DGAP-Adhoc: 1&1 Drillisch AG on a Steady Course of Growth in 2017

2018. március 21., szerda, 21:27





DGAP-Ad-hoc: 1&1 Drillisch Aktiengesellschaft / Key word(s): Final Results/Forecast


1&1 Drillisch AG on a Steady Course of Growth in 2017


21-March-2018 / 21:27 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 on a Steady Course of Growth in 2017



- Number of customer contracts rises by 48.0% to 12.64 million (2016: 8.54 million)



- Revenues rise by 15.7% to EUR2.81 billion (2016: EUR2.43 billion)



- Adjusted EBITDA from continued operation grows by 37.2% to EUR532.2 million (2016: EUR387.9 million)



- Dividend proposal of EUR1.60 per share, total disbursement of EUR282.8 million (2017: EUR98.6 million)



- Forecast 2018: approximately 1.2 million new customer contracts, approximately EUR3.7 billion in revenues, EBITDA of approximately EUR750 million



Maintal, 21 March 2018 - 1&1 Drillisch AG (ISIN DE 0005545503) continued on its course of growth in 2017. The Company was able to improve substantially yet again the number of customer contracts, the revenues and the operating profit figures and fulfil its forecast.



The year was marked by the merger of Drillisch AG and 1&1 Telecommunication SE (1&1). The successful conclusion of the complete transaction has created a powerful full-service telecommunications provider that has many different possibilities to take advantage of any opportunities for growth that arise.



Accounting effects of the transaction with United Internet AG



In the accounting, it is assumed that 1&1 as the economic acquiree has acquired the shares of the former Drillisch AG ("Drillisch"). The calculation of the goodwill and the hidden reserves as well as hidden liabilities that must be reversed in the process of the purchase price allocation and the accounting principles that are to be applied as of the point in the time of the acquisition are based on the perspective of the economic acquiree. The consequence is that there is no longer any comparability of the balance sheet and comprehensive income statement of previous Drillisch financial statements because, for one, the figures of 1&1 must be given as the comparable figures of the previous year and, for another, the comprehensive income statement must be prepared according to the cost-of-sales method and the accounting principles of 1&1 must be applied. The date of registration of the Capital Increase II in the Commercial Register is deemed the point in time of the acquisition, i.e. the time at which the economic acquirer obtained control over the acquired company; in the present case, that date is 8 September 2017. The inclusion of Drillisch as the acquired company in the consolidated financial statements is therefore only proportional for the time period from the moment control was gained. Drillisch is consequently considered only for about four months in the comprehensive income statement and the capital flow statement of the Annual Report per 31 December 2017.



Growth of subscribers and revenues



In comparison with the closing date of the previous year, the number of customer contracts in the current product lines rose across all customer groups by 4.10 million (48.0%) - thereof 3.35 million from the first-time inclusion of 1&1 Drillisch - to 12.64 million subscribers (2016: 8.54 million). The figure of 3.99 million customer contracts was acquired in mobile internet business (thereof 3.35 million from the Drillisch takeover) and the total number of contracts rose to 8.30 million (2016: 4.31 million). The number of DSL full-service contracts (ULL = unbundled local loop) rose by 110,000 contracts to 4.34 million.



Besides of the12.64 million customer contracts in current product lines, the company holds a further 0.47 million contracts without monthly payments and service provider contracts (volume tariffs / MSP tariffs). In addition to 0.11 DSL contracts in the discontinued product lines (T-DSL / R-DSL).



Revenues increased by EUR382.2 million (15.7%) to EUR2,812.3 million (2016: EUR2,430.1 million).



Increase in earnings despite further investments in customer growth



Despite the investments in customer growth, the adjusted consolidated EBITDA from the continued operation (earnings from the continued operation before interest, taxes, depreciation and amortisation) increased by EUR144.3 million (37.2%) to EUR532.2 million in fiscal year 2017 (2016: EUR387.9 million). The adjusted EBITDA margin from the continued operation rose to 18.9% (2016: 16.0%).



