Ladies and gentlemen, dear guests, welcome to our investors' conference of United Internet. My name is Dominik Grossmann, and I'm happy to welcome you here today in Frankfurt. I'd also like to welcome our guest from Bankhaus Metzler. Let me briefly explain what we're doing today. Mr. Dommermuth will speak about the financial year of 2023 and its development, and give an outlook on the current financial year. Ralf Hartings will then give you more information on the figures. After our presentation, you'll have the opportunity to ask questions as usual. That's all for me. With that, we're going to start with our presentation, and I hand over to Mr. Dommermuth. Thank you very much, Mr. Grossmann. Welcome, and good afternoon, ladies and gentlemen, particularly those that didn't join us earlier for the 1&1 presentation.
I'm here today to give you an overview of the company development and an outlook for 2024. Then Mr. Hartings will give you the financial year results for 2023. You know our business. We have different segments when it comes to internet access and internet applications customized for our consumer and business customers. You see our skills in the center here. We have 11,000 employees. We have a very performant infrastructure, 61,000 kilometers of fiber network in Germany, a 5G mobile network, and more than 100,000 servers in our application business in Europe and the USA. We offer our services via different brands in access consumer. Our main brand is 1 &1. And beside that, we have other brands, our discount brands from the acquisition of Drillisch. We have business customers in access mainly via 1&1 Versatel .
In applications, our consumer brands are GMX, WEB.DE, mail.com, marketed through United Internet Media. Applications for businesses are provided via IONOS. Through acquisitions, they bought over many years several brands, for example, Strato in Germany or home.pl in Poland, Fasthosts in England, Arsys in Spain. On top of our core business of applications and access, we have different minorities with companies that we cooperate with. These are minority holdings that you can see at the bottom of this slide. Let's start with the company development in the access segment. I already presented it for 1&1 earlier, more than 4.01 million broadband connections and 1&1 users, our 1&1 Versatel, and then for the last mile, Deutsche Telekom and city carriers. We have 12.25 million mobile contracts. Since December 2023, our first Open RAN in Europe has been fully operational.
Our first existing customers and wholesale contracts have been migrated, and we are starting to migrate more than 12 million existing customers. 480,000 new customer contracts in the last year, mainly driven by marketing mobile internet contracts. While broadband connections went down, 90,000 connections were lost, but the fourth quarter was stable. Revenue +3.4%. Service revenue increased to EUR 3.243 billion. That's an increase of 2.1%. And other revenue grew by 8.3%. EBITDA decreased by 5.3% to EUR 653.8 million, mainly due to high expenses for rollout costs for our mobile network that increased by EUR 80 million to EUR 132.4 million in 2023. The EBITDA margin is 16%. 1&1 is divided in two segments. Access is one of them that buys services, refines them, and sells them on.
Access has had an EBITDA increase of 5.4% to EUR 786.2 million, EBITDA margin 19.2%, and the mobile network had the planned startup cost of EUR 132.5 million. Now let's come to business access. We acquire business customers and authorities in this segment. Our network is available in 350 German cities, including the 25 largest cities, 61,566 kilometers long. We have more than 25,000 directly connected locations such as companies, authorities, or other contact points, connections with other networks. Revenue increased by 3.8% to EUR 564 million last year. EBITDA increased by 5.7% to EUR 162.9 million. EBITDA margin increased slightly to 28.9%. So in total, a pretty good development. I'll have to tell you that there's huge investment in this area. We are building industrial areas at a big scope, and it's about connecting masts for 1&1 , for example, and connecting these masts to the glass fiber network.
Now let's come to the applications segment, consumer applications, development of email services such as GMX and Web.de. They are designed for private customers, personal information management. We have our GMX email and our German locations providing these services. And of course, the respective data protection requirements. We lost 180,000 accounts last year, 380,000 fewer free accounts, but then we had 200,000 more paid accounts. On the other hand, we had more free accounts in the past, but customers have become more inactive over the last year, and we only count active accounts. And then we had a record number of pay accounts, 2.84 million pay accounts. Then 2.84 million pay accounts, as I said. And for our usage and the stickiness of our customers, it's important that our mobile usage is provided by our own client.
