products, including Voice and IP-TV through strong last mile partners. In mobile, we manage more than 12.4 million contracts and operate Europe's first fully virtualized OpenRAN network. This gives us a future-ready infrastructure, broad market coverage and a very targeted customer approach. This is clearly reflected in our higher levels of customer satisfaction. The Enterprise and Network segment comprises the previous 1&1 mobile network segment as well as 1&1 Versatel. Our growth is driven by fiber and Europe's first fully virtualized OpenRAN. 1&1 Versatel operates one of the largest fiber networks in Germany with more than 68,500 kilometers of network infrastructure, its own assets in over 350 cities and scalable solutions for enterprise customers.

At the same time, we continue to push ahead with network expansion, increasing household coverage and delivering very strong overall network quality, which clearly underlines our technological positioning. Let me now turn to our key metrics. To ensure comparability with the prior year, our KPI overview includes adjusted prior year figures, assuming that 1&1 Versatel had already been part of the 1&1 Group since the beginning of 2025. On Slide 4, you can see our customer contracts. As of the end of March, we reported a base of 16.32 million contracts, including 12.48 million mobile Internet contracts and a total of 3.84 million broadband connections. Overall, this means that our contract base remained unchanged across both product areas compared to year-end. The stabilization of our broadband business after a period of declining contract numbers is mainly the result of our consistently executed fiber strategy. In the mobile business, we focus on acquiring and retaining valuable customers. On the next slide, we take a look at the revenues.

Total revenue came in at EUR 1.146 billion, which is slightly up by 1.1% compared to EUR 1.133 billion in the first quarter of 2025. Service revenues declined slightly by 1.2% year-on-year with the decrease fully attributable to the Consumer and Small Business segment. This is due to the smaller contract base compared to the previous year and is fully in line with our plan. Other revenues increased by 10.8% to EUR 246.3 million compared to EUR 222.3 million in the first quarter of 2025. This increase mainly comes from the Consumer and Small Business segment, driven in particular by higher smartphone revenues as part of our bundled product offerings. Let me now turn to EBITDA by segment.

In the Consumer and Small Business segment, we generated EBITDA of EUR 201.9 million in the first 3 months of the year. This represents a decline of 9.4% compared to EUR 222.9 million in the prior year period. The decrease is mainly driven by the change in our national roaming partner. Under the national roaming agreement with Telefónica, part of the capacity used by 1&1 were capitalized and depreciated over time, whereas under the Vodafone agreement, these costs are fully recognized at the EBITDA level. This effect is EBIT neutral, but it puts pressure on EBITDA. In addition, as already observed last year, we saw higher costs due to the slower-than-expected capacity ramp-up of the Vodafone network. Data growth at 1&1 and Vodafone has become increasingly stable. However, data growth at Vodafone remains below 1&1, which is exactly in line with our projections for '26 so far.

In the Enterprise Networks segment, EBITDA improved to a loss of EUR 9.5 million in the first quarter of '26 compared with a loss of EUR 30.4 million in the first 3 months of '25. This represents an improvement of 68.8%. The main reason for this is higher proportion of self-generated mobile services as well as more favorable purchasing terms for international roaming and voice services following the completion of customer creation to our own network at the end of last year. Let me now turn to the CapEx. In the first 3 months of the year, we invested EUR 95.2 million in total. Of this amount, EUR 3.1 million was allocated to the Consumer and Small Business segment, while EUR 92.1 million was invested in the Enterprise and Network segment. Overall, investment spending was, therefore, only slightly below the comparable level of the prior year, fully in line with our business plan. Let me now turn to the earnings position of the group.

As with the key figures presented earlier, the prior year figures have been adjusted accordingly to ensure comparability. Let me start with our income performance. Total revenue amounted to EUR 1.146 billion in the first quarter of ' 26, up 1.1% compared to EUR 1.133 billion in the first 3 months of '25. Of this, EUR 1.030 billion was generated in the Consumer and Small Business segment compared to EUR 1.017 billion in the first quarter of '25, representing an increase of 1.2%. Revenue in the Enterprise segment and Networks segment amounted to EUR 116 million, roughly the same figure as in the previous year. Cost of sales increased to EUR 896 million in the first quarter of '26. This represents an increase of EUR 31.1 million or 3.6% compared to EUR 864.9 million in the first quarter of '25. Higher cost of sales were mainly driven by increased cost of goods following higher hardware revenues, increased national roaming costs following the slower-than-expected capacity ramp-up at our national roaming partner, Vodafone as well as an increase of depreciation and amortization due to the ongoing ramp-up of our mobile network.

Gross profit in the Consumer and Small Business segment declined from EUR 359 million in the first quarter of '25 to EUR 248 million in the first 3 months of '26.

In the Enterprise and Network segment, -- gross profit increased from minus EUR 90.7 million in the first 3 months of '25 to minus EUR 98.5 million in the first quarter of '26. The slight increase is the result of increased depreciation and amortization due to the ongoing ramp-up and that's partially compensating for increased savings of external costs, given the higher volume of data produced by our own mobile network. Overall, gross profit from revenue declined from EUR 268.3 million in the first quarter of '25 to EUR 250 million in the first 3 months of '26, representing a decrease of 6.8%. This range was mainly driven by higher national roaming costs. Selling expenses decreased from EUR 158.5 million in the first quarter of '25 to EUR 133.7 million in the first quarter of '26. The decline is primarily attributable to the expiration of amortization of the customer base capitalized as part of the initial consolidation of Drillisch, which expired in August '25.

Administrative expenses amounted to EUR 42.9 million in the first quarter of '26 compared to EUR 44.4 million in the prior year period, with moderate savings in personnel expenses, depreciation and amortization as well as other minor changes in various positions. The balance of other operating income and expenses came in at EUR 12.9 million in the first quarter of '26, slightly above the prior year level of EUR 12.8 million. Impairment losses on receivables and contract assets declined due to lower payment defaults from EUR 32.7 million in the first quarter of '25 to EUR 28.5 million in the first quarter of '26. As a result, EBIT increased from EUR 45.5 million in the first quarter of '25 to EUR 57.8 million in the first quarter of '26. This is the

result of the elimination of amortization related to the Drillisch customer base as well as higher savings from the own mobile network, partially offset by higher costs of for national roaming. The financial result amounted to EUR 32.1 million in the first quarter of ' 26, slightly higher than the prior year level of EUR 29.6 million. Profit before tax, therefore, amounted to EUR 25.7 million in the first quarter of '26 compared to EUR 50.9 million in the first quarter of '25. Income tax expenses increased year-on-year according to the higher profit before tax from EUR 4.8 million to EUR 7.9 million. Overall, we generated a net profit of EUR 17.8 million in the first quarter of '26 compared to EUR 11.1 million in the first quarter of '25.

Let me now turn to the balance sheet. The total assets decreased slightly from EUR 11.0 billion at the end of '25 to EUR 10.9 billion as of March '26. Short-term assets decreased by 8.8%, mainly driven by short-term receivables due from associated companies. In connection with the acquisition of 1&1 Versatel, receivables of EUR 377.1 million were recognized at year-end and settled at the beginning of year '26. At the end of first quarter, the receivables due from associated companies now only represent the receivables against United Internet, resulting from cash management. Long-term assets increased by 0.4% given the investment in fixed and tangible assets as well as the increase in right-of-use assets due to new lease agreements related to our network rollout. Short-term liabilities reduced by 27.6%, mainly driven by trade liabilities and liabilities due to associated companies.

At the beginning of year '26, several supplier invoices have been settled, resulting in a reduction of trade payables, which were, therefore, 32.4% below the year-end level. Liabilities due to associated companies decreased from EUR 204.4 million to EUR 19.8 million. Liabilities at year-end '25 contained liabilities in connection with 1&1 Versatel acquisition and have been settled at the beginning of the year. Long-term liabilities increased by 4.7% to EUR 3.985 billion, mainly due to an increase of long-term liabilities due to associated companies. At the beginning of the year, an amount of EUR 225 million was drawn under the framework credit facility provided by the Japanese Development Bank, JBIC. This facility is formerly held by United Internet.

Equity increased slightly as a result of earnings from EUR 5.996 billion at the end of '25 to EUR 6.015 billion as of end of March '26. As a consequence, the equity ratio improved from 54.5% to 55.3%.

Let me now turn to cash flow. Net cash flow inflows from operating activities amounted to EUR 151.3 million in the first quarter of '26 compared to EUR 43.8 million in the first quarter of '25. The increase is mainly driven by cash inflows from United Internet related to the acquisition of 1&1 Versatel, which I already mentioned in the context of the balance sheet development. Operating cash flow in the first quarter of '26 mainly reflects the following effects: EUR 183.6 million from operating activities, minus EUR 29.2 million from changes in contract assets, plus EUR 22.6 million from changes in prepaid expenses. plus EUR 122.5 million from changes in receivables from liabilities against related parties, resulting from the settlement of balances in connection with the acquisition of 1&1 Versatel, minus EUR 180.6 million from changes in trade payables due to the settlement of various supplier invoices at the beginning of the year, plus EUR 22.9 million from changes in other liabilities and plus EUR 9.5 million from changes in other working capital items.

Cash flow from investing activities amounted to minus EUR 250.0 million in the first quarter of '26 compared to minus EUR 319.6 million in the first quarter of '25. This mainly consists of minus EUR 95.2 million of cash CapEx, primarily related to investment in the 1&1 mobile network and FTTH network, minus EUR 156.0 million from the investment of surplus liquidity with United Internet and plus EUR 1.2 million from interest received mainly from cash investments with United Internet. Cash flow from financing activities totaled EUR 95.7 million in the first quarter of '26 compared to EUR 274.8 million in the prior year quarter. The main components were minus EUR 39.1 million from the repayment of lease liabilities minus EUR 67.0 million from the repayment of liabilities related to the 5G frequency spectrum, plus EUR 225.0 million from new borrowings and minus EUR 23.2 million from interest payments. Overall, we generated a free cash flow of EUR 56.2 million in the quarter of '26 compared to EUR 15.8 million in the first quarter of '25.

On the next slide, you can see the bridge from EBITDA to free cash flow. The change in contract assets had a negative impact of EUR 29.2 million. The change in receivables and liabilities vis-a-vis related parties contributed EUR 122.5 million. The change in prepaid expenses added EUR 22.6 million. The reduction in trade payables had a negative effect of EUR 180.6 million. The increase in other liabilities contributed EUR 22.9 million. Other working capital items changed by minus EUR 6.2 million. Tax payments amounted to plus EUR 7 million. Capital expenditures came in at minus EUR 95.2 million. Overall, this results in a free cash flow of EUR 56.2 million.

Let me now turn to the outlook. Since January 1, '26, we have been reporting under a new segment structure. The former Access segment has been replaced by the Consumer and Small business. The new Enterprises and Networks segment combines the former 1&1 Mobile Network segment with the figures of 1&1 Versatel. For the '26 financial year, we continue to expect service revenue to remain at prior year levels at around EUR 3.66 billion. EBITDA is expected to increase to approximately EUR 800 million in '26. We continue to plan investment spending our cash CapEx for '26 in the range of EUR 500 million to EUR 550 million. Looking ahead to 2027 and 2028, we continue to expect annual operational EBITDA growth of around EUR 100 million. Cash CapEx is expected to remain at a similar level to that planned for '26.

Thank you for your attention. I would now like to hand over to Oliver to open the Q&A session.

First question might come from Ganesha Nagesha from Barclays.

.

A couple of questions from my side. First one on the competitive situation. So can you provide some color on the competitive situation in the German mobile and the fixed market? Are you seeing any improvement in the pricing environment? Any detail on that would be helpful.

My second question is on your low-band spectrum access discussions. So how is it progressing? So could you provide any update on this, please?

