United Internet Aktie

Good day, and thank you for standing by. Welcome to the United Internet Quarterly Statement Q1 2026 Webcast and Conference Call.

[Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Dominic Grossman. Please go ahead.

Thank you, operator. Hello, and good morning, everyone. I would like to welcome you to our Q1 2026 Analyst and Investor Call. Thank you for joining us today. My name is Dominic Grossman. I'm responsible for Investor Relations at United Internet. And here with me today, I have our CFO, Carsten Theurer.

Briefly about today's call. Carsten will first take you through our presentation with the business development in the first quarter and will also give an outlook for the remainder of the year. Afterwards, we will be happy to answer your questions.

So far to our agenda, I would now like to hand over to Carsten. Carsten, please go ahead. The floor is yours.

Thank you, Dominic, and also a warm welcome from my side to our webcast on our 3 months figures 2026. Before diving into our figures, I would like to present the new reporting structure that we have adopted since the beginning of the new fiscal year 2026. Going forward, United Internet will only have the following 3 segments based on the names of the respective subgroups, 1&1, IONOS and Mail & Media. This streamlined reporting structure further reflects the changes due to the sale of 1&1 Versatel to 1&1 as the former segments, Consumer Access and Business Access will be only reported on a consolidated basis, the 1&1 AG. In addition, the former segments, Business Applications and Consumer Applications are renamed to IONOS and Mail & Media, respectively, which allows for streamlined reporting with reduced complexity.

Moving on to the financial performance on the quarter. Let us take a glance at our major KPIs for the group. Starting with the customer figures, we are happy to show that our customer contracts increased by 380,000 to over 30 million to 30.1 million in the first months of 2026. The strong momentum is especially driven by Mail & Media and IONOS with more details to come once we go through our respective segment performance.

Our revenue subsequently improved by 2.5% to more than EUR 1.55 billion. Group EBITDA grew by 2.4% to EUR 331.9 million. Our EBIT increased by more than 15%, which is driven by a significant decrease in PPA depreciation. Nevertheless, our amortization of intangible assets and depreciation of property, plant and equipment continued to increase as we continue to make investments in the rollout of the fiber optic network and the rollout of the 1&1 mobile network. As a result of the improved EBIT and lower taxes, we managed to increase EPS to EUR 0.36 per share, an increase of 44%.

Over the following slides, we will do a deep dive into our segment development, starting with 1&1. Overall, the number of customer contracts remained stable at 16.32 million customer contracts in the first quarter of 2026. Both the number of mobile contracts and broadband connections remained unchanged at 12.48 million and 3.84 million, respectively. On the broadband side, that is a positive development against the backdrop of the slight decrease over the last quarters. We are happy to see that our latest campaign that promotes the easy switch to 1&1 has been paying off, and we were able to put a stop to the churn.

While the competition in the mobile market remained intense in the first quarter, and we expect this environment to continue in the second quarter of this year, the performance is in line with our expectation. That means, in terms of revenue, 1&1 generated around EUR 1.1 billion, which is an increase of 1.1% compared to the first 3 months of the prior year. Service revenues have slightly decreased year-over-year and, in line with the business plan to almost EUR 900 million. Hardware sales grew almost 11% to EUR 246.3 million.

If we turn our attention to EBITDA on the next slide, we can observe that the segment EBITDA is stable at EUR 192.4 million. EBITDA in Q1 was impacted by an increase in wholesale costs. Due to the capacity-based model underlying the national roaming agreement, the slower-than-planned growth of Vodafone's own network usage resulted in higher costs for 1&1. In addition, as a consequence of the switch of the national roaming provider from Telefonica to Vodafone in 2025, the cost of certain network components are directly recognized in EBITDA, whereas previously under the Telefonica national roaming agreement, they were activated and depreciated. While both effects were fully reflected in Q1 2026, they were only partially effective in Q1 2025.

In contrast, savings on external mobile network wholesale services had an offsetting effect in Q1 2026 [indiscernible] as an wholesale services is being produced within the company's own mobile network. The EBITDA margin is thus largely unchanged and in line with our expectations.

Next up, let's proceed with the performance of IONOS. IONOS increased their contract portfolio by 300,000 contracts to 10.35 million. This surge is driven both by winning customers domestically as well as abroad with our operations abroad performing even stronger. Revenues in this segment increased by 5.7% to almost EUR 350 million as a result of aforementioned strong customer growth and up- and cross-selling. Excluding foreign exchange impacts, the revenues growth is even higher with 7.6%. We have invested in higher marketing expenses compared to previous year. Despite that, EBITDA increased by 5.5% to EUR 112.2 million, and the operating EBITDA margin remained strong above 32%.

To conclude the segment deep dive, this brings us to the performance of the Mail & Media segment. The number of pay accounts rose by 80,000 to 3.43 million in the first quarter of 2026. By contrast, due to seasonal effects as well as the successful ongoing conversion to pay accounts, ad-financeed free accounts were down by 220,000 or 0.6% compared to year-end 2025. The Mail & Media achieved a revenue growth of 7.6% to EUR 79.3 million, driven primarily by growth in pay contracts as well as a positive development on the advertising side of the business. There was also further growth in EBITDA with operating EBITDA increasing by 70.3% to almost EUR 30 million and corresponding improvement in our operating EBITDA margin by more than 3 percentage points year-over-year to 37.6%.

Besides the underlying operative business performance contributing to the growth in EBITDA, the increase results from the acquisition of the server infrastructure used in IONOS Group's data centers, which was previously leased from IONOS. Following the acquisition effective January 1, 2026, the prior incurred lease costs fully expensed through EBITDA as OpEx, have been shifted. The acquired infrastructure is now recognized as capital expenditure on the balance sheet and depreciated on a scheduled basis, impacting EBIT.

So much for the segments. Here, we have summarized additional KPIs for the group. At around EUR 118 million, our CapEx was down year-over-year from EUR 122 million. This confirms that we are on track to finish the year below the elevated levels in the past 2 years. Our free cash flow improved significantly year-over-year, turning positive to the first 3 months of the year with more details on the next slide. The net bank liabilities increased by 4.3% to around EUR 3.3 billion as our net bank liabilities reached their peak ahead of planned repayment, while our equity ratio rose slightly by 0.4 points to 44%.

And this slide shows you the bridge of our EBITDA to free cash flow. One of the main contributors to our outflows this period is CapEx totaling EUR 115.2 million. This reflects ongoing investments in our infrastructure across fiber optics mobile networks and data centers, which highly contribute to the digital sovereignty of Germany and Europe. After accounting for taxes and changes in working capital, our free cash flow before leasing stands at EUR 47.5 million, a significant improvement year-over-year. And therefore, our free cash flow after leasing amounts to EUR 3.7 million.

And finally, a brief word on the outlook. So far, we are right on track. And looking ahead, we fully confirm our guidance for fiscal year 2026. As broadly discussed, we are planning with a back-end loaded CapEx development like in the previous year. So it's a bit too early to specify the range we've indicated.

So much from our side, and we are now available for any questions you may have.

Carsten, many thanks for your explanation. Now I'd like to start with our Q&A session. The first question, please.

[Operator Instructions] Our first question today comes from the line of Polo Tang from UBS.

So apologies, I missed the 1&1 call because it clashed with Vodafone. But really, it's just a question in terms of the evolution and the development in terms of the mobile network build. So you have an 18-year NRA with Vodafone with costs being relatively fixed. It seems less likely that you will get low-band spectrum. So my question is, does it really make sense to continue and progress with a mobile network build? And can you remind us where you are in terms of the number of active cell sites and where you expect to be at the end of the year?

Polo, thanks for your questions. Concerning the spectrum discussion, discussion is still ongoing. There is still the draft from the BNetzA on the table since February. We are still waiting how this will end. But we will continue building out our network as the next spectrum auction will be in 2030, then. And therefore, we try to reach then the low-band spectrum. For the time being, we have a bridge -- we have a solution to bridge the situation with our national roaming agreement.

About the speed of our network rollout, it's still the same. It's up to 200 to 300 each quarter, and we are almost in line with that in the first quarter. So we will end at the end of the year in 4x of that, so we can think about that we will end up at about 3,000 at the end of the year.

[Operator Instructions] Your next question today comes from the line of Nizla Naizer from Deutsche Bank.

I have 2 questions from my end as well. And one is something that we tend to ask you every quarter, Carsten. But when you look at the portfolio of the company now and your 64% stake in IONOS, how do you view that stake? Are you happy to remain long-term shareholders? Could there a be scenario where you feel like you'd want to lower the stake to sort of fund projects elsewhere? Could you give us some color on how you think about your IONOS investment?

And second, on United's own sort of leverage and capital allocation, anything there that you can comment on whether -- how you're happy with the leverage target levels at the moment? What's the target leverage you'd want to be within? And is there anything else you could consider if you think there's some balance sheet flexibility? Or is 1&1 the priority now in terms of getting that network rollout done? Some color there would be great.

Thank you, Nizla, for asking the questions. So let me start with IONOS. As mentioned before, we are still happy with our stake in IONOS, and it's very, very well growing business. And therefore, we are happy to have those investments. Considering the ongoing AI trend and momentum in the sector for digitalization, we continue to see additional potential. In our view, it is therefore too early to leave the party. It means we will be still the anchor investor for the IONOS for time being.

On the leverage side or the capital allocation side on the UI level, we -- as mentioned on the year-end meeting, we still aim to reduce our leverage to a target of 2.0 multiple in meaning of net debt divided by EBITDA. And at the same time, we are basically open to do more share buybacks again as in the past, but nothing is decided right now.

[Operator Instructions] And the next question comes from the line of Karsten Oblinger from DZ Bank.

It's Karsten from DZ Bank. I would like to come back to the low-band topic. So did I get you right that the low band is off the table now and then that you have to rely on the Vodafone solution? Or is there a chance that you will get low band later on this year?

