United Internet AG (UTDI) Earnings Call Transcript & Summary

[Interpreted] Ladies and gentlemen, dear guests, welcome to our press conference, investors. I'm Dominic Grossman, Investor Relations, and I'm happy to welcome you to our webcast today. Our Board, Ralph Dommermuth and Martin Mildner are going to give you an overview of the development of the business in 2023 with the respective figures and give you an outlook on 2023. Following our presentation, the Board will be available to answer questions. And I pass the stage to Mr. Dommermuth.

[Interpreted] Well, thank you very much, Mr. Grossman. Good afternoon, ladies and gentlemen. I would like to give you an overview of the fiscal year 2022 and an outlook for 2023, and then my colleague, Mr. Mildner will give you some details on the business year -- on the fiscal year 2022. You know about our 2 segments, access and applications, which we then break down into consumer business and business customers. In the center of the graph of Page 4, you can see our assets, 10,500 employees and about 5 million contracts that we generate per year, 50,000 registrations per day for our free services, 67 million accounts in 18 countries our data centers and our fiberglass infrastructure in Germany. We offer our services and products via different brands. For Consumer Access, the main brand is 1&1. And then we have the discount brands from taking over Drillisch: winSIM, Premium SIM. For business customers, we offer services under the brand 1&1 Versatel. For the Applications business for consumers, we have the brands, GMX, WEB.DE and mail.com. Marketing of these portals is handled by United Internet Media. And the business customer business IONOS is our main brand. And then we have other brands that we acquired over the years, such as home.pl. in Poland, Arsys in Spain, Fasthosts or Strato Germany, World4You in Austria. We also hold minority shares at AWIN, Open-Xchange, rankingCoach, Stackable, Tele Columbus, and Uberall. Let's start with the access business. And first, with Consumer Access. Here, we have about 4.1 million broadband customers, who use our Internet access by DSL or fiber-to-the-home. We have good quality, which is certified with various wins or certificates. But the most important network Internet access test in Germany, the so-called Connect test. Then we offer mobile business for consumers. We are the leading MVNO in Germany. Before, we used the infrastructure of Vodafone and Telecom -- Telefónica. We are building up our own infrastructure now, and we're approaching different market segments. In Consumer Access, we were able to generate 53,000 new contracts -- 350,000 new contracts in 2022. And operatively, these were numerous new contracts, but due to the modifications of the telco act, we had a lot of customers leaving earlier. So we had a net gain of 350,000 customers. We expect this to be better this year. Turnover in Consumer Access increased to EUR 3.943 million (sic) [ EUR 3.943 billion ]. The service revenue, which is most valuable, is included in this with EUR 3.175 billion. That's an increase of 1.5% (sic) [ 1.7% ]. Other revenues, particularly from smartphone provision, increased by 1.1% to EUR 767.6 million. EBITDA in Consumer Access was 3.2% better than last year. The EBITDA margin at 17.7%. It was 17.4% in the prior year. If we look -- closer look at EBITDA and break it down, then we have 2 different subsegments to look at. First of all, the pure access business and then the ramp-up of the 5G mobile phone network in the access business, i.e., with DSL and fiberglass -- fiber optic and mobile services that we acquired from Vodafone and Telefónica, we were able to achieve an EBITDA of 5%, more than last year was 19% margin. The 5G network cost of EUR 51.7 million in ramp-up costs after EUR 37.9 million last year. Next to consumers, we also address businesses, of course, and we offer fiber-optic access points. 1&1 Versatel is our brand for this business, and it operates a transport network of 55,000 kilometers length. We reached 250 German cities among them, 19 of the 25 largest cities. In these cities, we have 23,464 directly connected locations. These are mostly companies or authorities. We also have handover points of telecom and of city networks in order to cover the last mile with FTTH or fiber optic so with partners such as Telekom or wilhelm.tel or -- and NetCologne. But the fiber-optic direct connection takes precedence for our business customers. Revenues increased by 5.5% at 1&1 Versatel to EUR 514.4 million, which includes losses from negative regulatory effects to the tune of EUR 6.1 million. And if we ignore these, we have a comparable revenue increase of 6.7%. EBITDA was 3.1% lower than last year, amounting to EUR 155.6 million. This includes the start-up costs for the construction of the infrastructure for the 1&1 mobile network, 1&1 Versatel, made some fiberglass -- fiber-optic cables available to 1&1 but also data centers, so we need [ 580 ] data centers across Germany. Also, EUR 2.3 million were invested into the migration of SDH customers, and there were higher electricity costs. If we factored this in, the EBITDA would have been increased by 4.7% if you ignore these effects. Now let's speak about the applications business, starting with the consumer business again. Here, our e-mail services are increasingly becoming a communication information and identity management portals with numerous applications that go far beyond just e-mail services. We are one of the leading providers of consumer applications in Germany alone. We have 35.2 