United Internet reported record sales
There was also a further rise in United Internet's customer figures in the reporting period with the addition of 660,000 contracts, taking the total to 14.11 million customer contracts.
This customer growth was mainly driven by the Access segment where the company gained 390,000 Mobile Internet contracts and 170,000 DSL contracts.
In the Applications segment, the company made changes to sales and marketing measures for its Business Applications, as previously announced, during the reporting period. As part of this change, there was less focus on new customer acquisition in the first nine months of 2014 and more on developing and expanding existing customer relationships.
Nevertheless, the company also raised the number of customer contracts in this segment by 100,000 and sold 280,000 new top-level domains (nTLDs) to new and existing customers.
At the same time, start-up losses in new business fields (De-Mail / 1&1 MyWebsite) and for the “E-Mail made in Germany” initiative were reduced to EUR 34.1 million in the reporting period (prior year: EUR 87.0 million) – thanks to rising contribution margins and reduced advertising spending.
At Group level, earnings in the first nine months of 2014 were affected by one-off income from the contribution of investments held by United Internet in the portfolio companies of the Global Founders Capital Funds to Rocket Internet AG.
This one-off, non-cash income accounted for EUR 71.5 million of total earnings before interest, taxes, depreciation and amortization (EBITDA) and earnings before interest and taxes (EBIT) in the third quarter. As a result, earnings per share (EPS) increased by EUR 0.36.
Without this one-off income, EBITDA rose by 35.4% from EUR 280.5 million (prior-year figure) to EUR 379.8 million and EBIT by 49.0% from EUR 210.6 million (prior-year figure) to EUR 313.7 million in the first nine months of 2014. Adjusted EPS improved by 56.5% from EUR 0.69 last year to EUR 1.08.
The entire group's ability to generate very healthy levels of cash while at the same time achieving strong qualitative growth is illustrated by the free cash flow position. At EUR 239.8 million, this figure was also well above the prior-year level (EUR 155.3 million). ■