Thank you for the question. It's not off the table. We are still waiting for the final decision. As mentioned in the 1&1 call before, there is a solution with 6 million each year over the 5 years for all competitors, but there is no final decision. We are still fighting for a final decision, which will go in our direction. But it's too early for us to give you the right outlook if we will be successful or not. We're still believing in doing that. But what I mentioned before was even if we not will get access to the low band in this process, then the next option will be 2030, and then we will get low-band access for sure. And in the meanwhile, if we don't be successful, then we will bridge that with the solution with national roaming with our Vodafone agreement.

We will now take the next question. And the question comes from the line of Gustav Froberg from Berenberg.

Just a follow-up question again on the low-band topic. And maybe this is a pointed way of asking it. But from your perspective, is there any reason why you should not receive low-band spectrum this time around before 2030? Or is this only a matter of time? I'd be very curious to hear how you're thinking about the topic.

Thank you, Gustav, for your question and also for asking us the low-band spectrum. In our opinion, and that is what we are fighting for, there is no reason why we should don't get any access to low band because we apply for building up a network and to be a full network provider, there is necessary to have access to low band, and that is still our meaning, and that is still the way we are fighting for. And all other words I mentioned are only the options if that will be not successful but we will still fighting for it. But it's been, it's kind of a lawsuit route. So it's not that easy to see what the final outcome will be for us.

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

Thank you, operator, and thank you, everyone, for attending our call today. Please feel free to contact us for any follow-up questions. We wish you a nice day. Stay safe, and goodbye.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Ladies and gentlemen, dear guests, welcome to the Analysts and Investors Conference of the United Internet Company. My name is Dominic Grossman, and I'm very happy to welcome you in-person here to Sofitel in Frankfurt. I would also like to welcome all participants in the webcast.

I'll be happy to take you through our agenda of the day. First, Mr. Dommermuth will speak about the developments of the fiscal year 2025 and give you an outlook on the current business fiscal year of 2026. After that, Carsten Theurer will give you the details of the financials.

Ladies and gentlemen, after our presentation, as usual, you will have the opportunity of asking your questions in the Q&A session. So much by way of introduction, I'll give the floor to Mr. Dommermuth.

Thank you, Mr. Grossman. I think we've all met before. Those of you who haven't been there, welcome on my behalf as well. Mr. Grossman has taken us through the agenda. I will start with the company development. Many of you know this. We work in the Internet access and applications. We offer that for consumers and business customers. In the middle, you see our assets, our team and our infrastructure. We have over 10,000 employees. Our optic fiber network is 86,000 kilometers long. We have a 5G mobile network, and we operate about 100,000 service. We offer our products in different brands in the consumers, mainly the 1&1 brand, other brands which we have taken over from Drillisch and in the business customers, 1&1 Versatel and applications for the consumers, we offer in GMX and WEB.DE, mail.com.

Applications for small, medium-sized companies, mainly driven by IONOS or the IONOS subsidiaries. You see them here on the chart, companies that we have acquired over the years, Strato in Germany, for example, Fasthosts in England, Arsys in Spain and so on. And we have some minority shares companies that we cooperate with.

Let me start with the Access business. We have just heard in the 1&1 conference, 3.8 million broadband connections, 12.5 million mobile contracts, our own Open RAN, fully virtual networks, reaching 27% of the households as per end of the year '25, over fulfilling the requirements of the authorities, high customer satisfactions in Internet Access and also in the mobile range. First place in both competitions on the connect customer range.

Customer contracts, minus 70,000 in the access, minus 110,000 broadband accesses. I've just said that we get a hold on this. And the mobile contracts are -- is a bit dampened by the migrations of our customers in the last year. Our turnover revenue, 0.8% growth. Service revenue stayed about the same. Others, especially selling smartphones, tablets and so on, 3.7% plus.

EBITDA in the Consumer Access as a total, a minus of 11.7%, I'll reason this. If we look at the individual segments, we have the segments [Foreign Language] 1&1 mobile network with EUR 265.3 million. The cost for the same figure as in '24. And in the segment EBITDA excess, which is our end customer business, 8.1% less EBITDA with the change of the national roaming partner. And this is reasoned by Telefonica activating a part of the costs. Now we don't have this activation anymore. And it's the Vodafone network is growing slower in '25 than we had expected.

Looking at the business access range. Here, we work with 1&1 Versatel 68,450 kilometers of network, 350 biggest cities in Germany and 29,000 directly connected customers, 2 handover points, 2 antennas or handover points, 2 telecom or regional carriers. The turnover increased by 2.1%. Also the EBITDA, 2.1% better, EUR 177 million (sic) [ EUR 167 million ] higher than before despite the starting costs.

Application business in the fiscal year starting with consumer, GMX, WEB.DE, mail consumer, we offer a broad consumer portfolio for information management, e-mails, calendars, online office, cloud storage as well for the photos on your cell phone, for example, we fund this by -- we differentiate by the German data protection, German service last year, we won over more than 60,000 new accounts, 360,000 pay customers. Usually, we start with a free account and step-by-step, migrate the customer to a pay account. We did very well in that last year.

We have 310,000 additional pay accounts. Free accounts also from the conversion is dropping due to the conversion, and we have increased the revenue by 8.1%. That's good, EUR 322.6 million driven by the better monetization and the pay accounts also due to advertising. Parallel to the revenue, the EBITDA grew a little bit more even, 8.7% to EUR 123.1 million. This is a business that we've been doing long years, developing well, and we are optimistic for the year to carry on with good opportunities in the future.

Looking at AI, which we implement or in our services or offer as add-on to extend the business. Business applications, the last range I'd like to present here, driven by IONOS, IONOS subsidiaries. IONOS is the leading digitization partner for small- and medium-sized companies in Europe, a cloud enabler, 14 European countries and in the U.S., Canada, Mexico, a large product range, presence in the Internet. We need domains for that, website for that, e-shops, online marketing tools and so on and also products concerning office organization, business e-mail with opportunities to administer different accounts, office suits, online storage, for example, to store your e-mails legally correctly or bigger data management, AI assistance, cloud infrastructure, a broad range, all at higher security standards developed in Germany and the EU, all conform with the data protection laws.

Customer contracts have increased here, driven mainly from growth abroad with 5.25 million. The domestic contracts, 4.8 million. Germany, good and still ahead, but the international business growing stronger. We could compensate in the business applications, the drop of the dollar. So the growth here, good EBITDA, 19.8%, well scaled EUR 464.1 million, 35.2% EBITDA, major margin. An overview to what I said, 700,000 new customer contracts up to 29.72 contracts. Revenues grew by 1.9%, EBITDA, 2.4% EBITDA due to the invest. EBIT is a little less, 11.5% less due to the EUR 42 million of depreciation.

EPS, EUR 1.23, a plus of 43% due to the difference in the taxation. What are we going to see in the future? This year, we want to increase our turnover to EUR 6.25 billion. The EBITDA should end up at EUR 1.45 billion, EUR 170 million more compared to the year before. Cash CapEx, we see at EUR 600 million, EUR 650 million. We've just said this at EUR 1&1 before. We've invested a lot into decentral and regional data centers. That's going to slow down a bit. We have EUR 350 million already up and running. So the cash CapEx is a little lower here.

What's going to change in '26? Besides the figures, we are going to report by segments. We are going to use the Access business after selling the 1&1 Versatel, a new segment consumer access since January '26. So when we meet next time on the quarter figures, it will be set up a new and it is then called [Foreign Language ] 1&1 Mobile network will be taken out and consumer access will then be called consumer and small business, showing that we address small businesses as well.

There's going to be a new segment, which is then 1&1 Mobilfunknetz network together with Business Access, and it's going to be called Enterprise & Networks. With Versatel, we address large customers. And besides the Versatel network, we have the Mobile Network in this segment as well because we think that is a clearer structure for you having the pure let me call it, resale business, consumer ask us, consumers buy at enterprises and networks.

Enterprises & Networks is the wholesale business due to the networks that we have. So this is the idea of the new segmentation.

Okay. And now I'd like to ask Mr. Theurer to explain the financial figures to us.

Welcome again. Basically, everything has been said again. I can tell and explain it to you in a different -- from a different perspective from a cash flow view. So let's start with an overview of the key figures for the group. Mr. Dommermuth already said that we were able to increase our customer base. We have added 0.7 million users, mostly from consumer business, i.e. IONOS, IONOS with business applications with 460,000 and consumer applications. You can see that the pay accounts on the next line with 310,000 customers who we could convert from ad finance free accounts to pay accounts. That's why the ad finance free accounts are slightly decreasing because we converted them to pay accounts, which works very well and gives us a nice recurring revenue in this business model.

Revenue overall increased by 1.9%. We had an EBITDA growth of 19.8%. That's a main driver on the group level -- sorry, EBITDA was 19.8%. That was a mistake. That refers to the next line. EBITDA growth. We see a growth here of 19.8% of Business Applications, where we have an increase of 2.4%. What's different here, as we heard with IONOS earlier, due to the IFRS 5, we have a discontinued business unit Sedo within the P&L that was disregarded. But in the balance sheet, it's included and in the cash flow as well.

So we see it in the cash bridge later on that those are the rules of the IFRS 5. So the EBITDA, all figures without this segment EBIT, we can see the effect of the higher depreciations here. So we have a slight decrease of 1.9% compared to 2024.

Cash flow, we have a positive trend and significantly increased cash flow by EUR 70 million. This comes from cash flow from change in business activities. We have a positive cash flow. This is due to our payment of convergency payments. That is a volume that we paid, EUR 200 million that we paid in advance and it will be used up over time over the next few years. So that means that it's no longer a cash payment was made over the last 5 years already.

The net cash inflows from operating activities, we see a net inflow through investments. We have a dividend, the catch-up dividend that we paid last year. We have the acquisition of the 1&1 shares with over EUR 200 million that we managed in 2025, and we have a buyback program for our shares that started in the last business year and extended into this year with IONOS. That takes us to a free cash flow after lease, which has significantly increased by EUR 18 million from EUR 47 million in 2024 to EUR 320.6 million in 2025.

Cash flow bridge from EBITDA to free cash flow. You can see we have a slightly increased EBITDA compared to 2024, and I'll focus on 2025.