million active accounts, holding about 50% market share from private e-mails. We are differentiated by data protection and data security. And on the left-hand side, you can see a table where you can see the market position of our brands compared to Google, Microsoft, Telekom or Facebook. Overall, we were able to win 160,000 new accounts. We have 42.95 million consumer accounts worldwide by now, 40.31 million of those being free accounts and 2.64 million pay accounts. What's important for us is mobile usage as well. Our customers can use our services via the mail clients hosted on smartphones, but then we can't reach them. So we count separately how many of our customers use our -- clients our mobile website. And we were able to increase this number by 300,000 to 28 million. What's also important is the usage of our cloud storage. Here, we were able to add 600,000 new active users to a total of 22.4 million users. Revenues only increased by 1.7% -- only 1.7%. Well, we started very well in the new year. In the first quarter, we still had 7.5% due to the start of the war in Ukraine and increasing inflation. However, we found that there was some restraint in the marketing -- market, and we -- this is reflected in the quarterly figures that are much reduced in the second quarter then [ grew it ] in quarter 3. But in the particularly relevant fourth quarter, even a decrease compared to the prior year. So 1.4% EBITDA. We have a similar development here. It increased to EUR 119.3 million. Again, this includes higher electricity costs. A comparable EBITDA would have been 4.4% higher. The EBITDA margin is quite stable at 42%. Now as for Business Applications, where we started as a web host many years ago, evolving into a solutions provider for e-business, targeting particularly small and medium-sized enterprises. That's where IONOS already presented its figures. It is, by now, an independent company. So let me speak about this again. IONOS had a very strong market position. It's the leading provider in Europe, active in 18 countries, and there's a particularly good position -- is in a particularly good position in many European countries. It has a wide range of services from services -- productivity services to cloud solutions. Customer contracts increased by 260,000 to 9.04 million contracts now. 90,000 of them have been added abroad and 170,000 in Germany. Revenues increased by 17.4% to EUR 1.248 billion in 2022, driven by customer growth, increased up- and cross-selling but also through a particularly strong growth in our aftermarket business. If you disconsider the aftermarket business and look at the subscription business, only revenues increased by 7.5%. The EBITDA, excluding IPO costs, was unchanged at EUR 318.2 million, which includes additional marketing expenses last year at IONOS. We invested an additional EUR 32.4 million into marketing. And also, we have higher electricity costs here again due to the operation of data centers in Europe and the U.S. If we disconsider these effects, the EBITDA would have increased by 15.1%. The EBITDA margin is now 25.5%, coming from 29.9%. The target for IONOS is to go back in that direction and to achieve 30%. Now how is that supposed to be achieved? By stopping the growth of marketing efforts for branding so that with increasing scaling, the EBITDA margin should increase. As I said earlier, the IONOS already presented its figures earlier today. Let me explain to you where there are any differences. We report revenue of EUR 1.248 billion of Business Applications. IONOS reports EUR 1.293 billion because there is also intercompany revenue for the United Internet Group that IONOS reports. Similar situation with EBITDA. We show EUR 318.2 million. IONOS includes its intercompany profits and shows IPO costs so that IONOS reports EUR 320 million and then makes adjustments to the tune of EUR 25.2 million so that the adjusted IONOS EBITDA of EUR 345.6 million. By way of summary, the most important KPIs for 2022. Revenues increased by 4.8%. EBITDA increased by 0.7%. EBITDA includes, of course, much higher electricity costs and also the cost that we have for the ramp-up of the 5G network, which was higher than last year, similar for the EBIT at -- 0.3% increase in EBIT. EBT at EUR 720.8 million. For the EPS and EPS before PPA, you have lower figures as explained below. We have EUR 0.11 lower EPS. EUR 0.05 come from financial -- valuation of financial derivatives, and the rest comes from negative result of Kublai, where we have an interest, and Kublai holds shares in Tele Columbus, which, for 12 months of last year, we had them in our equity compared to 8 months in the prior year. Now before I hand over to Mr. Mildner, here's our outlook. Business has developed very well, and this is to continue this year. We can see a revenue increase of about 5% to EUR 6.2 billion. The EBITDA is to be at the same level as prior year at about EUR 1.272 billion, which includes, however, EUR 120 million for network rollout compared to EUR 52 million in the prior year. You can see that our company needs to increase its performance in order to achieve this, investing extra money into the network while maintaining its EBITDA. CapEx is to be approximately EUR 800 million after EUR 681.4 million in 2022, which is due to the buildup of the mobile network but also the expansion of a fiber-optic network. We provide fiber-optic access to ever more business areas, business parks. And we also make sure that we build up our mobile communication antennas. So I would like to ask Mr. Mildner to give you the results in detail.

