1&1:Quarterly Results/2022 Q4
Results(2022)[1]
1&1 2022 results were mostly in-line with estimates. Its revenue grew 1.4% to €3,964 million in 2022, compared with analyst estimates of €3,972 million(+1.6%). Similarly, service revenue was €3,175 million(+1.7%), versus analyst estimate of €3,186 million(+2.0%).Its EBITDA came in €693.3 million (+ 3.2 percent), in-line with estimates. Likewise, EPS was €2.08 in-line with analyst estimate of €2.02.
Customer contracts increased by 350,000 to 15.78 million, as expected (15.77 million). It added 490,000 new mobile internet contracts versus 478, 014 expected by analysts. On the other hand, Broadband contracts decreased by 140,000 versus 138,056 analysts estimate.
In 2023, service revenue is expected to increase by 2% to €3.23 billion, as per analysts estimate. Meanwhile, EBITDA is expected to grow to €655 million(-5.8%) in 2023 versus €674 million(-2.8%) expected by analysts. This is likely due to the expected increase in start-up network costs to €120 million (2022:- €52.4 million).
The company expects cash capex in 2023 to be around €320 million (2022: €250 million), below the €446 million analysts estimate.
1&1 expects to bring in 500,000 new customers in 2023, above the 436,110 customers projected by analysts.
| Key Items | 2022 | Y/Y |
|---|---|---|
| Revenue | €3,964 million | 1.4% |
| Service revenue | €3,175 million | 1.7% |
| EBITDA | €693.3 million | 3.2% |
| EPS | €2.08 | |
| Customer contracts | 15.78 million | 350,000 |
| mobile internet contracts | 490,000 | |
| Broadband contracts | - 140,000 | |
| Dividends | €0.05 per share | 0% |
2023 Managemnent Guidance
| Key Items | 2023 | Y/Y |
|---|---|---|
| EBITDA | €655 million | -5.8% |
| cash capex | €320 million | 28% |
| start-up network costs | -€120 million | 129% |
| Customer contracts | 500,000 |
Expectations
Management Guidance[2]
| Key Items | 2022 | Y/Y growth |
|---|---|---|
| Service Revenue in million | 3.2 | 3.2% |
| EBITDA in million | 690 | 2.68% |
| New contracts | 350,000 | |
| Capex (Cash-Capex) in million | -250 |
Analysts consensus estimates[3]
| Key Items in million | Q4 2022 | Q4 2021 | Y/Y growth | Net additions |
|---|---|---|---|---|
| Revenue | 1.022,1 | 1.007,6 | 1.4% | |
| Service Revenue | 799,2 | 787,6 | 1.5% | |
| EPS | 0.35 | 0.38 | -8.6% | |
| Access, contracts | 15.771.046 | 15.430.000 | 2.2% | 341.046 |
| Mobile Internet contracts | 11.668.014 | 11.190.000 | 4.3% | 478.014 |
| Broadband (ADSL, VDSL, FTTH) contracts | 4.101.944 | 4.240.000 | -3.3% | -138.056 |
| Key Items in Million | 2022 | 2021 | Y/Y growth |
|---|---|---|---|
| Revenue | 3.972,3 | 3.909,7 | 1.6% |
| Service Revenue | 3.186,0 | 3.123,4 | 2.0% |
| EPS | 2.02 | 1.94 | 4.1% |
| EBITDA | 693,5 | 671,9 | 3.2% |
| Capex (Cash-Capex) in million | -243,1 | -32,2 | 655% |
| Access, contracts | 15.771.046 | 15.430.000 | 2.2% |
| Mobile Internet contracts | 11.668.014 | 11.190.000 | 4.3% |
| Broadband (ADSL, VDSL, FTTH) contracts | 4.101.944 | 4.240.000 | -3.3% |
| Key Items in Million | 2023 | Net additions |
|---|---|---|
| Revenue | 4.025,7 | |
| Service Revenue | 3.235,8 | |
| EBITDA | 674,3 | |
| EPS | 1,80 | |
| Capex (Cash-Capex) in million | €446 million | 78.4% |
| Access, contracts | 16.207.156 | 436.110 |
| Mobile Internet contracts | 12.173.086 | 505.072 |
| Broadband (ADSL, VDSL, FTTH) contracts | 4.033.556 | -68.389 |
Competitor expectations and results
Notes from competitor(below) results:
- Robust pricing environment is expected in 2023.
- Offload of customers from Telefonica network to 1&1 network is expected in 2023.
- 1&1 will add customers in Q4 2022 results and possibly exceed estimates.
- German macro environment remains stable. Also digitalization is on a positive trend.
- Regulatory changes to remain an headwind to 1&1 in 2023.
- Three of the four MNOs are in favor of low-band spectrum extension in 2025.