Now then we had AdTech added because it is necessary for cash flow considerations. We had a similar CapEx, a little bit less than last year. You can see EUR 730 million right now. Investments into the extension of our network mostly. And you can see the biggest difference here in taxes. What is that to? Well, you can see last year, 2024, we had a normal tax as it were by the end of -- or at the beginning of 2025, backdating to beginning of 2024, we had Versatel integrated into the Tech Group. So we had an advanced payment for these taxes that we didn't pay back in 2024, but in 2025, the advanced payments have a positive effect on the taxes in 2025.

So we have a positive effect. And therefore, we have this big discrepancy because these 2 figures, and we have the working capital pretty constant in 2025 compared to 2024 of EUR 508 million and leasing -- minus leasing that takes us to a free cash flow of EUR 320 million of just EUR 270 million more than 2024.

Now let's take a look at the balance sheet. I won't read out every detail here. Maybe the most important topics you can see that the fixed assets grow fast. We have EUR 350 million added here, particularly through our investments in our fiber optic network. Then we had the contingent payments from telecom where using those up over the year. So we're activating those now. So nearly identical balance sheet, some despite increased intangible assets.

Let's take a look at the liabilities and equity, and we can see that we've increased those by EUR 350 million. Trade accounts are decreased. Liabilities due to banks have increased, particularly in order to finance the CapEx, but also due to the share buyback and our dividend had a negative impact on our cash flow. So we have a net debt of EUR 3.2 billion at the end of 2025 with a leverage of 2.48x at the end of 2025.

The other financial liabilities have slightly increased the leasing additions that we've seen, then lower frequency liabilities on the other hand. And equity has slightly decreased, but the ratio is still at 43.6%. So that's still a pretty solid equity rate -- equity ratio. So that takes us to the end of the financials here, and we're happy to take your questions if you wish to ask any.

Okay. So much concerning the presentation. Let's start with the questions and answers. [Operator Instructions]

First of all, on the left side, [indiscernible] bank. I have 2 questions concerning IONOS. First of all, concerning the data center that was planned since the beginning of last year or the summer of last year, is there any news? We never heard anything about it.

And the second question is concerning the revenue development. For Cloud Solutions, that's a bit behind schedule. Could you give us some reasons for this and maybe give an outlook for the next couple of years. What are the current plans?

Well, we're not the IONOS Board. I'm on the Supervisory Board, but I'll try to give you the best answer I can. If you speak of the plant data center, you're probably referring to the potential EU gigafactory. We're still waiting for the tender, which is being delayed again and again. The last thing I heard was end of March. And once we get the tender documents, then we or the IONOS management can determine whether it suits or not.

Concerning Cloud Solutions, I can tell you very little about this as far as I can tell, the business is going very well so far, but I really can't say too much. Well, I might be able to give you some information there. We had some headwinds in the last couple of years, but this leads to tailwinds right now. So we've had a quite good start in the first quarter, and we're quite optimistic that we can grow by double digits, particularly in the public space. And so we're quite optimistic looking forward there.

Next question, Polo Tang upfront here.

Polo Tang from UBS. Just a clarification question in terms of tax because your tax stepped down quite notably to less than EUR 100 million in 2025. I think it was EUR 250 million in terms of 2024. So how should we think about the tax charge going forward?

Yes, we have to make a distinction here between cash flow. We have to make a distinction between the cash flow. I showed that in the cash flow bridge and what is declared in the P&L. We have 2 different effects with the cash flow, we had the impact of the United Internet.

And in the second step, the sale to 1&1 of Versatel. We have the tax group Versatel including 1&1. So in 2024, it was for UI because the tax effects were similar for UI. And now we have the same thing for 1&1 Versatel. So due to the losses of Versatel included into 1&1.

So in 2027, we'll go back into a normal level. But in 2026, it will have an impact on the P&L concerning the taxes. So the main special effect was cash back from the advanced payments from the year 2024.

Next question on the right-hand side.

Yes, Mr. Dommermuth, my question also refers to IONOS, basically from investor to investor again. Since August, there have been opportunities for AI. We discussed them and everybody understands them. But since August, the opposite has occurred because everybody believes you probably is that there is a threat to the IONOS business model. And I would like to know what your current view of this is?

It won't surprise you that I'm quite relaxed in this context. I hope it's not a misjudgment. You've seen that last year, we increased our EBITDA at IONOS by 20%. The management gave a guidance of increasing it by another 10% this year. So I'd say business is going well there. But it doesn't necessarily mean that it will continue to do so. You mentioned quite rightly that the question remains whether we are setting the right track. And the big issue is what about AI.

And if you look at IONOS figures, we have a share price of up to EUR 43, which rose very fast, but then dropped very fast as well. But we have to see that our peers had more severe losses, have a 1/3 peak value and another competitor is down to a 6 of their peak value. So the entire segment has come under pressure.

Question is will AI be a benefit or detrimental to us. I think it will be beneficial. Why? Because we see the opportunity for a new business field, AI for small and medium-sized enterprises. I think we're excellently positioned there with the number of our customers, the type of our customers, our sales capacity, and we can see that it's going very well. It started very well. We're at the very beginning still. We are increasing the number of AI agents. We try to increase our sales efforts, and I see a lot of opportunity for additional business. At the same time, we're including ever more AI into our products. And in making our products in programming, we gain a lot of efficiency.

Now that's my personal view of things. It doesn't have to be right. Now where does this skepticism come from? It comes from new possibilities of building a website with so-called vibe coding and there are small new companies that are excellent in doing this, Lovable and keep's popping up here. And I don't see why that should affect us much because we ourselves well the value creation involves in making a website, building a website is not our main value creator. We makes the infrastructure available so we will also offer a vibe coding in a few months from now.

So I don't see any reason of why this [indiscernible] bypass us. I think the ooze are in the field of creating website is a core business there more effected. But even if you build a website via Lovable you still need that the main for that if you build the website with Lovable you still register the website with us because through a cooperation with an American supplier called [ Entry ], you wind up with [ entry ] again. So we cannot only sell the domain. We have a customer relation then and we can sell more products.

So the website has to be hosted some place. And with Lovable, there's a premium model. You can use a lot of products free of charge, then the next level is $25 and the final premium level is $50. And that's much more expensive than with IONOS, I told you about the share price development of [indiscernible], which crashed by 5% to 6%, and they have this premium pricing model as well, and that's not our model or IONOS, the IONOS model.

I think we still will continue to have this business model. We have a good customer growth. We expect even better growth this year. But maybe we just don't see the problem or the risk. We see opportunities more than risks.

Would it be an option? IONOS has its own share buyback program that you increase your share with United Internet? Or don't you see that as an option?

Well, if you ask me what I would like to do, I might go ahead with this, yes. If you ask me what I could do that, I would delist IONOS but if you ask Mr. Theurer, he'll tell me immediately about the high debt rate and all the things that we need money for the auction, et cetera. And we have to see. I hope that I have the right view of things, but if I have a wrong view, it might be a mistake that cost us -- might cost us billions.

So 50% of the honest shares are with us due to the buyback, and we're happy with that. If management were to desire more buybacks tomorrow, I'd always agree with it. So we could -- if we are to increase our stake, I'll go -- I'm on Board. But to say, okay, let's buy back everything. My heart says, yes, I want to do that. But I think it's a good thing that I can see that we don't have these opportunities and that we have other investment opportunities as well. And that is why we have to keep our powder dry. So that's not on the agenda right now.

Next question, just beside [indiscernible].

Mr. Dommermuth, you are active in 14 European countries, but U.S. and Mexico, Canada as well. And now the last 3, U.S., Canada and so on, there are the hyperscaler, Amazons, Microsoft and Google Cloud. I think they take care of small businesses as well, don't they? How are you moving forward in that segment? And can you say anything about the margins or the investments that you intend to place there? Possibly, you have a critical size already. Where are you at?

Well, in the U.S. U.S., our second most important country adding IONOS, but it's not a country where we would offer our cloud infrastructure. Our cloud infrastructure is mainly done in Germany, France, Spain, England, European range. And the focus really is Germany because here, we have a sovereign cloud addressing a part of the market very well. We can't compete with Google, Microsoft or Amazon in the full range. That's our target.

So we offer our web presence products, the productivity tools, IONOS. The business is growing well. We've had a nice growth in America last year. This year started well. Also, it's a good country, good money. We grow good. So I think we have more opportunities, but I don't see them in the cloud and structural range. Our USP, the European sovereignty is not worth anything in the U.S. And so we just cooperate by size. We just compete by size, and we won't have an opportunity against the big giants. But if one of the hyperscalers uses it, isn't it difficult to win over the products that you want to sell in the U.S.?

No, I think our products mainly address small and medium-sized companies, and these are not the Amazon customers or Microsoft either. And we sell everything concerning the website, the domain. This is not the focus of the hyperscalers. So we never know. Of course, maybe Google says to, I have to sell to small and medium-sized companies, okay? But they are -- Google had domains. They sold their domain business. Google has tools to make homepages. There's nothing really new, but it's not a part of Google Cloud. Google Cloud has different contexts.

Next question maybe on the left side.

Mr. Dommermuth, I have a question concerning the AI question we just raised. I do share your relaxation as far as IONOS is concerned, but I'm not quite sure what the consumer applications are concerned. What we do see is more and more AI-based inquiries, less search engine-based inquiries. Maybe you could illustrate a bit how consumer applications could be concerned if this trend continues.

Well, I'm even more relaxed concerning consumer applications. What do I see? Well, let me break it down. If you say there's less research, it's traffic that you have on a website that offers content where Google where you participate from Google Search. And now media tell us that many pages are losing traffic because AI has fewer content websites presented in the search results. However, that has no effect on us because we just look at the incoming traffic. If we sell advertising, the customer logged on.

So it's not the Google traffic that we live on. We do have a little, of course, but it's just behind the decimal. And it's an opportunity for us actually because if you do an advertising campaign in Germany to get range, the more the others lose, the less you can get around us, and we see this. We see that media planners start to look at us and the loss of the traffic is rather a benefit for us without me being happy about it.

But we have the lock-in traffic. People want to check their mails or address the web page, but they don't take Google, give me a hint on what I do if I have an infection. That's when you visited a website before, which is called your health. Now Google tells you what pill to take. And the website has no traffic. And we don't have this problem. So search, marketing, no problem.

