Right, good afternoon, ladies and gentlemen, dear guests. Welcome to the Analysts and Investors Conference of United Internet. I'm very happy to be able to welcome you here in person, and I obviously also welcome those guests who are here by webcast. Now, let's quickly look at today's agenda. I mean, firstly, Mr. Dommermuth is going to be taking the floor and presenting the company development in 2024, and also take a look at what we're expecting for 2025. Carsten Theurer is going to share the financial year 2024 results with you. Obviously, at the end, there'll be ample time for a proper Q&A session. Mr. Dommermuth, the floor is yours. Good afternoon, ladies and gentlemen. I think many of you I've already seen and personally welcomed. Many of you were already in the meeting for 1&1. I hope you won't be bored.
I am in charge of corporate development and will also give you the outlook for 2025. My colleague Carsten Theurer is going to go into the nitty-gritty details of the financials in 2024. You know, we're reporting in four segments: applications, internet access for consumers, private consumers, and business customers. We have 11,000 employees, and we have a good infrastructure, transportation network, 66,000 km of fiber optic networks, 5G mobile networks, and over 100,000 servers who are running into computing centers in the whole of Europe and the US. We are offering our products via different brands and investments, predominantly via the brand 1&1, our most important brand. In addition to that, we have brands such as Smartmobile or WinSIM. In the business customer business, we have 1&1 Versatel. For consumers, GMX, web.de, and mail.com, and United Internet Media business customers.
We have IONOS predominantly, and their subsidiaries where all of whom we also have grown inorganically by buying companies, particularly in Spain, in Britain, Poland, and other countries. We have certain minority shareholdings as well. Let us just start with consumer access: 3.95 million broadband connections, 12.44 million mobile contracts, and the first open RAN in Europe, fully virtualized. We are doing the migration of existing customers from wholesale contracts since January 2024. We are actually moving 50,000, migrating 50,000 customers per day and hope to be done with this by the end of the year. We have internet with 190,000, a very slight decline in the broadband applications. Our sales dropped by 0.8%, but other revenue certainly comes from making smartphones available to our customers.
We have had a marked slowdown, minus 10.8% to EUR 761.2 million, but this is a low-margin business and doesn't really affect the result. We have minus 9.6% EBITDA. It's EUR 590.8 million, including minus EUR 265.3 million costs for the rollout of the 1&1 mobile network. Prior year was minus EUR 132.4 million, where we had 133, I mean, I just said EUR 132.4 million of additional cost. How do I explain this EUR 70 million difference? They come from our operational business. That is the area of access where we had a plus of 8.9% EBITDA increase to EUR 856.1 million and EBITDA margin of 21.1%. That too, I think, very satisfying for a wholesale business because here we are asset light, basically. In the 1&1 mobile network, we're building our own mobile network, and I have told you markedly higher costs for infrastructure here than the year before.
Business access, 1&1 Versatel, 66,376 km of fiber optic networks available in over 350 German cities, including the 25 largest ones. When we say business locations, have been linked by plug-and-play solutions for businesses. This runs via 1&1 and 1&1 Versatel. We are predominantly using 1&1 Versatel for business applications with businesses or any form of public or state authorities, plus 1.9% revenues and increase to EUR 574.9 million. This is a bit miserly, that plus 1.9%, you're going to say, and I also would have hoped for more, but we have to say we are, in fact, losing sales in the voice area. I mean, in the past, we could basically bill for any moment used, and that is no longer feasible today. All people do want a flat rate for what they do, particularly business customers.
Voice usage is actually reduced and reducing. At the same time, monthly subscriptions for the fiber optic links are increasing so that below the line, we can still show a plus of 1.9% of added revenue. The EBITDA has risen by 1.4% to EUR 165.1 million, and there are minus EUR 21.6 million startup costs for the new business areas, 5G and expansion of the commercial areas. Obviously, this also includes data centers, and we also have startup costs for business areas where we're basically linking business areas at the same. At the start, we have one or two customers, and then we have two, and then we have ten. This is an ongoing process. Let's talk about applications. Let's start with consumer applications. You've possibly known GMX, web.de, and mail.com. You know all of those. This is a broad product portfolio for private customers.