[Interpreted] Thank you, Mr. Dommermuth, and welcome on my behalf as well. After Mr. Dommermuth has given us the outlook in 2023, I'll go back to 2022 and want to take you through the details in addition to the figures that you've already heard, giving you some major key figures concerning the cash flow and the balance sheet figures. On Chart #32, you see the key figures that you've just heard: turnover revenue, EBITDA, EBIT. I won't go through these again. I would focus on the CapEx now. Last year, with EUR 681.4 million, we were higher than in the year before 2021, that is, which is mainly due to the initiated 5G development and rollout and the investments corresponding. And you may remember that we had a guidance out on -- ranging from EUR 800 million to EUR 1 million (sic) [ EUR 800 million to EUR 1 billion ] CapEx, and that was reduced to nearly EUR 700 million, and we came out at EUR 681.4 million. Now on the balance sheet, we have 2 major features, which is the bank liabilities, which have increased due to the investment, of course, from EUR 1.822 billion to EUR 2.155 billion, and net that is EUR 2.150 billion (sic) [ EUR 2.115 billion ]. It was from EUR 1.712 billion. The equity has slightly increased from 50.9% in '21 to 51.2% in 2022. On the next chart, you will see the free cash flow bridge. Coming from EBITDA 2022, the operative of EUR 1.271 billion, you see the net CapEx situation of EUR 677 million. That considers a couple of investments. The net number was at EUR 677 million. EUR 452 million taxes and interest. There's a contingent payment of EUR 189 million going to Telekom. The working capital has reduced by EUR 32.7 million so that we end up out of free cash flow of EUR 79.4 million. And after IFRS 16, the leasing payments are not included in this. They are put on top. That's EUR 126 million so that we have reported free cash flow after leasing at 2022, which is minus EUR 205.4 million. At the same time, we have 2 more positions on the bridge, which result from a phasing effect, which I have explained last time already in 2021, taking effect in '22. One was a Telekom payment, which was delayed in 2022, should have been paid in 2021 of EUR 97.2 million, and the revenue tax wasn't changed so that we have liabilities there. And these payments were not done in '21, but after the new legislation early in '22. And this is why we have this phasing effect of EUR 72.8 million so that after all that, we end up with a cash flow at EUR 35.4 million. On the next chart, we have some major balance sheet figures. Looking at the assets side, as always, this is the short-term and long-term asset assessment joined up so that the figures are not directly taken from the balance sheet, but it's the long-term and short-term assets. Together, here in the tangible assets, I think we have to see that this has increased due to the major investments in 2022 into the 5G network. And the company values have hardly changed. The financial have only reduced slightly by EUR 3 million. That is the involvement of Kublai GmbH as Mr. Dommermuth has just talked about. Our liabilities of services has slightly increased by EUR 2 million, and our contract assets with the operative assets by EUR 865 million and the stock of [ EUR 31.3 million ]. And the other values have hardly changed, [ EUR 117.42 million ], and the payment. We try to keep that at EUR 50 million at the end. We ended up at the cash equivalents of EUR 40.5 million, EUR 40.5 million coming from EUR 110 million in '21, where '21 had an end year payment for the sale. And on the last chart, we have the liability side. As we said, our equity capital has increased by EUR 5.289 million (sic) [ EUR 5.289 billion ], and that is an 0.3% increase to 51.2%. Our liabilities, as I said, increased to EUR 2.155 billion, coming from EUR 1.8227 billion. Our trade accounts payable have slightly dropped to EUR 565.8 million. The same applies for the other liabilities, which I don't want to detail here so that I can give you the time to answer the questions now. And that means I hand back to Mr. Gross (sic) [ Mr. Grossman ].

