Half Year 2026 1&1 AG Earnings Call

August 6, 2026

Speaker #1: Hallo, meine Damen und Herren.

Oliver Keil: Hello, meine Damen und Herren. Hello, ladies and gentlemen. Welcome. Good morning. Good afternoon, whatever. On behalf of the board of 1&1, I welcome you to our Half Year Conference 2026. Our board, Mr. Dommermuth and Mr. D'Avis will present the results of H1 and the outlook for the rest of 2026 to you. Also looking into 2027 already. After the presentation, we are happy to answer your questions. Thank you. I pass the stage to Mr. Dommermuth. Thank you, Mr. Keil. Good afternoon, ladies and gentlemen. Welcome to our Half Year Press Conference. Mr. Keil has mentioned it. I will present the development of the company in H1. Then my colleague, Mr. D'Avis, will give you the financial figures and the outlook of 2026 and 2027. You know our business.

Speaker #2: Hello, ladies and gentlemen. Welcome, good morning, good afternoon, whatever. On behalf of the Board of Eins & Eins, I welcome you to our half-year conference 2026.

Oliver Keil: Hello, ladies and gentlemen. Welcome. Good morning. Good afternoon, whatever. On behalf of the board of 1&1, I welcome you to our Half Year Conference 2026. Our board, Mr. Dommermuth and Mr. D'Avis will present the results of H1 and the outlook for the rest of 2026 to you. Also looking into 2027 already. After the presentation, we are happy to answer your questions. Thank you. I pass the stage to Mr. Dommermuth.

Speaker #2: Our board, Mr. Dommermuth and Mr. D'Avis, will present the results of the first half of the year and the outlook for the rest of '26 to you, and also look ahead into '27 already.

Speaker #2: After the presentation, we are happy to answer your questions. Thank you, and I pass the stage to Mr. Dommermuth. Thank you, Mr. Keil. Good afternoon, ladies and gentlemen.

Ralph Dommermuth: Thank you, Mr. Keil. Good afternoon, ladies and gentlemen. Welcome to our Half Year Press Conference. Mr. Keil has mentioned it. I will present the development of the company in H1. Then my colleague, Mr. D'Avis, will give you the financial figures and the outlook of 2026 and 2027. You know our business.

Speaker #2: Welcome to our half-year press conference. Mr. Keil has mentioned it: I will present the development of the company in the first half of the year, and then my colleague, Mr. D'Avis, will give you the financial figures and the outlook for '26 and '27.

Speaker #2: You know our business. We split it up into two areas: consumers and small businesses. This is about mobile contracts for consumers and small companies.

Ralph Dommermuth: We split it up in two areas, Consumers and Small Businesses. This is about mobile contracts for consumers and small companies. We have broad market access. 1&1 is our main market brand and the cooperation with Drillisch as well. In the broadband area, we have 3.85 million broadband VDSL and FTTH. We have complete packages on the base of our fiber-optic network other than in other direct companies, where we connect directly with the big businesses. For the private customer business, we use the regional networks of Deutsche Telekom and City Carrier and connect them to our fiber-optic network. We have the largest FTTH footprint with 77% of the available households. The second area, Enterprises and Networks. Here we have our networks, the business customers business. We have the first Open RAN, fully virtualized in Europe. We reach up to 34% of the German households.

Speaker #2: We have a broad market access. Eins & Eins is our main market brand, and the cooperation with Relay as well. In the broadband area, we have 3.85 million broadband VDSL and FTTH.

Speaker #2: We have complete packages based on our fiber optic network. Unlike other direct companies, where we connect directly with the big businesses, for the private customer business, we use the regional networks of Deutsche Telekom and City Carrier and connect them to our optical fiber network.

Speaker #2: We have the largest FTTH footprint, with 77% of the available households. The second area: enterprises and networks. Here, we have our nets—the business customers, business.

Speaker #2: We have the first open RAN, fully virtualized, in Europe. We reached up to 34% of German households last year; previously, it was 27%.

Ralph Dommermuth: End of last year, it was 27%. We do not have low-band frequencies yet. If we had them, the range would be even bigger. In the broadband area, we have one of the most high-performance fiber-optic networks, over 70,000 km available in over 150 cities. To this, we connect businesses, institutions, and so on. Over 30,000 homes or locations are directly connected or Deutsche Telekom or City Carriers to our consumer products. I just mentioned it. We have 34% of the households that we cover in 2026. That is the mid-band. To the end of the year, we want to reach up to 40% of the households with mid-band and broadband range. We are doing well in the extension of the network. We have 16,180,000 customer contracts, mainly in the mobile area, 12.33 million. That is 150,000 less than last year to the end of the year.

Speaker #2: We do not have low-band frequencies yet. If we had them, the range would be even bigger. In the broadband area, we have one of the highest-performance fiber optic networks, covering over 70,000 kilometers.

Speaker #2: Available in over 150 cities. And to this, we connect businesses, institutions, and so on. Over 30,000 homes or locations are directly connected by Deutsche Telekom or city carriers to our consumer products.

Speaker #2: I just mentioned it. We have 34% of the households that we cover. In 2027, or '26—that's the middle bar—by the end of the year, we want to reach up to 40% of the households with the mid-band and broadband range.

Speaker #2: We are doing well in the extension of the network. We have 16.18 million customer contracts, mainly in the mobile area—12.33 million. That is 150,000 less than last year.

Speaker #2: Towards the end of the year, we have, in the second quarter especially, lost contracts. The first quarter was good. Why was that? In April, we changed the prices.

Ralph Dommermuth: We have in Q2, especially lost contracts. Q1 was good. Why was that? In April, we have changed the prices. We have discontinued the cheapest tariffs. We started a new minimum price. In the high end, we have reduced the data volume. That led to a loss of about 100,000 customers. It took a while for the market to catch up. Over the 8 months other market partners have developed. This is why in May and June, we lost fewer customers. We think in Q3, we are going to see customer losses lower, less than in Q2. Then it will turn back to positive. The broadband development was good as well, 10,000 plus. It is not the world, but we had losses in the years before.

Speaker #2: We have discontinued the cheapest tariffs. We started a new minimum price, and at the high end, we have reduced the data volume. That led to a loss of about 100,000 customers.

Speaker #2: It took a while for the market to catch up. Over the months, the market partners have developed, and this is why in May and June we lost fewer customers.

Speaker #2: We think in the third quarter, we're going to see customer losses lower—less than in the second quarter—and then it'll turn back to positive.

Speaker #2: The broadband development was possible, was good as well. 10,000 plus—it's not the world, but we had losses in the years before. And for Q3, Q4, we expect a bigger growth, and we see the big footprint in the optical fiber network, and we also see that we have more and more customers that are dropping out to minimum times.

