May 9, 2012

Successful start to FY 2012 for United Internet

- Growth in new customer contracts of 320,000 to 10.99 million
- Sales up 15.7% to new record of EUR 576.9 million
- Strong earnings growth in established business fields
- Expansion course accelerated with heavy investments in new business fields
- 2012 guidance confirmed

Montabaur, May 9, 2012. United Internet AG once again continued its growth path as Europe's leading internet specialist in the first quarter of 2012. The company succeeded in raising both sales and the number of customer contracts to new record levels and significantly increased earnings in its established business fields. At the same time, the company invested heavily in establishing and developing new business fields. With the targets already achieved in the first quarter of 2012, United Internet is well on track to meet its forecast for 2012 as a whole.

Business development of the Group
In the first quarter of 2012, consolidated sales of United Internet AG rose to the new record level of EUR 576.9 million - representing year-on-year growth of 15.7%. Sales in established business fields increased by 15.0% to EUR 570.8 million. In addition, sales in new business fields amounted to EUR 6.1 million (prior year: EUR 2.2 million).
United Internet also achieved strong growth in its customer contracts: with the addition of 320,000 new contracts to 10.99 million, the corresponding growth figure for the first quarter of 2011 (+210,000 new contracts) was easily exceeded.

At the same time, United Internet also succeeded in raising earnings significantly in its established business fields during the first quarter of 2012. Earnings before interest, taxes, depreciation and amortization (EBITDA) grew by 11.5%, from EUR 95.9 million last year to EUR 106.9 million, while earnings before interest and taxes (EBIT) improved by 12.2%, from EUR 76.0 million last year to EUR 85.3 million.

As announced in the forecast for the full year 2012, this positive earnings development in established business fields was used to invest heavily in the development of new business fields. The main focus was placed on the international marketing campaign for the 1&1 MyWebsite, and the development of De-Mail applications. In line with planning, EBIT-effective start-up losses of EUR 37.0 million (prior year: EUR 5.7 million) were incurred for these activities in the first quarter of 2012. These start-up losses result mainly from high expenditures for marketing the 1&1 MyWebsite in six European nations, the USA and Canada and are part of total start-up losses planned for new business fields in 2012 of EUR 86 - EUR 124 million.

As a result of these start-up losses, there was an expected overall decline in key earnings figures of United Internet AG compared to the same period last year. EBITDA amounted to EUR 70.5 million (prior year: EUR 90.5 million) and EBIT totaled EUR 48.3 million (prior year: EUR 70.3 million). Pre-tax earnings (EBT) stood at EUR 44.4 million (prior year: EUR 64.8 million), while earnings per share (EPS) amounted to EUR 0.15 (prior year: EUR 0.20).

"The dynamic growth in our established business fields gives us the strength to invest heavily in new business fields. Thanks to the positive development of our business and the gradual decline in start-up losses from new business fields over the coming quarters, we are well on track to reach the targets we set for 2012 as a whole," states Ralph Dommermuth, CEO of United Internet, in his assessment of the figures for the first quarter of 2012.

Group development Quarterly comparison
(in EUR million)	Q1 2011	Q1 2012	Change
Established business fields
Sales	496.4	570.8	+ 15.0%
EBITDA	95.9	106.9	+ 11.5%
EBIT	76.0	85.3	+ 12.2%
New business fields
Sales	2.2	6.1	+ 177.3%
EBITDA	-5.4	-36.4
EBIT	-5.7	-37.0
Total
Sales	498.6	576.9	+ 15.7%
EBITDA	90.5	70.5	- 22.1%
EBIT	70.3	48.3	- 31.3%

United Internet's business is divided into the segments, "Access" and "Applications", as described below.

Development of business in the "Access" segment As a result of the positive development in customer figures, "Access" sales grew by 16.9% to EUR 375.6 million in the first quarter of 2012. Despite greatly increased costs for new customer acquisition (+160,000 contracts in Q1/2012 compared to +80,000 in the same period last year), there was strong year-on-year growth in EBITDA to EUR 41.3 million (prior year: EUR 31.1 million) and EBIT to EUR 34.8 million (prior year: EUR 23.8 million).