[Interpreted] Well, thank you very much. So much for our presentation. I would like to start with the question-and-answer around. Please let's have the first question.

[Interpreted] [Operator Instructions] The first question, Martin Hammerschmidt, Citi B.

[Interpreted] I have 2 questions. Can you give us some information about Tele Columbus? There are management issues. Well, would you agree that this is the case? And what will you do in order to stay in control of the situation? And the second question is with reference to what Mr. Dommermuth said at the beginning. You accrued shares -- you activated some shares in order to get some free cash. And after you had performed this, can you tell us what you think about your share ratio? Is it important to maintain your current proportion? Or are you considering changing that?

[Interpreted] Well, allow me to start with the shares. I -- end of 2021, I bought shares to get over 50%. I ended up at 51% of the available shares and I was quite happy about this and thought I paid a good price. And we all know that now that -- well, it's also good to know things afterwards that I should have better bought them today. And I think you and your customers share that view. But that doesn't change the estimate that they have for the company. I still believe in the company to develop well as we have seen in 2022, and I think the shares are going to rise again. And in that respect, I -- we'll hold on to them. My goal is to stay above 50% due to the buyback. I have moved from 53% to over 54% because I have a different percentage from the stock that I hold. It's always difficult to say before, how many do you give out because you don't know what else will be supplied, and in that sense, I decided to supply enough shares to stay above 50% even if other shareholders do not supply any share. But that is quite clear, my strategy for the future to stay above 50%.

[Interpreted] Mr. Hammerschmidt, then let me answer your first question on Tele Columbus, and I would give you a bit more extensive answer concerning Tele Columbus. First of all, with the business development, we're very happy the way things are developing. The business around the fiber-optic development and of -- the business of the residential builders is very attractive. Last year, we were able to win important projects for us or maintain them for our long-term contracts. Nevertheless, the situation is such that we see a lot more potential here, and that is why there were demands to look for new management at Tele Columbus. And since the 1st of February, 1st of March, 1st of April, someone else is -- will be added. It's been on board since then. And the first job of the new management is, of course, to take a close look at the business plan, whether they agree with it. And our current work is to develop this business plan to see how fast can we extend this, how fast can we move from standard cable to fiber optic in the residential developers, what speed is required because the cables still have a good speed, but the residential developers, of course, want to get more and more fiber optic. And that is our challenge now. I think Morgan Stanley and we, as United Internet, have shown quite clearly that we believe in this business. In December '22, we performed the capital increase that we cleared during the takeover of EUR 75 million of -- Morgan Stanley declared [ it's sum ] of EUR 75 million of fresh equity. That was injected into the company. And you know that in 2024, there will be a refinancing round then '25, '26. The next one will follow. We're preparing for this. We are in close contact with the banks and the rating agencies in order to determine the future orientation of the company together with the new management. Financing is one thing. But of course, that's always based on credible business plans that have to be credible. And that is the first job that the new management needs to develop now, and they're working full steam on this.

[Interpreted] Next question is from the English room, Polo Tang from UBS.

Just have a few different questions. First one is given that United Internet is trading at a deep discount to its net asset value when you look at the listed value of 1&1 and IONOS, would you consider a breakup of the company or spinning off both 1&1 and IONOS shares to United Internet shareholders? Second question is for Mr. Mildner. Can you maybe elaborate in terms of why you're leaving United Internet now before your contract has expired? And my third question is really just clarification in terms of CapEx being spent at Versatel in 2023 and how much of the Versatel CapEx is related to the 5G network build.

[Interpreted] Would it be possible to repeat the first question, please?