Concerning AI itself, I see big opportunities, and we do this step by step. Putting this in the applications that you can have your mails translated in different languages, you have a smart search, giving you context, allowing you to give context so that they can look at your e-mails or with a couple of keywords, you get a proposal for your mail text. We have this as beta partly even rolled out. We have that, and we are doing more of that this year. And I see the opportunity to take AI agents, offering them to private people.

So as we've talked about IONOS before, saying they have a high range reach, they can use it to distribute their AI agents. I'm not talking about ones that you have to build yourself 1&1, we have an assistant for phone assistance. We've got a partner in America, one partner in Germany. And we integrate these products. And I think that's good because that makes us fast. And we can react better to the different market requirements apart from and we don't have to build up the know-how ourselves for every little detail. And that applies to the consumer range as well.

I've talked with the colleagues on the Board lately. And as an example, just to give you to illustrate this, we talked about an AI agent for travel planning, saying I want to go somewhere 3 weeks, Mallorca e-visa whatever, somewhere warm to children, need a rental car, hotel should be this and that along seaside, create a proposal for a travel.

And this is available already today. There are people often. I look at ChatGPT, they showed me a company, 24 people in Berlin, focusing on exactly this. So how do they get range? How do they get us tomorrow, book their journey with their tool. And this is where we get into the game. We could integrate them into our service and generate AI range for this AI application. So you learn about the customer. That means we can extend our data range. We know that we're going to go to a summer holiday in Mallorca, okay, that could help us in marketing, advertising and you sell it tomorrow for -- as a premium service, but I don't know that today.

So if somebody has a platform to distribute the products to consumers in the German range, it's us. We can do this better than WEB.DE, you name it, we are better. We are the best in that section. So this is why I do see opportunities.

And last but least, if you say Mr. Dommermuth is a dreamer, he's always optimistic. So he just puts the AI and sells agents on top, if it doesn't work, if he doesn't have range tomorrow because people ChatGPT, write the mail, whatever, he has no traffic anymore on his pages. He won't need a tool to write English mails or Spanish mails, and he won't need AI agents for travel planning because he's got no traffic. I got an idea for that. I'll just close the service and do it as a free service, I close it as a free service and charge for it. And there are services, a lot of examples for e-mail service who used to be free and then cost something.

And the e-mail address sticks because it's used everywhere. And there's about 20% of the customers who are ready to pay if we do this. And this is where we have the participation in open exchange. They do that. They buy e-mails where telco says, look, I did this. It's not a business model for me anymore. They buy the e-mails, switch off the free service and say, customer, you can keep your e-mail. It will be much better in the future, won't be any advertising, a great hotline. You have more storage, but you have to pay.

And then the revenue would rocket -- would skyrocket. Just take our customers and let's say, they pay EUR 5, EUR 60 per year, minus VAT, EUR 50 by 20% of our customers. I can't even calculate it, EUR 300 million. And with advertising, I think we do EUR 120 million. So EUR 180 plus and we could reduce complexity all the advertising, targeting, bidding, data and so on. We got 1,000 people working for that. Simply a cost -- an e-mail that costs the customer much simpler.

So it's not the plan. We want to go forward. We're not planning to do that. So no misunderstanding here, but we want to get into the products, to the agents and all of that, what I said. But if it all didn't work, I would say, whatever how the customer writes their e-mails, they will need the e-mail address. That's the thing with the owners. Whatever they do with their website, it has to be hosted. They needed a more domain. They need marketing. It has to be compatible upwards and so on.

So I'd say -- and that was when I started my monologue here saying I'm even less concerned here than with IONOS. I think we'll do it well, and I have a plan B in case it doesn't work.

Next question on the right-hand side [indiscernible].

The last aspect was very interesting, basically added value, which is your plan B. But my question is on 1&1. I saw your passion for IONOS just now. And you're willingness to buy back shares if Mr. Theurer wasn't sitting on the money back. But the question is whether the competition isn't just as enthusiastic about the possibility of purchasing United Internet or 1&1. I know that the money back, of course, is right now for the moment.

Well, of course, I spend more than most of my day on 1&1 and I spend maybe 1 day a month with the Supervisory Board of IONOS. But in the past, we were one company. I used to be the CEO of IONOS, and therefore, I spent many years with the hosting business. It's a beautiful business with many opportunities. And yes, there are moments where I say this telecommunications business with a slow market growth and all the problems that we had over the last few years, maybe it wouldn't have been the worst thing if I've never seen it.

If I had always stuck with hosting, but you never know. For you as a shareholder, you compile your own portfolio. A medium-sized company doesn't want to stand on one leg alone. If I focus on hosting alone and tomorrow, Google or Amazon say, well, we can do much better, and we give it all out for free, then I focus on telecommunications.

So I'm very happy with the portfolio. It's very balanced. There's always one wheel that turns more slowly than the others. But we do have 4 wheels that we drive on and not only one. And I think as a somewhat more elderly entrepreneur, I'm very happy about it. So our passion is for hosting for the Access business, for the mail business. I always have sparkling eyes. I see opportunities everywhere. And I'll give you the last anecdote now.

Years ago, I was standing on a blackboard when we were only one company back in the days of Deutsche Mark said if we do it right, we can earn EUR 100 million for Access, EUR 100 million Marks, -- Deutsche Marks for hosting and EUR 100 million for e-mail business and the others were just glaring at me. You see that was a while ago, but the ambitions were ones that we would earn EUR 100 million in each business field. We went way beyond that by now. And I think we're still not at the end of the line. There are still opportunities. We just have to accompany every transformation. We have to participate in the AI transformation. And we have to become much more efficient within internally.

We have a lot of AI projects. You can see that the number of staff is ever decreasing because we're becoming ever more efficient. And this will continue. Programmers are becoming more efficient. Customer care will be much more efficient. So we move into new fields where -- in marketing, in accounting, where we can consider ever more how can we do it faster, better and smarter.

So we're still at the beginning here. We can see that we're increasing the top line and at the same time, we're decreasing the costs. If we do it right, AI will be a positive thing for us.

Maybe explicitly on purchasing 1&1 as well, that would work in terms of your desirability. Well, if you have the opportunity, would you increase your share?

Well, last year, we did increase our share when packages became available. And you said, okay, we will make an offer. So that took us to 86.5%, and we feel happy about this. But if somebody were to offer us another package tomorrow, I'd take it as well. I'm still optimistic. I wouldn't buy every single share individually. But if somebody comes along and says, okay, I have another package. Are you interested, we'd go for it. Okay. I thought that was a strong statement to make.

Well, there's another question upfront here.

[indiscernible] I heard your enthusiasm vis-a-vis AI with great pleasure. And it might be a little bit as important as the Internet was when it was first introduced. Now your company is called United Internet, would it be possible that you make something much bigger than out of AI than AI agents with IONOS as they did with the web business?

Well, I don't think we'll find or develop any large language models. That's way too much effort. And it's not really possible in terms of the power costs in Germany and the competition is way ahead. So we will focus on the agents, and we'll have to think about where do we use them and how can we use AI to improve our products by installing or introducing them into individual products and tools. But I don't think that we'll become an AI company overnight now.

I was told that I should rename the company from United Internet into United AI, then our stock price would double, but I didn't go for that. So did I understand correctly that large language models with Alpha, you can see how you can fail with a huge investment there. But my question was that the AI agents and what you do could be so big that it might be an important business field.

Yes. Of course, if we do it right, it could be very big, yes. Are we too slow? If you ask me, we're always too slow. But here, we are behind our opportunities. You can see it over the last few months, we're rolling out a lot of things there, and I see a lot of opportunities there. The tickets are larger here than what we have in hosting. In hosting, I get a good website for EUR 10, but for 1, 2, 3 AI agents that run my office who handle my work, I'm willing to pay more for that. So I see huge opportunities there.

Meetings are always about this question. Okay, people, let's focus more on this, push the other stuff aside, fully focus on showing what we can do there. And we can see over the first few months, the figures are vast expanding -- fast expanding, but at a very low level. So we need to boost this and to learn as we go along of how to do this best, but we're well established for that. We can host the AI agents. We can integrate them into our processes. We can market and service them. So I see huge opportunities. We're excellently placed there.

May I follow up on that question? Mr. Dommermuth, now that we're talking about AI, I have another question on this topic. We've covered all various business fields. Now concerning 1&1 because I think it was Telefonica who said that they need to take more computing power to the network. My understanding is that they need to install more data centers for AI, and they have, they have the data crunching ability. But I was thinking where does the network, the mobile network require AI? Or what could AI contribute there?

Well, my understanding, but I'm not a technician, of course, I see 2 levels here. One being you will have efficiency gains in areas still handled by people today. Let me give you the example of network operating centers. That's where we have people 24/7 watching where something breaking and they alert repair crews. And that is something that you can automate. You don't need people anymore for that going forward. So that will lead to efficiency gains. But you won't see that happening in the network.

But in the core areas, the core places operating the network, if you read the press releases, then Telefonica says that we have such a great AI, they can help us identify capacity utilization levels in the network, but you don't need AI for that. I don't know what they could do better with a huge data center with AI, I can't really see that. What we would do is we say we have space for applications. And these applications could, of course, be AI applications, no question. But the benefit is we have -- we're faster near the antenna because we're only 10 kilometers away. That's a benefit.

But otherwise, I don't see any AI-specific aspect that needs to be fared because it can't run on the core. So I don't see that. Yes, well, I've had the same feeling about this. Yes, but it sounds great. If you say, oh, let's do AI everywhere. As was said, that will drive the share stock price.

I can't see any more questions. There is one more question.

Another question on consumer applications. Last year, EUR 123 million EBITDA. I'd like to know what your expectation is for this year, where are we headed? And the idea was whether you want to sell this? Is that still on the table or not because your sales expectations aren't realistic? Or what is your view there? Mr. Theurer, what's the bandwidth for the free cash flow for this year?