Development of Access segment
Quarterly comparison (in EUR million)	Q1 2011	Q1 2012	Change
Sales	321.2	375.6	+ 16.9%
EBITDA	31.1	41.3	+ 32.8%
EBIT	23.8	34.8	+ 46.2%

The number of Access contracts grew by 160,000 contracts to 4.24 million in the first quarter of 2012.

Customer contracts in Access segment
(in million)	March 31, 2011	Dec. 31,2011	March 31, 2012
Access, total	3.71	4.08	4.24
of which DSL complete (ULL)	2.37	2.51	2.58
of which Mobile Internet	0.37	0.79	0.94
of which narrowband / T-DSL / R-DSL	0.97	0.78	0.72

"The strong development in customer growth and sales in our 'Access' segment illustrates the dynamic trend resulting from our successful penetration of the Mobile Internet market over the last two years," concludes Ralph Dommermuth. "We intend to take the same approach in our 'Applications' segment. International expansion and the development of new cloud and e-business products will open up new business fields for us. The investments we make today will therefore lay the foundation for our future success."

Development of business in the "Applications" segment
Thanks to strong customer growth, sales in the "Applications" segment also rose by 13.5% to EUR 201.2 million in the first quarter of 2012. In the segment's established business fields, sales grew by 11.4% to EUR 195.1 million. In addition, there was also revenue from new business fields of EUR 6.1 million (prior year: EUR 2.2 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) in the established business fields rose from EUR 64.3 million last year to EUR 67.1 million, while earnings before interest and taxes (EBIT) improved from EUR 51.7 million last year to EUR 51.9 million.

These strong earnings in its established business enabled United Internet to make planned investments in new business fields. This resulted in EBIT-effective start-up losses of EUR 37.0 million (prior year: EUR 5.7 million).

Development of Applications segment
Quarterly comparison (in EUR million)	Q1 2011	Q1 2012	Change
Established business fields
Sales	175.1	195.1	+ 11.4%
EBITDA	64.3	67.1	+ 4.4%
EBIT	51.7	51.9	+ 0.4%
New business fields
Sales	2.2	6.1	+ 177.3%
EBITDA	-5.4	-36.4
EBIT	-5.7	-37.0
Total
Sales	177.3	201.2	+ 13.5%
EBITDA	58.9	30.7	- 47.9%
EBIT	46.0	14.9	- 67.6%

In the first quarter of 2012, the number of Applications contracts grew by 160,000 to 6.75 million (of which 2.83 million abroad). This growth in contracts resulted from 120,000 new Business Applications contracts (of which 60,000 contracts for the 1&1 MyWebsite) and 40,000 new Consumer Application contracts, raising their respective totals to 4.79 million and 1.96 million. The number of ad-financed accounts grew from 30.8 million to 31.0 million.

Customer contracts in Applications segment
(in million)	March 31, 2011	Dec. 31,2011	March 31, 2012
Total fee-based contracts	6.26	6.59	6.75
of which domestic	3.74	3.86	3.92
of which foreign	2.52	2.73	2.83
Ad-financed accounts	28.3	30.8	31.0

Outlook
In view of the successful start to its fiscal year 2012, United Internet AG can confirm its guidance for the full year and expects an increase in sales of approx. 15% in its established business fields as well as strong growth in earnings. The company intends to use this growth in earnings for heavy investment in new business fields. Depending on market and customer developments, start-up losses of EUR 86 - EUR 124 million (prior year: EUR 61.1 million) are expected from the year-long international marketing campaign for the 1&1 MyWebsite, and the development and launch of De-Mail applications. In addition to growth of approx. 900,000 customer contracts in its established business fields, the company believes that these investments will enable it to gain an additional 200,000 - 300,000 customer contracts for its new business field "1&1 MyWebsite". Depending on the size of the investments actually made, consolidated EBIT in 2012 is expected to reach EUR 243 - EUR 281 million (prior year without positive effect from the sale of Versatel shares: EUR 253.0 million). This corresponds to an EPS result of EUR 0.80 - EUR 0.90.

Based on strong customer growth in 2012, United Internet anticipates a significant improvement in earnings in 2013 - both in its established and in its new business fields. EPS is expected to then lie between EUR 1.00 and EUR 1.10.

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