28.5 million with this mobile usage, that's a plus of 500,000, and then 23 million use our cloud storage. So 23 million who use this cloud storage on a regular basis, and that's a plus of 600,000. We are very satisfied with these numbers as well as with our revenue increase of 5.4% to EUR 304.3 million. At the same time, EBITDA increased by 5.2% to EUR 109.8 million. The margin remained more or less the same, 36.1%. Last but not least, business applications. IONOS is Europe's leading digitization partner, listed company for freelancers, small and medium-sized enterprises, and reliable cloud enabler here in Germany. It's active in 15 European countries as well as in the USA with a broad product portfolio customized to our target group. Last year, IONOS was able to gain 350,000 new customer contracts and increase to 9.39 million. That's a good result.
Many came from abroad, 190,000 and 160,000 domestic new contracts. Revenue increased by 10.1% to EUR 1.4 billion, driven by customer growth as well as increased up-and-cross selling and a good aftermarket business. The result increased even more, 13.5% plus in the EBITDA. IONOS always shows adjusted figures, and we are showing these figures without the IONOS adjustments. That leads to an EBITDA margin of 26.2% while the IONOS figures that are given are a bit higher. Now the group at a glance, 1.03 million new customer contracts in the last year. Revenue grew by exactly 5%, EBITDA by 2.2%, EBIT decreased by 3.6% to EUR 762 million, and EPS decreased significantly by 29.5%. The reason for that is mainly the higher startup costs that are included in the EBITDA for 2023 for the rollout of our mobile network. Otherwise, we would have had 1.38 million and not 1.27.
On top of that, we have EUR 424.1 million in depreciations on investments included in the EBIT for 2023. At the end of 2022, we started the operation of fixed wireless access products. And then in December 2023, we started the mobile services as well, but the depreciation started in December 2022, so they were provisioned for 2023. Then we have EUR 71 million more, EUR 71.3 million to be exact, more in depreciations that will come in on top of and have to be accounted into the EBITDA. Then we have EUR 0.13 per share and a lower at equity result, a minus of EUR 0.16, mainly resulting by higher interest. And then we have higher interest rates giving us an EPS effect of minus EUR 0.30 for debt in leases. Now let's come to an outlook for 2024. We had a forecast that we can confirm today.
We are planning with revenues of approximately EUR 6.5 billion for 2024. We want to increase our EBITDA to approximately EUR 1.42 billion, cash CapEx 10%-20% more compared to EUR 756 million in 2023, in particular for building the mobile network. We want to build more antenna locations and for the expansion of the fiber optic network and additional expansion areas for connecting mobile antennas. We want to connect 16 antenna locations, and they are leasing them, but Versatel has the CapEx, and then it all ends up with United Internet. We had a good start to the new year, and we are optimistic that we can achieve this forecast. Now I will hand over to my colleague for more details on the figures. Ladies and gentlemen, welcome everyone. Welcome to today's conference, and thank you, Mr. Dommermuth.
I would now like to speak about the key figures. Some have already been mentioned, but I have some more for you. Fee-based customer contracts were already mentioned, increased by 1 million. Ad-financed free accounts decreased to 6 billion. Revenue increased to EUR 6 billion. EBITDA and EBIT were already explained, so I'm going to skip that. Let's have a look at cash flow from operating activities that increased despite low consolidated net income to EUR 1 billion. Roughly net cash inflows from operating activities increased from EUR 713.6 million, adjusted by a phasing effect from Q4 of the previous year to EUR 828.5 million. Cash flow from investing activities went down by roughly EUR 100 million. This decline is due to higher interest rates and is at EUR 43.6 million. You'll find a more detailed graph of our cash flow on the next slide.
The free cash flow bridge starts at our EBITDA of EUR 1.3 billion. In a first step, we reduce it by special items, CapEx, and derivatives. Then the main items are the higher CapEx, minus EUR 792.1 million due to the investment in network building at 1&1, taxes amounting to EUR 240 million, and contingent payments to Deutsche Telekom amounting to EUR 276 million. Then working capital of EUR 53.6 million leading to a free cash flow of EUR 36.4 million and a minus of minus EUR 85 million after leasing. Let's come to the group balance sheet. The balance sheet increased from EUR 10,358.5 million to EUR 11.245 billion. The drivers for assets were mainly property, plant equipment, and tangible assets. Due to increased investment in the mobile network expansion, expenses that increased due to higher leases, Telekom contingent payments mainly.