Sure. So the first question was about United Internet trading at a deep discount to its net asset value when you compare it to the listed value of 1&1 and IONOS. So just given this deep discount to net asset value or the listed value, in the mind of Mr. Dommermuth, does it make sense to consider a breakup of United Internet or spinning off 1&1 and IONOS shares to United Internet shareholders?

[Interpreted] You're quite right. We have a high conglomerate depreciation at the United Internet that is something, I think, in the business model. That's due to the business model because we have different business models, but there's no plans to do any change, neither at the United Internet not -- nor at 1&1 or IONOS. I don't think you should never say never, but currently, we are very happy with the structure as we have it.

[Interpreted] Then I'll answer the second question that was directed at me personally because of the -- well, the question about the reason for my leaving the company. I think from the get-go, as I always said in all investor meetings, I took on this job for certain challenges and also to reorganize the group in that individual group companies will be more decentralized so that IONOS, for instance, would be capable of being floated. And that was -- one of the big challenges was the floating of IONOS. And I think I dispensed these 2 tasks to everybody's satisfaction. And that's made me realize that after the IPO, which happened in February, this concludes my job, and then I would like to face a new challenge, which will be, again, in this portfolio control function where we're now, of course, moving more into tasks that deal with operative functions.

[Interpreted] The next question is from the English side, Stéphane Bianco (sic) [ Stéphane Beyazian ].

Stéphane Beyazian from ODDO BHF. I just want to come -- to follow up on one of the answers with a different angle regarding 1&1. Last year, we sort of discussed already about possibly buying out some minority shareholders. So I was just wondering what is your thought process regarding your potential delisting of the minorities in 1&1. And obviously, what would you think of the benefits such as cutting the holding discount, optimizing the structure and also perhaps working more -- in a more quiet environment regarding 5G, so that's one. And the second question, and sorry for the translation, and I wasn't too sure of the answer, but a question for Mr. Dommermuth. What was the rationale for you to sell the 5 million shares in the share buyback [ you've launched ] by the company. Sorry, I wasn't too sure about the translation.

[Interpreted] Okay. First of all, excuse us for answering in German. Let us start with the minority shareholders, which -- who we have in 1&1 and IONOS. That is a structure that we see as permanent. They are low -- IONOS is below the initial price, although the operative business is going well, but I do think the highest value adding for the shareholders in United Internet is in buying United Internet shares back because in that, besides the low value of IONOS and 1&1, it has the conglomerate discount. And this is why we did decide to start a buyback program on United Internet level. And on my own supply deposit, I see myself above 50%. But at the moment, I do not plan to have a bigger share. And this is why these buyback programs, if they are there, I have to deposit shares in order not to increase my own share. I did that by the reporting lower than by the percentage. I should have done -- this is why my votes in United Internet have increased from 53% to 54%. And now you may wonder why I do this, if you do believe that it's still going well, you could have kept it. That's right, but you may know that for the purchase, I had to take a loan, and the interest is increasing. And this is why I thought it was a good idea to pay somewhat of that loan back. I have no pressure. The loan is going on for a couple of years. I have not agreed any margin calls. And this is what I mentioned, which I can handle well. But on the other hand, of course, one wants to make a payback in times of increasing interest. So in the perspective, things will stay as they are. I will stay with my plus 50%, and beyond that, this didn't have any signaling value or misbelieving for me. It doesn't matter what value I deposit on. If I don't deliver more than the other shareholders do, I always participate from the deposit. So I get cash and increase, as in this case, my share, or the share stays equal. And this is why the buyback program is a good opportunity to generate cash as long as I make sure to stay above the 50%.

And if I can just follow up. I think you said earlier that you're obviously expecting other shares to rise, whether it's 1&1 or United. But at the same time, what we heard this morning from 1&1 is that they will have a costly transition to 5G, which may take a couple of years, as we discussed this morning, and obviously, that could mean that the shares remain volatile for a little bit of time. What do you think can change the market perception on that? Are you confident that the Capital Market Day can provide some, let's say, better outlook on the 1&1 and help investors to be more confident there?