Ralph Dommermuth: Q3, Q4, we expect a bigger growth, we see the big footprint in the optical fiber network. We also see that we have more and more customers that are dropping out to minimum times, which are ready to change their provider. The primary marketing is door-to-door. In the secondary market, that's too expensive. We have to look at the distance business, that is what we're good in. This is why altogether, we are optimistic for the broadband business. Looking at the revenue, which developed by a plus 1.6% to EUR 2.27 million. The service revenue has dropped a little to EUR 1.84 million. The other revenue has increased by 13% to EUR 464.8 million. The EBITDA has been increased by 5.1% to EUR 382.7 million altogether. That splits up into consumer and small businesses, where we did EUR 391 million.

Speaker #2: Which are ready to change their provider. And the primary marketing is door-to-door. In the secondary marketing, that's too expensive. We have to look at the distance business.

Speaker #2: And that is what we're good at. This is why, all together, we are optimistic for the broadband business. Looking at the revenue, which developed by plus 1.6% to €2.27 million.

Speaker #2: The service revenue has dropped a little to 1.84 million euros. The other revenue has increased by 13% to 464.8 million. The EBITDA has been increased by 5.1% to 382.7 million, altogether.

Speaker #2: That splits up into consumer and small businesses. Where we did €190.391 million. That is a minus of 6.5% to 6% compared to the year before.

Ralph Dommermuth: That is a minus of 5.6% compared to the year before. This drop is not resulting from the operative business. You know that we've changed the roaming partner, Telefónica, to Vodafone. In 2025, in the H1, our Telefónica contract was in place, a part of the costs were activated then. Now with Vodafone, we don't have this activation anymore. No difference in the EBIT, but in the EBITDA, we have the difference from the activated component. We've said this already. This is about EUR 20 million per half year. What also hits us is that we have roaming costs that are higher than we had expected. You know that we have a contract with Vodafone, our roaming partner. We buy network capacities from them, on a percentage capacity basis.

Speaker #2: But this is not operative; this drop is not resulting from the operative business. You know that we've changed the roaming partner from Telefónica to Vodafone.

Speaker #2: And in 2025, in the first half of the year, our Telefónica contract was in place, and part of the costs were activated then.

Speaker #2: So now, with Vodafone, we don't have this activation anymore. There is no difference in the EBIT, but in the EBITDA, we have the difference from the activated component.

Speaker #2: We've said this already. This is about €20 million per half year. What also hits us is that we have roaming costs that are higher than we had expected.

Speaker #2: You know that we have a contract with Vodafone, our roaming partner. We buy network capacities from them on a percentual capacity basis. So, depending on the capacity that we need, we have to buy more or less percent and pay for them.

Ralph Dommermuth: Depending on the capacity that we need, we have to buy more or less percent and pay for them. Our data volume is growing every year, as everywhere, but the Vodafone data volume is growing much less than our volume is growing. This means that we have to buy a higher percentage share of the common usage rather than the Vodafone data volume would grow as fast as ours. We do assume that this will level out in the future, at the moment, you see the Vodafone figures. They are public. Vodafone, before we did the roaming contract, they had year-on-year a much higher data growth volume. This is why we have higher roaming costs than we had originally expected. If you reduce these two effects, you will see an EBITDA growth, which is quite beautiful in the H1 2026.

Speaker #2: Our data growth is increasing. Our data volume is growing every year, as always. But the Vodafone data volume is growing much less than our volume is growing.

Speaker #2: And this means that we have to buy a higher percentage share of the common usage, rather than the Vodafone data volume growing as fast as ours.

Speaker #2: We do assume that this will level out in the future. But at the moment, you see the Vodafone figures—they are public. Vodafone, before we did the roaming contract, had year-on-year a much higher data growth volume.

Speaker #2: And this is why we have higher roaming costs than we had originally expected. So, if you reduce these two effects, you will see an EBITDA growth, which is quite beautiful in the first half of the year '26.

Speaker #2: Enterprises and Networks has developed according to plan. €8.6 million is the negative EBITDA—much better than before. And for the whole year, we expect a positive result here.

Ralph Dommermuth: Enterprises and networks has developed according to plan. EUR -8.6 million is the negative EBITDA, much better than before, in the whole year, we expect a positive result here. The CapEx slightly dropped to EUR 220 million now, driven by the networks, the enterprises and networks segment. Why is the CapEx lower than the year before? Although our network is expanding more antennas than last year, we have less investment into the computer centers. Our topology is that we have four core computer centers, 24 decentralized and 100 regional ones, they have been set up now. We have over 300 regional computer centers, they are done now. We have a few data centers that are going to be added, this is a lot cheaper than the initial build-up of that strategy. We had to invest into servers and so on, software.

Speaker #2: The Capex slightly dropped—€220 million now—driven by the Networks, the Enterprises and Networks segment. Why is the Capex lower than the year before?

Speaker #2: Although our network is expanding—more antennas than last year—we have less investment into the computer centers. Our topology is that we have four core computer centers, 24 decentralized, and 100 regional ones.

Speaker #2: And they have been set up now. We have over 300 regional computer centers, and they are done now. So we have a few data centers that are going to be added.

Speaker #2: But this is a lot cheaper than the initial build-up of that strategy. So we had to invest in servers and so on, and software.

Speaker #2: So, this is the overview: where we are, and what the first half of the year has developed into. Mr. Davies is now taking over to explain the financial figures.

Ralph Dommermuth: This is the overview where we are and what H1 has developed to, Mr. D'Avis is now taking over to explain the financial figures.

Speaker #1: Ja, vielen Dank, Herr Dommermuth. Auch von meiner Seite möchte ich Sie recht herzlich willkommen heißen.

Sascha D'Avis: Thank you, Mr. Dommermuth. I would welcome you again to the first financial results press conference for H1 2026. In the following, I would like to provide you with an overview of the financial highlights for H1 2026 and give you an outlook on our expectations for H2. I'd like to begin with our earnings performance. To explain our earnings performance, we've presented the income statement and deviation from our published IFRS financial statements as if 1&1 Versatel had already been part of our group for the entire prior year. Revenue for H1 2026 totaled EUR 2.270 billion compared to EUR 2.234 billion in H1 2025, an increase of 1.6%.

Speaker #2: Thank you, Mr. Dommermuth. I would like to welcome you again to the first financial results press conference for the first half of 2026. In the following, I would like to provide you with an overview of the financial highlights for the first half of 2026 and give you an outlook on our expectations for the second half of the year.

Speaker #2: I'd like to begin with our earnings performance. To explain our earnings performance, we've presented the income statement in deviation from our published IFRS financial statements, as if 1&1 Versatile had already been part of our group for the entire prior year.

Speaker #2: Revenue for the first half of 2026 totaled €2.270 billion, compared to €2.234 billion in the first half of 2025—an increase of 1.6%.

Speaker #2: Of the revenue, €2.037 billion were attributable to our Consumer and Small Business segment, up from €2.002 billion in the first half of 2025, representing an increase of 1.7%.

Sascha D'Avis: Of the revenue, EUR 2.037 billion were attributable to our Consumer and Small Business segment, up from EUR 2.002 billion in H1 2025, representing an increase of 1.7%. Revenue in the Enterprises and Networks segment remained at the prior year level in H1 2026 at EUR 233 million. Cost of sales rose from EUR 1.730 billion in H1 2025 to EUR 1.776 billion in H1 2026. The increase in cost of sales is primarily attributable to a higher cost of goods sold resulting from increased hardware revenue, as well as higher depreciation and amortization expenses included in cost of sales due to the ongoing expansion of our mobile network. In addition, there were higher costs in national roaming due to slower than expected capacity growth at our national roaming partner, Vodafone.