When it comes to liabilities, equity increased by EUR 260 million, and liabilities to banks increased by EUR 310 million. The equity rate went down by roughly 2 percentage points. The net bank liabilities amounted to EUR 2 billion, roughly, by the end of the year. We are taking your questions now. Thank you very much.
Vielen Dank. Soweit unser.
Thank you very much. That's it for the presentation, and I will start into the Q&A session. I would ask you also for the benefit of our remote participants to use the microphone that you will be given. Before asking your question, please tell us your name and the company you come from.
Der ersten Reihe, Polo Tang.
First row, please, Polo Tang.
Hi, it's Polo Tang from UBS. Just have three different questions. The first one is, is there anything preventing you from spinning off IONOS this year, and can you talk through if there would be any tax issues from such a move? Second question is, does it make sense to have 1&1 separately listed? Would it not reduce your sum of the parts discount if you bought out all of 1&1? And the third question is, can you give us an update on what your stake is in Tele Columbus post the recent capital raise, and what are your longer-term plans for your Tele Columbus stake? Thanks.
Ja. Ich muss mich erst mal schlau machen.
I just needed to follow up for Tele Columbus because I don't know all the details. Let's start with IONOS. A spin-off, if I understood correctly, can be tax-free if you own 100% of the company. That means we'd have to put our shares of IONOS in a separate entity, and we would then have to list this entity. Then, to my understanding, it's tax-free. Then we would have two listed IONOS. One is the current free float, and the other would then be the part that is held by the United Internet shareholders. This doesn't sound like it makes a whole lot of sense at the moment. Another opportunity for a spin-off would be to have a dividend in kind. We can do that at any point in time. We can always give out a dividend in kind. We only had to add the amount of the income tax.
At least that was my understanding. That's the opportunities for a spin-off. But we don't have any plans to do any such thing at the moment. But your question was what the rules would be for such a spin-off. At least that's what I understood. Then you asked about the separate listing of 1&1. We reached that listing by integrating the 1&1 business into the Drillisch AG in 2017. The current free float is currently the inventory of the old Drillisch shareholders. And of course, one might ask themselves, does this have to be like that forever? Does this company have to be listed forever? At the moment, however, there are no plans to delist the company or to take over the shares. There are no thoughts going into that direction. But maybe we will reach that point at some point in time.
But up until now, it has never really come up as an option. And we're not unhappy with the listing. Of course, we're unhappy with the share price, but 1&1 doesn't need capital. 1&1 has invested fixed money at United Internet, can pay for all construction projects quite well, so we don't need to be too upset about the low share price. Then you asked about the Tele Columbus stake. I think we originally envisioned a different development when we took a shareholder we went into Tele Columbus.
So I think we expected the development a bit better than what has happened, especially the interest development. We didn't really forecast that. Tele Columbus is currently spending a lot of money on interests due to their financing structure. Other than that, operating business is making good progress. There was recently a capital increase. We did not participate in that in the first place.
It was initiated by Morgan Stanley Infrastructure Partners. We have a catch-up right, so we have six months to think about whether we might still want to participate or not. So we will look at that in roughly May or June. And then we will look at the development of the company until then, specifically in regard to losing the ancillary cost privilege. You know that as of June 1st, July 1st, the costs for cable television will not be paid together with the lease. They will have to be billed separately. And the question is how many customers manage to keep their cable providers. It doesn't only hit Tele Columbus, also Vodafone or other cable television providers. So how many customers will be lost in this process because they say, "Well, I don't even need cable television because I use IPTV," for example?
We will have to look at that when it happens, and then we will evaluate and decide in May or June. Next question. Question from Titus Krahn. Thank you. Titus Krahn from Bank of America. I have two questions. First question on the consumer application segment, which was very strong this year, also benefiting from price increases. Could you please elaborate a bit further and give us a bit of an outlook on future price increases that will certainly also happen or have an effect on the first half of 2024, but also on the marketing market, which is an important driver? Second question would be on the business access segment and the investments you're making in that area. I think we can all do the math and know the CapEx budget ourselves. But within this CapEx budget, what percentage, what proportion is budgeted for the 1&1 network expansion?
