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MarketScreener Homepage  >  Equities  >  Xetra  >  1&1 Drillisch    DRI   DE0005545503

1&1 DRILLISCH

(DRI)
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1&1 Drillisch AG: Substantial price increase from July 2020 onwards for the use of Telefónica's network capacity. As a precaution EBITDA forecast 2020 reduced to approx. EUR 600 million.

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09/18/2020 | 10:35pm EDT

DGAP-Ad-hoc: 1&1 Drillisch Aktiengesellschaft / Key word(s): Forecast/Change in Forecast
1&1 Drillisch AG: Substantial price increase from July 2020 onwards for the use of Telefónica's network capacity. As a precaution EBITDA forecast 2020 reduced to approx. EUR 600 million.

19-Sep-2020 / 03:31 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: Substantial price increase from July 2020 onwards for the use of Telefónica's network capacity. As a precaution EBITDA forecast 2020 reduced to approx. EUR 600 million.

Maintal, 19 September 2020. The first five-year prolongation phase of the existing MBA MVNO agreement between Drillisch Online GmbH, a wholly-owned subsidiary of 1&1 Drillisch AG, and Telefónica Germany GmbH & Co. OHG (?Telefónica") started on 1 July 2020. The MBA MVNO agreement serves to implement the commitments of Telefónica under the merger clearance decision of the EU Commission regarding the merger with E-Plus. The parties are negotiating parallel to the for some time ongoing negotiations to conclude a national roaming agreement also the prices under the MBA MVNO as from July 2020. Despite the ongoing negotiations, yesterday, Telefónica has sent 1&1 Drillisch MBA MVNO-invoices for the advance service prices for July and August 2020 with the advance service prices that Telefónica considers to be applicable without making this subject to agreement in the negotiations.

Whereas, so far, the voice prices per minute and data prices per GByte were reduced steadily in the last five years based on the MBA MVNO Agreement, Telefónica now assumes consistently high voice prices per minute and data prices per GByte from July 2020 and for the following years. They shall be equivalent to the average prices in the period between 1 July 2019 and 30 June 2020 and no longer be reduced in the future. Furthermore, certain, so far free of charge capacities for voice and SMS shall no longer exist. This, compared to the previous months, resulting price increase as from July 2020 and the future discontinuation of the annual price degression will result in annually substantially increasing additional costs, in particular due to the expected significant annual data growth. As a precautionary measure, 1&1 Drillisch therefore reduces its EBITDA forecast for 2020 und now expects an EBITDA of approx. EUR 600 million in this year instead of approx. EUR 683.5 million (the EBITDA of the previous year). Moreover, also in the next years, there will be high decline in earnings should the prices requested by Telefónica continue to be applied permanently.

This forecast is still subject to uncertainties as a precise assessment of the duration and further effects of the coronavirus pandemic and the outcome of the ongoing negotiations is currently not possible.

The outcome of the ongoing negotiations also has an impact on the rollout of a high-performance 5G network planned by 1&1 Drillisch. This is because national roaming will be required for a multiyear transitional period. For the national roaming agreement, which is negotiated between Telefónica and 1&1 Drillisch for almost two years on the basis of Telefónica's commitments under the EU merger clearance decision regarding the merger with E-Plus, the prices of the MBA MVNO Agreement are principally applicable. However, it is not foreseeable whether an agreement will be reached and under what conditions.

1&1 Drillisch considers the advance service prices claimed by Telefónica from 1 July 2020 onwards to not comply with the commitments of Telefónica under European Commission's merger clearance decision on the merger with E-Plus as well as the MBA MVNO agreement. In the agreement, for both five-year prolongation periods from 1 July 2020, according to 1&1 Drillisch's understanding, only provisions to determine the maximum prices per bitstream component were agreed. The prices per unit (per GByte, voice minute and SMS) to be determined within these maximum requirements must also be guided by the market trends and continue to be annually reduced to enable the offering of mobile tariffs in line with the market.

1&1 Drillisch will take the measures necessary to safeguard its rights (including possible claims for damages). 1&1 Drillisch is in exchange with the European Commission on this issue. Furthermore, the prices are subject of ongoing price adjustment proceedings initiated by 1&1 Drillisch. Telefónica is blocking the appointment of an independent expert for the two price review proceedings initiated in January and July 2020 (Price Review 5 and 6). 1&1 Drillisch has, with respect to the appointment of an expert, already filed a request for arbitration for the Price Review 5 proceedings and is preparing the necessary steps for the Price Review 6 proceedings].

Maintal, 19 September 2020

1&1 Drillisch Aktiengesellschaft
The Management Board

Contact
Oliver Keil
Head of Investor Relations
Email: ir@1und1-drillisch.de

Note:
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 page 37 of the Annual Report 2019 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.




Contact:
Oliver Keil
Head of Investor Relations
Mail: ir@1und1-drillisch.de

19-Sep-2020 CET/CEST The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Archive at www.dgap.de


Language: English
Company: 1&1 Drillisch Aktiengesellschaft
Wilhelm-Röntgen-Straße 1-5
63477 Maintal
Germany
Phone: +49 (0) 6181 - 412 218
Fax: +49 (0) 6181 - 412 183
E-mail: ir@1und1-drillisch.de
Internet: www.1und1-drillisch.de
ISIN: DE0005545503
WKN: 554550
Indices: SDAX
TecDAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange
EQS News ID: 1133919

 
End of Announcement DGAP News Service

1133919  19-Sep-2020 CET/CEST

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© EQS 2020

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Yield 2020 0,29%
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Average target price 25,38 €
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