Speaker #2: Revenue in the Enterprises and Networks segment remained at the prior-year level in the first half of 2026 at €233 million. Cost of sales rose from €1.730 billion in the first half of 2025 to €1.776 billion in the first half of 2026.

Speaker #2: The increase in cost of sales is primarily attributable to higher cost of goods sold, resulting from increased hardware revenue, as well as higher depreciation and amortization expenses, included in cost of sales, due to the ongoing expansion of our mobile network.

Speaker #2: In addition, there were higher costs in national roaming due to slower than expected capacity growth at our national roaming partner, Vodafone. Gross profit in the consumer and small business segment decreased from €694.2 million in the first half of 2025 to €682.3 million in the first half of 2026, representing a decline of 1.7%.

Sascha D'Avis: Gross profit in the Consumer and Small Business segment decreased from EUR 694.2 million in H1 2025 to EUR 682.3 million in H1 2026, representing a decline of 1.7%. This is primarily due to the aforementioned increase in costs for national roaming services. Gross profit in the Enterprises and Networks segment improved from EUR -190.5 million in H1 2025 to EUR -189.0 million in H1 2026. Cost savings from in-house data traffic were offset by increasing depreciation expenses for our mobile network sites. Accordingly, gross profit fell from EUR 503.7 million in H1 2025 to EUR 493.3 million in H1 2026, a decline of 2.1%.

Speaker #2: This is primarily due to the aforementioned increase in costs for national roaming. National roaming services. Gross profit in the Enterprise and Network segment improved from minus €190.5 million in the first half of 2025 to minus €189.0 million in the first half of 2026.

Speaker #2: Cost savings from in-house data traffic were offset by increasing depreciation expenses for our mobile network sites. Accordingly, gross profit fell from €503.7 million in the first half of 2025 to €493.3 million in the first half of 2026, a decline of 2.1%.

Speaker #2: Selling expenses decreased from €370.6 million in the first half of 2025 to €262.5 million in the first half of 2026, representing a decline of 17.3%.

Sascha D'Avis: Selling expenses decreased from EUR 370.6 million in H1 2026 to EUR 262.5 million in H1 2026, representing a decline of 17.3%. This decline resulted from the expiration of amortization on the Drillisch customer base in August 2025. General and administrative expenses totaled EUR 82.1 million in H1 2026, slightly above the prior year figure of EUR 80.3 million. The net amount of other operating income and expenses was EUR 25.9 million, slightly higher than the prior year figure of EUR 25.0 million. Impairment losses on receivables and contract assets rose from EUR 61.7 million in H1 2025 to EUR 63.3 million in H1 2026. Increased bad debt losses and higher other income from the collection process largely offset each other.

Speaker #2: This decline resulted from the expiration of amortization on the Drillisch customer base in August 2025. General and administrative expenses totaled €82.1 million in the first half of 2026, slightly above the prior year figure of €80.3 million.

Speaker #2: The net amount of other operating income and expenses was €25.9 million, slightly higher than the prior year figure of €25.0 million. Impairment losses on receivables and contract assets rose from €61.7 million in the first half of 2025 to €63.3 million in the first half of 2026.

Speaker #2: Increased bad debt losses and higher other income from the collection process largely offset each other. Earnings from operating activities, the EBIT, amounted to €111.3 million in the first half of 2026, compared to €69.1 million in the first half of 2025.

Sascha D'Avis: Earnings from operating activities, the EBIT amounted to EUR 111.3 million in H1 2026, compared to EUR 69.1 million in H1 2025. This represents an increase of 61.1%. In addition to the higher EBITDA, this strong increase was driven by an overall decline in depreciation and amortization. Higher amortization of intangible assets and depreciation of properties, plant, and equipment were offset by lower PPA amortization related to the Drillisch customer base. The financial result for H1 2026 was EUR -63.3 million compared with EUR -58.5 million in H1 2025. The increase is due to a slight rise in the variable interest rates on which the interest payments on our loans are based. Earnings before taxes amounted to EUR 44.0 million in H1 2026, compared with EUR 10.6 million in H1 2025.

Speaker #2: This represents an increase of 61.1%. In addition to the higher EBITDA, this strong increase was driven by an overall decline in depreciation and amortization.

Speaker #2: Higher amortization of intangible assets and depreciation of property, plant, and equipment were offset by lower PPA amortization related to the Drillage customer base. The financial result for the first half of 2026 was minus €63.3 million, compared with minus €58.5 million in the first half of 2025.

Speaker #2: The increase is due to a slight rise in the variable interest rates on which the interest payments on our loans are based. Earnings before taxes amounted to €44.0 million in the first half of 2026, compared with €10.6 million in the first half of 2025.

Speaker #2: Tax expenses amounted to €13.5 million in the first half of 2026, compared with €3.2 million in the first half of 2025. As a result, we achieved consolidated net income of €30.5 million in the first half of 2026, compared to €7.4 million in the first half of 2025.

Sascha D'Avis: Tax expenses amounted to EUR 13.5 million in H1 2026, compared with EUR 3.2 million in H1 2025. As a result, we achieved consolidated net income of EUR 30.5 million in H1 2026, compared to EUR 7.4 million in H1 2025. I would now like to turn to the balance sheet. Total assets stood at EUR 11.007 billion as of 31 December 2025, and decreased to EUR 10.923 billion as of 30 June 2026. The decrease of EUR 84.3 million is primarily attributable to the following factors. Current assets stood at EUR 1.9 billion at the end of 2025 and decreased by EUR 175.9 million to EUR 1.724 billion in H1 2026. Receivables from affiliated companies decreased from EUR 377.1 million as of 31 December 2025, to EUR 250.8 million as of 30 June 2026.

Speaker #2: I would now like to turn to the balance sheet. Total assets stood at €11.007 billion as of December 31, 2025, and decreased to €10.923 billion as of June 30, 2026.

Speaker #2: The decrease of €84.3 million is primarily attributable to the following factors: current assets stood at €1.9 billion at the end of 2025 and decreased by €175.9 million to €1.724 billion in the first half of 2026.

Speaker #2: Receivables from affiliated companies decreased from €377.1 million as of December 31, 2025, to €250.8 million as of June 30, 2026. This represents a decline of 33.5%.

Sascha D'Avis: This represents a decline of 33.5%. As previously explained in the presentation of the Q1 report, receivables totaling EUR 377.1 million were recognized at year-end in connection with the acquisition of 1&1 Versatel and were settled in early 2026. As of the end of H1, receivables from affiliated companies now consist exclusively of cash management receivables from United Internet. Non-current assets increased by EUR 91.7 million from EUR 9.108 billion at the end of 2025 to EUR 9.2 billion as of 30 June 2026, as a result of investments in property, plant, and equipment and intangible assets, as well as an increase in right-of-use assets for new lease agreements related to our own network expansion. Current liabilities decreased from EUR 1.207 billion as of 31 December 2025, to EUR 887.0 million as of 30 June 2026.