Maybe concerning the consumer applications, they are growing very well because we have natural growth, organic growth and because we're winding down a shared service, IONOS was handling that for us, and they want to focus on their own business and don't want to do that anymore. Multimedia has bought the service from IONOS, so they have to handle it, and that increases the EBITDA. In the past, they paid on a monthly basis. Now we have the upfront investment. That's why the EBITDA is much higher, but it only comes from our growth. Partially, it comes from the fact that we operate our own service. I think we're over EUR 140 million by now. Is that realistic? Yes, more than EUR 140 million. That's what we expect there.

And sale, I think it was in 2022 when we were asked, we want to sell the business, but we didn't get far. And it's not on the agenda. I said before, never say never. Maybe tomorrow, somebody comes along and says, "Oh, this is so great. I gold played it for you. Then of course, we have to listen in the interest of all investors. But it's not a plan. The business is going well. Last year was good year, before was good. This year will be good again. We have a lot of good ideas.

Free cash flow, around about EUR 600 million, very rough estimate. We're coming from EUR 500 million, just under, as we saw. You have the EBITDA improvement with 1&1, the forecast. So around about EUR 600 million ballpark figure.

Any other questions? I can't see anyone wishing to ask a question. I hope I didn't overlook anyone. So thank you very much for your interest, your questions. And I would like to close this conference and I invite you to have a coffee out in the foyer and thank you very much.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good morning, everyone. I would like to welcome you to our Q3 2025 Analyst Investor Call. Thank you for joining us today. My name is Dominic Grossman. I'm responsible for Investor Relations at United Internet. And here with me today, I have our CFO, Carsten Theurer.

Briefly about today's call. Carsten will first take you through our presentation with the business development in the first 9 months and will also give an outlook for the rest of the year. Afterwards, we will be happy to answer your questions. So far to our agenda, I would now like to hand over to Carsten. Carsten, please go ahead. The floor is yours.

Thank you, Dominic, and also a warm welcome from my side to our webcast on the presentation of our 9 months figures for 2025. First of all, I would like to point out 3 noteworthy events. Number one, 1&1 has successfully completed the migration of our customers to our own network. I will get back to this later on. Number two, in October, we were able to complete the disposal of our energy business field. And number three, as mentioned during the IONOS call this morning, our group figures have been adjusted due to a change in presentation of the AdTech business in the Business Applications segment, which is carried in accordance with IFRS 5 as discontinued operation as of September 30, 2025. The prior year was adjusted accordingly.

Having said that, let's have a look on the development of our major KPIs. We are happy to report that our customer contracts increased by 480,000 to 29.5 million in the first 9 months of 2025. Our revenue subsequently increased by 1.4% to EUR 4.5 billion. Group EBITDA increased by 1.9% to EUR 966 million despite EUR 34 million higher mobile network rollout expenses compared to the same period before.

Our EBIT declined by 11.3% to around EUR 443 million. The development in EBIT is driven by higher depreciation and amortization expenses attributable to investments in the rollout of the fiber optic network at 1&1 Versatel and the rollout of the 1&1 mobile network. As a result of improved performance from our associated companies and lower tax expenses, our EPS increased by EUR 0.03 to EUR 0.75 per share.

So now we will do a deep dive into our segment development, starting with Consumer Access. And here we go. As mentioned during this morning's 1&1 call, the migration of our customers to the 1&1 mobile network has been successfully completed. This marks a major milestone for our company. What's particularly remarkable is that despite the complexity of executing the largest customer migration in the history of German telecom market, we not only retained our customer base, but also achieved net customer growth during the transition. This clearly demonstrates the strength and appeal of our 1&1 mobile brands.

Overall, the number of fee-based contracts fell by 50,000 to 16.34 million. The decrease is driven by the loss of 90,000 broadband connections to 3.86 million. However, during the same period, we were able to increase our number of mobile Internet contracts by 40,000 to 12.48 million. Despite the biggest impression, we turned a 20,000 Q1 decline into a 20,000 gain in Q2 and doubled momentum with an increase to 40,000 net additions in Q3.

I will continue on Slide 5 with the development on the segment's revenues. Revenue in the Consumer Access segment is fairly stable and amounts to approximately EUR 3 billion. Both the development of service revenues and hardware sales have remained flat year-over-year and are in line with our expectation.

That being said, if we turn our attention to EBITDA on next slide. We can observe that in particular, due to the further year-over-year increase in expenses for the rollout of the 1&1 mobile network segment, EBITDA fell to almost EUR 410 million. The network rollout costs amounted to EUR 201 million compared to EUR 167 million in the same period last year.

As shown in the breakdown next slide. The Access subsegment EBITDA remains robust at around EUR 611 million. The decline is a result of higher advanced payment costs for national roaming due to a lower-than-expected network growth at Vodafone and the different accounting treatment of certain network components under the Vodafone national roaming agreement, which are all recognized directly in EBITDA without having an impact on EBIT in comparison to the former Telefonica contract. The EBITDA margin remains fairly stable. Our rollout costs for the 1&1 mobile network amounted to around EUR 200 million and are in line with the business plan.

Moving on to the Business Access segment. We are able to increase sales by 1.1% year-over-year to EUR 435 million. At the same time, segment EBITDA increased by 2.1% to EUR 123.1 million. There was a corresponding improvement in the EBITDA margin from 28.0% in the previous year to 28.3% this year. In the first 9 months of 2025, total start-up costs for the new business fields, 5G and expansion of commercial areas amounted to minus EUR 16.3 million for EBITDA declining by almost EUR 6 million year-over-year.

Let us now turn to the application side of the business. Starting with the Consumer Applications segment. The number of pay accounts rose by 220,000 to 3.26 million. Here, we have to point out the year-over-year development in free accounts with a decline of 210,000, which shows you, in particular, the successful migration to pay accounts where we added 280,000 over the same period. Overall, we are able to grow our consumer accounts by 70,000 in Q3 year-over-year.

The growth of pay accounts, in particular, led to adjusted sales growth of 5.6% from EUR 218 million to EUR 230 million in the first 9 months of 2025. There was also further growth in key earnings figures such as EBITDA. With EBITDA increasing by 5.1% to EUR 82.9 million. The EBITDA margin remains stable at above 36%. In the Applications segment, we increased our number of customers contracts by 310,000 to almost reaching 10 million customers in our portfolio for the first time. This increase is driven both domestically and abroad with our operations abroad performing even stronger. Revenues in this segment increased by 6.2% to EUR 980 million from EUR 923 million a year ago. The increase in revenue was driven by the strong customer growth and increased up and cross-selling.

EBITDA in the Business Applications segment increased by 21.5% compared to previous year's number of EUR 290 million to EUR 345 million -- EUR 354 million, sorry. The operating EBITDA margin rose accordingly from 31.5% to above 36% as well. So much for the segments. Here, we have summarized the most important KPIs for the group once again and added a few more. Our CapEx amounted to EUR 488 million after EUR 442 million in the previous year, reflecting our continued investments in our fiber optic network at 1&1 Versatel and the rollout of the 1&1 mobile network. Please note that we are expecting a very significant proportion of our annual CapEx in Q4.

I will provide a detailed breakdown of free cash flow on the next slide. However, the significant improvement in free cash flow is already worth highlighting. Our net bank liabilities increased by 20% to over EUR 3.2 billion, which relates to a leverage of 2.4x EBITDA. In addition to our substantial investments, we paid out EUR 328 million in dividend payments and EUR 246 million as part of our voluntary public -- partial public tender offer for 1&1 shares and additional purchases to increase our stake to 86.5% overall. Our equity ratio amounted to 43.5%.

This slide shows you a bridge of our EBITDA to free cash flow. The largest items here is our next -- net CapEx of approximately EUR 485 million as a result of investments in the continued rollout of mobile network and expansion of our fiber optic infrastructure. Furthermore, we had phasing effects from Q4 2024 of around EUR 110 million. And after accounting for taxes and changes in working capital, our free cash flow before leasing stands at EUR 259 million, respectively, EUR 146 million after leasing.

And finally, a brief word on the outlook. We are confirming our revenue and EBITDA forecast and are specifying our cash CapEx forecast with accounting for AdTech as discontinued operation. We are now expecting full year revenues for fiscal year 2025 to amount to EUR 6.05 billion. Operating EBITDA is expected to amount to approx EUR 1.3 billion, which includes approx EUR 20 million in costs associated with the transition from Telefonica national roaming agreement to the Vodafone National roaming agreement. Under the Telefonica national roaming agreement, certain network components are activated and depreciated, whereas under the Vodafone National roaming agreement, these costs are recognized directly in EBITDA. This change has no impact on the EBIT.

Capital expenditures are expected to total approximately EUR 750 million, primarily driven by the continued rollout of our mobile network and the expansion of the fiber optic infrastructure. While this implies a slight spillover of investments in the following year, 2025 is still anticipated to represent the CapEx peak at United Internet. So much from our side. We are now available for any questions you may have.

Carsten, many thanks for explanation. Now we would like to start our Q&A session. The first question, please.

[Operator Instructions]

We will now take the first question. And your first question today comes from the line of Polo Tang from UBS.

I have three different ones. So first of all, apologies, I missed the 1&1 call earlier. But can you comment on where you are in terms of getting access to low-band spectrum? And then how do you think about your network build if you're not able to get access to low-band spectrum?

Second question is just really about CapEx profiles. You mentioned for United Internet as a group that you expect 2025 to be the peak. But can you clarify whether the 1&1 CapEx has been scaled back?

And my third question is really just about the perimeter of the group and corporate structure. So what are your latest thoughts on IONOS and whether you should or should not spin out IONOS? And what's your latest thoughts on owning 100% of 1&1.

Thank you for your questions. Let's start with the low-band spectrum. As explained in the months before, we are still waiting of a decision for the low-band spectrum. There are some offers on the table, but they are not negotiable on our side so that we are still waiting to become true offers, which we can deal with.

And therefore, what we are anticipating is that the BNetzA will step in the process, and then we are quite sure that we will get access to low-band spectrum. So there is not worth to talk about what will happen if we don't get any access to low-band spectrum. We are quite sure that, that will come not at the end of this year as expected before. But in Q1, Q2 next year, we are quite sure that we have access to the spectrum.

