DGAP-Ad-hoc: 1&1 Drillisch Aktiengesellschaft / Key word(s): Annual Results/Dividend
1&1 Drillisch Aktiengesellschaft Continues Course of Growth in 2018
27-March-2019 / 19:00 CET/CEST
Disclosure of an inside information acc. to Article 17 MAR of the Regulation (EU) No 596/2014, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
1&1 Drillisch AG Continues Course of Growth in 2018
- Number of customer contracts rises by 970,000 to 13.54 million (2017: 12.57 million)
- Revenue per IFRS 15 rises by +30.2% to EUR3.66 billion (pro forma: +13.3%)
- Adjusted EBITDA per IFRS 15 rises by +35.6% to EUR721.9 million (pro forma: +14.3%)
- Two-track dividend proposal for fiscal year 2018
- Forecast 2019: Continued strong growth in customer numbers, about +4% in revenues, about +10% EBITDA
Maintal, 27 March 2019 - 1&1 Drillisch AG (ISIN DE 0005545503) continued on its course of growth in 2018 and can look back on another successful year of business. Despite the intensity of the competition in its market environment, the Company grew strongly once again and increased further its clientele, revenues and the key operating profit figures.
Growth for contracts and revenues
The number of customer contracts in the current product lines rose across all customer groups by 970,000 over the closing date of the previous year to 13.54 million contracts (2017: 12.57 million). The number of contract customers in the mobile internet sector alone rose by 900,000 to 9.20 million (2017: 8.30 million). Broadband connections increased by 70,000 to 4.34 million (2017: 4.27 million).
In comparison with the previous year, the revenue and profit figures were marked by positive changeover effects from the initial application in the accounting of IFRS 15 (previous year: IAS 18). The IFRS 15 effects on revenue are positive (EUR+277.6 million) while the IFRS 15 effects on profit figures and the expenditures for the increased use of smartphones virtually cancel each other out completely (no or only low one-time payments by customers on conclusion of the contract and return via higher rate prices over the term of the contract).
Specifically, reported revenue in fiscal year 2018 rose in comparison with the previous year by 30.2% from EUR2.812 billion (previous accounting in accordance with IAS 18) to EUR3.663 billion (accounting in accordance with IFRS 15). From the pro forma perspective (with the inclusion of Drillisch over the entire previous year), revenue rose by 13.3% from EUR3.234 billion (previous accounting in accordance with IAS 18) to EUR3.663 billion (accounting in accordance with IFRS 15).
Disclosed adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 35.6% from EUR532.2 million (previous accounting in accordance with IAS 18) to EUR721.9 million (accounting in accordance with IFRS 15). From the pro forma perspective (with the inclusion of Drillisch over the entire previous year), the EBITDA rose by 14.3% from EUR631.7 million (previous accounting in accordance with IAS 18) to EUR721.9 million (accounting in accordance with IFRS 15). The positive effects from the changeover to IFRS 15 contained in this figure totalling EUR268.1 million are virtually offset by additional investments (above all, from the increased use of smartphones) in the same amount so that the two items balance each other out in the bottom line, and to this extent the figures are comparable with those of the previous year. Moreover, the EBITDA of fiscal year 2018 contains realised synergies in the amount of EUR51.1 million and one-off expenditures from ongoing integration projects in the amount of EUR25.1 million.
Adjusted consolidated EBIT (earnings before interest and taxes) rose by 21.2% from EUR468.1 million (previous accounting in accordance with IAS 18) to EUR567.2 million (accounting in accordance with IFRS 15). The lower percentage growth in comparison with the EBITDA (+35.6%) results essentially from increased write-offs on purchase price allocations (PPA write-offs) pursuant to the merger of 1&1 Telecommunication SE and Drillisch AG in 2017.
Profit per share came to EUR2.30 (2017: EUR2.28). Excluding PPA write-offs, profit per share amounted to EUR2.75 (2017: EUR2.57), in the comparison values of fiscal year 2017 contained pro rata temporis PPA write-offs for only four months.