To your first question about the competition. Competition in the mobile business remains intensive, but we believe the market is slowly stabilizing. We have decided to focus clearly on value and remain rational. We are monitoring the market very closely and decided in early April to raise our prices slightly. This will result in a slightly slowdown in mobile growth in Q2, but we are convinced that we are on the right track with a business focused on value. Competition in the fixed line business is similar, but the market is increasingly becoming on where customers switch providers once their initial 24-month contracts expire. This combined with our ever-expanding fiber optic infrastructure is now paying off.

We have signed wholesale agreements with nearly all major fiber optic infrastructure providers, making us the provider with the largest fiber optic footprint in Germany. Our online approach to market entry is also helping us return to a growth priority. We are satisfied with the fixed line business, which has performed increasingly well, even though we have also raised prices slightly here at the beginning of April this year.

To your low-band question, the Federal Network Agency has proposed that we should receive EUR 6 million per year over 5 years from Telekom, Vodafone and Telefónica as compensation for not having been allocated spectrum. This is currently part of a consultation process. We have submitted our comments and now we need to see how this develops. However, this has no impact on our network rollout. We continue to expand our network, and are already deploying low-band antennas. We are continuing to push for access to low-band spectrum in order to operate these antennas accordingly. That is the current status. So we will continue to pursue access to spectrum.

If in the end, the Federal Network Agency opts for a roaming solution, we will try to challenge that. If we are not successful, we have to assess it, but it does not impact our expansion plans.

And the next question comes from the line of Dhruva Shah from UBS.

Three questions from my side, please. First is on your service revenues. They were down 1% in Q1, but you've reiterated your guidance, which implies a more stable profile. So can you just talk through the moving parts on what is going to improve through the year for you to achieve your guidance? And I guess within that, your broadband net adds have stabilized after several quarters of decline. So what's driving this improvement here? Is it, as you mentioned, that fiber optic expansion? Or is there anything one-off in the quarter? Or it really is stable to growing what we should expect from Q2?

Second question is just on the progress of the network build. Could you just share how many active sites you now have? Any comments on how we should think about the phasing of CapEx throughout the year would also be really helpful. You've only spent EUR 95 million in CapEx so far versus the budget of EUR 500 million to EUR 550 million for the full year. So should we expect CapEx to be back-end loaded? And what are the big ticket items still left to do in the build?

And the final question is just on the new Enterprise and Networks segment. Within that, could you just break out what the network investment OpEx is in Q1? And can you give us a sense of what we should expect for the full year network build OpEx? Should it be around EUR 165 million, given that you have EUR 100 million from last year drop out, which were related to the migration costs?

Yes. To your first question about the service revenue. In the Q1, the service revenue is lower than last year because the contract base at the beginning of '26 was also smaller than in the previous year. This is -- this was in line with our plans. In the coming quarters, service revenue is expected to increase through sustainable net growth and sustainable portfolio transactions, thereby remaining stable year-over-year.

To your second question, the broadband net adds, I mentioned before, there is no one-off. We are really happy with the performing. We are increasingly well. And at this point, I would say that Q2 will be better as Q1. So we are really, really happy with this performing to the sites. We had every quarter around 300 antenna sites and make good progress in that each quarter. We, as I mentioned before, at 300 sites. By the end of '25, we had achieved 27% household coverage. By the end of the first quarter '26, we recorded household coverage of around 30% -- with the ongoing antenna expansion, we expect household coverage to reach out 35% by the end of the year '26. And approximately 40% would be possible with the use of low-band frequencies.

To your CapEx question, the CapEx includes mainly the antenna rollout and the connection with fiber. Besides that, the expansion of the fiber optic network to provide fiber optic connections for business and corporate customers. The CapEx is more backloaded like in the previous years. And there are a number of factors that affect activation and cash out. For example, it doesn't matter what equipment is installed, we activate when the acceptance inspection take place. There may be delays in this regard. So we are maintaining our guidance that we will invest between EUR 500 million and EUR 550 million in '26. We are exactly in our business plan.

[Operator Instructions] And our next question today comes from the line of Gustav Froberg from Berenberg.

I just have one, please, and it's just a follow-up. And it's around customers. I'm wondering how you view the prospects for a pickup in net adds on the mobile side for the remainder of this year and what the moving parts are with that in mind, what needs to happen for there to be growth in net adds as we progress through Q2, 3 and 4?

Yes. It depends on the competition level. We have a look at the competition level. We raised our prices. And at this point, -- we believe the market is slowly stabilizing. So I think there's a chance that we have with a focus on value, healthy growth in the next quarters.

Your next question comes from the line of Ben Rickett from New Street Research.

I have two, please. Firstly, coming back to your CapEx, the EUR 500 million to EUR 550 million, are you able to say how much of that relates to the mobile network and how much of it relates to enterprise fiber? Just as a rough split would be really helpful.

And then second question, you've mentioned that you have now signed wholesale deals with nearly all of the alt nets in Germany. I'm just wondering, are those contracts now live, are you actively adding subscribers on all of those networks? Or are they going to go live over the next year or so? And therefore, is that going to drive broadband net adds? Just anything you can say on that dynamic would be helpful.

Yes. To the CapEx question, I would say, around EUR 300 million to EUR 350 million is related to the mobile network build-out or the antenna rollout in the 1&1 Mobilfunk GmbH and the connection of the antenna sites with fiber from 1&1 Versatel .

And to your second question about the fixed line business and our partnerships. A lot of the partnerships are live, but there are still more to come in the next months and will go out -- will go live in the next month. So that will help us.

So on the second question, could we see broadband net adds being positive for the remainder of the year?

Yes, I'm pretty sure that they will get positive.

Your next question comes from the line of Karsten Oblinger from DZ Bank.

My question is related to the guidance of '27, '28. Do you need any customer growth for this EUR 100 million operational improvement? Or is this a worst case even possible without any customer growth?

We should have customer growth, healthy customer growth, especially to get the EUR 100 million. But the EUR 100 million are splitted on all segments, but customer growth is sure important.

Your next question comes from the line of Keval Khiroya from Deutsche Bank.

I have two, please. So firstly, can you give us a sense of how much traffic you expect to have on your own network with the 35% coverage you expect to have by year-end, and that's both with and without low-band access? And secondly, how should we think about your related payments to Vodafone? Could you give us a sense also of how we should expect these payments to trend this year versus last, but also what you would expect by way of savings by 2028?

To your questions to Vodafone payments, I cannot give you an exactly number, but due to the projection of our own mobile network, I would expect that the payments will slow down. But it depends on many factors. Your first question is about the traffic we have on our own network. We cannot give you an exactly number of that. But low band will have a positive -- would have a positive impact. I would say we would have around about 5% more traffic with low band than without. And sorry, can you repeat your third question, please?

No, no, just the two questions, which I think you've answered.

Your next question today comes from the line of (Tim Jack from EIP.)

It's regarding the guidance. So Mr.Dommermuth clearly stated that you would be interested in buying more 1&1 shares.

Tim, sorry to step in. Tim, apologies. We cannot hear you. Sorry to interrupt you, but your line is pretty bad. Either you have to take the phone directly or there is too much noise around.

Sorry, can you hear me now?

We try...

I'll try again. Can you hear me now? Is it better? I'm sorry, I'm in the car.

It is a little bit better. Maybe you speak not too fast, but we are trying to pick up your questions.

Regarding the guidance, if I do a quick model in terms of EUR 500 million in investment, and therefore, I get EUR 100 million increase in EBITDA per year. If I have a 10-year lifetime of those CapEx, this leads to a rough 7% IRR return and that is pretax. This does not seem to be very attractive. Where is the thinking wrong...

Tim, the line is by far too bad, and that is the very first time in over 15 years. I have to apologize that we cannot take your question. I will be so kind and send it to us, and we spread it with the attendance of this call and explain it in a very proper way, but you were not understandable, not by the sense, but by your words, the quality of volume.

[Operator Instructions] There are currently no further questions. I will hand the call back for closing remarks.

Thank you very much for your attention, and apologies for our last question as I will pick up contact to you, Tim, and spread the answer then in the community and the tendency. As usual, we will be available, and I'm returning now to the operator after a short break, wishing you an interesting meeting in the call with our parent company, United Internet. Thank you, and stay healthy. seeing you soon on the next conferences. Goodbye.

[Interpreted] Ladies and gentlemen, dear guests on behalf of the Board of 1&1 AG, I would like to welcome you very warmly for a presentation on behalf of our investors conference in 2026. Mr. Dommermuth and Mr. D'Avis will present the results of the Fiscal Year 2025 and the outlook for 2026 and beyond. As always, after the presentation, we will be available for questions but of course, only after our parent company has reported as well.

So I'd like to give you the floor to Mr. Dommermuth.

[Interpreted] Good morning, ladies and gentlemen. Thank you, Mr. Keil, for the welcome to our press conference this year. For this year, Mr. D'Avis and I will share the presentation that I will present the development of the company and tell you where we are with the network and Mr. D'Avis will provide the financials and the outlook for 2026.

Looking at the development of the business, we offer broadband. I'll start with broadband, 3.84 million that is VDSL, FTTH, which we get from STF Versatel. Versatel has a national transport net with handover points from Telekom or city carrier. The net is 86,000 kilometers long. And since 1&1 at the end of last year, acquired from Internet AG. It is part of the 1&1 as well. At the bottom, you see the topology of the network. It's a national network with connections to city carriers or telecom, a couple of hundred of these around. And with this network, we address business customers directly connected to the fiber optic and our antennas are connected to that network as well.

We have a good quality. And in test, we did the -- won the first prize and the customer satisfaction is very high. The Connect Customer range gave us first prize for Best Customer Satisfaction in the broadband section. We've always got best customer satisfaction in the mobile range. The network was tested with very good. And we had this connect test for the first time, which is done by Umlaut, which is an Accenture subsidiary. It's a global test according to the same criteria. In the mobile range, we have 12.5 million contracts. We are operating the first Open RAN, fully virtualized network in Europe. We cover a broad market with main brand, 1&1, the co-branding, GMX, WEB.DE and our discount brands, which we have acquired over the time.

As I said, for the first time, we have participated in the connect test. And you see that from the start, we got a very good mark. And you can see clearly Telekom, Vodafone, Telefonica are still ahead of us, but not with much headway. And as we have just started, we think that we have delivered a very good result that we can be proud of.

In total, 16.23 (sic) [ 16.32 ] million customer contracts -- 32 (sic) [ 16.32 ] million contracts, 12.5 million mobile internet access, which is a growth of 40,000. We had good customer migration going on last year from the old reselling contracts to our own network. This is why we have developed now with the 40,000 customers. The broadband lines, we have lost 110,000 customers. We want to improve there. What is new? We have a bigger footprint. We have got lots of contracts with regional carriers. So M-Net in the South, [ Venttel ] In the North, [ OXG ], Vodafone, Tele Columbus, Deutsche Glasfaser, the net of which we can use as well, especially if we look at optic fiber networks, Telekom has got 100% footprint, but only a partial footprint. And this is how we can address more customers now, more and more customers.

Now we actually do half of the new business not in the Telekom network. If we talk about fiber-to-the-home, half of the new connections are in alternative networks. So this is why we think the growth we can cover up the gap, which we did. We started very good in the first quarter. We did a campaign. We are investing in advertising for DSL broadband glass fiber, which we didn't do last year. So more marketing, bigger footprint will result this year in better figures.

The revenue has grown by 1.8%, [ 0.1 ] service revenue. Out of this EUR 29.8 million from Versatel, 5% other revenues, this is mainly marketing of smartphones, EUR 10.4 million from Versatel. The EBITDA has EUR 537 million. We were better EUR 590.4 million. So you see our 2 segments here. The gray segment is the Access segment and the blue one is the broadband network and the difference is Versatel. In the middle, as you see, the mobile network EBITDA as before is going to improve this year because we don't have the migration cost anymore. And with our own network, for example, we can produce more than in the year before or in international broadband, we cooperate more with other networks. And we can negotiate the prices where we had to take the Telefonica prices beforehand.