We have email, we have tasks, appointments, calendar, online office, and cloud storage. We also have a differentiation through data protection and security. Basically, the consumer application accounts, we've actually seen a minus of 0.76 million. We have invested quite a lot to ban spam, so the attractiveness of the system has increased. We haven't lost accounts that were key accounts for us. 3.04 million pay accounts, that's 240,000 more than the previous year. We have plus 7.7% revenue increase to EUR 298.3 million, plus 6.6% EBITDA to EUR 113.2 million, and 37.9% EBITDA margin. Previous year was at 38.3%, and all of this with just very little CapEx because running the data centers requires a lot less CapEx than building a mobile network.
I think we can say that the EBIT is also at about EUR 100 million, but you've got it in your handout. These are business applications via IONOS as Europe's leading digitization partner for freelancers, small, medium-sized enterprise, and reliable cloud enablers, active in 15 European countries as well as in the US, Canada, and Mexico. We basically have plus 220,000 new customers, particularly abroad, plus 160,000 abroad, 4.96 million, and plus 60,000 domestic, 4.63 million, plus 9.6% increase in the revenue to EUR 1,560.3 million. Customer growth, and we have moderate revenue growth in the ad tech segment as a result of temporary phasing effects in connection with the new product launch, plus 2.4%.
The ad tech segment is a small segment, so if we exclude that and hone in on the core segment, then we see a revenue growth of +11.6% in the core business, digital solutions, and cloud. I think this is quite healthy. EBITDA did even better, +15.1% last year to EUR 430.2 million. I'll show you the non-adjusted results because IONOS itself shows adjusted results, and they also do adjust it. The billing carve-out, they used to have a joint system, but after the IPO, they now have their own one. They need to, and they have it. Therefore, you can see the numbers without the adjustment, EUR 430.2 million. That is despite the fact that we're in a tech segment. At the EBITDA side, we did slightly worse.
We had minus 16.5% less EBITDA in the ad tech segment, but then in the core business, if we were to exclude that, we'd have 20% EBITDA growth in our core business. We have now summed up the numbers, plus 590,000 customer contacts in the group. That's plus 1.9% of revenue. EBIT is in decline, minus 15.3%. EBITDA plus 0.1%. If you look at the EPS, if you look at the operational EPS, then you basically have to process the EBIT first, which was negative, and that is why the operating EPS was only EUR 0.98, but positive was plus EUR 0.03 as a financial result, minus EUR 0.99 impairment on Kublai and Tele Columbus investment. You know we are in mediation proceedings with them, and that there, I think the last capital increase has strongly diluted that effect.
We have one-off tax effects through a regrouping that we need to show is minus 0.30, so we show a negative EPS of -0.28. The dividend proposal to the AGM 2025, we suggest to pay EUR 0.40 per share, regular dividend, plus EUR 1.50 per share, one-off catch-up dividend to compensate for the reduced dividend payments for the financial years 2018 to 2023. You can see the red columns. Those are the dividends we paid in euro cents: 2016, 80 cents; 2017, 85 cents. You see 2018, the legal minimum of 5 cents, and then a regular 50 cents for the years 2019 to 2023.
The National Grid Agency has decided that the auction of new frequencies is going to be postponed by a few years, and that actually makes us confident that 1&1 will be able to do and shoulder the burden of this auctioning process on its own without any external financial assistance. We've said we'll actually pay an extraordinary dividend of EUR 1.50 to compensate for these weak financial years beforehand. That will take us to roughly 35% of adjusted consolidated net income after the minority interests, and that is what we want to pay out with these 35%. I think we'd then be happy and healthy. I mean, it obviously still needs the consent of the AGM, but I would assume that it'll come like that. In 2025, this new year, we've seen revenues of approximately EUR 6.4 billion. EBITDA is roughly at EUR 1.35 billion.
In 2024, it was at EUR 1.295 billion, so it's basically a minus EUR 20 million deductible due to the change of national roaming structures and the provider at 1&1, but no impact on the EBIT. It costs us EBITDA, but in the EBIT, it stays the same. The cash CapEx is approximately EUR 800 million, and it was EUR 774.6 million in 2024. If you add that up, so there's EUR 20 million on these EUR 1.35 billion, then we talk about a 6% growth for EBITDA that we're planning to reach this year. Cash CapEx, I already said, EUR 800 million, slightly more than last year, particularly driven by the expansion of the 1&1 mobile network and 1&1 Versatel with the fiber optic networks and basically linking up more and more business centers and basically affording to run the base business.