Second question, CapEx profile and the call on 1&1 gave the answer that the expected CapEx next year will be on the same level than on 2025, but we stay to our CapEx expectation on the group level, which will be the top or the peak level CapEx in this year, 2025 despite the spillover on the 1&1 side. And the discussion on IONOS spin-off, we have had it in the years before, but there is no way for any spin-off without any tax issues. So therefore, there is no plan for a spin-off on the IONOS side.

And then your thoughts on owning 100% of 1&1?

Not really because we -- as mentioned before, we stay at the moment at 86.5%, and we are fine with that. There is no need to get 100% at the moment. And therefore, there are no further plans to get 100%.

And the next question comes from the line of Mollie Witcombe from Goldman Sachs.

Just wanted to dig in a little bit more on the CapEx peak. Obviously, a large portion of that is Versatel. What -- is there any risk that at some point in the midterm, you might look to expand into new areas and we could see an uptick again in CapEx driven by that segment?

And then my second question is -- sorry if I've missed this, just on the EUR 110 million in phasing effects on the free cash flow from Q4 2024. Could you just run through quickly what that's made up of?

Thank you for your questions. So for the peak CapEx, we can't see there any risk at the moment that the CapEx will get, will increase in the next year because we have our rollout pace, as mentioned before, 200 to 300 sites each quarter, and that remains very stable. So therefore, we don't see any peaks despite what we already have told you that the peak CapEx will be this year. And the second question was about -- sorry, what was the second question?

There's a EUR 110 million phasing effect from Q4 '24. I was just wondering a little bit more color.

Okay. There are some invoices, which had a spillover from the last year, which will be paid in this year. And that means the phasing effect, which we can see in the EUR 110 million.

[Operator Instructions]

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

I had two questions, please. Firstly, I might have missed this morning, that IONOS, the AdTech EBITDA seems to have collapsed as a result of the RSOC transition. Are you expecting that EBITDA to recover? Is this just a phasing issue? Or what's the outlook for that Adtech EBITDA line? And then second question, I was wondering, can you say anything about whether you've made revenue commitments to Rakuten. So specifically, I was interested if you were to stop the mobile network build, are you then liable to continue to make payments to Rakuten.

Starting with the first question because I didn't get the second one, but I will come back on that. On the first one, EBITDA drop on the AdTech segment. As expected, due to that effect that the old one, the old product from Google, the AFD is replaced with the new one, with RSOC. So we can see a slightly decrease on the AFD tool and only a small increase on the RSOC side.

So therefore, figures were getting better. That is what we can see month-over-month at the moment, but it is not a dramatic dynamic at the moment, to be honest. And therefore, we will have to see where we will end up at a year.

And the second question about Rakuten, what was the exact question?

I was just trying to understand is there any commitments that you've made to Rakuten for the 1&1 mobile network build. So if the mobile network build was to stop, is there a liability there to Rakuten?

I don't know about any obligations or any payments we have to do if we stop building out our network, but there is no reason to talk about that because we are on the way to build out our network. As mentioned before, we have migrated now all over our 12.4 million customers on our own mobile network.

And the next question comes from the line of Simon Stippig from Warburg Research.

Firstly, I would be interested in your expectation about when the Federal Cartel Office will disclose its decision about the Vantage Tower dispute? And then secondly, are there any discussions with your peers about consolidation such as merging or selling the 1&1 mobile network as is?

Starting with the Vantage question, we already expected this summer any statement from the Cartel office, but we are still waiting for it. So therefore, we can't tell you an exact date when a decision will come, but we are also waiting for that decision.

And on the consolidation, what can we say? There is not really something to tell. No one showed up here in Montabaur. If someone will come, we are open to have a conversation as always. We look more after our own activities, and we are working with very good success on our own network. And as already said, are happy to have all of our customers on our own network.

Okay. Great. Maybe a follow-up. Did anyone show up in Madrid from United Internet or 1&1 from the group?

Not as I know. There are always some calls, but not on the discussion of consolidation. We are always in touch with each other for cases like low band and things like that, but not for consolidation questions. And as I know, no one showed up here from Madrid.

And the next question comes from the line of Nizla Naizer from Deutsche Bank.

I just have one question, please. Your net debt to EBITDA being at 2.4x, is that a position you're comfortable with? And would you consider sort of streamlining your portfolio to free up some cash to lower that net debt if you're not? For example, would you consider selling a stake in IONOS or the Consumer Applications business? How are you sort of looking at your financial position and the portfolio that you've built?

Yes, leverage at 2.4x, we are feeling comfortable. As already mentioned before, we feel comfortable in the range still from 2.5 to 3, but our aim is to get more and closer to 2 in the next years. And maybe today is not the right day to talk about selling some shares of IONOS if you had a look at the stock price at the moment. So therefore, it's not the right day for this discussion.

There are currently no further questions. I will hand the call back to Dominic.

Thank you, operator, and thank you, everyone, for attending our call today. Please feel free to contact us for any follow-up questions. We wish you a nice day. Stay safe.

Ladies and gentlemen, dear guests, ladies and gentlemen, welcome to the analysts and investors conference of United Internet for the half year figures 2025. My name is Dominic Grossman. I'm very happy to be able to welcome you here personally at Zofiechallen in Frankfurt. I also like to welcome everybody who is participating online.

And allow me to take you through the agenda today. We will start with Ralf Dommermuth presenting the development of the first half of the year, giving a forecast on the second half of the year. And following that, Carsten Theurer is going to explain the figures in detail. You will, after our presentation, have opportunity to place your questions in our Q&A session. That's it from my behalf, and I pass on the stage to Mr. Dommermuth. Thank you.

Thank you, Mr. Grossman. Welcome, ladies and gentlemen. As announced, I will present the development of the company in the first half of the year and a forecast on the rest of the year and then my colleague, Mr. Theurer, will give you the details on the figures of the first half of the year. You know our business.

We work in a team with about 10,800 employees, 4,000 of them in product management, development and data centers. We run a powerful Internet structure with fiber optic networks, a mobile network, and computer centers with over 100,000 service worldwide. We have the access business and applications. And these again split up in offers for consumers and business customers.

Our products are offered in a number of brands in the consumer business, the main brand is 1&1, and we have discount brands from the merger in 2017. In the business access, we are active in -- with 1&1 Versatel application for consumers are GMX, WEB.DE, mainly and Internet media application for business customers are provided by IONOS with different subsidiaries like -- and acquired like Opel and STRATO in Poland, Austria, England, and so on and a number of minority partners.

Let me start with the consumer access in the first half of 2025, you know our business. Our consumer access business is organized in 1&1. They are stock listed 3.89 million broadband customers and 2.44 million customers contracts. We are operating the first Open RAN business, and we are migrating the existing customers from the wholesale contracts to this Open RAN. At the end of the year, we had 16.33 million customer attract mobile broadband hasn't changed and the broadband has reduced by 60,000.

Our service revenue could increase slightly to EUR 1.647 billion. The general development, minus EUR 13.1 million to EUR 130.6 million. Included in this is the buildup of the mobile network. 1&1 reports 2 segments, 1 segment of Access, minus 3.5% due to the change of the roaming partner with higher roaming costs as expected before and then the mobile network with EUR 130.6 billion coming from EUR 111 million. Business Access, 1&1 Versatel operates one of the largest German fiber optic networks.

We operate the access network, transport networks on 67,000 kilometers. We are available in over 350 cities in Germany, including the 25 largest and over 28,000 buildings are directly connected. We have increased EUR 287.3 million. This is the accumulated figures. Our own optic fiber is growing much more. We have a decline in the voice business where earlier customers paid per minute for voice, and they don't accept this anymore. This is why we are losing nonrecurring revenue, but the recurring revenue is growing. That is the lines, for example.

So we'll see this development over a couple of years still. The EBITDA has start-up costs. Without the start-up costs, the EBITDA would have been at EUR 92 million. The margin is a bit higher than last year with 28%. Looking at the applications, I have said so, the consumer area is GMX, WEB.DE, Mail.com, online office, cloud service, cloud storage.

And our differentiation here is German data protection and data security, we had 41.75 million active consumer accounts at the end of the year, and that is free accounts, which are funded by advertising, EUR 38.7 million, minus EUR 360,000. And we have 3.8 million pay accounts, which are much better for us than the advertising accounts. There's some seasonal figures. That's why we have a difference here towards -- between the end of the year and the middle of the year.

This is a bit misleading, but if we look at the year-to-date, we see a plus of EUR 90,000 coming from EUR 41.66 million. We see this in revenue as well, a plus of 3.1% to EUR 148 million. And the result is not brilliant. We expect that to rise with the revenue as well, but we expect a change. We have a high business region, EUR 36.2 million EBITDA, and we don't need many service to have that business running.

Business applications, IONOS, they published figures today as well as the leading digitization market for small and medium-sized companies. They're cloud enabler active in Europe and in the U.S., broad product portfolio ranging from digital solutions, websites, e-shops, marketing tools, right to virtual servers, dedicated servers, cloud infrastructure as a service, all of these are the active figures.

A very good growth in the first half of the year, 210,000 new contracts, EUR 9.8 million as a total, also from abroad, but our main market in Germany, 80,000-plus contracts, reaching 4.71 million. The revenue have grown strongly, 19% to nearly EUR 900 million. That is due to customer growth and better up and cross-selling of additional products and a strong growth in the AdTech segment. The total EBITDA, even better growth, EUR 24.6 million plus to EUR 258 million in the first half, the margin now at 28.9%. So a very strong margin business here.

The figures again in the overview, a total of 290,000 new customer contracts and pay services reaching EUR 29.31 million contracts, a plus of EUR 4.3 million in revenues, EBIT plus EBITDA plus 2%. EBIT is dropping due to investments and the antennas, the computer centers and so on, which are being added and activated. So a drop here and a result of minus 3.3%. So included in this, as I've said, is the EUR 130 million ramp-up costs, as I've said, and if you take this EUR 18.4% on the EBIT, you will get a growth of, I'd say, around 5%, a little bit less.