Segment Access, 8.1% drop in EBITDA, mainly driven by the roaming contract. We -- due to the change from Telefonica to Vodafone, the situation is that all costs are directly in the profit and loss sheet and it had a net component one before, which was paid for 5 months -- years, activated and then depreciated over 5 years. So this is why this position is visible in the EBITDA, but it's not affecting the EBIT. But we have higher -- we had higher roaming costs than we had planned before as we had reported last year. We had a contract with Vodafone over the capacities of Vodafone. And when that Vodafone network grows slower than we have assumed in our business case, we have to buy more percentages of the Vodafone network. If it grows faster than we expect, we buy lesser.

Fewer percentages of the Vodafone network. You know the Vodafone network figures and that's published. And after the quarter, when we entered, the growth was slow. It used to be 30% and more. And after we started with Vodafone roaming in the third quarter '24, it was only 15%. We do assume that Vodafone will grow faster in the future. And as soon as it goes as quick as ours, we don't have to buy capacities from them anymore to supply to our customers. The business plan assumed that this year, we grow a little bit more than Vodafone does. So we expect this to be turning out correctly.

CapEx, EUR 409.2 million mainly driven by the Mobile segment, EUR 366.1 million for new antennas, masks and computers. In the overview, 16.32 million customer contracts, 40,000 less than before. Revenue, EUR 3.1358 billion. I don't have read the figures out all of them. I have explained the key points. I think this is self-explanatory. Versatel with EUR 16 million from December '25 in this EBITDA here. In the EBIT, you do see the drop in the [ EBITDA ] and also the depreciations of the equipment in the Mobile Network, which we bought. So the proposal of the dividends is 0.5% per voting share corresponding to the minimum dividend according to Section 254. And we don't see any issues coming up here, including the debt that we need to cover and we want to reduce over the past -- over the next years.

Concerning Versatel, looking at the Mobile Network, this is the infrastructure. As you know it, we have 4 core data centers, 24 decentralized edge data centers around them, 331 regional far edge data centers online now. In the end, it's going to be a bit over 500 until the next level, 2030. And to these data centers, we can access this by our Open RAN and connect different manufacturers. Over the end of last year, we supplied over 27% of the German households, 25% was the legal minimum. We did it well there. The second requirement we have to fulfill until end of '25, which is the independency. So we can't operate the network and be a reseller at the same time. This is why we migrated all the customers to the end of '25. So we have fulfilled all requirements of the Federal Net Agency.

How do we differentiate? It's an open system, standardized interfaces, software, hardware, all different manufacturers can be combined. We collaborate with over 100% partners, 50% from Germany, 40% from the rest of Europe and about 10% from other countries overseas, except from China. And we are ready for real-time applications. We have gigabyte antennas at all locations connected with fiber optics, and we've got enough space in the Far Edge data centers to put in more servers. The benefit is here that the latency times get shorter if we transport the data because the distance to the antenna is shorter, giving us 0.3 milliseconds of 5G signals. No, 3 milliseconds and 2.5 milliseconds are used by the 5G signal. Our network uses little energy compared to the traditional ones. That is the operative development and the condition of the Mobile Network.

And now I'd like to ask Mr. D'Avis to present the financial figures. Thank you.

[Interpreted] Well, thank you very much, Mr. Dommermuth. Good afternoon to you all from me as well. I will now present the key financial figures for the 2025 financial year and provide an outlook on our expectations for the current financial year.

As you know, we acquired 1&1 Versatel on the 1st of December 2025. Accordingly, our earnings figures and cash flow include 1&1 Versatel's figures for the month of December. Our statement of financial position includes the assets and liabilities of 1&1 Versatel as per 31st of December 2025. I will highlight these where appropriate, should this be helpful for your assessment.

Allow me to begin with the income statement. Revenue for the 2025 financial year amounted to EUR 4.136 billion, representing an increase of 1.8% on the previous year's figures of EUR 4.064 billion. The sales for the 2025 financial year included EUR 40.2 million in external revenue from 1&1 Versatel for the month of December.

The Service revenue for the 2025 financial year stood at EUR 3.336 billion compared with EUR 3.303 billion in 2024. Of this, EUR 29.8 million referred to 1&1 Versatel for the month of December 2025. Other revenue increased to EUR 799.4 million. The comparative figure from 2024 was EUR 761.2 million. Other revenue also includes EUR 10.4 million in revenue from 1&1 Versatel for December 2025.

Costs of sales rose from EUR 3.022 billion in 2024 to EUR 3.202 billion in 2025. Gross profit accordingly fell from EUR 1.042 billion in 2024 to EUR 934.3 million in 2025, a decrease of minus 10.4%. Gross profit in the Access operating segment fell from EUR 1.401 billion in 2024 to EUR 1.378 billion in 2025, representing a decline of minus 1.7%. This is primarily due to increased wholesale costs for national roaming as well as a reserve. The increased wholesale costs for national roaming stemmed from the switch from Telefonica to Vodafone. The change of national roaming provider has a neutral effect on EBIT, but impacts EBITDA. This is because under the national roaming agreement with Telefonica, the capacity used by 1&1 was partially capitalized and depreciated on a straight-line basis, whereas under the agreement with Vodafone, it is recognized in full in the EBITDA.

In addition, as reported during the year, there was an unexpected increase in national roaming presale costs to slower-than-expected capacity growth on the Vodafone network. The gross profit in the 1&1 Mobile Networks segment stood at minus EUR 437.9 million in 2025 compared with minus EUR 359 million in 2024 due to rising expenses for construction, operating and depreciation of the 1&1 Network. The depreciation relates primarily to network technology, network software and 5G frequencies. The gross profit of 1&1 Versatel as at December 2025 amounts to minus EUR 5.8 million. Sales expenses fell from EUR 535.7 million in 2025 to EUR 521.1 million in 2025, representing a decrease of 2.7%. This is primarily attributable to the scheduled completion in August 2025 of the amortization of the Drillisch customer base, which was capitalized under the PPA in 2017 with a positive effect of EUR 28 million in 2025.

The inclusion of 1&1 Versatel has the opposite effect amounting to minus EUR 12.1 million. Administrative expenses rose from EUR 112.2 million in 2024 to EUR 123 million in 2025. This increase is primarily due to higher legal and consultancy costs compared with the previous year as well as the consolidation of 1&1 Versatel. The net balance of other income and expenses stood at EUR 43.4 million in 2025, up from EUR 37 million in 2024. This change is primarily attributable to improved results from the debt recovery and collection process.

Impairment losses on receivables and contract assets increased from EUR 121.9 million in 2024 to minus EUR 125.4 million in 2025. Essentially -- well, yes, operating profit, sorry, stood at EUR 208.2 million in 2025, down from EUR 309.4 million in 2024, attributable to higher cost in national roaming and higher depreciation and amortization resulting from the expanding Mobile Network. The financial result for 2025 at minus EUR 30.2 million was lower than the previous year's figure of minus EUR 4.2 million. The increase in finance costs resulted primarily from our lease agreements and loan interest.

The increase in interest expense from leases stems from the ongoing network expansion and for the month of December from the consolidation of 1&1 Versatel. Interest on loans relates to the EUR 290 million borrowed by United Internet from the Japanese Development Bank, JBIC at the beginning of 2025 as well as interest expenses for the loan totaling EUR 1.65 billion received in connection with the acquisition of 1&1 Versatel. Interest income relates to the short-term investments held by United Internet. The decline is primarily due to lower interest rates.

Profit before tax thus stood at EUR 178 million in 2025 compared with EUR 305.2 million in 2024. Tax expenses fell to EUR 12.3 million in 2025, down from EUR 92.4 million in 2024. Approximately half of the decline in tax expenses is attributable to the change in earnings with the remainder resulting from the tax losses of 1&1 Versatel for the whole of 2025, which were fully utilized by 1&1. Consequently, the consolidated net profit for 2025 amounted to EUR 165.7 million compared to EUR 212.8 million in the previous year.

Now let me speak about the balance sheet. The assets rose from EUR 8.13 billion at the end of 2024 to EUR 11 billion at the end of 2025. The 35.4% increase is mainly attributable to the following factors. Current assets stood at EUR 1.899 billion, thus 3% higher than the previous year's figure of EUR 1.844 billion. The increase is primarily due to the first-time consolidation of 1&1 Versatel. Noncurrent assets rose by 44.9% from EUR 6.286 billion in 2024 to EUR 9.107 billion in 2025, also due to 1&1 Versatel. EUR 2.622 billion of this increase is attributable to 1&1 Versatel's noncurrent assets. These comprise, in particular, EUR 1.9413 billion in property, plant and equipment, EUR 398.3 million in goodwill and EUR 222.3 million in intangible assets.

The property, plant and equipment at 1&1 Versatel related in particular to telecommunications equipment and rights of use arising from leases. In addition, we invested more in our Mobile Network in 2025, particularly in property, plant and equipment. Deferred expenses have fallen to EUR 697.3 million. In previous years, we made advanced payments to Deutsche Telekom for broadband quotas, which are now being written off over the years. Current liabilities rose from EUR 730.6 million in 2024 to EUR 1.206 billion in 2025, an increase of EUR 475 million. The increase is primarily attributable to the consolidation of 1&1 Versatel. In particular, this has caused trade payables to rise by EUR 194.4 million to EUR 543.9 million.

Also, other financial liabilities have increased by EUR 182 million to EUR 291.3 million. This is primarily due to the rise in lease liabilities resulting from the inclusion of 1&1 Versatel and the further expansion of antenna sites and the concomitant leasing liabilities. What's more, the first installment of EUR 67 million for our frequencies in the 2 gigahertz band was due at the beginning of January 2026, which is why we now report this portion of the frequency liability under current liabilities.

Noncurrent liabilities rose from EUR 1.305 billion to EUR 3.805 billion in 2025, an increase of EUR 2.5 billion. EUR 1.94 billion of this increase relates to long-term liabilities to United Internet. These consist of the loans of EUR 290 million taken out at the start of the year, the loan of EUR 650 million used to settle the purchase price for 1&1 Versatel and EUR 1 billion in loan liabilities of 1&1 Versatel. The increase of EUR 475.2 million in other long-term financial liabilities is primarily attributable to the inclusion of long-term lease liabilities of 1&1 Versatel as well as to increased lease liabilities resulting from the continued expansion of our Mobile Network. Equity fell from EUR 6.094 billion in 2024 to EUR 5.995 billion in 2025. The decline is primarily due to the first-time consolidation of 1&1 Versatel.

Now let me continue with the cash flow development. Net cash inflows from operating activities amounted to EUR 604.3 million in 2025 compared with EUR 311.4 million in the previous year. These consist of EUR 499.2 million in cash flow from operating activities, EUR 34.1 million from changes in receivables and other assets. This change is due to the reporting date and settlement-related factors, plus EUR 25 million from the change in inventories due to the further reduction in stock levels, plus EUR 51 million from the change in deferred expenses due to advanced payments for broadband quotas to Deutsche Telekom in previous years. These are now being utilized and are decreasing annually, minus EUR 45.8 million from the change in receivables and payables from related parties and plus EUR 27.7 million from the change in other liabilities and plus EUR 12.0 million from the change in other working capital.

Cash flow from investing activities amounted to minus EUR 798.8 million in 2025 compared with minus EUR 180.8 million in 2024. This comprises the following: cash CapEx in 2025 amounting to minus EUR 409.2 million, primarily comprising investments in the 1&1 Mobile Network, minus EUR 4 million in connection with the acquisition of A1 Marketing, Communication and New Media minus EUR 399.5 million from the investment of surplus cash and cash equivalents with United Internet during the year, plus EUR 14.0 million from interest received and particularly from the investment with United Internet.