So much from me, and I turn the floor to my colleague, Carsten Theurer, who is going to go into the nitty-gritty details of the financials with you.
Thank you very much. Good afternoon. I'd like to give you a summary and give you an overview. Let's have a look at the results and the trends. First of all, the customer contracts, you've already seen them with a growth of 0.59 million coming from consumer access, 1&1, 130,000 new customers, consumer application portal, 3,240,000 paying customers on top, and business applications, 220,000 plus. So 29.02 million paying contracts. Free accounts at finance is a slight decrease and a shift from free to paid accounts due to the security issues with the free accounts. Revenue, 1.9% plus.
Here we can say that for 1&1, EUR 32 million minus in revenue, but in service revenues a plus of about EUR 60 million and low margin decreasing from EUR 93 million. From the 1&1 segment, a slight decrease compensated by consumer applications with EUR 20 million in growth and business applications with EUR 136 million in revenue. The EBITDA plus 0.1%, same as the previous year, even though we had higher expenses for the 5G network expansion with EUR 132.9 million in expenses. We also see the improvement of the access segment for 1&1, EUR 70 million more in EBITDA, which can somehow compensate for the expansion expenses. We have EUR 45 million more in business applications EBITDA compared to the previous year. Let's go to the EBIT.
Here you can see our expansion of the network, EUR 117.2 million higher depreciations compared with the previous year, minus 15.3% EBIT and more assets and the depreciations effects that come with it, so minus EUR 117.2 million. Cash flow. Let's have a look. You can see an increase here despite lower consolidated net income. You can see here the effects of the EUR 117.2 million of depreciation, and you also have the Kublai depreciation of Tele Columbus. The third factor here is taxes. Versatel was included tax-wise to United Internet to be able to make use of the losses. You have a slight tax impact here and had to take latent taxes out of the balance sheet with EUR 80 million of an impact. The net cash inflows from operating activities. You can see a slight increase despite the lower consolidated net income.
Here we have the contract assets that have seen a slight decrease with a lower hardware sales volume in 2024. Let's go to the cash inflow from investing activities, a slight decrease of CapEx that led to a decrease in investments. The net cash flow from financing activities. Here we see an increase due to higher interest expenses, about the same as what you can see here. Now here you can see the cash flow bridge from the EBITDA to free cash flow, EUR 1,294 million of EBITDA 2024, net CapEx in minus EUR 770 million roundabout, and then the contingent payment to Deutsche Telekom over the past four years. This is the last year. In 2025, we will not have the same amount. Then taxes, then the change in working capital that leads to the free cash flow of EUR 184.5 million.
Deducting leasing, we get to free cash flow after leasing of EUR 47.4 million. Now let's have a look at the balance sheet. Here you can see the trends that I have already mentioned. We have tangible assets increasing about EUR 600 million due to investments primarily into the 5G network coming from 1&1 and Versatel. The goodwill mainly unchanged. In financial assets, you see a decline in the Kublai share with EUR 170.5 million. Accounts receivable mainly unchanged. Contract assets I have already mentioned. Here you can see the effect of the decline of the volume, the hardware 1&1 volume that has an impact, a negative impact in the contract assets. Inventories and deferred expenses. Here we see the leases, rental and pre-service providers, payments, telecom contingent contract, which leads to this increase in assets. Income, tax claims, and other assets, cash and cash equivalents.
We see a slight increase in the claims due to upfront payments because we included Versatel and now we can make use of the positive effects, and that leads to the increase in the income tax claims. Cash and cash equivalents at reporting date, a slight increase as well. As Mr. Davies said, we are in an investment phase, and so the phasing effects play a role, and this is what you can see here for cash and cash equivalents. This could be optimized. Let's switch to equity. First, the equity ratio mainly unchanged due to the balance sheet sum. We are talking about 3 percentage points to 46.5%. Liabilities to banks. We see an increase here due to the financing over the past few years, and you can see the different factors here. Telekom contingent payment, EUR 262.9 million, and CapEx that was linked to that.