On 24 January 2019, 1&1 Drillisch AG announced its intention to submit an application to the Federal Network Agency for participation in the auction for the awarding of mobile network frequencies ("5G Frequency Auction") and, in the event of the successful acquisition of frequencies, to establish and operate a 5G mobile network.
In consideration of the 5G frequency auction that is currently under way and the investments that may possibly become necessary (depending on the outcome), Management Board and Supervisory Board of 1&1 Drillisch AG have decided to make the following two-track dividend proposal (that is in harmony with the dividend policy) to the Annual General Meeting that will take place on 21 May 2019:
- Payment of a dividend in the amount of EUR0.05 per share in the event that Drillisch Netz AG acquires frequencies as a result of the 5G frequency auction by 20 May 2019. This proposal is oriented to the minimum dividend required in Section 254 (1) AktG. Assuming 176.2 million shares entitled to dividends, this would result in a total disbursement of EUR8.8 million for fiscal year 2018.
- Payment of a dividend in the amount of EUR1.80 per share (previous year: EUR1.60 per share) in the event that Drillisch Netz AG does not acquire frequencies as a result of the 5G frequency auction by 20 May 2019. Assuming 176.2 million shares entitled to dividends, this would result in a total disbursement of EUR317.3 million for fiscal year 2018.
1&1 Drillisch in an excellent position to take the next steps in the Company's development and is looking ahead to the future with confidence. The Company is planning on strong growth in customer numbers to continue in 2019, revenues are targeted to increase by about 4% (2018: EUR3.663 billion) and the EBITDA about 10% (2018: EUR721.9 million). The Management Board plans to provide more precise figures for the EBITDA forecast after the conclusion of the assessment arbitration relating to the price adjustment negotiations with an advance service provider.
Performance Indicators Pursuant to IFRS - Comparison 2018 v. 2017
|EBITDA (adjusted)(1, 2)
|EBITDA margin in % of revenue (adjusted)(1, 2)
|EBIT (adjusted)(1, 2)
|EBIT margin (adjusted) in % of revenue(1, 2)
|Profit per share(1)
|Profit per share excluding PPA write-offs(1)
|Net payments of operating activity from continued operation(1)
|Customer contracts in millions
|Current product lines(3)
|thereof Mobile Internet
|thereof Broadband connections (VDSL/ADSL/FTTH)(3)
(1) In 2017: Without the positive special effects from the sale of Versatel Group
(2) In 2017: Adjusted for one-off expenses totalling EUR28.2m related primarily to the sale of the yourfone Shop GmbH and the restructuring of the retail trade per the end of 2017.
(3) In 2018: Adjusted by about 70,000 broadband contracts from discontinued previous business. The comparative figures of the previous year have been restated appropriately so that the adjustment does not have any impact on the net change.
The complete Annual Report will be made available on the Company's home page on 28 March 2019.
Maintal, 27 March 2019
1&1 Drillisch AG
The Management Board
Financial performance indicators such as EBITDA, EBITDA margin, EBIT, EBIT margin or free cash flow are used in addition to the disclosures required by the International Financial Reporting Standards (IFRS) in the annual and interim financial statements of 1&1 Drillisch AG and in ad hoc reports pursuant to Art. 17 MAR to ensure a clear and transparent presentation of 1&1 Drillisch's business development. Information about the use, definition and calculation of these performance indicators is available on pages 38 and 39 of the Annual Report 2018 of 1&1 Drillisch AG.
Disclaimer: This report contains statements regarding the future which are based on the current assumptions and projections of the 1&1 Drillisch AG management. Various risks, uncertainties and other factors, both known and unknown, can cause actual developments, especially in the results, financial position, and the business of our Company, to deviate substantially from the projections about the future as they are shown here. The Company does not undertake any obligation to update such future-oriented statements and to adapt them to future events or developments.
Head of Investor Relations
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