The cash flow from financing activities amounted to EUR 198.1 million in 2025 compared with minus EUR 129.7 million in the previous year. This comprises the following: minus EUR 29.9 million from the repayment of lease liabilities in connection with the accounting treatment of the leases for antenna sites under IFRS 16 accounting, minus EUR 8.8 million from dividend payments, minus EUR 0.58 million in other interest-like payments, minus EUR 61.3 million in repayments of liabilities relating to the 5G radio spectrum, plus EUR 340 million from the raising of loans, minus EUR 36.1 million from interest payments, in particular, from leases and in addition, interest payments on the loans. We, therefore, generated a free cash flow of EUR 195.1 million in 2025, following EUR 20.8 million in 2024.

Now allow me to discuss the bridge from EBITDA to free cash flow. We start with an EBITDA of EUR 537.5 million, then inventories amounting to EUR 25.8 million, deferred expenses of EUR 51.3 million, receivables and payables from related parties of minus EUR 45.8 million, receivables and other assets of EUR 34.1 million, other liabilities of EUR 27.7 million, other working capital of EUR 21.5 million, taxes of minus EUR 47.8 million and CapEx of minus EUR 409.2 million. This brings us to a free cash flow of EUR 195.1 million, which is a significant improvement over the prior year.

Now let's take a look at the outlook for 2026 and subsequent years. From 2026 onwards, we will report on the following 2 segments. The previous segment [ Axis ] will be renamed Consumer and Small Business, whilst Enterprises Networks will combine the former 1&1 Mobile Network segment with the figures from 1&1 Versatel. Service revenue is expected to remain at the previous year's level in 2026 at approximately EUR 3.66 billion. EBITDA is expected to rise to approximately EUR 800 million in 2026. The investment volume, i.e., cash CapEx is expected to amount to between EUR 500 million and EUR 550 million in 2026. We also expect annual operating EBITDA growth of approximately EUR 100 million for the financial years 2027 and 2028 each. The investment volume, cash CapEx is expected to remain at the 2026 level in 2027 and 2028.

Thank you very much for your attention. And this will now take us to the answering of your questions. Thank you very much.

[Interpreted] Okay. So I'd like to ask the colleague at the front row from UBS. Please go ahead. Mr. Tang first. Mr. Polo, just wait for the microphone.

I have 2 questions. So the first question is really just some clarification around CapEx. You've given midterm guidance, but can I clarify if the guidance assumes a build to 50% population coverage? Also, if you look at your envelope of EUR 500 million to EUR 550 million per annum through to 2028, how much does Versatel account for that envelope? And can you clarify in terms of the Mobile Network build what are the main elements that are still yet to be done? Is it mainly just building out cell sites and the RAN? Or are there other elements in terms of the Mobile CapEx?

Second question is really just about low-band spectrum. So the [ BNR ] is proposing the MNOs pay you EUR 6 million per annum for the next 5 years to compensate for the absence of low-band spectrum. But if you cannot get access to low-band spectrum, does it still make sense to continue the network build to 50%? And can you clarify if you actually still have coverage obligations to build to 50% by 2030, given that my understanding is the 2019 spectrum auction outcome was actually annulled by the Cologne Court.

[Interpreted] Let me start with the second question. As you said quite rightly, the agency proposed that we have the EUR 6 million for 5 years from Telekom and Telefonica as compensation for not getting the frequencies. This is a hearing now. We have made our statement yesterday, and we will have to wait for the outcome. It doesn't have any effect on our network building because we build our network, we are building low-band antennas as well. We are fighting to get the low-band in order to be able to use these antennas. And well, that is where we are today. I think we're still after getting the frequencies. And if the agency doesn't decides in the wrong way, we'll try to change it. If we can't change it, we'll have to pull up with it, but it's not going to have an effect on our building plans.

And if I understood the second question right, we have an obligation? Yes, we have to connect 50% of the households in 2030. By the end of '25, we reached 27%. And until the end of this year, we plan to reach the 35% mark. So that's end of '26. So we do think that 50% by 2030 is well doable, and that is still without the low-band. With the low-band, we'll automatically get a bigger range. We'll automatically get not 35%, but 40% household coverage. And from this point, we are optimistic that we will be able to do it quite well. We have 300 new sites per quarter in the last year, which is a rate that we see going on for the near future as well. So we -- as far as deployment is concerned, we are well underway.

[Interpreted] Concerning your CapEx question, this guidance is set up on the setup of the 50% buildup. And respectively, the CapEx in the years is scaled for the years to come to cover this. The point is here looking forward is mainly costs for the new antennas and also by Versatel, the connection of these antennas to fiber optic cables. These are the main components of this CapEx budget. And what we have behind us is the expansion of the [ CDCs ], the [ CDCs ] extension coverage that has been concluded and that gave us high CapEx last year. We had a peak last year. We can say that clearly. Now we focus on the quick development of the antenna sites as quickly as possible. And in the CapEx, we will have the focus at this point as well.

If we look at the Versatel CapEx in the guidance and the 1&1 Mobilfunk and the Access business, which is a small part if we're going to split it up, I would say Versatel CapEx is about [ EUR 220 ] million and the rest mainly is on the extension of the 1&1 Mobilfunk network with the limited companies, respectively. And a smaller part is for the Access business. Well, that is a minor part really.

[Interpreted] Had a second question on the left-hand side.

It's Ben Rickett from New Street Research. I had 2 questions, please. First question on low-band spectrum again. In the past, you've spoken about needing to keep leverage down ahead of a potential low-band spectrum auction. I think your leverage now is nearer sort of 3x. So how do you -- how would you finance an auction if there is an auction in 2030 or before then?

And then second question, just on consolidation. I'd be interested to hear your latest thoughts on consolidation in Germany. Is it sustainable to have 4 mobile operators in this market or does there need to be consolidation? And would you be prepared to sell into a transaction or you would want to retain control?

[Interpreted] Well, as far as the debt is concerned, we are at a factor of 2.5 on the EBITDA at the moment up to the auction, possible next auction, which is going to be in '28, '29, this factor is going to reduce. We are at the peak on the debt at the moment, which is from the Versatel takeover. Without that, we wouldn't have any debt at all. So we bought Versatel and some integrated debt as well. So this is where this comes from. I think EUR 2.1 billion which you are planning, which is 2.5x EBITDA, but it will drop below after that, at least that's the planning.

So we do think that we have enough to -- in 1&1 itself, but United Internet as well in order to be part of -- take part in the auctions. Is it sustainable to have 4 operators? Well, there are other countries where 4 work well. I think, of course, I understand that 3 are more efficient than 4, 2 are more efficient than 3 and 1 is the most efficient. And you asked whether we are prepared, at least I understood it that way to sell the business. We are not preparing for that. And there is no discussion on this either. I have to say very clearly. We read this once a week what Telefonica thinks in the Spanish news. I don't know how they know it. Germany's papers seem to copy it, but we have no dialogue with them at all. So there is no discussion in that direction.

[Interpreted] Well, my question is on the midterm outlook in '28 that you plan to add EUR 100 million worth of EBIT per year. Can you give us some more detail on what will be the core driver for this expansion, please?

[Interpreted] Yes. The EBITDA growth of about EUR 100 million each year is to be fed from both segments. So the operative Access business, that's our target. It's supposed to grow. We want to have valuable growth there again. And accordingly, the EBITDA is to grow there. But also in the segment, Enterprises and Networks, we want to grow. On the one hand, this will be possible due to increased production -- own production in the 1&1 Mobile Network. So we swap external roaming costs or we can reduce them.

And also, there are to be positive contributions from 1&1 Versatel. So this growth expectation rests on broad shoulders, I'd say. And we're quite optimistic that we'll achieve this.

[Interpreted] The next question by Mr. [indiscernible] here on the right and then [ Mr. Olinger of DZ Bank ].

[Interpreted] It's a follow-up question concerning competition and network expansion, which is costly, of course. And your operative business can capture this? And how could you scale this maybe? The service business is quite strong, after all, will competitors pull level or if there are any gaps in coverage, do you have an edge over the competition? Can you give us some details on how you would like to differentiate against the competition technologically speaking? And can you actually maintain prices or even increase them compared to competitors?

[Interpreted] Well, that's an excellent point. Mr. D'Avis said, we are planning to grow on different -- well, on all levels in 1&1 Versatel, the business customer business, the Mobile Network utilization also in our Access business and our end customer business and growth in end customer business only will work out if we generate more customers that are profitable. And over the last 1.5 years, we had a very tough price competition in Germany, from our point of view, that was triggered by Telefonica be that as it may, who moved first.

Now we have a feeling that this is kind of calming down a bit. We are at a low level indeed, but it's not going even further down. And we were able to adjust our prices to an extent for fiber optics. And we're also planning to increase prices in DSL and Mobile Phone Networks. We will see whether the markets allow for this. And those are only moderate adjustments. It's not like we can just double our prices. But we believe that here or there, we have a bit of [ wing ] room for price adjustments. And that must succeed.

So that we are working in a reasonable enough market environment. We're not banking only on price increases. I would like to underscore this. We're talking of moderate price increases. But if prices started tanking and going down tomorrow again, then we couldn't do that any better than our competitors. And we try not to go along with this nonsense in this cyber hype that we had where we could get 100 gigabytes for EUR 9.99. We didn't go along with that, but we can't completely ignore it either.

So this is why we have the idea that we will have a certain amount of growth, and we will adjust prices for new customers here or there just very slightly. That's the approach really.

[Interpreted] I have 2 questions that are to do with the Versatel acquisition. One being, you mentioned tax aspects in the context of the acquisition. Could you quantify them, please?

And then another question of clarification concerning net indebtedness. It was a bit difficult sometimes to understand after the press release came -- the last press release came. I didn't quite understand how net indebtedness developed in the context of this loan. And then this aspect of the spectrum obligation so that we have an idea of the overall indebtedness of 1&1. Could you please help me out with that?

[Interpreted] Well, concerning the tax benefits due to the acquisition of 1&1 Versatel, we could use their deferred debts against tax, as I said earlier. In my presentation of figures concerning net indebtedness, it's composed as follows: we acquired a debt of EUR 950 million with the acquisition of Versatel. So we just took on this debt on that Versatel had vis-a-vis United Internet. We got a credit of EUR 650 million from United Internet and added EUR 150 million over the last couple of years. And this is how our debt is composed.

So basically, it's all loans that we got from United Internet, a total of EUR 1.94 billion. And we will increase this one more time, one final time this year. That's our plan to a maximum of EUR 2.1 billion. And in subsequent years in 2027, it's supposed to be -- remain stable. And beginning 2028, we will start reducing our debt. We have to add, of course, the fact that in this period, we will have an increasing EBITDA, as Mr. Dommermuth said, we -- this multiple will, of course, improve significantly.

[Interpreted] Well, I'd say one more question by Mr. [indiscernible] on the left-hand side, if there aren't any further follow-up questions, we really covered everything that had been mentioned in the context of the consensus discussions, which wrap it up.

[Interpreted] Well, one more short question on the capacity mechanism with Vodafone. If I understand this right, you pay your share in the network costs in line with your share of capacity utilized by you. You said, Mr. Dommermuth, that the overall capacity of the network has increased less than expected. Can you tell us what that is due to? Is Vodafone doing a poor job at expanding their network or what?

[Interpreted] Yes, I'll try to explain that. We purchase percentages of the Vodafone network. Let's say we buy a 10% share and 10% produce 10 gigabytes. Now if Vodafone produces 30% more next year than our 10% or no longer 10%, but 13 gigabytes. We made certain assumption for our growth in terms of existing and new customers. And we assume that Vodafone's stock of customers will grow correspondingly. And if you look back into the history in August 2024, that was the first time we cooperate with Vodafone in this way. Vodafone's growth was always a little bit around about 30%. And since then, it has decreased to around about 15%. We had expected initially that it will remain at 30%. So with a 30% increase, 10% of the network would increase at 30% to 13 gigabytes, but we only got an increase of 15%, so 11.5 gigabytes. So we had to buy another percent on top or some share. It doesn't have to be a percentage point now exactly.