Trade accounts payable, 1&1's business, mainly an increase of about EUR 100 million. For contract liabilities, it's about the same as the previous year, and accrued taxes and deferred liabilities, the passive latent taxes, that has a slight increase, that is one factor. We have the positive effect that the tax we have to pay goes down due to the positive effect mentioned before. Accrued liabilities and other liabilities at reporting date. Now, the total here, you can see the effect of the investment phase and the assets, the tangible assets that have gone up, and this is what you can see here in the total. With that, we end this presentation, and we are happy to hear your questions. Thank you very much. Now we'll start our Q&A session. Please wait for the microphone. We'll start with Polo Tang, UBS.
From UBS, I've got two questions. The first question is really just about use of cash because you've announced a EUR 1.50 special dividend, but would you consider special dividends or buybacks in the near to medium term? Can you maybe talk about what your priorities for use of cash are going forward? In terms of leverage, you're running right about two times leverage at the moment, but in your view, what is a comfortable leverage range? Is there a floor? Is there a ceiling? Second question is really just about the perimeter or shape of the group, specifically in terms of IONOS. You've previously talked about spinning it off. What are the latest thoughts on this topic, and are there any tax implications? Thanks. I first didn't understand what you meant by IONOS split, but it was just explained to me.
Now, this is not something we have planned. We are happy to have IONOS on board, and as you could just see, we're quite happy with the results. In regards to cash, now we have this catch-up dividend that we have paid due to the lower dividend over the past few years. The National Grid Agency has postponed the auction, and we will have a larger frequency volume. 1&1 will by then have a larger network, and we suggest to our shareholders that we should now pay the adequate dividend for 2018 to 2023 by 35% to increase it by 35%. We're not planning on changing the overall dividend policy, and there's no reason to do that now that we have that one-time dividend to catch up. We don't want to change our overall dividend policy with special dividends or the like.
We do not plan on a buyback either. You never know what is going to happen, of course. Who knows what is coming next and what we will decide then, but for now, this is not something that we are planning to do. You also asked about leverage and our bank net, about two times our EBITDA, and we feel comfortable with that, and we have low financing costs. If you look at our margins, what we pay between 0.8% and 1.4%. For Euribor, I think it is 3.5%. I know what I am talking about. 3.5% interest rate. Compared to that, we have a very cost-efficient financing, and especially in this investment phase, interest rates are very important, and our debt needs to stay in adequate limits.
Ich sehe eine weitere Frage in der dritten Reihe. Ist Simon Stippig, Warburg? Simon Stippig von Warburg Research.
Auch vielen Dank nochmal für diese Präsentation und die Möglichkeit, jetzt Fragen zu stellen. Ich hätte drei Fragen. Die erste ist hinsichtlich Ihren eigenen Aktien, Treasury Shares, die haben Sie auf der Bilanz. Was planen Sie denn damit? Die zweite Frage ist der Bewertungsabschlag, den die Holding hat, gemessen beispielsweise an IONOS, ist doch relativ hoch. Planen Sie irgendwas, diesen Bewertungsdiscount zu reduzieren? Sprich, man kriegt ja eigentlich 1&1 und das E-Mail-Business umsonst. Und die letzte Frage ist hinsichtlich Versatel, was planen Sie denn da in der Zukunft an CapEx weiterhin auszugeben? Wie hoch ist da Ihre Penetration der Gewerbeparks? Nur so ein bisschen ein Gefühl zu geben mit Term, was da Ihre Pläne sind. Vielen Dank.
Ich fange hinten an. Das ist die schwierigste Frage mit dem Versatel CapEx. Ich denke mal, das CapEx wird die nächsten Jahre runtergehen, einhergehend mit weniger Ausbau für 1&1. lot of CapEx at the moment for providing the data centers. We have to do the 1&1.
There is still the obligation of making networks available, and they will be linking them, and that is going to come to an end in the next few years. That is why in this area it is going to go down. The CapEx is going to go down. On the trading parks, it is possibly going to stay the same or similar, but we are not going to be accelerating this development because we do not just have to build it and put the infrastructure into place, but we also have to market it and sell it so that we always make sure that whatever we build in terms of infrastructure then gets put to use as well. We are slightly behind our plans rather than running ahead.