[Interpreted] Well, that would be my wish as well. I would like to spark more confidence. If you look at 1&1, you see that our operative business is picking up every year in revenue and yield, and it's a good and stable business on the subscriber base. And if you look at the value -- stock value of 1&1 and you see the cash -- reduce the cash of the company, then you will get at the multiple of below 2 of the EBIT from the operative business. And that is, of course, not a good value. Why is that? It is because we have a high uncertainty on how the 5G network will develop. This is something that our competition likes to enforce, and I can't counterbalance it. I can say, as of today, technically, the network is working, functioning. That's one issue, which keeps on being addressed. And I can say the operational costs, as of today, after 3 months, are as assumed. That's another point, highlighted by the competition. But what I can say is that at the end of the year or end of next year or whenever, there will be a certain number of antenna available. And that is an unplanned situation. We have just talked about my holding of shares, and end of 2021, '22, that's when the transfer took place. That was a point in time when I thought that we're looking at the net we had, the most important contracts completed and closed. And I thought that our contract partners would actually fulfill the contracts. And in the second half of last year, we had to learn that this is not the case. Now we have got a new forecast, which -- in which the partners promised to fulfill their contracts. The first quarter being -- showing that this is the case, we have [ 94 ] sites, and there is a strong ramp-up in the second and third quarter, which we can understand because by now, we have taken all the intermediate steps of providing the sites, and we've made all these steps transparent, closely monitoring them, which is actually not our work. We have ordered the sites, and we have a deadline for delivery, but to spare us of surprises, we take months ahead and look at whether this is realistic or not. But even the best monitoring and accompanying of a partner doesn't guarantee that they will deliver as planned in the end. And that's the situation that we're in today that, as of today, we can't provide a schedule for the next month -- years because of CapEx, OpEx that depends on the number of antenna sites being provided per year. And currently, we are expecting 1,200 this year, 3,000 from next year so that at the end of next year, we'll end up at 4,200. If I knew I could depend on this, then I could give you a forecast for the next years. However, we have thought at 1&1 to do a Capital Markets Day last year. We didn't do that because we didn't have the sites. We thought of doing that by the end of March. It didn't work again because in February, we had the phaseout, and this is why we filed a complaint in the antitrust office. And if we see in the second and the third quarter now that deliveries are coming as contracted, I would have enough trust to present you a plan for the next years. But if the ramp-up doesn't take place as planned, a little less -- a lot less than any plan is void and has to be reviewed. And this stopping us at the moment from providing you with more background knowledge or background information because as of today, we have a background contractually. But what helped is that if I have a contract partner that doesn't deliver their contracts, so we have to rebuild trust here now. And once we have that, we are going to explain this as quickly as we can because, as I said this morning, explaining the principles on how we calculate. And I'm still convinced that we have great new technology available. It's a technological masterpiece, and with the setup of the network, we internalize costs, which we had to pay to Vodafone and Telefónica than the past. And I think for everyone involved, that's going to be a very good investment and make the companies sound for the future. And I think the comments of the competition and the strong resistance shows us that they have the same view. And in that sense, I'm very optimistic that we are on the right way. And we are not going to fail on the question of the sites. We're going to have them earlier or later. We're starting with our own production now, and that problem is going to be solved. The only thing is I can't precisely tell you when, but we are not going to be the first mobile network company who fails in getting the rooftop sites. So I have to ask you for some more patience. I hope that when we speak again in August, we will have a bit of a better view. And latest, at the end of September, October, we'll have to know how the year is going to evolve. And then this phase of uncertainty should hopefully be over.

[Interpreted] [Operator Instructions] We have another question from the English room. The next question is from Usman Ghazi of Berenberg.

I just had a Versatel and Consumer Applications. In, I mean, Consumer Applications, how do you see this business kind of proceeding because -- I mean do you see a benefit in having more scale in this business? Or are you just happy harvesting it for cash as is the case currently? So -- and just your view on how it fits -- if it fits into the current kind of setup. So that's the first question. The second question is on Versatel. I guess we're hearing that some alternative fiber builders are having issues with the higher rates, et cetera. I mean are you seeing any acquisition opportunities here on the infrastructure side to increase scale? And would you be interested in doing something like this? Or are you focused on organic organically executing with regards to Versatel?