So if we grow as fast as Vodafone, then for the legacy customers, we have to purchase the same percentage. I'm not talking about new customers now. If we grow faster, then we use up a larger percentage of the Vodafone network. If we go slower, we have to take up a smaller percentage. The benefit is that we don't have to negotiate the price of a gigabyte. That was the problem we always had with Telefonica. Of course, we have opposing interest here. One party wants to pay as little as possible. The other party wants to get as much as possible. So here, we have a different mechanism. We get a percentage, whatever this means. That's the way our contract operates. And I think it's a very fair and equitable one.

Now at the beginning, of course, it's stupid to say that's a great contract if you pay more than you expected to start with, but we do believe that it will level out over year. We believe that Vodafone will start growing again. We don't think that they're too dumb to grow. It's always their business decision as to which market segments they want to grow, et cetera. But it has nothing to do with the expansion of the network. As soon as they do that, as soon as they expand their network, we participate in by simply grabbing our percentage of that growth in the network.

[Interpreted] Okay. I'll have another look around if there is any more questions. We'd be happy to take it.

Okay. Maybe a closing remark, Ben.

A quick question on your lease expense. So it's really helpful that you've given guidance out for 2027 and 2028. Can you say anything about what the lease expense will be for 2026? And then how you expect that to evolve over the next 2 years?

[Interpreted] The leasing liabilities of about EUR 200 million, and they are going to increase slightly over the year.

[Interpreted] Okay. So I would -- and we would like to thank you for the interesting discussion and questions. And we wish you a good break shortly before you can follow the invitation of our mother company. Thank you.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

Good morning. Welcome to everybody to our 9 months results call. On behalf of the Executive Board, I would like to welcome you. During this call, our CFO, Sascha D'Avis, will present to you the results for the first 9 months, followed by the guidance and the status of our 1&1 mobile network.

Before I hand over to Sascha, please pay attention to our usual disclaimer, which is part of our presentation. Thank you very much.

And now it's my pleasure to hand over to Sascha.

Thank you, Oliver. Good morning. This is Sascha D'Avis, CFO of 1&1 AG. Welcome to our call today. As Oliver has already mentioned, I would like to provide you with an update on our performance in the third quarter as well as our financials as of the end of September.

Let's start with the customer contract. As of the end of September, we had a total of 16.34 million contracts in our base, 12.48 million mobile Internet contracts and 3.86 million broadband contracts. This represents a decrease of 50,000 contracts in the first 9 months of 2025. While we recorded a decline of 90,000 contracts in the fixed line segment, we were able to increase our mobile contracts by 40,000 after a flat development until the beginning of the third quarter.

We continue to experience intense competitive pressures in all areas. In the Mobile business, we saw an increase in contract cancellations due to the now successfully completed migration of all mobile customers to the new 1&1 network. However, in the third quarter, we managed to increase the number of our mobile contracts again.

Please allow me to say a few words to conclude the migration. Less than 2 years after launching mobile services on the 1&1 O-RAN, we have completed the largest customer migration in German mobile communication history. All 1&1 customers now use the modern 5G network. This means that 1&1 has fulfilled the competitive independence requirement imposed by the Federal Network Agency ahead of the set deadline.

On the next slide, I will move to revenue. Total revenue for 2025 amounts to EUR 3.016 billion, roughly in line with the previous year's level. Service revenues have remained stable as projected, while other revenues mainly from the low-margin hardware business declined by 0.3%. This part of the business is subject to seasonal fluctuations and depends largely on the appeal of new devices and the product cycles of the manufacturers.

Let us move on to EBITDA by segments. In the Access segment, we achieved an EBITDA of EUR 611 million in the first 9 months, representing a decrease of 3% compared to EUR 630.1 million in the comparable period in 2024. The decline is mainly due to higher wholesale costs resulting from Vodafone's lower-than-expected network expansion as well as the switch of the national roaming partner from Telefónica to Vodafone. Under the commercially equivalent national roaming agreement with Vodafone, the capacities used by 1&1 are fully recognized and affect EBITDA directly, whereas under the national roaming arrangement with Telefónica, they were partly capitalized and depreciated as planned.

The negative EBITDA of minus EUR 201.2 million in the 1&1 Mobile Network segment reflects our activities related to the expansion and operation of the mobile network. It also includes the cost associated with the successfully completed migration of existing customers.

Now let's move on the investments CapEx. In the first 9 months, we invested EUR 228.7 million, of which EUR 11.2 million were allocated to the Access segment and EUR 217.5 million were dedicated to the expansion of our Mobile Network.

Now let us move to the current status of our mobile network, Europe's first OpenRAN. The slide shows the already familiar network architecture. In addition to the 4 central core data centers and the 24 decentralized edge data centers that have been completed for some time, as of September 30, 2025, a total of 297 regional Far Edge data centers and around 1,500 antenna sites are in operation. Another 4,500 antenna sites are currently under development. Network expansion is, therefore, continuing to progress well.

Our O-RAN offers significant advantages over conventional network architecture. On the one hand, it features an open system with standardized interfaces supported by a partner ecosystem of nearly 100 companies, providing independence from dominant vendors. In addition, we are ready for real-time application as all antennas are connected via fiber. This enables data processing directly on site in the Far Edge data centers. The open network architecture also creates potential energy savings of between 10% and 30% compared to a traditional network.

On the next slide, you can see that our strength stems not only from our people but also from a broad and resilient ecosystem. With more than 3,100 dedicated employees across 8 locations in Germany, we provide the foundation for innovation and sustainable growth. At the same time, our success extends well beyond the boundaries of our own organization. More than 100 partners are part of our network, roughly half based in Germany, 40% from other European countries and the remainder from global markets. This diversity enables us to respond swiftly to new demands and to develop forward-looking solution in close collaboration with strong partners. We have chosen to operate entirely without Chinese suppliers.

Let us now turn to the financial figures, starting with the earnings situation. Total revenue in 2025 stands at approximately EUR 3.016 billion, roughly at the same level as the previous year. Service revenue, as forecasted, also matches the prior year's figure. The cost of sales increased from EUR 2.191 billion in 2024 to EUR 2.301 billion in the first 9 months of 2025. The increase is primarily driven by the 1&1 Mobile Network segment.

In particular, depreciation on network components has risen due to the ongoing expansion of the network. The gross profit in the operational Access segment decreased from EUR 1.046 billion in the first 9 months of 2024 to EUR 1.030 billion in the first 9 months of 2025, representing a decline of 1.5%. This includes the connectivity costs for the fixed line segment, which remain largely at the same level as the previous year.

Connectivity costs for mobile Internet have risen moderately. The prices for Vodafone National roaming were slightly above our expectations, which is due to slower growth of the Vodafone network. The cost of goods sold has decreased in line with the decline in hardware revenue. The gross profit from revenue consequently decreased from EUR 826 million in the third quarter of 2024 to EUR 715 million in the third quarter of 2025, representing a decline of 30.5%.

Distribution costs increased from EUR 390.6 million in the third quarter of 2024 to EUR 392.4 million in the third quarter of 2025, representing a rise of 0.5%. This is primarily due to the intensified marketing of our unlimited plans during the first half of 2025. Administration costs amounted to EUR 89.2 million in the third quarter of 2025, slightly above the prior year figure of EUR 86 million.

The balance of other income and expenses amounted to EUR 34 million, exceeding the prior year's figure of EUR 27.6 million. This change is primarily attributable to improved results from the collection process. Impairment losses on receivables and contract assets increased from minus EUR 89.9 million in the third quarter of 2024 to minus EUR 91.9 million in the first 3 quarters of 2025. A portion of this is offset by the aforementioned higher income from the improved collection process.

The operating profit EBIT amounted to EUR 175.4 million in the third first 3 quarters of 2025 compared to EUR 287.5 million in the first 3 quarters of 2024. The decline is primarily attributable to the increased number of antenna sites in the 1&1 mobile network. The financial result in the first 3 quarters of 2025 stood at minus EUR 16.3 million compared to minus EUR 1 million in the previous year. This is due to the financing expenses of minus EUR 27.5 million, up from minus EUR 30.8 million in the prior year and financial income of EUR 11.2 million, down from EUR 12.8 million in the first 9 months of 2024.

The increase in financing expenses is partly due to the accounting of lease agreements for our growing number of antenna sites. Additionally, since the beginning of 2025 fiscal year, there have been additional interest expenses from the loan taken out at the start of the year from the Japanese Development Bank, JBIC. This loan is being used to co-finance strategic investments as part of the network expansion. Formally, the loan was taken out by United Internet and passed on to 1&1.

Financial income amounted to EUR 11.2 million in the first 9 months of the 2025 fiscal year. And as in the previous year, was primarily derived from interest on investments with United Internet AG. The decline is attributable to the lower interest rate level compared to the first 9 months of the 2024 fiscal year. Of the total EUR 800 million credit facility, we have so far drawn EUR 290 million, resulting in interest expenses of EUR 6.2 million in the first 9 months of 2025. The interest income, primarily from the investments of free liquidity with United Internet decreased by EUR 1.6 million due to lower interest rates. As a result, earnings before taxes amounted to EUR 159.1 million in the first 9 months of 2025 compared to EUR 286.5 million in 2024.

Correspondingly, tax expenses decreased to EUR 48.4 million in 2025, down from EUR 90.2 million in the same period of 2024. Consequently, we achieved a consolidated net income of EUR 110.7 million in the first 9 months of 2025 compared to EUR 196.3 million in the third quarter of 2024.

Let's now turn to the balance sheet. The total assets increased from EUR 8.13 billion at the end of 2024 to EUR 8.55 billion as of September 30, 2025. The increase of plus 5.1% is primarily attributable to the following effects: Current assets amounted to EUR 1.84 billion at the end of 2024 and increased by 17.6% to EUR 2.17 billion by the third quarter of 2025. The increase is primarily attributable to EUR 447.8 million invested as free liquidity with United Internet AG, which resulted from both positive operating cash flow and the disbursement of the JBIC loan.

Conversely, current contract assets decreased by EUR 78.1 million due to the recent decline in hardware revenue. Noncurrent assets increased by 1.4% from EUR 6.29 billion at the end of 2024 to EUR 6.38 billion as of September 30, 2025. This increase is primarily due to the rise in property, plant and equipment by EUR 177.6 million, driven by the continued ramp-up of the 1&1 mobile network. The increase is mainly attributable to capitalized usage rights for antenna sites. The decline in intangible assets by EUR 78.1 million is largely the result of scheduled amortization on assets capitalized during the purchase price allocation following the merger of Drillisch and 1&1.

Current liabilities increased from EUR 730.6 million as of December 31, 2024 to EUR 739 million as of the September 30, 2025. The decrease in liabilities to related parties and the increase in current other nonfinancial liabilities are primarily related to the reporting of our VIT liabilities. Until December 31, 2024, 1&1 was part of the VIT Group of United Internet. So VIT liabilities were reported under liabilities to related parties. Since January 1, 2025, 1&1 is no longer part of this VIT group and VIT liabilities are now reported under current other nonfinancial liabilities.

The increase in current other financial liabilities is mainly due to the short-term payable installments for the frequency cost auctioned in 2019. The first installment for the 2 gigahertz frequency block is due on January 1, 2026, thereby increasing the short-term portion of frequency liabilities. Noncurrent liabilities increased from EUR 1.305 billion at the end of 2024 to EUR 1.607 billion in the third quarter of 2025. This increase is primarily due to the loan taken out to finance investments in the 1&1 mobile network.

Additionally, lease liabilities rose as a result of the continued expansion of antenna sites within the 1&1 mobile network. Conversely, noncurrent financial liabilities decreased due to the reclassification of the short-term portion of the frequency liabilities. Equity increased from EUR 6.0954 billion to EUR 6.199 billion due to the positive consolidated net income.