That means we're not going to push this building rate into the umpteens level, but to just continue doing what we're doing and then market it well and sell it. 1&1 and the others, we are going to have those structures in future. The base business is going to be slightly declining because we have invested a lot into modernization, and then we basically have a little bit less of that. Possibly that was my input on Versatel. You had asked, are there plans of doing something with our own shares? We're actually using our own shares for staff participation programs, for example. We've got a share program where people can actually settle payments with cash or with shares, but we actually do not need as many of our own shares as we have here. We're only holding about 10% of our shares ourselves.
I mean, those shareholders do not get a dividend. They do not vote, so they do not damage anybody or disadvantage anybody, but they basically help us that if we wanted to do our own incentive program for our own staff, we did not have to create those, but we could take them in. At the top, we had 252 million shares, and now we are at 192 million, and of those, 173 million are free-floating, and the remainder is held by the company. We have already gone down from 252 million to 173 million through buying some back. After the IPO, we are at 176 million, but there are no special plans as to what we want to do with these shares we are holding ourselves. Possibly a purpose is going to arise, but there is also not a disadvantage for us having them.
On the deductible, we have the problem, or I shouldn't say problem, but that's the situation that many holdings have, that you have different business models, and the shareholders are actually reacting to that by putting a deductible on that. We basically don't have any plans to use that deductible. We could only do that by selling off parts of this, and that is not something we're planning to do. I also don't feel bad at all because the shareholder actually came in with a deductible at the time. I mean, sometimes it's higher, sometimes it's lower, but that's something decided by the capital markets. As a general principle, we've always been a holding, so we have never changed our business model. We always had these different concurrent business models, and that is basically the essence of this company. Volker Glaser, please. Volker Glaser, MPPM.
In the field of consumer applications, you've increased your EBITDA slightly to EUR 113 million. What are your further plans there, and also your financial expectations also when it comes to the general perspective? Now, on the topic of IONOS, from investor to investor, you have given an outlook today with an EBITDA of EUR 510 million. That looked quite good indeed. Cloud and Solutions with 8% growth. Is that something that makes you happy? Is that enough? Last year in August, you had very clearly said you are not going to sell a single share to IONOS. Are you continuing to say that because the perspectives are what they are with IONOS? I'd like to have your gut feel. Let me start at the end again. There are no plans to sell any IONOS shares. As I said, the company's developing well.
It does not give us any headaches, really. I think the financing is working well. Financial efforts are financed easily. EUR 510 million EBITDA after EUR 450 million adjusted is healthy. I think that is a good value. I think it is something we like, obviously. You said 8% growth with digital solutions and cloud. That is more than our competition can say for themselves. You said from shareholder to shareholder, I could imagine more. I mean, we can always imagine more. I would love 10 and 12. Obviously, that goes without saying. You also have to keep an eye on how much money you want to invest into winning over new companies. It is difficult to do both things: to strongly increase profitability and to outgrow the market, to buy additional market share that normally goes at the expense of your profitability.
At the end of the day, I mean, the management puts together a business plan, and I have to say that their priorities are right. Of course, we could actually show more growth at the detriment of the financial result. I mean, these are our priorities, and I think they're all right. I think the other supervisory board has agreed with that as well. That is why we adopted this proposal. You then just said the other portal went to 6.6% EBITDA. That is a better result than before. What is the perspective? How do we see this? Yes, we will see more growth in the years to come at this portal, but I do not know whether we are fully capitalizing on all of our potential here, whether we are getting all of our horsepower on the road.
I think that is something we would like to see more here. Yeah, I can certainly say that. We will obviously have to see what the next few years will bring. I mean, there are some points that speak in favor of room for maneuver in this area, but there are always points that you have to bear in mind: changes within the market or other things that affect you negatively. As I said, in the next few years, I am sure we are going to see growth rates, but we are not going to fly into the moon, unfortunately, just to curb excessive expectations. Right. I think certainly in the cloud area, I think there is a lot of potential upside that I can see.
There's also certainly data security, mobile telephony security, data security on mobile phones, where we have to say we have huge potential, where lots of customers are not saving their mobile phone data in any cloud so far, and therefore we see great opportunities in that area. It's not there. Using our data pool, obviously, which is also a data treasure, obviously, but there is continued that there will be growth, but I do not see a skyrocketing of it for the next few years. Another question, I think, here in the first row. I'm Klaus Stötter. I'm coming from Solventis. Let me be a bit of a nag. I mean, the dividend you're paying out for these years where you have been paying underproportionately badly, you've just explained why you're doing it and how you're doing it.