Speaker #2: As previously explained in the presentation of the Q1 report, receivables totaling €377.1 million were recognized at year-end in connection with the acquisition of one.one Versatel and were settled in early 2026.

Speaker #2: As of the end of the first half of the year, receivables from affiliated companies now consist exclusively of cash management receivables from United Internet.

Speaker #2: Non-current assets increased by €91.7 million, from €9.108 billion at the end of 2025 to €9.2 billion as of June 30, 2026, as a result of investments in property, plant, and equipment and intangible assets, as well as an increase in right-of-use assets for new lease agreements related to our own network expansion.

Speaker #2: Current liabilities decreased from €1.207 billion as of December 31, 2025, to €887.0 million as of June 30, 2026. Trade payables decreased from €543.9 million to €394.1 million at the beginning of 2026.

Sascha D'Avis: Trade payables decreased from EUR 543.9 million to EUR 394.1 million. At the beginning of 2026, we settled several supplier invoices, which led to the reduction in payables, bringing them 27.6% below the year-end level. Liabilities to affiliated companies increased significantly from EUR 204.4 million to EUR 21.6 million in line with receivables from affiliated companies. This change is also attributable to cash flows resulting from the Versatel acquisition. Long-term debt rose from EUR 3.805 billion at the end of 2025 to EUR 4.018 billion as of 30 June 2026. The increase is primarily due to the higher liabilities to affiliated companies, which rose from EUR 1.94 billion to EUR 2.165 billion. As previously reported in the Q1 results, EUR 225 million were drawn down from the JBIC loan at the beginning of the year. Formally, the loan is held by United Internet and passed on to 1&1.

Speaker #2: We settled several supplier invoices, which led to the reduction in payables, bringing them 20.7, 27.6%—sorry—below the year-end level. Liabilities to affiliated companies decreased significantly from €204.4 million to €21.6 million, in line with receivables from affiliated companies.

Speaker #2: This change is also attributable to cash flows resulting from the Versatile acquisition. Long-term debt rose from €3.805 billion at the end of 2025 to €4.018 billion as of 30 June 2026.

Speaker #2: The increase is primarily due to the higher liabilities to affiliated companies, which rose from €1.94 billion to €2.165 billion, as previously reported in the Q1 results. In addition, €125 million were drawn down from the JVIC loan at the beginning of the year.

Speaker #2: Formally, the loan is held by United Internet and passed on to 1&1. Equity increased from €5.996 billion as of December 31, 2025, to €6.018 billion as of June 30, 2026, due to net income.

Sascha D'Avis: Equity increased from EUR 5.996 billion as of 31 December 2025 to EUR 6.018 billion as of 30 June 2026 due to net income. The equity ratio improved from 54.5% to 55.1%. Now, concerning the cash flow, net cash provided by operating activities amounted to EUR 387.2 million in H1 2026, compared to EUR 229.5 million in H1 2025. This represents an increase of 68.7%. Operating cash flow for H1 2026 includes, in particular, +EUR 369.2 million in cash flow from operating activities, -EUR 38.9 million from the change in contract assets due to increased hardware revenue, +EUR 31 million from the change of deferred expenses. This reflects the positive cash effects from prepayments made in prior years under the wholesale agreement with the Deutsche Telekom. +EUR 49.4 million from the change in income tax receivables.

Speaker #2: The equity ratio improved from 54.5% to 55.1%. Now, concerning the cash flow, net cash provided by operating activities amounted to €387.2 million in the first half of 2026, compared to €229.5 million in the first half of 2025.

Speaker #2: This represents an increase of 68.7%. Operating cash flow for the first half of 2026 includes, in particular, plus €369.2 million in cash flow from operating activities, minus €38.9 million from the change in contract assets due to increased hardware revenue, and plus €31 million from the change of deferred expenses.

Speaker #2: This reflects the positive cash effects from prepayments made in prior years under the quarter agreement with Deutsche Telekom. Plus €49.4 million from the change in income tax receivables—the tax savings for 2025 resulting from the acquisition of 1&1 Versatel were refunded by the tax authorities in the second quarter.

Sascha D'Avis: The tax savings for 2025 resulting from the acquisition of 1&1 Versatel were refunded by the tax authorities in Q2. +EUR 124.7 million from the change in receivables and payables from related parties in connection with the acquisition of 1&1 Versatel. -EUR 151.2 million from the change in trade payables due to payment terms at the beginning of 2026, and +EUR 3.0 million from the change in other working capital. Cash flow from investing activities amounted to -EUR 412.4 million in H1 2026, compared to -EUR 478.9 million in H1 2025. This consists primarily of the following, -EUR 222 million in CapEx, primarily for the construction of our fiber optic and mobile networks, -EUR 195 million from the investment of free cash in United Internet, +EUR 2.5 million in interest received primarily from the investment with United Internet.

Speaker #2: Plus €124.7 million from the change in receivables and payables from the acquisition of 1&1 Versatel. Minus €151.2 million from the change in trade payables due to payment terms at the beginning of 2026.

Speaker #2: And plus €3.0 million from the change in other working capital. Cash flow from investing activities amounted to minus €412.4 million in the first half of 2026, compared to minus €478.9 million in the first half of 2025.

Speaker #2: This consists primarily of the following: minus €222 million in capex, primarily for the construction of our fiber optic and mobile networks; minus €195 million from the investment of free cash in United Internet; plus €2.5 million in interest received, primarily from the investment with United Internet.

Speaker #2: Cash flow from financing activities amounted to €24.3 million in the first half of 2026, compared to €250.2 million in the first half of 2025.

Sascha D'Avis: Cash flow from financing activities amounted to EUR 24.3 million in H1 2026, compared to EUR 250.2 million in H1 2025. This breaks down as follows: -EUR 8.8 million in dividend payments, -EUR 71.1 million in repayment of lease liabilities, -EUR 67 million in repayment of liabilities for the 5G spectrum, +EUR 225 million from new borrowings, as well as -EUR 53.8 million in interest payments. As a result, we generated free cash flow of EUR 167.2 million in H1 2026, compared to EUR 111.5 million in H1 2025. This represents an improvement of EUR 55.7 million. Now, let's turn to the bridge between EBITDA and free cash flow, which I'd like to present to you below. We start with EBITDA of EUR 382.7 million in H1 2026. The increase in contract assets had an impact of -EUR 38.9 million.

Speaker #2: This breaks down as follows: minus €8.8 million in dividend payments, minus €71.1 million in repayment of lease liabilities, minus €67 million in repayment of liabilities for the 5G spectrum, plus €225 million from new borrowings.

Speaker #2: As well as minus €53.8 million in interest payments. As a result, we generated free cash flow of €167.2 million in the first half of 2026, compared to €111.5 million in the first half of 2025.

Speaker #2: This represents an improvement of €55.7 million. Now, let's turn to the bridge between EBITDA and free cash flow, which I'd like to present to you below.