Let's now turn to cash flow. Net cash flow inflows from operating activities amounted to EUR 32.7 million in the first 3 quarters of 2025 compared to EUR 133.8 million in the first 9 months of 2024. The positive change compared to the previous year is primarily due to the advanced payments made in the prior year for the contingent contract with Deutsche Telekom, which no longer apply in 2025.

The operating cash flow for the first half of 2025 includes the following key components: plus EUR 31.8 million from the reduction of inventories, minus EUR 43.1 million from changes in receivables and liabilities to related parties and plus EUR 55.6 million from changes in other liabilities. These changes are primarily due to adjustments in the VIT group structure, minus EUR 60.6 million from changes in trade payables, plus EUR 70.3 million from changes in contract assets, plus EUR 29.7 million from changes in income tax receivables and liabilities, plus EUR 0.7 million from changes in other working capital.

The cash flow from investing activities amounted to minus EUR 673.8 million in the first 9 months of 2025 compared to minus EUR 73.7 million in the same period of 2024. This is composed as follows: Minus EUR 228.7 million in cash CapEx for 2025, primarily related to investments in the 1&1 mobile network; minus EUR 4 million for the acquisition of A1 Marketing, Kommunikation and neue Medien GmbH, minus EUR 450.5 million from the investments of free liquidity with United Internet, plus EUR 9.6 million in interest income from the investments of funds with United Internet.

The cash flow financing activities amounted to EUR 240.2 million in the first 9 months of 2025 compared to minus EUR 59.3 million in the prior year. This is broken down as follows: Minus EUR 14.5 million from the repayment of lease liabilities; minus EUR 8.8 million from dividend payments; minus EUR 5.8 million from other interest-related payments, plus EUR 290 million from loan proceeds; minus EUR 20.7 million in interest payments. As a result, we achieved a free cash flow of EUR 204 million in the first 9 months of 2025, a significant increase compared to EUR 63 million in the same period of 2024.

On the next slide, we present the bridge from EBITDA to free cash flow. We start with an EBITDA of EUR 409.8 million. Change in inventories contributed plus EUR 31.8 million. The decrease in contract assets amounted to plus EUR 70.3 million. Changes in receivables and liabilities to related parties resulted in minus EUR 43.1 million. The reduction in trade payables had an impact of minus EUR 60.1 million. The increase in other liabilities contributed plus EUR 55.6 million.

Other working capital changes amounted to plus EUR 4.3 million. Tax payments totaled minus EUR 35.4 million. Investment CapEx amounted to minus EUR 228.7 million. This result is in total free cash flow of plus EUR 204 million.

Let us now conclude with the forecast for the 2025 fiscal year. With a stable contract base, service revenue is expected to remain at the prior year's level of approximately EUR 3.3 billion. EBITDA is projected to decline by approximately 7.7% to around EUR 545 million compared to EUR 590.8 million in 2024.

Segment-specific expectations. Access segment. EBITDA is expected to decrease to approximately EUR 810 million, down from EUR 856.1 million in 2024. The decline is primarily due to higher than planned primarily costs for national roaming with Vodafone, resulting from slower-than-expected network growth at Vodafone and approximately minus EUR 20 million related to the transition to a new national roaming provider, which has no impact on EBIT.

1&1 Mobile Networks segment. EBITDA is expected to be around minus EUR 265 million. 2024, minus EUR 265.3 million. This includes approximately minus EUR 100 million in migration expenses and temporary network prepayments, which will no longer apply or will be reduced after the migration of all customers. Investment volume, cash CapEx is projected to be approximately EUR 400 million. 2024, it was EUR 290.6 million, primarily driven by the network expansion. The initial forecast of approximately EUR 450 million has been revised.

Thank you for your attention so far. I would now like to hand over to the operator to open the Q&A session.

[Operator Instructions] And the first question today comes from the line of Ganesha Nagesha from Barclays.

So a couple of questions from my side. The first one on the CapEx guidance. So your CapEx guidance implies like EUR 50 million CapEx guidance cut. Is that moved to next year? Or how do we -- how should we see the CapEx trajectory ahead?

And my second question on the fixed segment. So could you please provide some color on the competition in the fixed market? So the broadband net adds have been weak in the recent quarters. So how do you see the trends ahead?

Thank you. To your first question, to the CapEx, we have reduced our CapEx guidance by EUR 50 million because there will be some projects that will be finished in Q1 and '26, not in Q4 '25. We will, therefore, postpone EUR 50 million to the coming year. We will make up for these expenditures in the first and second quarter of the next year. To your second question, we continue to see aggressive competition in the mobile business. The level of competition has not eased but nor has it intensified compared with recent quarters. In the fixed line business, the competitive situation has remained unchanged compared with recent quarters. Let me say this in a matter of principle, we will stay rational and balanced, and we will always keep an eye on our profitability.

And the next question comes from the line of Dhruva Shah from UBS.

I have 2, please. The first is just on competitive dynamics and how you're seeing the German competitive landscape, primarily in mobile but also you already touched upon broadband. But then now that your migration over to your own network is now complete, should we expect to return to more than 100,000 net adds on mobile per quarter as seen historically? And could you give us any indication of when you may expect the broadband net add base to stabilize?

The second question is just a follow-up because you mentioned that EUR 50 million lower CapEx expected this year is going to be pushed out into 2026. But does that mean that 2025 will still be a peak CapEx year? And just linked to that, is it being pushed out because you're going slower on the network build? Do you still expect to reach the 25% population coverage requirement by the end of the year? And just linked to the network build, if you could kind of give us an update on how any discussions with the other operators are going with regards to them giving you low-band spectrum, that would be great.

To your first question, as mentioned before, we continue to see aggressive competition in the mobile business level competition in the Northeast. It's like in the recent quarters. Because of the CapEx, we have reduced the CapEx guidance by EUR 50 million because there are some projects that will be finished in Q1 '26, not in Q4 '25. That's the only reason why we reduced the CapEx. And if it is peak CapEx in 2025, it's hard to say at this moment because we are not having a detailed budget for '26 at this moment. I would expect that the CapEx will be in '26 in the range of [ EUR 25 million. ]

Because of your broadband question, broadband remains challenging. Although fiber optic expansion is progressing in Germany, overall progress is rather slow. This is compounded by strong competition, including from around 200 [indiscernible] in the fiber optic segment, which blocks customers from switching to us during the initial 2-year contract period. In addition, the sales approach is door-to-door in contrast to our traditional online approach.

But the market is increasingly becoming a switching market. More and more contracts run out of the 2-year initial contract period, and we are preparing for this in order to gain a fair share in this segment in the future. However, this is more an issue of '26 and '27 onwards. This year is and was a transition year for us. I think next year, we should see better broadband performance as in 2025.

Sorry, sorry, I forgot one question, the 25% coverage. It is important to distinguish how many antennas are needed for high-performance network that reaches into areas and homes and how many antennas are needed to meet the coverage requirements in the Federal Network Agency measurement procedure. We expect to use up to 2,000 antennas to achieve this. The coverage will be measured outside the building to cover the requirements, and we will have 25% coverage by the end of December 2025.

[Operator Instructions] And your next question comes from the line of Florian Treisch from Kepler Cheuvreux.

Due to no response, I will now hand the call back to Oliver.

Thank you very much, Sharon. And Florian, in the case your line is broken, and we, of course, can settle your question in the aftermath.

I thank you very much for your attention. And as usual, we will be available for further discussions but not over the next 2 days. That will be difficult because we are attending the Barcelona conference to present our success story with the 1&1 OpenRAN.

I may now return to the operator and after a short break, wish you an interesting meeting and the call with our parent company, United Internet. We wish you all the best. Stay healthy. See you soon. Thank you very much.

[Interpreted] Hello and welcome, ladies and gentlemen. On behalf of the Board of 1&1 AG, I would like to warmly welcome you to our semiannual conference. In this context, our Board members, Mr. Dommermuth and Mr. D'Avis, will speak about the figures for the first half of the year, and we'll be happy to take your questions after the presentations as usual. Thank you very much. And I'll give the floor to Mr. Dommermuth now.

[Interpreted] Well, good afternoon, ladies and gentlemen. Let me present the figures of the first half of the year and the status of the development of the 1&1 Mobile network. And after that, Mr. D'Avis will present the figures of the first half of the year to you. We are active in the field of broadband connections and mobile connections. At the end of the first half of the year, we had 3.89 million broadband connections. We have fiber optic connections and VDSL and FTTH complete. And we use 1&1 Versatel as its own transport network, combining it with the local networks of Deutsche Telekom or regional carriers such as Deutsche Glasfaser, M-Net, NetCologne, OXG, Westconnect, et cetera. We have an excellent network quality.

We have once again been won an IMTEST competition that is the test performed by Connect with a rating of 1.3. We won the national competition, but also the regional competition. In the past, we were the best on -- ever again, we were the best nationwide, but there were individual regional suppliers that were better. Now we're the best regional as well. Customer satisfaction was also rated as us being the best by IMTEST again. So we're the best supplier in terms of customer satisfaction for private customers for Internet connections. We also won the competition for mobile phone connections. The customers surveyed elected us as the best. We have a total of 12.44 million mobile contracts in the group. We are operating the first Open RAN network in Europe, fully virtualized. We have a primary brand 1&1.

Then we have co-branding with GMX and WEB.DE and our discount brands, yourfone, smartmobil, winSIM, et cetera. The customer contracts decreased a little bit over the first half of the year, 60,000 fewer contracts from the mobile Internet with the broadband lines. We have as many as -- sorry, with the mobile Internet, we have the same number, 12.44 million. We decreased a bit with the broadband lines. We have been migrating to 1&1. We're losing some customers in the context of this migration because they say, "Oh, I don't use them anymore or they say you have a roaming partner, say, Vodafone, and I live in an area where Vodafone has a poor coverage and so I have a poor connection now, and that's why I don't want to retain this contract.

And this is why our growth is offset by the losses from this migration so that the number of contracts is unchanged. In the third and fourth quarters, we will return to having a little bit of growth again. We have, by and large, concluded the migration, about 2 million customers still have to be migrated, but you would see that in -- reflected in an increase in the number of contracts again. We're not happy with the revenue. It's a little bit less than last year. We are preparing our cooperation with Deutsche Glasfaser. It will take a few months before our grids are connected. And if we can't provide individual points during some period of time, then, of course, we won't be able to retain customers, but this is why we believe that we can turn this around. It continues to be a difficult business, and we still don't want to reduce our prices to buy back market share.

Turnover development is a little bit better than it used to be, 0.1% more with service revenue where we have high margins then we have long-term mobile phone contracts that usually amortize over 24 months, but we don't have a margin there. Then EBITDA down by segment. We normally report about the different segments. First of all, Access and then the ramp-up costs in the mobile network. The operating EBITDA in Access is EUR 414.5 million. We have 2 special effects that lead to the decrease compared to last year. The service revenue was unchanged, as you remember. First of all, we have losses incurred by changing from the partner Telefónica to Vodafone because there were components that were activated with the contract with Telefónica. We don't have that with Vodafone.

So if you compare this on an annual basis, we have identical service revenue, but we have a lower EBITDA. Also, the roaming costs were different than expected. We had made other assumptions concerning the Vodafone network expansion. We buy capacities that are in line with the overall network. And if the network grows more slowly than expected, then we have to buy more of these percentage shares than expected in order to provide the service to our customers. And in the mobile network, we have ramp-up costs that are higher than last year. Then CapEx, we are still investing into server rights and frequency transmission masts. Let's speak about the mobile network. We have 4 core data centers. We have 24 decentralized edge data centers in the final stage of ramp-up. We have 281 regional Far Edge data centers. The final target is 500.