It is now being paid to the shareholders, and there's obviously one anchor shareholder who gets a lot of the money. I mean, what are you planning to do with this? I mean, you said you were going to be a little nerve-wracking, and I could say that it's none of your business, it's mine, but let me possibly begin at the start. You correctly said I'm a major shareholder of United Internet, and therefore it is true if you say that I dominate the AGM.
If you look at how I've looked at the proposals of the shareholders and also of the supervisory board and the shareholders' representatives, I could have voted for other things, but I haven't done that, and I've basically forced the other shareholders to accept that lower dividend because I wanted to be prudent, and we could possibly say that prudence is no longer required. That is why I think it goes without saying to say, "Okay, this is now safe, and we can now pay out the money." I mean, that was a demand we heard from these small-scale investors every year because why do you keep that dividend? Why are you not paying? Therefore, I think this is appropriate and right to now compensate for it and pay. You want to know what I do with my dividend?
I'm not going on holiday with it. You will not believe it. I have enough cash. I could actually go on holiday for the rest of my life. I do not think I'll take it and go on holiday. No, certainly not. We have somebody in the second row. CA again. CA again, France City Group. I have two questions, please. The first one is really the market consolidation has been a key topic, especially with the change of the EC. Maybe the broader question is how you think about the market consolidation, and specifically for United Internet. Do you see there could be a scope for you to have further strategic cooperations with your competitors, either through consolidation or through network JV? That's my first question. The second question is more about numbers.
I was wondering if you can help us to understand the moving parts of your free cash flow for 2025, maybe also give an indication about how should we think about the free cash flow profile for the years to come. Thank you. Right. On market consolidation, I do not think I have any thoughts. I mean, I have to be a bit crude here. I cannot tell you anything else on market consolidation. It is not something we talk about. Regarding the free cash flow 2025, we are going to be moving to a very similar level as in 2024. The subsequent years, we will hopefully generate a bit more cash flow. I see a positive trend.
When we will see an increase, I cannot tell you because we have our investments coming, and we do not know when and what they are, but the trend is definitely going to be a positive one. The gentleman from HSBC, please.
I have got three questions, please. The first one, in your presentation, I think you made some comments about IONOS carving out some systems from United Internet to be a bit more independent. I was wondering, is that process, if I have understood that correctly, is that process fully finished now, or is there still more they could do? Or maybe there are advantages you want to talk about for them having still some links to the group? The second question builds on a couple of others on capital allocation, and I suppose the old chestnut of the value that you see in the IONOS listing.
I appreciate the comments that you've made around the dividend or the special dividend. Did you consider any alternatives such as the 1&1 minorities? Is that just a separate conversation from your perspective? Have your thoughts at all changed there? A question for Mr. Theurer. Could you talk a little bit about your plans and focus for the next 12 months? I wondered if you wanted to comment on anything you've seen initially in your new role or anything that you want to work on in particular. Thank you. Ja, fange ich mit den 1&1 minorities.
I'll start with the 1&1 minorities. In the past few years, we have actually bought the odd share package for 1&1 when they were offered to us. When the price is good or was good in the past, when we felt that the price is appropriate, we'd also buy packages.
There is not so much free float in 1&1. I mean, there are not that many shareholders who hold major packages, but if there were to be one who wanted to talk to me and say, "I want to sell," then I'd always listen and be generally interested, just like I've always done it in the past few years as well. Now, on the independence of IONOS, they used to use commercial systems of the corporation. They continue to do that with SAP applications, etc., etc. It does make sense to administer that from one spot. There are systems where they have special needs, and that was, for example, in the field of billing. That is why IONOS decided to acquire a new billing system, and it's actually undergoing a test phase in Spain as the first market for rollout.
We will basically, after the test phase, if it goes well, roll it out for the remainder of Spain. Subsequently, there is also going to be a rollout for other nations to follow. I think in two years' time, that should be completed. Without actually saying things that the management have not officially said yet, that is a major part also of the adjustment of the EBITDA within IONOS because this is basically a legacy burden that they are still dragging along with themselves and that they would ideally like to shed ASAP. Regarding my plan, there are parts that I can choose freely, parts that I have just taken over. An S4 SAP migration where the project is just starting, I think that is something that is going to keep me pleasantly occupied for the next two years to come.