The adjusted consolidated EBIT from the continued operation (earnings from the continued operation before interest and taxes) rose by 23.4% to EUR468.1 million (2016: 379.3 million). The adjusted EBIT margin from the continued operation rose to 16.6% (2016: 15.6%).



Dividends



Management Board and Supervisory Board will propose a dividend in the amount of EUR1.60 per share to the Annual General Meeting scheduled for 17 May 2018 (previous year: EUR1.80), corresponding to a disbursement volume for 176.7 million shares of EUR282.8 million (previous year: disbursement volume for 54.7 million shares of EUR98.6 million).



1&1 Drillisch wishes to share its business success appropriately with its shareholders in future as well. In accordance with the Company"s dividend policy, the proposed disbursement should always correspond to about 80% of the consolidated operating profit unless the funds are required for the further development of the enterprise.



Outlook



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. 1&1 Drillisch is planning an increase of about 1.2 million in the number of customer contracts subject to charge. Growth drivers are coordinated brand management, higher marketing budgets and the significantly increased offering of subsidised smartphones (mostly without initial additional payment) in sales via GMX and WEB.DE as well as for the 1&1 Drillisch discount brands (smartmobil.de, yourfone, winSIM and others). These measures will affect both new and current customers.



In May 2014, the International Accounting Standards Board (IASB) promulgated the standard IFRS 15 "Revenue from Contracts with Customers". Application is mandatory for reporting periods beginning on 1 January 2018 and later.



Based on IFRS 15, 1&1 Drillisch projects a rise in revenue to about EUR3.7 billion (2017: EUR2.8 billion) in fiscal year 2018. This will result from the planned organic growth, the consolidation of Drillisch for the entire year and the increased offering of subsidised smartphones in conjunction with the earlier realisation of hardware sales in accordance with IFRS 15 (revenue effect: approximately EUR200 million).



The EBITDA in the Group is expected to reach approximately EUR750 million (2017: EUR532.0 million). This includes about EUR300 million in diminished earnings from the additional subsidies for smartphones (recovered via higher rate prices) and the contrary positive effect of about EUR300 million from balance sheet disclosures pursuant to IFRS 15. Synergies of about EUR50 million from the merger of 1&1 and Drillisch, related especially to savings during the procurement of network advance services and smartphones, are also included in the planned EBITDA. These cost savings are contrasted by about EUR30 million in diminished earnings from an increased marketing budget and about EUR20 million in one-off expenditures for integration projects.



Performance Indicators Pursuant to IFRS - Comparison 2017 v. 2016






















































In EURm 2016 2017 in %
Revenue 2,430.1 2,812.3 +15.7%
EBITDA1 (adjusted) 387.9 532.2 +37.2%
EBITDA margin1 (adjusted) in % 16.0% 18.9%  
EBIT1 (adjusted) 379.3 468.1 +23.4%
EBIT margin1 (adjusted) in % 15.6% 16.6%  
Profit per share 2.08 2.28 +10.1%
       
Net payments of the operating activity from the continued operation 65.4 294.1 +349.6%
 
Customer Contracts (Million)
Current product lines
Access, contracts 8.54 12.64 +48.0%
thereof mobile internet 4.31 8.30 +92.6%
thereof DSL/VDSL 4.23 4.34 +2.6%

 

(1) Adjusted for one-off expenses totalling EUR28.2m related primarily to the sale of yourfone Shop GmbH and the restructuring of the retail trade per the end of 2017.




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 pages 37-38 of the Annual Report 2017 of 1&1 Drillisch AG.



The complete Annual Report will be made available on the Company"s home page on 22 March 2018.
https://www.1und1-drillisch.de/investor-relations/reports



Maintal, 21 March 2018



1&1 Drillisch AG

The Management Board



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








21-March-2018 CET/CEST The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
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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@drillisch.de
Internet: www.drillisch.de
ISIN: DE0005545503
WKN: 554550
Indices: TecDAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Munich, Stuttgart, Tradegate Exchange





 
End of Announcement DGAP News Service




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