So we still have some ways to go there. And we had more than 1,200 active masts in operation as per June 2025, more than 4,000 are being developed. What does that mean? We have to sign lease contracts, then build the masts. Sometimes we also have the mast already in place. Maybe the antenna is on top already. Maybe we need to connect it to the fiber optic network or the fiber optic network may be there already, but it may not be connected to a fiber optic hub yet. So that is a bit of a head wave that we're pushing ahead of us. How we differentiate our network from traditional networks? Well, we have an open system, Open RAN network. We don't cooperate with ZTE. We use standard servers and standardized interfaces. The network is a cloud that runs in data centers on standardized servers, and we control the software there. We have gigabit antennas in every site. We always have a fiber optic connection, never a long connection.

There must only be a maximum of 10 kilometers of fiber optic cable in order to have no latencies. Also, data processing on site is possible in the data centers so that we can have real-time connections. We have a pretty efficient network. We need 10% to 30% less power than comparable networks. We have 3,200 employees in our different locations across Germany. And we have an ecosystem with more than 100 partners. I said it before, we cooperate with partners with -- for provision of antennas, but we have no dominant supplier who imposes their standard. About 50% of our suppliers come from Germany, 40% come from the rest of Europe, 10% from the rest of the world, but none from China. We were able to continue our migration in the first half of 2025.

We have now more than 10 million customers in our network. I said that we will conclude the migration in the next month, and all of our customers will be running on our network. We won't have to have any indirect customer relations anymore. There was a press release by the Cartel Office with our dealings with Vantage Towers that have been going on for 2 years. The Cartel Office said that they consider the delay in the provision of antenna sites as an abusive restriction of competition. Vantage Towers can now take -- make a statement to counter this statement as well, but we expect the final assessment at the end of this summer.

Then the Federal Network Agency extends the frequencies until 2031 and they are actually extending it beyond '31, to the end of '31 or with Telefónica a little bit longer even. And the Federal Network Agency said that 1&1 needs to be taken into consideration. So the 3 suppliers have to make frequencies available to us. So Telefónica must continue making available the 2x10 megahertz for us. So that was a requirement that Telefónica had to make the frequencies available. And this requirement is to be extended by 5 years. And Deutsche Telekom, Vodafone and Telefónica were charged with making at least 2x5 megahertz low band available for shared use. We need to negotiate that now. I hope that we managed to do that quickly and that will then have a good situation in order to continue extending the network, so much on the status of the network, and my colleague, D'Avis will go through the figures now with you in detail.

[Interpreted] Thank you, Mr. Dommermuth. Also, I'd like to welcome you here. And I would like to introduce you to the figures of the first half of the year of '25 and give you a perspective on the expectations on the second half of the year. And I'd like to start with the revenues. The revenue amounted to EUR 2.006 billion in the first half compared to EUR 2.015 billion in the first half of '24, which is a minus of 0.5%. The high-margin service revenue rose by 0.1% to EUR 1.647 billion. And while the low-margin hardware revenue declined by 3% to EUR 359 million. The development of the hardware revenue increased to EUR [ 1.16 million ] and the result, therefore, dropped from EUR [ 117 million ] to EUR [ 649 ] million, which is a drop of 12%. The gross profit fell from EUR 557 million (sic) [ EUR 716 million ] to EUR 694 million, which is a minus of 3%.

And this mainly drops from the input costs to the landline segment, which is due to the Vodafone development and the change of the national roaming from Telefónica to Vodafone, which is EBIT neutral. The gross profit in the mobile network, due to the increase in depreciation and the migration of the existing customers to the 1&1 net was at minus EUR 204 million compared to minus EUR 149 million (sic) [ minus EUR 159 million ] in the first half of 2024. The sales costs (sic) [ distribution costs ] in the first half of the year dropped to minus EUR 272 million, which is an increase of 3.6%. This is mainly due to the intensified marketing of our unlimited tariffs in the first half of 2025. The administration expenses were slightly higher in '25 of -- slightly higher than the last year of minus EUR 57.5 million.

The balance of other income and expenses, EUR 28.7 million (sic) [ EUR 20.8 million ] was up from EUR 18.7 million. This is mainly attributable to the improved results from the collection and debt recovery processes and the losses on receivables and contract assets rose slightly from minus EUR 59.4 million in the first half of '24 to minus EUR 61.6 million in the first half of '25. The operating profit -- EBIT was, therefore, EUR 118.1 million in the first half of '25 compared to EUR 196.1 million in the first half of '24, the decline. The financial result was a minus of EUR 10.9 million, down from EUR 0.4 million, and this resulted in EUR [ 3.8 ] million of interest paid, and this is mainly from the use of free liquidity at United Internet and decreased by EUR [ 2.2 ] million due to lower interest rates.

The earnings before taxes, therefore, were at EUR 107.2 million compared to EUR 196 million in the first half of 2024. Consequently, tax expenses reduced to minus EUR 32.6 million in '25. In '24, this was minus EUR 60.1 million. And this means in the first half '25, we have a consolidated net income of EUR 74.6 million compared to EUR 136.4 million in the first half of 2024.

And following, I'd like to look at the balance sheet. The total asset rose from EUR 8.1 billion at the end of '24 to EUR 8.49 billion at the end of the midterm in '25, the increase mainly is attributable to the following effects. Current assets amounted to EUR 1.844 billion at the end of the year, rising by EUR 339 million, and this increase was driven by receivables from related companies in the frame of the cash management, these rose by EUR [ 155.1 ] million. This is mainly attributable to the client loss in hardware sales or drop in hardware sales by EUR [ 52.5 ] million and the nonasset -- noncurrent assets rose to EUR 6.307 billion in '25. This is mainly due to the increase in property, plant and equipment and the short-term liabilities increased to EUR 752 million.

And the decrease of liabilities to related companies and the increase of other short-term nonfinancial liabilities is mainly due to the recognition of our sales tax liabilities until the end of December '24, 1&1 was part of the United Internet VAT Group. And that means this was shown there. Since January '25, 1&1 is no longer part of that and this means the financial liabilities are assigned to the other noncurrent -- nonfinancial liabilities. The increase of other current liabilities is mainly due to the current installments for the frequency costs acquired by the auction in 2019.

The first installment of the 2 gigahertz frequency is due in January '26, and that increases the current proportion of the frequency liabilities. The long-term liabilities rose from EUR 1.603 billion (sic) [ EUR 1.305 billion ] to EUR 1.577 billion, which is mainly due to the loan taken out for investments from the 1&1 -- for 1&1 and the decline in the long-term financial liabilities is due to the lower term portion in the frequency liability offset. This was due to an increase in lease liabilities for further expansion. The equity rose due to the positive result from EUR 6.094 billion to EUR 6.16 billion.

Now looking at the cash flow. The net payment amounted EUR 229.5 million in the first half of '25 compared to a minus of EUR 24.5 million in the first half of '24. The positive change of the operating cash flow is mainly due to the advanced payments and the quarter agreement with Deutsche Telekom, which amounted to EUR [ 260 ] million nearly in '24 and which will no longer have to be made in '25. Other changes were the decline in consolidated net income by EUR [ 61.8 ] million, of which EUR [ 35.3 ] million is attributable to noncash depreciations, resulting in a cash flow of EUR 246.1 million. The operative cash flow in the first half of the year also includes, in particular, minus EUR 27.6 million from changes in trade receivables and other assets, a minus of EUR 46.8 million from changes in receivables and liabilities to related companies and a plus of EUR 50.7 million from the changes in other liabilities.

These 2 changes result in particular, from the change in the VAT Group, minus EUR 42.3 million from the change in trade payables and plus EUR 49.5 million in the change of contract assets. The cash flow from investing activities amounted to a minus of EUR 478.9 million in the first half compared to EUR 69.5 million in '24. This breaks down to a cash CapEx of minus EUR 118 million in '25, mainly from investments to the 1&1 Mobile Network, minus EUR 4 million from the acquisition of A1 Marketing, Communication and New Media GmbH Limited that is, minus EUR 360 million from the investments of free cash and cash equivalents from United Internet, plus EUR 3.1 million in interest payments from the investment in United Internet. The cash flow from financing activities amounted to EUR 250.2 million in the first half of '25 compared to minus EUR 45.4 million in the previous year.

This sets up by a minus EUR 10.5 million from repayment of lease liabilities, minus EUR 8.8 million from dividend payments, minus EUR 5.8 million by other interest-related payments, plus EUR 290 million from the loans and minus EUR 14.7 million by the interest payments. And this leads to a generated free cash flow of EUR 111.5 million, a great plus in '25 compared to minus EUR 58.5 million in '24.

Now let's look at the bridge between EBITDA and the free cash flow, which I'd like to present now. We are starting at an EBITDA of EUR 283.9 million. This was offset by an increase in receivable and other assets of minus EUR 27.6 million. The increase of contract assets, a plus of EUR 49.5 million. The change of receivables and liabilities to related companies amounted to minus EUR 46.8 million. The decrease in trade payments had an impact of minus EUR 42.3 million. The increase of other liabilities contributed EUR 50.7 million to the result. The working capital changed by minus EUR 10.5 million. Tax expenses amounted to minus EUR 27.4 million. Capital expenditures amounted to minus EUR 118 million, and this results in a total free cash flow of EUR 111.5 million.

Looking at the forecast for the business year of fiscal year 2025. With a stable contract base, the service revenue is going to end up -- should end up at the last year's levels of EUR 3.3 billion. With EBITDA, we expect 7.7% to approximately EUR 545 million. And for the Access operating segment, we expect the EBITDA decline to approximately EUR 810 million after EUR 856.1 million in '24. The decline mainly results from higher than planned costs for national roaming, the lower growth of the network, and minus EUR 20 million from direct payments to be made by changing the roaming provider. The EBITDA in the 1&1 Mobile Network will be constant or remain at minus EUR 265 million. This also has migration costs and which will be over when all the customers have migrated. The investment volume, cash CapEx is expected to amount to approximately EUR 450 million, mainly driven by the network expansion.

Thank you for your attention, and we will be happy to take your questions now.

[Interpreted] We have 2 colleagues here for the questions who will be taking microphones to your seats on either side of the room. We'll start at the front left from our point of view in the third row, the representative of New Street, Mr. Rickett.

I'm Ben Rickett from New Street Research. I have 2 questions, please. Firstly, can we get your latest thoughts on mobile consolidation in the German market? And specifically, whether you think the regulatory environment has become more favorable for mobile consolidation and whether you are interested in participating in mobile consolidation?

And second question just on your EBITDA phasing. So EBITDA stepped down in Q2 to EUR 192 million, I think, because of the higher Vodafone costs. But the guidance implies that, that now improves in the second half. So could you just help us understand what drives that improvement?

[Interpreted] Yes. Thank you very much. Let me start with a question concerning consolidation in the mobile phone market and our thoughts about this. I can read about this in the newspapers that competitors of ours say that it will be nice if we could consolidate the market further and if we had European champions, but I do believe we have European champions. We have companies that are active in several European countries. Deutsche Telekom, for instance, is active in, I believe, 10 European countries, just sold its business in the Netherlands, but they could have retained it and they could buy additional business in different countries. So there's no reason why they couldn't consolidate across borders as free shows it, they're expanding internationally.

When you consider reducing the number of suppliers from 4 to 3, then I can't really estimate what the regulatory environment to that is as far as I know, the idea is still to retain at least 4 suppliers in every country, but I don't know if that is true. And I know that this is being told for years now that 3 suppliers earn more than 4 and then you can consolidate the market and the money that we earn. Additionally, we can invest it in AI. That sounds good, but I don't know whether this will happen. You also asked whether we are interested in consolidation. And I don't think we're currently capable of participating in any consolidation beyond Germany. We have to do our homework in Germany first. And maybe this may come to pass at some stage, but it's not on the agenda now for us to participate or play a role in European consolidation.

[Interpreted] Well, concerning your question concerning the EBITDA phasing, in the second half of the year, the EBITDA in Access segment will be below the first half of the year. It will not increase. It will actually be weaker than in the first half of the year, which is, of course, due to the fact that we have higher cost with Vodafone due to the slower network growth. On the other hand, we're consistently improving our cost structure. And of course, we looked at where we can make savings, and we're quite optimistic that we will be able to do that in the second half of the year as well. But as I said, the second half of the year will be a bit weaker in terms of the EBITDA than the first half of the year.