Now, on the one hand, we obviously have a high-level view there, so we're talking about synergetic effects across the group and also intra-group cooperation. There is the topic of independence on the one hand and optimized cost structures on the other. Those, I think, are going to be the main topics that are going to be my focus for the year to come. Noch mal eine Frage. Another question. Mark Hallenberg, fourth row. Yes, thank you very much. In regards to 1&1, you have already said something. Now, can you add anything on Tele Columbus and the procedure? What's the current state? As far as I know, the mediation procedure is undergoing, and I think they have now found mediators, the arbitration procedure, and its BS is. The DS procedure is undergoing.
The arbitrators have been appointed, and they are in the beginning of the procedure, and it'll take some time. Another question in the second row. Hans-Dieter Klein, Hastet Alpha. A long-term question. In the next two years, you will then have built up your network, licenses, frequencies, you said maybe 2028, and then you'll have concluded your investments. Could you then think of a new dividend policy afterwards? You are still growing, you have state-of-the-art technology, you have high free cash flows. Would you then consider changing your dividend policy and going over to a much higher dividend? Yes, that would be fantastic. That is our goal. I mean, we will not conclude the network expansion within two years. This is going to take some more years and still cost money, but it is correct after the next frequency auction.
If that does not cost us too much cash, and if we do not have to pay too much for financing, if we can continue to have low-cost financing and fewer expenses, and of course, other disclaimers, what could happen, then yes, it would be appropriate to pay out a higher dividend. We have seen that in other companies that do not have strong growth because in total we do not have strong growth. We can then, of course, pay an adequate, appropriate in telecommunications as 1&1. Why should they not pay a higher dividend and United as well linked to that? Yes, that would be the perspective. That is the desire here. Another question for Kacklasa. Mr. Dommermuth, I would also like to ask this. With the federal government planning on more digitalization, IT, and so on, do you see any opportunities there?
Any possibilities for IONOS, for example, how IONOS could benefit from this federal program? IONOS is also building a cloud for the federal administration. What's the status quo and what's your outlook? Yes, I could see that. That's a topic we are looking into for IONOS. As far as we know, the topic of cloud, digital sphere, that plays a role in the coalition agreement. We will have to see what the outcome will be. I think that here in Germany, we are at a top location to do more in this area. If we get support for better growth or even better public orders, as it has been the case in other countries as well, that would be great. That could also lead to growth impulses or should actually lead to growth impulses.
For IONOS, yes, it should be a very positive development to see that politicians are now seeing that we need to catch up in this field. If there are opportunities, I will make sure, together with the management, to seize those opportunities. The status quo of the project for the federal administration, as far as I know, we're going approximately according to plan. That's what I've heard. There are different projects. It's the National Grid Agency. It's the Job Agency. It's 200 administrations that we are modernizing. My last question. Pinkers has already sold a large part of the shares, so I think you have a colleague in the supervisory committee. I'm always telling them to get it done, to sell the remaining 3% or what, to then have more free flow that would be good for the share.
We do not have questions like that referring to the overhang. My colleague is not telling me anything about it, which is, of course, the right thing to do. I do not know if he can make that decision or if that decision is being made in New York or wherever. Yes, I would love to see that as well, to see this getting to an end. We would like to see a 36.2% free float. That would be quite comfortable. I do not know what that would be in EUR, maybe a billion, so that we could get in and out. There is a certain free float today as well, but it would be better to have more. Another question on the left, Carsten Doblinger. Yes. Hello. In regards to your corporate structure, you said that you are not planning on introducing any changes.
I was a bit surprised to hear that because two and a half years ago, I do not know if that was just an idea of the capital market, but there were rumors that the telco business would be merged and IONOS would be paid out. Now it does not sound like that anymore. What can you tell us about that? We had not thought about that. Paying out IONOS, we would have to do that before the IPO, together with Pinkers. Before the IPO, we could have saved taxes then, but if now we have 63.8% of shares of IONOS, then we would have to pay the taxes accordingly, and that would be on top.