Speaker #2: We start with EBITDA of €382.7 million in the first half of 2026. The increase in contract assets had an impact of minus €38.9 million.

Speaker #2: The change in receivables and payables from related parties contributed plus 124.7 million euros to cash flow. The increase in deferred expenses amounted to 301 million euros plus the change in trade payables had an impact of minus 151.2 million euros other working capital increased cash flow by 12.9 million euros the net balance of tax refunds from tax authorities in our tax payments amounted to plus 26 million euros capital expenditures capex totaled minus 220 million euros the result this result in a total free cash flow of 167.2 million euros for the first half of 2026.

Sascha D'Avis: The change in receivables and payables from related parties contributed EUR +124.7 million to cash flow. The increase in deferred expenses amounted to EUR +301 million. The change in trade payables had an impact of EUR -151.2 million. Other working capital increased cash flow by EUR 12.9 million. The net balance of tax refunds from tax authorities and our tax payments amounted to EUR +26 million. Capital expenditures, CapEx, totaled EUR -220 million. This results in a total free cash flow of EUR 167.2 million for H1 2026. Let's now turn to the outlook for fiscal year 2026. For the fiscal year 2026, we continue to expect service revenue to remain at the prior year level of approximately EUR 3.66 billion. EBITDA is expected to rise to approximately EUR 800 million in 2026.

Speaker #2: Let's now turn to the outlook for fiscal year 2026. For fiscal year 2026, we continue to expect service revenue to remain at the prior-year level of approximately €3.66 billion.

Speaker #2: EBITDA is expected to rise to approximately €800 million in 2026. We continue to plan for capital expenditures, with cash capex in the range of €500 to €550 million looking ahead to 2027 and 2028.

Sascha D'Avis: For 2026, we continue to plan for capital expenditures, cash CapEx, in the range of EUR 500 to 550 million. Looking ahead to 2027 and 2028, we continue to expect annual operating EBITDA growth of approximately EUR 100 million. Cash CapEx is expected to remain at a level similar to that planned for 2026. Thank you very much for your attention. We will now move on to answering your questions. Thank you very much.

Speaker #2: We continue to expect annual operating EBITDA growth of approximately €100 million. Cash capex is expected to remain at a level similar to that planned for 2026.

Speaker #2: Thank you very much for your attention. We will now move on to answering your questions. Thank you very much.

Oliver Keil: Yeah. Thank you very much. We have a question. Third row, second left, Karsten Oblinger, DZ BANK. After that, we move to the third row, far right, Hannes van Katnen. Karsten Oblinger, DZ BANK. I have two questions. The first would be, can you split up the EBITDA guidance to two segments? The second is the customers that you lost, can you give us an indication of the gross margin of these customers? Was that positive or negative? Let me start with the lost customers. Usually, we don't have customers with a negative gross margin. Of course, it may happen that somebody fully uses their data tariff. On average, in the individual tariffs, all our contracts have a reasonably high margin. What we switched off were tariffs with prices below EUR 6.99. We had tariffs for EUR 4.99, EUR 3.99, EUR 2.99.

Speaker #1: Yeah, thank you very much. We have a question—third row, second from the left, Carsten Poblinger, DZ Bank. And after that, we move to the third row, Florian Reit, Anders Kapnes.

Speaker #1: Carsten Hoblinger, DZ Bank. I have two questions. The first would be: Can you split up the EBITDA guidance into two segments? And the second is: For the customers that you lost, can you give us an indication of the gross margin of these customers?

Speaker #1: Was that positive or negative? Let me start with the lost customers. Usually, we don't have customers with a negative gross margin. Of course, it may happen.

Speaker #1: That somebody fully uses their data tariff. But on average, in the individual tariffs, all our contracts have a reasonably high margin. What we switched off were tariffs with prices below €6.99.

Speaker #1: We had tariffs for €4.99, €3.99, and €2.99. And even if we have a good percentage of gross margin, if you do the full cost calculations, you won't get a big margin out of that.

Ralph Dommermuth: Even if you have a good percentage of a gross margin, if you do the full cost calculations, you won't get a big margin out of that. At the same time, we had data volumes in tariffs from EUR 6.99 upwards and releasing them. We do that against the background that this EUR 100 million EBITDA is what we have promised for this year and the coming years, this is why we need a good customer base. As with everybody else, the problem is not so much that we get new customers in that we have a little margin on or don't make any profit with the full calculation because it's an add-on. You always have to see that you may lose customers, existing customers, or they swap tariffs if they can, then you make less money on that.

Speaker #1: And at the same time, we had data volumes in tariffs from 6.99 upwards, and we are reducing them. We do that against the background that this €100 million EBITDA is what we have promised for this year and the coming years.

Speaker #1: And this is why we need a good customer base. And as with everybody else, the problem is not so much that we get new customers in that we have a little margin on, or don't make any profit with the full calculation.

Speaker #1: Because it's an add-on, but you always have to see that you may lose customers, existing customers, or they swap tariffs if they can, and then you make less money on that.

Speaker #1: And as of 1st of April, we have introduced this, and it took about April for the competitors to react. You see this today with Plaut, Zimio, Freenet tariffs, that they have caught up with us.

Ralph Dommermuth: As on 1 April, we have introduced this. It took about April for the competitors to react. You see this today with Blau, Simyo, Freenet tariffs that they have caught up with us. Barros in discount, they have just taken out 1 tariff out for EUR 2.99. They still offer them EUR 2.99, EUR 3.99. We left this segment because for us, the next 2 years, we are looking at profitability as our highest priority. You see this in the figures that we invest a lot. We are moving on with the network stability extension and so on. We have a good hand on that for now. We have to start making money on that.

Speaker #1: And Baras, in the discount segment, they have just taken out one tariff at €2.99. They still offer them at €2.99 and €3.99. But we left this segment because for us, over the next two years, we are looking at profitability as our highest priority.

Speaker #1: You see this in the figures, that we invest a lot. And we are moving on with the network stability, extension, and so on. We have a good handle on that.

Speaker #1: So now for now, so we have to start making money on that. And the EBITDA guidance, we don't guide on the segments, but in total, but I think I can say as much as in the last year, we in the segment enterprise networks altogether with Versatel, we had a roundabout minus 100 million euros EBITDA.

Ralph Dommermuth: The EBITDA guidance, we don't guide on the segments, but in total. I think I can say as much as in the last year, we in the segment enterprise networks, all together with Versatel, we had around about -100 million EUR EBITDA, as someone said this already. That is going to turn positive this year. We expect in the consumer small business segment that we move horizontally, more or less. Which would be a success because at the end of the day, by the change of national roaming partner, we have a shift from EBITDA to EBIT. The result is neutral. If you look at the EBITDA, it is quite a good success. Well, looking at the mechanics you guided before. Looking at the mechanics of the balance sheet, you guided 1&1, the normal business and network.

Speaker #1: It's the amount—we’ve said this already—that is going to turn positive this year. And we expect, in the consumer small business segment, that we move horizontally, more or less, which would be a success because, at the end of the day, by the change of national roaming partner, we have a shift from EBITDA to EBIT.