Sorry, can I just follow up on the second. Were there any specific one-off costs in Q2, though? Because Q2 specifically was very weak.

[Interpreted] No, there were no special effects in the second quarter. The additional cost from Vodafone from the slower network growth have a bigger impact, of course, as the number of customers on the Vodafone network increases. And as we're migrating our customers to the Vodafone network, we've had more of this effect compacted into the second half -- the second quarter than in the first.

[Interpreted] I have 2 questions concerning the low band frequencies. When do you expect any effects? And what EBITDA effect do you expect because you will have to make a payment? Will that have -- immediately have a positive effect on the EBITDA or a negative one initially?

And second question, you have a credit line of EUR 290 million. Why did you take out this loan? And where did you take it out with UI or with the bank?

[Interpreted] Well, let me start with the low-band frequencies. I can't tell you when we will have agreement there. We still don't have an offer yet. Our competitors haven't made it yet. You know the business. These 3 will try to postpone this as long as they can to have a lot of questions. The offers will be completely unacceptable initially. So it depends how early and how forcefully the Federal Network Agency will intervene here. That will have an impact on the speed of our agreement. So we can't really predict that. You would really have to ask the federal network agency because they dominate this procedure.

Now you also asked what will be the impact on our EBITDA. It will have a positive impact because we have the infrastructure in place with the servers, the fiber optic network, the software, we have the low-band antennas installed on the masts already. So the moment we get the frequencies, the individual masts can produce more gigabytes because they can use low band as well. And these additional gigabytes, particularly after all the infrastructure has been paid off already are cheaper than the gigabytes that we buy via national roaming today. And the more antennas we build, the bigger the savings will be, of course. So that is correct.

[Interpreted] Concerning your question regarding the EUR 290 million credit line that we took out, the credit line was made available by United Internet who have a contract with JBIC, which is a Japanese bank, which is owned by the government. So this credit line is purpose committed to the expansion of the network. So this is what we're planning to do with it. Right now, we don't need this credit line yet, but we need some flexibility. And so it was important or a good opportunity for us. Maybe I can add to this for those who are not familiar with that, the JBIC is comparable to the German KfW bank and the credit lines are very inexpensive.

[Interpreted] I have a follow-up question on low band. I know it's very difficult to say something about the time line. But I seem to remember that the Federal Network Agency said in their decision that they will intervene no later than the end of 2025. Now how fast that will lead to an agreement, but is that correct?

[Interpreted] Yes, it will start even before that. The Federal Network Agency has developed a questionnaire now and every supplier has to -- every provider has to fill in this questionnaire now. And so now that nothing has happened, the Federal Network Agency has introduced some reporting so that they can see more clearly what are the individual steps being taken, who is doing what. When they will actually intervene actively, whether it will become necessary in the first place is something that will have to transpire going forward. But it's correct that by the end of the year, the frequencies have to be made available to us.

[Interpreted] We would like to take more questions, if you have any. Mr. Glaser, MPPM, on the right side, please.

[Interpreted] Volker Glaser, MPPM. I have a question on Vantage Tower and the Federal Cartel Office. If things remain as you indicated, what does it mean in monetary terms? Or what is your expectation? What you can negotiate -- what result can you negotiate based on the current situation?

[Interpreted] Well, of course, I can't predict the Cartel Office's decision. I can tell you what we would like to see. Vantage Towers have an obligation and they have to meet it. And that's our expectation as fast as possible. That's our interest in this that we've been pursuing since the get-go, we don't want to get any cash. We want to get the transmission towers. And that's where we're going. So if Vantage Towers have promised anything that they can't provide anymore because they've used mast for Vodafone already, they're welcome to substitute them by, for instance, building new sites, new towers, new masts in order to provide what they promised. That's my interpretation of the contract. So there is a commitment that they made. And if they can't meet their commitment because individual sites have been blocked already by Vodafone, well, then just build another one. That's no difference in quality for us. So that is the one thing, get those sites and get them quick.

And the second thing is, of course, that we have claims to compensation because Vantage indicated many sites for us. We built the fiber optic cables, and we never got the sites. So we have a situation where we had high investments that were incorrectly allocated. We just put them in place, and they're not good. So we want to get compensation for that. And then, of course, we had to buy roaming for many years rather than being able to provide services with our own infrastructure. So all of this is secondary. But the first thing now is to get the sites as soon as possible. And to make this clear, Vantage is continuously delivering sites, but much fewer than contractually agreed.

[Interpreted] But right now, you're on track that it's going faster, right?

[Interpreted] No, it isn't.

[Interpreted] So what would be the sum for the compensation that you're looking at?

[Interpreted] I can't tell you, I haven't calculated yet. One thing after the other. First, we need a clear decision by the Federal Cartel Office and our focus is on getting our masts as soon as possible, and then we will calculate how big the damage was.

Mollie Witcombe, Goldman Sachs.

A couple of questions, please. Firstly, I was wondering, could you give us some more color on the build and your confidence in hitting 25% coverage by the end of the year? What sort of form do you think that might take? You've said that there were 1,200 active sites, I think. I'm just wondering how many were built but not active so far? And are you still committed to building out the network beyond that point?

And my other question is a bit of a technical question, sorry. Apologies if I missed the explanation. Why was -- what motivated the change in the VAT group? I'm just wondering what the cause of that was.

[Interpreted] The speed, the pace of the network build after 25%. I understood that correct, but I wasn't able to understand the second question. Can you kindly repeat?

Yes. The VAT group, the tax group. I don't know the translation was...

Okay. We explained what we call in German [Foreign Language].

[Interpreted] Okay. I'll try it. Sorry for my English not being enough that I haven't got your question 100%. If I'm not clear, please ask again. So I understood your question, how many antennas are active? It's over 1,200. We are carrying on building new ones and increasing the speed by which we build. The question was, are you going to get the 25% coverage, if I understood you correctly. We have an obligation to cover 25% of the households to the end of the year. And there is a measuring equipment or measuring applied by the Bundesnetzagentur, which all others do, and they have to adhere to it as well.

And we do assume that 1st of January '26, we will be able to deliver this 25%. Maybe we have to differentiate between what do we have to build for a really good coverage, high-performance networks, high speeds in the area and into the households and what do we have to build to provide the minimum supply. And I think that is a difference. It is a difference. And if you build the network with the capacities like we are thinking of, you will need more antennas than you would need if you just fulfill the minimum obligations.

Sorry, you said 1,200 active, but I'm just wondering how many do you have that are built but not active yet.

[Interpreted] Currently, we have built, I think, 3,500. And out of these, we have about 1,200 in operation and the others are waiting for the optic fiber and the Far Edge computer centers and so on. But beyond that, of course, we carry on building every day. We are opening new sites with new antennas. As I've just said, we are developing currently about 4,500. So in total, we have 4,500 plus the ones that we already have up and running. So it's about 5,800, which are either active in the net or which are -- haven't built and not connected or where we only have a contract as yet.

[Interpreted] [indiscernible] member of the Board with 1&1, member of the Board with United Internet. So 2/3, that means we were economically integrated kind of now since Markus has left 1&1 and is responsible member of the Board for United Internet only, we are not integrated. Of course, we are integrated, but the measurement is only 1/3, and that has caused the changes in brief. We can discuss this later. I give you the rules and the framework, but I think [indiscernible] already has introduced something of this. Thank you very much.

In the case we have no other question with the last -- okay, Stippig from Warburg Research.

[Interpreted] A question on my behalf. If you have the migration completed by the end of the year and then have the 25% coverage, what would you expect in quantities in savings on your own net?

[Interpreted] Well, that depends on the frequency equipments that we have. If we have the low bands, the savings are bigger than if we don't have them. And the savings also depend on the reciprocal handing over in the roaming. Today, we have the handover in one direction only. That means if a customer gets -- moves out of a cell that we cover. He moves to Vodafone, but he doesn't move back. That is going to change. So the customer, when he moves on to an [indiscernible] cell, he will automatically roam back to us. That's going to increase the traffic. And in parallel, the amount of antennas that we are building, but we are not publishing precise figures there because that depends on the handover directions, the speeds of the antennas, all the antennas are different.

We have antennas in high-traffic regions and antennas in low-traffic regions. So if the high-traffic antennas are finished quicker than the low-traffic antennas are, we have bigger savings. So that's why we are not publishing the figures as yet. But what we're going to see next year in the mobile segment, we see major cost savings because the migrations will be over, and we will save the upfront payments in the international roaming, which we can buy if the customers are in our own net, and we don't have to buy it from Telefonica, which is much more expensive. And I have said already that will end up in savings of about EUR 100 million.

[Interpreted] Thank you, Mr. Stippig, and thank you to the audience. Maybe Mr. Glaser for a final question.

[Interpreted] Yes. It's quick. If you say you can save EUR 100 million, so consensus for next year's EBITDA is EUR 670 million. That's going the right way and CapEx. Maybe your take on that.

[Interpreted] Well, we haven't got a plan for next year as yet and have not discussed it with the Supervisory Board as yet. Of course, EUR 670 million EBITDA is no problem. We just have to save some marketing money or if we show more in the plan, we have to spend more marketing money to get us there. I can't give you the plan for next year as yet. But maybe in a nutshell, we want to grow on the customer base in parallel, generate more service revenue and with that more profit. And at the same time, our net should be more efficient. We think that next year -- this year, we're going to have a peak on the EBITDA side, and it's going to be better than that next year.

And then quite soon, as far as the net is concerned, we will move into a positive EBITDA. But the net has depreciations as well. So we don't have to look at the EBITDA only, but we have to take some more time for it. It's going to take a few years. And for all shareholders, it's important -- more important is what the cash is. And the cash will take even more longer, even longer in years. So we're going to see that we turn EBITDA positive, then the EBIT will turn positive. And again, a few years later, the cash side. That's the net side.

And the Access business, we expect a moderate growth with customers, with service revenue and in the results. But the plan is going to be done at the end of the year, and then we'll have to look at the market situation. You all know that the market is under pressure. Telefonica reduced prices a couple of months ago quite strongly, and that means that everybody has to think now on how to handle that, how far to accompany it, how far not. These are questions that we are putting to ourselves on if we want to take losses or not if subscribers being moving away.

[Interpreted] Okay. The final, final question, we'll have to take -- give the floor to our parent company.

[Interpreted] Yes, I'm happy to. Mr. [indiscernible]. Now do we still have the chance for the next 2 to 3 years to observe the situation as 1&1 investors or shareholders? Or is this only possible via United Internet in 3 years' time now. So the basic question is -- what about the revision in a first step, it was a clear signal that you believe in the network and that you have expanded it. But for us, as shareholders, a question, can we follow up on that in a direct communication to 1&1 or with United Internet?

[Interpreted] Well, we can only give you today's view because a few years from now, things can be different. But I can tell you how we see the world today. At the end of the day, you will decide this. So what was the situation we were offered several large packages. We took them over. And then we said, okay, our share didn't develop too favorably over the last few time periods. If there are requests to let go some of those packages and let's do that in order to -- for the share to recover. So let's make sure that we have enough free flow so that the share is actually being traded.

And that's the way I see the world today, and the same goes for my colleagues. So that's why it depends on you. If we're offered further packages at a reasonable price, then I would acquire them as United Internet. If they are not offered to us, then I wouldn't buy them. I wouldn't try to acquire them via the stock exchange. We don't have a target -- dedicated target that we can say, okay, we want to have a squeeze to do a squeeze out or something, then we would have made a different offer. What this is about is to take out any overhang, and we will have to see how things pan out from here.

[Interpreted] So let me conclude this event. Thank you very much for your questions. And as always, we're happy to answer follow-up questions in person. We will continue with a presentation by United Internet by our mother -- parent company after a short break. Thank you very much.