[Interpreted] Well, thank you very much. Let me start with Versatel. If there are acquisition opportunities that fit Versatel, we'll take a look at them, and we'll use them. We just made a deal with British Telecom, acquiring the city networks in Munich, Frankfurt, Stuttgart and Düsseldorf. British Telecom used to maintain them up until then. And if an opportunity arises for additional city networks or increasing our distribution network, then we're interested, yes. What I can say right now, I don't see fiberglass -- fiber optic for consumers. I can't see that business model now in 1&1 Versatel. That's not our specialization. 1&1 Versatel can handle business customers very well. It has the right product range, the right services. And that is where I'd like to move forward. That is our expansion strategy with 1&1 Versatel. We are developing 300 business parks this year alone. Then we add -- customers that we add by -- online then there are further expansion possibilities along the fiber-optic lines that are used by 1&1 Versatel, but it's always about business customers and authorities. We have nice 2-digit growth with this business and -- with Versatel, and we'd like to continue that over the next 3 years. Now concerning Consumer Applications business, I think we can see some restraint among advertisers not only with us but also with other providers of online advertising. I hope this will get better again. But we have to say that with our e-mail services, we not only benefit from advertising revenue, but also, we don't have a lot of subscribers. And this is what we're focusing on this year to develop the subscriber business to increase the number of subscriptions -- the number of subscribers. This looks pretty good, and it will mean a nice profit growth next year, some quite optimistic. And if this is supported by a growing advertising market, then I think that in consumer advertising business, we can use EUR 140 million, EUR 150 million. I don't see a problem next year. Now if the advertising market deteriorates, of course, we can't go against the market trends, but I do believe that we will see nice growth again next year, largely driven by the subscription business. Now concerning the question of how well does it match our business model? Well, we'll have to see. Within the group, we use GMX and WEB.DE as a sales platform for mobile phone contracts made available by 1&1. Now mobile phones are increasingly equipped with eSIM so that at the press of a button, I can change my supplier -- my provider without having to wait for a new SIM card. So as I said, you just switch from A to B on your mobile phone. That will be a functionality that we will support in a new mobile phone network, of course. And as I said earlier, in Germany alone, we have more than 30 million active users who then will be able to move over to a 1&1 mobile phone tariff at the press of a button. We have to build all this. We have to be able to support it well. Users have to learn about this functionality. We'll have to see where we wind up at the end of the day, but that will be a key question when we answer a question of how well does it fit our overall group, how well do we manage to support all these millions of users. I said we have 28 million app users alone. How well can we address them through this avenue, generating more mobile phone business? I see huge potential here. But as I said, we have to build it first. We have to educate our users, so they know if I need a new mobile phone tariff, I don't have to go to a website anymore or get my prepaid SIM cards in a supermarket or a gas station. Now I can simply do this at the press of a button to access this tariff at -- through WEB.DE or via GMX. And when the data volume has been used up, all it takes is another press of a button, and I can go on. We'll have to see how things pan out, but there might be a big benefit that might increase the reach of GMX and WEB.DE in Germany for the group.

[Interpreted] We have an additional question from the English channel from Polo Tang, UBS.

Just 2 quick follow-up questions. So in your guide -- CapEx guidance, can you clarify how much CapEx is being spent at Versatel this year? And can you break it down between ongoing underlying CapEx and then CapEx for the 5G network build? So that's the first question, Versatel CapEx. And then the second quick question is, can you clarify what your current shareholding is at 1&1?

[Interpreted] Our shareholding in 1&1 hasn't changed. If I recall properly, it's 78.3%. And you can look them up on the website. That has not changed. And concerning the Versatel invest, do you have precise figures? Then I pass on to Mr...

[Interpreted] Versatel has about EUR 104 million to spend, around about of that EUR 150 million to EUR 180 million to the normal operative business, and the rest is then the buildup of the 5G network and, of course, the industrial areas.

Sorry, I think I lost something in translation, but what is the total CapEx for Versatel this year?

[Interpreted] The overall CapEx is EUR 400 million in Versatel. And the normal business that we've always done is EUR 150 million, EUR 160 million, and the rest goes to the additional invest, which splits up into the rollout of the additional industrial areas and the rollout of the 5G network.

[Interpreted] [Operator Instructions] There aren't any further questions. So I'll give the floor back to Mr. Grossman for final remarks.

[Interpreted] Thank you all for participating. And if there are more questions, please contact us. I wish you a good afternoon. Bye-bye. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]