How much is budgeted for B2B, and how much is purely maintenance for the existing network? Thank you very much. Let's start with your last question. Yes, you can do the math. You can know the CapEx that we have in 1&1 Versatel. It's quite high. We're currently in what I would call a land grabbing, where we want to expand areas with glass fiber, and we want to convert that into usage. That doesn't only apply to private households but also to businesses. Therefore, we're focusing on industrial areas that are close to our lines, our connections, so that they're easy for us to connect. We, of course, want to we're looking at the number of companies in that industrial area, the proportion of different industries, and on the existing providers already present.
Then we're doing a pre-marketing, and once certain thresholds are reached, we're making the investment decisions, and only then will we invest the actual CapEx. Then we have certain ideas how high usage will have to be after a certain time. So how many connections do we have after one year, two years, etc., depending on what we invested and what we constructed? And as long as we're on a good path, we're happy to make these investments because we know we will make that money back. You need a certain amount of time until you've reached a good ratio compared to CapEx, but it's only a matter of time. You don't need to wait for ages. Same goes for real estate. Once I've leased that out to a good tenant, I have a good return. The nicer thing is that we only have industrial or commercial clients.
We have good, high-quality leases, and therefore, it goes a lot faster to have a good return compared to the consumer business. That's why we decided to go down that path. The main portion of CapEx goes into this expansion of industrial areas, but of course, you know that we need CapEx to keep the system running overall. We also need CapEx for our radio masts. I don't know the number from the top of my head, but I read in our management report that we reported on the result without these new business areas, so without the connection of the new 5G radio masts and without the industrial clusters. We would not only have a positive EBITDA but also a significantly positive EBIT in what we call base business. So we have a base business which works well, which works positively.
We want to expand the business or in industrial clusters that we decide case by case after pre-marketing so we can always put a stop to it. Therefore, it's a low-risk investment. We don't have to first construct a nuclear plant only to find after 10 years that we cannot operate it. No, we decided on a cluster-by-cluster basis. And for 1&1, we only connect our radio cells when we have a lease with 1&1. Therefore, the CapEx stands on a good foundation. Sorry that I don't have the exact figures for you right now, but that's just as far as the methodology goes. So we're quite happy, and we spend CapEx in a way that we have a fast return compared to other infrastructures. You also asked about consumer applications.
Last year, we increased the prices of our pay services, and still, we had significant growth in our pay services. I just showed you that with +200,000, and that is continuing into the new year. For consumer applications, we will have a very strong first quarter, strong EBITDA, strong revenue growth, for once it's driven by the pay services but also by marketing. We're looking at a plus of roughly 7% in advertising marketing. Growth in pay services will be even higher than that. Will this continue throughout the whole year? We have different assumptions according to our planning, not because we think business will go badly but because we're going to restructure part of that business.
We've had a COO change last year in November, and we also have now a couple of new ideas we want to reprioritize together with the new COO, and the team has agreed already to that. So that will mean that the result in this segment in this year, despite significant growth due to the ongoing investments, will be flat. So that's our assumption in our business plan. But like I said, not because the business is not going well. You can see that in Q1, business is going great, but because we want to invest into improvements, and we want to invest into new business areas. Therefore, consumer applications, to sum it up, very good start. Now it gives us a lot of leeway to invest into further steps. Next question from Nizla Naizer.
Naizer from Deutsche Bank. I have two questions as well. The first follows up on consumer applications. Could you remind us how strategic is it for the rest of United? Do you use it to cross-sell 1&1 products? Just how important is it to still own it? So how do you view your ownership there strategically would be great to understand. The second is you showed that you do have smaller minority stakes as well. Any plans to increase your stakes in these businesses, or how do you view future M&A to strengthen what you already have? And linked to that, are you happy with your leverage levels, or do you think you can lever up the business a bit more, or would you want to lever it down by some divestments? Some color on how you think of the financial profile would be great. Thank you.
I cannot tell you much about the strategic level of the consumer applications. Why is that? Because in the next couple of months, we will conduct tests with the marketing of eSIMs. I briefly mentioned on how many people use our mobile apps, and all of these apps will get an eSIM functionality. And with a push of a button, consumers will be able to download an eSIM contract without having to go into the Google Store, go through a complex identification process just to get an eSIM contract. Looking at the number of our customers, of course, we're hoping to get quite a significant business with that because we have more and more phones able to support eSIM. More than 50% of the phones we're delivering are capable of providing eSIM services. And in the future, we think there will be no more prepaid SIM feature of business anymore.