Speaker #1: So the result is neutral, but if you look at the EBITDA, it is quite a good success. Well, looking at the mechanics, you guided before, so looking at the mechanics of the balance sheet, you guided 1&1—the normal business and networks.

Speaker #1: So there was kind of minor 160. You gave out a published guidance. Can we see the old guidance? What was the estimate? And put Versatel on top?

Oliver Keil: There was kind of EUR -160. You gave out a published guidance. Can we see the old guidance? What was the estimate, put Versatel on top? Yeah, that is correct. Okay, thank you. Well, as we said, Florian Treisch. Good afternoon. Thank you for taking my question. I have a question sitting on the comment, Mr. Dommermuth, that over the next 2 years, you focus on profitability. If we look at the guidance for service turnover revenue, not quite flat, EUR little negative. Do you expect a development of the + in H2? Is service growth going to be more important in the next 2 years to deliver this EUR 100 million? Or is that an effect of less cost? Well, I think it's a sum of all of this. We work on our costs all the time. We have a continuous better utilization of our network.

Ralph Dommermuth: There was kind of EUR -160. You gave out a published guidance. Can we see the old guidance? What was the estimate, put Versatel on top?

Speaker #1: Yeah, that is correct. Okay, thank you. Well, as we said, Florian Reich. Good afternoon, thank you for taking my question. I have a question regarding the comment, Mr. Dommermuth, that over the next two years you focus on profitability.

Oliver Keil: Yeah, that is correct. Okay, thank you.Well, as we said, Florian Treisch.Good afternoon. Thank you for taking my question. I have a question sitting on the comment, Mr. Dommermuth, that over the next 2 years, you focus on profitability. If we look at the guidance for service turnover revenue, not quite flat, EUR little negative. Do you expect a development of the + in H2? Is service growth going to be more important in the next 2 years to deliver this EUR 100 million? Or is that an effect of less cost?

Speaker #1: If we look at the guidance for service turnover revenue, it's not quite flat—it's a little negative. Do you expect a development toward the positive in H2, and is service growth going to be more important in the next two years to deliver these €100 million?

Speaker #1: Or is that an effect of less cost? Well, I think it's a sum of all of this. We work on our costs all the time.

Ralph Dommermuth: Well, I think it's a sum of all of this. We work on our costs all the time. We have a continuous better utilization of our network. We've invested a lot. We manage more and more now to utilize the antenna locations, in the service turnover, we have to increase as well. It's all 3 aspects, really. Keeping an eye on the cost, more service revenue, and using our own network. Next question on left side, first row, our Analyst, Andrew Lee.

Speaker #1: We have a continuously better utilization of our network. We have invested a lot, and we manage more and more now to utilize the antenna locations and the service turnover we have.

Ralph Dommermuth: We've invested a lot. We manage more and more now to utilize the antenna locations, in the service turnover, we have to increase as well. It's all 3 aspects, really. Keeping an eye on the cost, more service revenue, and using our own network. Next question on left side, first row, our Analyst, Andrew Lee.

Speaker #1: So, increase as well. So, it's all three aspects, really—keeping an eye on the cost, more service revenue, and using our own network. The next question, on the left side, first row—our analyst, Andrew Lee.

Speaker #2: Thank you. It's Andrew Lee from Goldman Sachs. And apologies for asking the question in English. I had two questions. The first one is a hot topic in telco at the moment.

Andrew Lee: Thank you. It's Andrew Lee from Goldman Sachs. Apologies for asking the question in English. I had two questions. The first one is a hot topic in telco at the moment, so satellite evolution. Has what SpaceX and Starlink been doing and saying over the past couple of months caused you to alter either your plans for mobile network build or your expectations for your ability to monetize that network investment? That's question number one, thoughts on satellite impact on your operations. Secondly, again, apologies because this is a question you get asked a lot, but on German consolidation. I see your growth in 1&1, but over the past years and quarters, we've had a number of telco markets accelerate their growth, and Spain has just joined the number of countries that are displaying accelerating growth as it benefits from consolidation.

Speaker #2: So, it's satellite evolution. Have what SpaceX and Starlink have been doing and saying over the past couple of months caused you to alter either your plans for mobile network build?

Speaker #2: Or your expectations for your ability to monetize that network investment? So that's question number one—your thoughts on the satellite impact on your operations.

Speaker #2: And then secondly—and again, apologies, because this is a question you get asked a lot—but on German consolidation: so your growth in 1&1, but over the past years and quarters, we've had a number of telco markets accelerate their growth.

Speaker #2: And Spain has just joined the number of countries that are displaying accelerating growth as it benefits from consolidation. And Germany telecom's growth as a market looks quite anemic.

Andrew Lee: Deutsche Telekom's growth as a market looks quite anemic, small, low growth relative to what we're seeing elsewhere in the sector where we've seen this concentration. The question is, given consolidation is one way to change this, what are your thoughts on the viability of consolidation in Germany in the near term? Could you be a seller into this event? Do you actually see it as a clearly value accretive event? Thank you.

Speaker #2: Small, low growth relative to what we're seeing elsewhere in the sector, where we've seen this concentration. So the question is: given that consolidation is one way to change this, what are your thoughts on the viability of consolidation in Germany in the near term?

Speaker #2: Could you be a seller into this event? And do you actually see it as a clearly value-accretive event? Thank you.

Sascha D'Avis: We are looking into this topic of satellites, of course, like anyone else. We consider whether this might be a good admixture to the terrestrial network. Nevertheless, at the end of the day, we believe in the terrestrial network, particularly where we expanded right now. We're doing that in the big cities right now, and we believe that the network here is superior to the satellite network in financial, but also in performance terms. We look at it, but it doesn't change our strategy. I think we agree on that with other network operators. Concerning the growth, that's true. We don't have much growth in Germany in the telecommunications market. We have to think about it, and we do think about how to deal with this situation. I do believe that even if you consolidate the market, there's no growth there.

Speaker #3: We have are looking

Speaker #1: ...into this topic of satellites, of course, like anyone else. And we consider whether this might be a good addition to the terrestrial network. Nevertheless, at the end of the day, we believe in the terrestrial network, particularly where we've expanded right now.

Speaker #1: We're doing that in the big cities right now, and we believe that the network here is superior to the satellite network not only in financial terms, but also in performance terms.

Speaker #1: So we look at it, but it doesn't change our strategy. I think we agree on that with other network operators. Concerning the growth, that's true.

Speaker #1: We don't have much growth in Germany in the telecommunications market. We have to think about, and we do think about, how to deal with this situation.

Speaker #1: But I do believe that even if you consolidate the market, there's no growth there. It doesn't mean that tomorrow you'll have more SIM cards or fiber optic connections.

Sascha D'Avis: It doesn't mean that tomorrow you'll have more SIM cards or fiber optic connections. You could only achieve growth via price increases. We believe rather that we have to offer added value, that we have to develop new channels, that there are channels where we're too weak today, for instance, in the B2B segment. That's where we're still very far removed from our fair share. That's the topics that we're considering right now. If I understood your question right, you asked whether we are a seller when it comes to consolidation. I think I've said it before and I'll say it again, we don't see this happening. Next question from Ben Rickett on the left-hand side. The gentleman on the outside there.