What is the forecast? How are we going to carry on? We confirm our forecast. We are expecting the forecast to fulfill EUR 6.45 billion. The EBITDA is about EUR 1.35 billion. We've just explained this EUR 20 million less EBITDA due to the change of the national roaming partner from to Vodafone. We had deactivated components before that increased the EBITDA. Vodafone doesn't do this and EBIT, there's no impact. However, -- so if we add this difference to the EUR 1.35, we would end up at EUR 1.7 billion, which would be 5.5% of growth, something in that range, which is quite reasonable.

CapEx will end up at about EUR 800 million this year, a bit higher than last year. We are still investing into the optical fiber network, in the mobile network, and also in the cloud infrastructure. So thank you for your attention so far. And I would like to ask Mr. THEURER to present the figures.

Welcome again from -- by me. I'll have the honor of taking you through the figures in detail. giving you a summary from the overall view and into the balance sheet. First of all, why do we have different figures here? Mr. Dommermuth mentioned it. We have the comparison like-for-like, i.e., the key figures as of 30th of June 2025 compared to 30th of June 2024. And you can see that the fee-based customer contracts actually grew by more than EUR 0.5 million in this period of time.

If we take a look at the A finance free accounts, we have a decrease with 180,000. But at the same time, we were able to get paying customers, which are in the first figure I indicated. So we have actually plus 270,000 customers. revenue growth, 4.3%. As I mentioned, EBITDA, as we can see here again with 2% despite the EUR 19.6 million higher costs for the rollout of the 1&1 mobile network. The EBIT, a larger impact of the effect we've mentioned already shown in the EBIT, but not in the EBITDA.

In the EBIT, we see the EUR 39 million higher depreciation in connection with the network expansion, EUR 12 million for Versatel. -- so that we have an overall decrease of EUR 8.5 million the EBIT. Let's speak about the cash flow. In the first half of the year, we have an increase from EUR 557.9 million to EUR 578.9 million cash flow from operating activities, we see strong growth here.

Why? Well, last year, the contingent payment -- the last contingent payment of EUR 260 million was paid to Deutsche Telekom for the last time, and we benefit from this now. So we don't have this payment anymore, and that has this positive effect here, the increase of operating activities. In investments, we can see the impact of the CapEx, which is more or less at last year's level, EUR 13 million higher than last year. And for financing, we have 2 effects, EUR 15.4 million positive last year, and we're minus EUR 211,000 this year, there's 2 effects.

There's dividend payments of EUR 426 million that have an impact, but also the catch-up dividend for last year, just under EUR 240 million. We have an effect of the 1&1 shares that's EUR 160 million that we bought in April, and we have a repurchasing program of EUR 36 million that is reflected here. So we have this overall change of EUR 426.3 million. It's not quite true. It's EUR 326 million. Sorry, the figure is wrong here.

Let's speak about the EBITDA bridge, the cash flow, starting with EBITDA, EUR 675.6 million. Then we can see the CapEx, which is a little bit different from what we saw before because there's EUR 2 million investment removal, then a phasing effect, payments made in the first quarter that actually were for quarter '24, but that led to a decrease of money then the tax, EUR 51.2 million, then working capital and others, reduction of our payments due to our liabilities, then free cash flow arrives at EUR 105.8 million and then EUR 80.7 million worth of leasing costs. So the free cash flow after leasing for the first half of the year 2025, EUR 25.1 million.

Look at the balance sheet, what can we see? Let's start at the bottom line. We have a slight decrease of the balance sheet total from EUR 11.935 million down to EUR 11.863 million, where is it coming not from assets from property assets, that's pretty much the same. Goodwill financial assets are pretty much at the same level. Accounts receivable is a little bit higher. Contract assets are a bit lower with the decrease of contract assets due to lower customer growth and lower hardware sales. The inventories are at the same level, slight increase due to rental and pre-service provider payments and then the income tax claims a little bit lower than as per the end of the year, same goes for cash and cash equivalents. So that leads to a slight decrease in the balance sheet.

Now let's look at the liabilities. We have a little bit more movement in equity here, and I'll tell you a little bit more about why. Maybe we'll speak about this effect. First of all, we had the purchase offer for 1&1 shares. This goes beyond the 30th of June. So this total of the increased offer needs to be reflected here, even though only EUR 140.1 million were spent on shares. So we have a deviation here, which is, however, required by us by IFRS. I find it a bit strange because it also has a serious impact on the equity ratio, which is 4.6% lower at 41.9%. The right figure would be -- if we only accounted for the EUR 140 million, then we'd be at 3.3 percentage points and 43.3% equity ratio.

What else do we have? We have the acquisition of the 1&1 shares with the EUR 60.8 million and the dividend payment accordingly of EUR 328.4 million. Liabilities have increased and we can see our CapEx measures, acquisition of 1&1 shares, but also the dividend, then trade accounts payable. We've seen it already the decrease of liabilities to EUR 603 million and with contract liabilities were nearly at the same level. And then, of course, the EUR 300 million that we have to reflect here from the offer to increase our number of shares. So this takes us through the figures. And now we have the possibility of taking your questions. So please get ready.

Well, thank you very much so much on our presentation. We'll start with a question-and-answer session now. Please use the headsets the microphones that our colleagues make available for you. And please start by indicating your name and company will start on the left-hand side.

It's Ben from New Street Research. I had 2 questions, please. The first question was on the DT contingent payments. You mentioned that you made the last payment last year and that you're now seeing a benefit from that. So should we now expect -- are you now receiving working capital inflows from that asset?

And can you comment on the scale and the timing of the inflows you expect to see from that prepayment asset? And then second question on the Consumer Applications business. You're seeing declining free subscriber numbers, but you're growing the number of premium subscribers. I just wondered if you could talk a bit about the relative value of those subscribers. So for example, what is a typical ARPU for a free subscriber -- and what is the typical ARPU for a premium subscriber?

Yes. Let me start with the consumer contracts. The typical ARPU of a free subscriber is about EUR 0.25 a bit more, let's say, EUR 25 to EUR 30 and the paid customers is about EUR 3 3 about. So that means the paid customer is 10x as valuable as the free customers. And this is why we try to convert the customers wherever we can. If we look at the business, the turnover composes of advertising fees and the fees of the paid customers, and we do more with them, and this is the goal to carry on with this.

The contingent payments, I can answer that. The time was 10 years. The first 4 years were the high upfront payments ranging about EUR 260 million per year, which were decured and are being used over the years now. So a clear cash flow effect, which is probably not going to reflect in the results because we have accrued it. So we have taken it over the years and the cash effect that we have taken up in the first 4 years by the payments. Maybe I can add a note for everybody who's not so involved with this.

And telecom, you can select when you get the -- want to use the optical fiber for the last mile, then you can select whether you want to pay upfront in the contingent model that will go over 4 years, and that will give you a better price or whether you will not have the upfront payment and pay a higher price every year. And now as in Alliance, we fund and have a good funding. It was a good opportunity to do this upfront payment. So that means we paid about EUR 1 billion over the 4 years, and now we have the benefit that we don't have to pay them for the next 6 years. And that won't help us in the result, but it will help us in the cash.

Another question on the right-hand side.

I have a couple of questions, please. Firstly, in terms of your longer-term strategy for the group in terms of maybe the consumer applications business, for example, do you still see it as a core part of the group? Would you consider monetizing it? And then the same question for IONOS. How do you think about your stake in the business? Would you consider increasing it? What are your thoughts on maybe disposing of parts of it to fund build? Just wondering how you're thinking about the structure of the group and your strategy into the midterm.

We do assume that the business as we have it will stay with us in the long run. We don't plan to sell any of the business or sell shares of IONOS or 1&1. We think we have a good portfolio. It's balanced. And I understand that a shareholder doesn't want a conglomerate saying I could set up my own portfolio. However, if you are a medium-sized company, you will get more business models quite attractive because some things may not work out in the market as others as well as others. So we can compensate that.

So I think we have a good and stable portfolio basing on a number of business models. Of course, that means the growth would be a bit smaller. If we had IONOS only, we would grow faster now. But I can recall years where we didn't have any growth at IONOS. So I think it's good that we have the different business models and that they do compensate each other, and we have no plans to change this.

Okay. I don't see any more questions maybe here on the back side, [indiscernible].

Yes, [indiscernible] question has just been answered. And the other perspectives, we got some news as far as AI is concerned. We had this last year, Gigafactory -- how do you assess this in the term of 2, 3, 4, 5 years? What may be the perspective there? That will be the first part concerning IONOS.

Well, I'm not on the Board there. I'm in the Supervisory Board. So I can't talk for the company. I can only give the main shareholders' view. We are satisfied with the development IONOS has taken. We took them over in '89 with 38 staff members and EUR 25 million marks -- German marks turnover, which wasn't occurred. So the prepayments weren't occurred. And that has developed greatly for us. We see many opportunities for the future as well.

Where do they arise from? First of all, from the AI issue. But because we do think that we think we have a good access to our customers and the investments in home pages and websites can be sold to small businesses and assistance, agent functions that will facilitate business. That's where we see business fields in the next years, but we'll have to get into that. We see opportunities and platform consolidation. I've shown that we have different companies founded by ourselves in different countries, Spain, U.S., and so on and where we had opportunities, we bought the competitions.

And so these platforms have been integrated to a certain extent, but not completely yet. So we want to tap into synergy effects here, which as we did in the past years as well, accompanying our business development, increasing productivities. That's going to be a driver for the IONOS profit as well. And in addition to the business today with the websites and so on is growing about 8% per year. So growth in the core business, consolidating platforms and opportunities here by new products and artificial intelligence. These are growth opportunities for IONOS.

And then we have a cloud business. We have our own cloud infrastructure developed over many years. It's completely sovereign. No in there, no Huawei as in telecom or open-source stack self-built. So we do see that we can sell this well to public administrations and some big federal authorities are using it. So we have to see on how far companies are willing to take this up to have an independent cloud. I think that discussion has just started.

What is an independent cloud? Is it a cloud which I buy from Amazon or Google or Microsoft? Or will it be independent if they have a subsidiary in Germany or in Switzerland? And is that independent enough? Or is independent only if it was done by a European company who developed it and understands it themselves and can change it. So that discussion is ongoing.