We're not even in the prepaid business right now, so this is an opportunity for us to enter into this business. But of course, it allows me also to sell eSIM contracts in the future. We want to try all of that out. We will start in the second semester of this year, and we'll just have to see how that goes. If it works well, then of course, the strategic importance of consumer applications will increase. And if it does not work, then the significance will remain the same. Right now, they're a good profit driver for us, and they're also a good sales channel for our DSL and mobile contracts, but it's not a huge opportunity. It's not a huge pillar right now.
It's not that our business would completely break down if we didn't have it, but it's still good for a couple thousand contracts that we enjoy having. On the minority shareholdings, some of these shareholdings haven't been paid in cash by us but by services, by gaining contracts. So we're given equity for these shareholdings. And things like this will happen once in a while. But in the future, we will probably not do it under the umbrella of United Internet. But if you look at, for example or if you exclude, for example, Tele Columbus, all the other minority shareholdings have an interface with IONOS. So some sort of I think we will do some equity for customer deals or something like that in IONOS. But we have even together with Springer, we have 20%. Springer has 80%.
We've been a shareholder for a long time already, and we just have to see what business will look like in the future. Certainly, there will be quite a positive development and increases year by year, but we cannot say right now if we'll stay in there forever. But on the other hand, we will also not say that we will exit very soon. We'll just have to look at the development in the next couple of years. Then we have Tele Columbus, where, as I said earlier, we will make some decisions in the next couple of months if we will participate in the capital increase, if we will improve. We will just have to see according to the depending on the business development. On leverage, I agree. If you look at bank loans, we have a leverage that is underneath the 2x EBITDA.
You see this year, EBITDA is growing well. Of course, our leverage is also increasing, but EBITDA is increasing at the same time. And with our model, we have now reached a peak. So leverage will keep increasing this year, and then next year, it will remain stable. Afterwards, it will probably rather decrease. So now we could maybe think about using this headroom. Currently, we're not thinking about that because we don't know what the frequency purchase will look like in the future. For the last frequency purchase, we had EUR 3.3 billion in loans that we were able to actually access. At the end of the day, our frequency costs were deferred, which was a lot better, but we didn't know that from the get-go. At the moment, there are a lot of discussions on the extension of frequencies.
In that case, we wouldn't have to pay any cash. Instead, we'd pay so-called administration costs every year. But we don't know if that will be the case at the end of the day. If there will be an auction, then we need to have this headroom in order to be able to participate in this auction. Therefore, we're currently not thinking about deleveraging. Are there any further questions, Usman Ghazi ?
For the opportunity, I wanted to touch base on Versatel and IONOS. For Versatel, if I look at the EBITDA from 2021 till 2023, EBITDA has been flat at EUR 160, right? But the CapEx for Versatel has gone up at least by 2.5 times. Just from the outside, that implies that you're building a lot of fiber, but the penetration rate on the fiber that you're building out is pretty low. Otherwise, the EBITDA growth would have been much stronger. Perhaps could you give a bit more color on what are the penetration rates that you are seeing in business parks, maybe 3-4 years after the fiber has been built out, just to give us an idea of the potential upside to EBITDA in Versatel as you monetize these fiber investments? And then my second question was on IONOS.
Obviously, the company continues to perform very well but is held back in the public markets by the liquidity situation. United obviously has a big shareholding. I mean, do you have any views on how you might help to resolve or improve the liquidity in the stock? Thank you.
At Versatile, from 2021 to 2023, we've seen a growth of EBITDA. This growth in EBITDA was roughly EUR 9 million from 2021 to 2023. You're absolutely right. We're also investing a lot. Why is this not higher? First of all, we have a delay between the construction of a cluster and the marketing and the connection of individual businesses. In the beginning, utilization is low, and then it grows bit by bit. We will see that in the next couple of years because we've only started with this business model two years ago. Glass fiber business overall is growing with more than 10% per year. On the other hand, we have less business in the non-recurring area. So for example, we're doing voice terminals for other carriers or also for business customers.