Speaker #1: You could only achieve growth via price increases. And we believe, rather, that we have to offer added value, that we have to develop new channels, that there are channels where we're too weak today—for instance, in the B2B segment. That's where we're still very far removed from our fair share.

Speaker #1: So, those are the topics that we're considering right now. And if I understood your question right, you asked whether we are a seller when it comes to consolidation.

Speaker #1: And I think I've said it before, and I'll say it again: we don't see this happening. Next question from Ben Rickett, on the left-hand side—the gentleman on the outside there.

Speaker #3: Thank you, Ben Rickett from New Street Research. I had two questions, please. Maybe firstly on your sort of network development. So you're saying you're now covering 34% of households.

Ben Rickett: Thank you. Ben Rickett from New Street Research. I had two questions, please. Maybe firstly on your network development. You're saying you're now covering 34% of households. What does that mean in terms of the traffic coverage? How do you think about the network evolving by 2030? By 2030, how many sites do you expect to have, and what percentage of the traffic do you expect to be carrying by that point? Second question, really just a clarification on the mobile net adds development. You're saying you removed some very cheap tariffs which impacted net adds in Q2. The improvement that you're expecting to see in the net adds, is that because you've now removed those or you've reintroduced those cheap tariffs, or you're saying that market pricing as a whole has increased? It'd just be useful to understand that dynamic. Thank you.

Sascha D'Avis: Thank you. Ben Rickett from New Street Research. I had two questions, please. Maybe firstly on your network development. You're saying you're now covering 34% of households. What does that mean in terms of the traffic coverage? How do you think about the network evolving by 2030? By 2030, how many sites do you expect to have, and what percentage of the traffic do you expect to be carrying by that point? Second question, really just a clarification on the mobile net adds development. You're saying you removed some very cheap tariffs which impacted net adds in Q2. The improvement that you're expecting to see in the net adds, is that because you've now removed those or you've reintroduced those cheap tariffs, or you're saying that market pricing as a whole has increased? It'd just be useful to understand that dynamic. Thank you.

Speaker #3: What does that mean in terms of the traffic coverage? And then how do you think about the network evolving by 2030? So by 2030, how many sites do you expect to have?

Speaker #3: And what percentage of the traffic do you expect to be carrying by that point? And then second question, really just a clarification on the mobile net adds development.

Speaker #3: So you're saying you removed some very cheap tariffs, which impacted net adds in Q2. The improvement that you're expecting to see in the net adds—is that because you've now removed those, or you've reintroduced those cheap tariffs?

Speaker #3: Or are you saying that market pricing as a whole has increased? It would just be useful to understand that dynamic. Thank you.

Sascha D'Avis: Let me start with the traffic coverage question. We now reach 34% of households, according to a measurement system enforced by the Federal Network Agency. That means that that measurement system requires a signal to arrive at the household. That doesn't meet our own standards. Although we reach 34% of households, we don't cover 34% of the traffic. It may be too weak for our standards, so we wouldn't provide our customers with a sufficient quality. If we don't have a sufficient signal strength, we switch to the Vodafone network. We have a large number of antenna sites, but they're not sufficiently close to each other to cover 34% of the population. Our objective is to reach 40% of households by the end of the year, according to this official measurement standard of the Federal Network Agency.

Speaker #1: Let me start with the traffic coverage question. We now reach 34% of households. According to a measurement system enforced by the federal network agency, that means that the measurement system requires a signal to arrive at the household.

Speaker #1: But that doesn't meet our own standards. Although we reach 34% of households, we don't cover 34% of the traffic. It may be too weak for our standards.

Speaker #1: So we wouldn't provide our customers with sufficient quality. So if we don't have sufficient signal strength, we switch to the Vodafone network.

Speaker #1: So, we have a large number of antenna sites, but they're not sufficiently close to each other to cover 34% of the population. Our objective is to reach 40% of households by the end of the year, according to this official measurement standard of the Federal Network Agency.

Speaker #1: And more or less by the end of 2028, we will reach 50% of households—more or less. It'll tend to decline, of course. And then, in subsequent years, it'll be a question of, or the goal will be, to intensify the system, to improve the system, so we won't have a higher reach.

Sascha D'Avis: More or less by the end of 2028, we will reach 50% of households, more or less. It'll tend to decline, of course. In subsequent years, it'll be a question of, or the goal will be to intensify the system, to improve the system, so we won't have a higher reach, but the quality will improve so that we will have a lesser and lesser reliance on Vodafone in these areas. Our first objective is to achieve 50% of households with top quality, and we believe that with that, we will be able to generate about 50% to 60% of our total traffic. Assuming that we will also have low-band frequencies and that we can extend our mid-band frequencies. It also hinges on which frequencies you have that impinges on your range and the signal strength you have within this range.

Speaker #1: But the quality will improve so that we will have a lesser and lesser reliance on Vodafone in these areas. Our objective is—that our first objective is—to achieve 50% of households with top quality.

Speaker #1: And we believe that, with that, we will be able to generate about 50% to 60% of our total traffic, assuming that we will also have low-band frequencies and that we can extend our mid-range frequencies.

Speaker #1: It also hinges on which frequencies you have that impinge on your range, and the signal strength you have within this range. So, within the appropriate frequency portfolio, we will achieve 50% of households and generate 50% to 60% of our own traffic ourselves.

Sascha D'Avis: Within the appropriate frequency portfolio, we will achieve 50% of households and generate 50% to 60% of our own traffic ourselves. That's the first goal that we have. You asked how many sites do we anticipate for 2030? We now have 2,500 mobile phone stations. By the end of the year, it'll be 3,000. I can't tell you exactly where we will be by the end of 2030. You can expect something like 9,000 to 10,000 stations being operated by us by then. The last question, I failed to understand it, but maybe Mr. D'Avis can answer it. Yes, concerning your last question, we bank on value, and this is why we discontinued the lower prices, and we also reduced volumes for the more highly priced tariffs. The market followed suit. That's why we had this dip.

Speaker #1: That's the first goal that we have. You asked how many sites will we do we anticipate for 2030? We now have two and a half thousand mobile phone stations.

Speaker #1: By the end of the year, it'll be 3,000. But I can't tell you exactly where we will be by the end—where we'll be by the end of 2030.

Speaker #1: You can expect something like 9,000 to 10,000 stations being operated by us by then. And the last question—I failed to understand it, but maybe Mr. D'Avis can answer it.

Speaker #1: Yes, concerning your last question, we bank on value, and this is why we discontinued the lower-price prices, and we also reduced volumes for the more highly priced tariffs. The market followed suit.

Speaker #1: That's why we had this dip at the beginning. We had a strong loss of customers, but ever since April, this loss has slowed down.