If we wanted to do that, we should have done that before the IPO, but it was never our goal to do it, and neither is it our goal today. Of course, you never know what the future will bring, but for the moment, there are no such plans of a split or selling it or anything like that. I'm asking you because the deductible over the past two, three years was not like that before, and before the share price was evaluated very differently. We did not have the 100% of the sum of the parts before, and so, of course, the deductible was different. We are not in charge of the share price. I do not understand why you are not doing a share buyback program now. As I said, there is a certain debt, but it is at low cost.
With the higher dividend, EUR 1.90 per the number of shares, it is a total of EUR 240 million. That basically would be the implication of the buyback. Who knows, maybe there will be a buyback program at some point once we have more clarity and stable financing and so on. We have done that in the past, so we could do it again in the future, but for now, we said we will catch up on the dividend, and then we can check that point. Maybe there will then be a good moment for a buyback program. We want to make sure that the shareholders that are staying can then benefit from that. Right. Another question from Warburg, I think. Thank you. I have got one more question regarding the free cash flow. Mr. Theurer, you just said it is going to be at the level of 2024.
When I look at that, then I see those EUR 260 million that you've paid to Deutsche Telekom and EUR 25 million more CapEx. EBITDA was supposed to be growing slightly. Quo vadis the rest of that? I would like to know because I think that would be quite interesting to hear. One question to Mr. Dommermuth. In which of the three shares would you invest if you had to make the choice? Oh, well. That's a good question. I think United Internet is low, and 1&1 is low, and IONOS as well. I find them all underrated and undervalued, but I remember in 2021, we actually split the share 40 times. I think in 2000, we actually had split it 10 times or something, and the share was at, I don't know, possibly EUR 50 or something. I can't remember.
It then went down to EUR 20, and we said to our supervisory board, and they said, "That's way too cheap." We technically wanted to do a capital increase, and it's completely undervalued. After the internet bubble burst, the share was at EUR 0.40 or something. I mean, I do believe it's underrated, undervalued. I think it affects all three, but I obviously can't forecast as to whether it is going to be even more underrated tomorrow or whether it will go up. It is difficult to tell that I would prefer the one or not the other. I do think in 1&1 we have a lot of leeway to make up, and if it works, then we will see strongly increased profitability that speaks in favor of an investment in 1&1.
On the other hand, we have to say that there is a lot of pressure from the market. The price pressure is huge. Telefónica hyper-aggressively pushes prices across the whole of the market. I mean, you need to look at with IONOS, I'd have to say they still have a strong business model. Small and medium-sized companies have to invest more and more. They just have to be present on the web. And with the cloud computing, we are getting more and more traction in this business. I mean, even the government has now said more has to happen in that field. I mean, those are growth opportunities directly benefiting IONOS.
I mean, you could also talk it down and do it the other way around and say, "Oh, possibly small companies will no longer need a web presence because there won't be websites because people will just use artificial intelligence and get their information. I'll just talk into my mobile phone, so give me the seven best offers or the three best so-and-so's because I want to buy XYZ." I mean, then people no longer need all these websites. I mean, there are always scenarios how you could inflate it or deflate it. The same holds true for United Internet. We have a deductible for being a conglomerate, but is that going to increase or decrease? Only the Lord knows. I think I'd invest in all three. I mean, I am very strongly invested in all three.
I always say to my people, "Let's walk our talk." I mean, I have been walking and talking for a long time. Right. On that cash flow question, you're absolutely right. The contingency payment goes down, but we have these EUR 240 million that also will find its reflection in the books so that they mutually compensate for one another. Right. I don't see any raised hands right now. Yes, there is one in the first row.
Thank you. Maybe a question for the new CFO, Carsten. Mr. Dommermuth laid out a few options that you have, potentially more share buyback if you cancel shares, potentially acquiring more of the minorities in 1&1. What is the financial leverage flexibility that you deem to have as CFO in the company while keeping the cost of that attractive? Is two and a half to three times net equity a fair range for you?
From my point of view, up to 2.5% I'd be comfortable. I think up to three, no problem. Yeah, maybe we shouldn't go above that. I mean, if you ask for a ceiling level, then I'd say three. Right. Anybody else requesting the floor before we come to the end? I don't see any more hands, and I use the opportunity of thanking you for your attendance and attention. May I invite you to have a coffee with us at the end, and I look forward to seeing you next time round. Thanks indeed. Bye-bye.