Our business customers were used to paying per minute, and nowadays, of course, they don't want to pay per minute for voice. They want to have a flat rate. So in our non-recurring business, in the last couple of years, we have lost. But in our recurring business, we've seen nice growth. But now we only see the net worth. And if we don't see the fiber optic business alone, and we don't see the recurring business alone, therefore, we're quite satisfied with the fiber optic development. Of course, it could always be more, but we're quite satisfied, and we're in line with our guidance. Then you asked about the IONOS liquidity. We don't feel responsible for that because we've had an IPO. Within the scope of the IPO, 15% of shares were provided. There was a contract that we had with Warburg Pincus that we had with Warburg Pincus.
This contract ended at the day of the IPO. They joined in 2018, and there was an agreement that by a certain point of time, an IPO needs to take place and that at least 15% need to be free-flow shares. Therefore, we have provided our share of 75%, but that was not our goal. We did not want to sell anything, and we wanted Warburg Pincus to sell all of their shares for this free-flow. But this was not what our contract said. Therefore, we needed to provide these shares. This also ended our sale of IONOS shares because we've been a part of this company for many years, and we see ourselves as a we see it as a major part of our group. Simon Stippig. Hello. To get back to frequency and frequency costs and capital allocation in United Internet.
You said leverage level is okay at the moment, but you might want to get another credit line potentially depending on the frequency situation. But would you be able to defer the costs of frequency? If you were able to defer frequency costs again, what would be your first priority in capital allocation? Would it still be investment in one of the companies, or would it also be, for example, special dividends or stock buybacks? Because you would benefit from that as well. I would be grateful to get a bit more insight in this. If frequency costs will be deferred again, we don't know. We might know after the auction, so I can't answer that today. I don't know if there will even be an auction or if there will be administration costs that would also have a lower capital outflow every year. We'll just have to see.
If we did not have a large liquidity need and we'd say we'd use our headroom, then we don't have any specific plan on that today. But let me give you an example. If we participated in the capital increase in Tele Columbus, then that would cost us EUR 120 million, which we would then have to pay. Or Mr. Huhn mentioned it in the 1&1 conference. We're starting to construct rooftop locations, and these rooftop locations will or we want to sell these rooftop locations to Tower and then lease them back. Question is, when would be the right time for that? Will we get a good multiple today, or would we get a bad multiple due to the high interests, and we will wait for the interest situation to cool down a bit?
Those would be my priorities for now to see what would be our capital need for existing investments. For example, at Tele Columbus, if we want to participate, will it be successful to sell the towers at a good price and to lease them back at a good price, or would we rather hold onto them for a certain amount of time, one to three years? I don't know. Then that would cost us part of our CapEx. But other than that, you're on a good path if you say, "Well, if I had a stock buyback or a nice dividend," then of course, I'm always willing to do that because I also see how low the stock is how low the stock price is. Of course, I always think our stock price is too low, but currently, I think so even more.
So therefore, I wouldn't have anything against a stock buyback. And looking at the dividend, we have to say that our shareholders have given up a lot in the past couple of years. In 2018, they got EUR 0.85. 2019, the year of the frequency auction, we waived the dividend payment. We only paid the minimum dividend of EUR 0.05. So EUR 0.80 were missing there. And then in the years after, we only paid EUR 0.50. I know this number. By chance, if we paid EUR 0.85 again next year and we wanted to catch up, for the last couple of years, we'd have to pay EUR 2.05. So it was EUR 0.50, and it was EUR 0.05 and EUR 0.50. So if I wanted to mitigate all of that and say, "Well, now this phase of uncertainty, this phase of investments is over.
Therefore, we pay a special dividend," then it would be EUR 3.05. You can see I know this number, so you can see that I've already thought about it. But this would mean EUR 300 million for us, this special dividend payment. Therefore, we need to see how the auction goes, then we need to see what money do we need for existing investments, and then we can potentially come to the conclusion that a stock buyback would be nice or that we could pay a long-term higher dividend or that we pay a special dividend. All of that would be possible, but nothing's decided yet. I currently don't see any further questions. Thank you so much for your participation. I'll thereby conclude this conference. I'd like to invite you to stay for coffee and see you soon. Take care.