Sascha D'Avis: At the beginning, we had a strong loss of customers, but ever since April, this loss has slowed down. Nevertheless, we continue to pursue this strategy. We've seen that things are getting better and better month-over-month. For Q3, we will still see losses, but they're much smaller than in Q3. From Q4 onwards, we expect additional growth again, particularly profitable growth.

Speaker #1: Nevertheless, we continue to pursue this strategy. We've seen that things are getting better and better. Month over month for Q3, we will still see losses, but they're much smaller than in Q2.

Speaker #1: And from Q4 onwards, we expect additional growth again, particularly profitable growth.

Ben Rickett: Okay. Thank you. That was really helpful. Still guiding for total customers to increase this year. Maybe that, I think that's still in your report, but I assume you wouldn't actually expect that.

Sascha D'Avis: Okay. Thank you. That was really helpful. Still guiding for total customers to increase this year. Maybe that, I think that's still in your report, but I assume you wouldn't actually expect that.

Speaker #3: Okay, thank you. That was really helpful. Are you still guiding for total customers to increase this year, or is that still in your report?

Speaker #3: But I assume you wouldn't actually expect that.

Sascha D'Avis: Well, we don't guide for the growth. We didn't guide for that. In the report, we said it is going to be stable, and we have to expect what competition does and how it develops in H2. In the broadband business, we have a positive perspective. We expect larger growth than in H1. In the mobile business, we want to see an improvement. We expect an improvement in H2 as well. That is clear. In this respect, we would see a horizontal movement in the number of contracts. This is a challenge, but we will probably be able to deliver it. The main point is that we focus on the high end, high value. We want to have that EUR 100 million EBITDA, a one Europe, and deliver that in the coming years as well. Okay.

Speaker #1: Well, we don't guide for the growth. We didn't guide for that in the report; we said it is going to be stable. And we have to expect what competition does and how it develops in the second half of the year.

Speaker #1: In the broadband business, we have a positive perspective. We expect larger growth in the first half of the year. In the mobile business, we want to see an improvement.

Speaker #1: We expect an improvement in the second half as well. That's clear. And in this respect, we would see a horizontal movement in the number of contracts as a challenge, but we will probably be able to deliver it.

Speaker #1: The main point is that we focus on the high-end, high-value segment. We want to achieve that €100 million EBITDA A1 Europe target, and deliver on that in the coming years as well.

Speaker #1: Okay. If I don't see further questions, third row, second on my right side, Dr. Isselts from Stadsa. Thank you. Thank you. Mr. Dommermuth, the low band topic hasn't been solved, apparently.

Sascha D'Avis: If I don't see follow-up questions, third row, second on my right side, Dr. Issels from Stifel.

Georg Issels: Thank you. Thank you. Georg Issels, Scherzer & Co. AG. Mr. Dommermuth, the low-band topic hasn't been solved, apparently. Looking at the mechanics, a low-band assignment, if it were there, it would save costs. How is that compensated at the moment, and what is the preview until there is an agreement from the past start of the year? How is that going to be compensated? That's now clear. The Netzagentur had this idea that you shouldn't have a setback, a disadvantage out of that.

Speaker #1: So, looking at the mechanics, a low-band assignment, if it were there, would save costs. How is that compensated at the moment? And what is the preview until there is an agreement from, first, from the past, first start of the year? How is that going to be compensated?

Speaker #1: That's not clear. The networks are going to have this idea that you shouldn't have a setback—a disadvantage out of that. That's a good question.

Sascha D'Avis: That's a good question. For us, our planning was that from the 1 January 2026, we were able to use the low-band frequencies. That was the conditions for the frequency assignment in 2019. We had mid-band and high-band, and low-band would have been available for purchase from January 2026.

Speaker #1: For us, our planning was that from the first of January 26, we were able to use the low-band frequencies. That was the condition for the frequency assignment in 2019.

Speaker #1: We had minimum band and high band, and low band would have been available for purchase from January 26. The agency then decided to deviate from that path, not doing a tender where everybody could participate.

Ralph Dommermuth: The Agency decided to deviate from that path, not doing a tender where everybody could participate, but do that freehand to the three established network operators. We filed a complaint against this, there's going to be some time until this is decided. As a help, the Agency proposed that the low-band frequencies could be used in a cooperative way. The three established providers would provide the low band to us in the cells where we would be able to use this. This was to be negotiated. There should have been offers for this, but these didn't turn up. We informed the Agency of this. There was a report monthly on this.

Speaker #1: But do that freehand to the three established network operators. We filed a complaint against this, but it's going to be some time until this is decided.

Speaker #1: So as a help, the agency proposed that the low band frequencies could be used in a cooperative way. The three established providers would provide the low band to us in the cells where we would be able to use this.

Speaker #1: This was to be negotiated. There should have been offers for this, but these didn't turn up. We informed the agency of this. There was a monthly report on this.

Speaker #1: And then in February, I think they started a survey and made a proposal. Saying we think to give a eins and eins 30 million euros 10 million each from the three providers and then eins and eins should not get low band until the next round and use national roaming also where the eins and eins locations are.

Ralph Dommermuth: In February, I think, they started a survey and made a proposal saying, we think to give 1&1 EUR 30 million, EUR 10 million each from the three providers, 1&1 should not get low band until the next round and use national roaming also where the 1&1 locations are, the sites are. Concerning the antennas. We are building the antennas in complete. High band, mid-band, and the ones where we plan it's not 100%, but many of them we planned low band and we have built low-band antennas as well. We commented on that. Our goal is not to get the EUR 30 million. Our goal is to get the frequencies. On the outcome of this, I can't say anything. How it is going to be compensated, the damage that we have, I can't tell you either. It's going to take a long time.

Speaker #1: The sites are concerning the antennas. We are building the antennas incomplete—so, high band, mid band, and the ones where we plan it. It's not 100%, but for many of them, we plan low band and we have built low band antennas as well.

Speaker #1: So, we commented on that. Our goal is not to get the €30 million; our goal is to get the frequencies. The outcome of this, I can't say anything.

Speaker #1: How it is going to be compensated, the damage that we have, I can't tell you either. It's going to take a long time. I said in February we had this paper of the agency, and we are in August now.

Ralph Dommermuth: I said in February we had this paper of the agency and we are in August now. That's half a year and we haven't heard anything since. Look at the frequency issue, the frequency assignment 2019. The court in Cologne 2024 said it wasn't right. Now we are two years down the line and the agency did a market survey and that was all. We can't do more than file a complaint.

Speaker #1: That's half a year and we haven't heard anything since. But look at the frequency issue. The frequency assignment in 2019—the court in Köln said in '24 that it wasn't right.

Speaker #1: Now we are two years down the line, and the agency did a market survey, and that was all. So, we can't do more than file a complaint.

Oliver Keil: Good. Well, I see that there are no further questions. We'd like to thank you for your interests. Of course, over the next few days and weeks, we will be available to you as usual. After a short break, I can wish you an interesting meeting with our parent company. Until then, stay healthy. Thank you very much.

Speaker #3: Good.

Speaker #1: Well, I see that there are no further questions. Then we'd like to thank you for your interest. Of course, over the next few days and weeks, we will be available to you as usual.