And of course, we do hope that there's going to be an increasing awareness and our positioning can be strengthened in the market here, and we can grow on that base. So that's the big fields that IONOS sees opportunities in, and that means we should stay invested. And what we also have to see is we have a good development of the shares. If you look at the normal development? Well, let me explain. Over all the years that we bought smaller hosting companies in Europe, we had 13 to 14 EBITDA.

And if we look at the IONOS listing today, you see although it was listed so well, it just got there. So the European market leadership, i.e. ideas, cloud ideas, the small hosters didn't have that. That's not depicted in the share. So this is why I'm positive. We have to do the business, of course, but I'm optimistic that we will be able to show that this has more to gain that we can carry on and the market understands the business opportunities involved. And this is why I think we will stick to our position as we have it.

And if IONOS needs more capital for AI factory, will that be possible without having to increase your capital?

No problem. We're only talking of EUR 3 billion to EUR 5 billion there. Let me break it down. What you could read in the press was gigabit factory costs EUR 3 billion to EUR 5 billion. Yes, that may be true, but you don't build it in a day. You build it in individual stages and you fill it in stages. As you increase your business, it doesn't make sense to set up a huge number of computers and just keep them there if you don't use them. So growth accompanies business.

How will we finance this? You need some equity, of course, I'll get back to that. But the envelope of the data center, the passive infrastructure, you can do that with credit. You don't need to do -- to use your own money for it. And software we develop ourselves. The hardware has to be bought that costs some money. We buy it gradually, but we can also use the subsidies made available by the EU now that will cover something of like 35% of the cost. That means that we have less financing need. We do it together with a partner that decreases the financing needs.

And if you see that IONIS has a net debt of less than EUR 800 million now of EUR 530 million DDA, you can see that we really could take up a credit line of EUR 1 billion without any increase in equity. So if you take these assets together, creditworthiness, the partner, also the availability of passive infrastructure credits plus the subsidies available by the EU, then this should be possible. But as I said, it doesn't -- it isn't done overnight. It has to be built, filled by the buy by then the conditions will be better, more cash will have been generated. We don't want to take any dividend out of this. So we don't see any need for an equity increase as per today.

Now if you take a look at the demand so that you can use capacity, what year are we talking about? When will that be? Difficult to say. It depends on how product development progresses. It depends on market demand. On the one hand, I'm very optimistic. On the other hand, I can also see that a lot of companies don't appreciate this issue of independence of sovereignty enough big companies. So we will take a Microsoft product at their subsidiaries located in Switzerland.

And if we ask them like what if they don't make any update available anymore, how will you continue? Or there's no more update for this cloud anymore? Or if it gets more expensive, how would you handle this? Many haven't thought about that yet. Also, a lot of oil companies are locked into multiyear contracts. You booked so many capacities for the next 5 years or whatever, then you don't need additional capacities anymore. And it's very difficult to implement. This is always big major projects. So this won't happen overnight.

It's very difficult to say that within 3 months, 6 months, 5 years. It also depends on our own performance. We have to be good. We have to make enough capacity available. We're only at the beginning here because we don't have the ecosystem that Amazon or Microsoft can make available. But there's an 80-20 principle here as well. 80% of workload will cover only 20% of the workload databases, backups, LLM models, ERP software. I think we have a lot to offer here, and we'll do more going forward so that our offering will become ever more competitive, but it's very difficult to predict. then the complex of 1&1 is listed IONOS is listed.

What about 1&1 Versatel? Are we peaking here and this going down Hill beginning next year? So you are about EUR 600 million revenue, 30% EBITDA margin. You said this is going down. fiber optic will go up. So when will this move back into a growth phase? Absolutely, in absolute terms. I think you can see increasingly how the nonrecurring revenues are decreasing. So we have hit the bottom now that the nonrecurring is beginning to grow.

We will see that over the next few years, investments, we will have to continue to make that's positive because we're increasing our footprint in commercial estate. That costs money. Every commercial estate, we connect cost money. We have a bigger footprint because we connect to the 1&1 network. That increases our return because the contract has to be made, but we have to make an investment upfront. With a growing business, these investments will earn ever more money.

I have a feeling maybe a year ago or so versus how used to invest EUR 400 million, have an EBITDA of EUR 160 million, and the rest was paid by United Internet. And this year, we still have some subsidy, but it's less than it was. And next year, it will be -- it will break even. So we increasingly managed to generate cash through our own business that will be an improvement. So that has to be taken into consideration.

A lot has to be invested by Versatel. We completely renovated the fiber optic network, overhauling the entire technology. We're very happy with the technology. Now we're able to win tests, best network compared to network Telef nica, Vodafone. We invested a lot of money there. We invest into expansion of the network, and we can increasingly see that money is rolling in now.

And that is our view from the holdings point of view because 1&1 doesn't cost us any money because it has its own money. IONOS doesn't cost any cash because they generate it. And all our further businesses generate their own cash. The only company that is costing us money, if you wish, is 1&1 Versatel and that will end over the next couple of years. So we don't need to look at cash too much here. We're doing -- we're well underway.

Last question, United Internet Group, what will it look like in the free cash flow basis? That should turn around the beginning next year after this intensive phase of investments that you've had.

Well, we have a multiyear plan, and I don't know the details of it now. It's indicating basically that our debt ratio will decrease. So we're peaking in terms of debt now. If we don't buy anything else, well, we took out another credit line because we bought 1&1 shares. But operatively speaking, our indebtedness will decrease by the buy, even though we're extending the mobile network, investing into the cloud. But that is still excluding the AI Gigafactory, of course, I have to say that we have to exclude that. Now if we exclude that, then our indebtedness keeps going down year-on-year despite the other ongoing investments.

Next question from the left side, Karsten.

I have a question concerning Versatel. You indicated in your presentation that there's a lot of CapEx for the mobile network included there. Can you roughly indicate how we will -- when we will see that in the profit and loss statement? Will it be visible? Or will it be background noise basically?

There's an upfront payment for any connections between 1&1 to Versatel. And then there's a long -- relatively long period where we have this background noise, recurring revenues that will generate -- keep generating cash. So the margin will be at the level of the same level as the company is right now? Yes, that's what we're planning, yes.

Next question is by Simon Stipping, Warburg Research.

I have a couple of questions as well. You have 10% of your own shares on the balance sheet. I would like to know what you're planning to do with them because you could take a view that the holding is undervalued. In other words, you could be very satisfied because you could then buy IONOS very cheaply via the holding if you were to buy United Internet shares.

So I'd like to know you can't buy back your own shares right now. What's your plan here? And then a number of short questions -- you just mentioned the leverage, your balance sheet capacity. You said that you have a maximum leverage or what's the maximum range you can imagine there. Then the refinancing ratio, what is it right now with you? And then finally, the dividend for the next year, could you imagine that it goes up a bit than the EUR 0.50 that you have been paying out, excluding this year?

Well, we have about 10% own shares. We can buy more shares at any day. We have a resolution by the Board. We would have to withdraw shares, but that can be done by the Board. We used to have 252 million shares in United Internet, and we're now at 173 million shares floated. So EUR 60 million have been already withdrawn over the years. So we could do the same again.

If we wanted to buy more shares, we could withdraw them and then buy more. But we feel very well with these own shares because we can use them to use them as a b currency or to make them as part of a payment for our employees, and they have no voting rights. But if we need to withdraw them because we need shares for tomorrow, we would have to first have them registered with the stock exchange, etc. So it's easier to withdraw our own shares.

Now concerning the dividend policy, we have a policy of paying out somewhere between 25% and 40% of our profit. And what we've been paying out was not an obligatory dividend. It's just what we calculated. We had a catch-up effect now because we paid less over the last few years and in 1 year didn't pay anything at all. So we -- that takes us to an average of EUR 35%. And I think that is what we feel happy with. So the catch-up dividend was 50% and previously, it was 40%. So we -- that was at the upper limit of the 30% limit. Leverage now with the increase program, the purchasing program, we have 2.5 leverage now.

The threshold for us would be 3%. If we calculate without leasing and frequency liabilities, if we calculate leverage, then it is -- the limit would be 3 for us. And as Mr. Dommermuth said, to reduce the leverage with an increase in cash flow over the next 3 years to actually pay it back. It all depends on what we spend the money for. If we buy shares in companies, then it may make sense. If we invest into fiber optic cables into transmission towers, and we have an asset in return. So we are quite optimistic in terms of the 2.5 because they're well underpinned.

But in the long term, we would like to reduce it. We used to have a lower indebtedness and we'd like to return to that in terms of the conditions that we get, they are still very favorable for us. The margins are somewhere between 0.8 and I think 1.4. So it's still, in our view, a good access that we have to the financial markets. We can finance ourselves very well. The overall interest rates have decreased again. So we feel quite well in this context.

Are there any other questions? For Karsten again.

But I asked the last time as well in the context of our economic environment, can you see anything where you do very well, but you also participated in this March meeting with about 60 entrepreneurs. Do you have any optimism for things improving in this country? Or what's your view?

That's a good question. First of all, our business is more than resilient. We've seen all sorts of things, financial crisis, COVID, etc. We never had any problems because we're a provider. We provide e-mail accounts, websites, access -- Internet access to our customers. And before people let go with that, a lot has to happen. Now concerning the overall economic development, I can't say because on the one hand, I see some optimism because people say, okay, the government is well intended. They want to do something. I won't comment on whether it is sufficient or correct, but the trend is that they want to do something.

We have the uncertainties, however, coming from tariffs, etc. So I don't know what comes out at the bottom line. A much bigger worry, whether we have 1% more or less is the question of digital sovereignty because AI will penetrate all walks of life, all areas of the economy, all products, and that determines -- if you determine what the prices are, who can get what services will have enormous power.

And we have to say, and there's China and America today as we talk about AI. And we'll have to see whether Europe can catch up here or whether we fail to do so. And I think over the years, that will be the big game changer because it has ramifications everywhere. You can make the best product if you only have the third best AI, it won't work.

I don't see any further questions here now at this stage. So we would like to thank you for your keen interest and the many questions. I hereby close the conference. I would like to warmly invite you to a cup of coffee, and thank you very much. Safe home and see you next time.