Thank you very much, Sharon, and welcome to everybody. Good morning, ladies and gentlemen.

On behalf of the executive board of 1&1, I would like to warmly welcome you to our first-quarter conference call. During this call, our CFO, Sascha D'Avis, will present the results of the first 3 months of fiscal '26 followed by the outlook.

Afterwards, following the presentation, we will be happy to answer your questions as usual. Thank you very much.

I now like to turn the floor over to Sascha.

Thank you, Oliver. Good morning, everyone.

This is Sascha D'Avis, CFO of 1&1 AG. Welcome to our call today.

I will give you a quick update on our performance in the first quarter of 2026 and walk you through our financial results as end of March. I will then wrap up with a brief outlook on how we see the rest of the year developing as well as our expectations for 2027 and 2028.

To start off, I will give you a brief overview of our new segment structure. In the Consumer and Small Business segment, former Access segment, we serve around 3.8 million broadband connections in our fixed-line business, offering high-performance VDSL and fiber products including voice and IPTV through strong last-mile partners.

In Mobile, we manage more than 12.4 million contracts and operate Europe's first fully virtualized Open RAN network. This gives us a future-ready infrastructure, broad market coverage, and a very targeted customer approach.

This is clearly reflected in our high levels of customer satisfaction. The Enterprise and Networks segment comprises the previous 1&1 Mobile Network segment as well as 1&1 Versatel.

Our growth is driven by fiber and Europe's first fully virtualized Open RAN. 1&1 Versatel operates one of the largest fiber networks in Germany with more than 68.5 thousand kilometers of network infrastructure, its own assets in over 350 cities, and scalable solutions for enterprise customers.

At the same time, we continue to push ahead with network expansion, increasing household coverage and delivering very strong overall network quality, which clearly underlines our technological positioning. Let me now turn to our key metrics.

To ensure comparability with the prior year, our KPI overview includes adjusted prior-year figures assuming that 1&1 Versatel had already been part of the 1&1 Group since the beginning of 2025. On slide 4, you can see our customer contracts.

As of the end of March, we reported a base of 16.32 million contracts, including 12.48 million mobile internet contracts and a total of 3.84 million broadband connections. Overall, this means that our contract base remained unchanged across both product areas compared to year end.

The stabilization of our broadband business after a period of declining contract numbers is mainly the result of our consistently executed fiber strategy. In the mobile business, we focus on acquiring and retaining valuable customers.

On the next slide, we take a look at the revenues. Total revenue came in at €1.146 billion, which is slightly up by 1.1% compared to €1.133 billion in the first quarter of 2025.

Service revenues declined slightly by 1.2% year-on-year, with the decrease fully attributable to the Consumer and Small Business segment. This is due to the smaller contract base compared to the previous year and is fully in line with our plan.

Other revenues increased by 10.8% to €246.3 million compared to €222.3 million in the first quarter of 2025. This increase mainly comes from the Consumer and Small Business segment driven, in particular, by higher smartphone revenues as part of our bundled product offerings.

Let me now turn to EBITDA by segment. In the Consumer and Small Business segment, we generated EBITDA of €201.9 million in the first 3 months of the year.

This represents a decline of 9.4% compared to €222.9 million in the prior-year period. The decrease is mainly driven by the change in our national roaming partner.

Under the national roaming agreement with Telefónica, parts of the capacity used by 1&1 were capitalized and depreciated over time, whereas under the Vodafone agreement, these costs are fully recognized at the EBITDA level. This effect is EBIT-neutral, but it puts pressure on EBITDA.

In addition, as already observed last year, we saw higher costs due to the slower than expected capacity ramp-up of the Vodafone network. Data growth at 1&1 and Vodafone has become increasingly stable.

However, data growth at Vodafone remains slightly lower than 1&1, which is exactly in line with our projections for '26 so far. In the Enterprise and Networks segment, EBITDA improved to a loss of €9.5 million in the first quarter of '26 compared with a loss of €30.4 million in the first 3 months of '25.

This represents an improvement of 68.8%. The main reason for this is a higher proportion of self-generated mobile services as well as more favorable purchasing terms for international roaming and voice services following the completion of customer migration to our own network at the end of last year.

Let me now turn to the capex. In the first 3 months of the year, we invested €95.2 million in total.

Of this amount, €3.1 million was allocated to the Consumer and Small Business segment, while €92.1 million was invested in the Enterprise and Networks segment. Overall, investment spending was therefore only slightly below the comparable level of the prior year, fully in line with our business plan.

Let me now turn to the earning position of the group. As with the key figures presented earlier, the prior-year figures have been adjusted accordingly to ensure comparability.

Let me start with our income performance. Total revenue amounted to €1.146 billion in the first quarter of '26, up 1.1% compared to €1.133 billion in the first 3 months of '25.

Of this, €1.030 billion was generated in the Consumer and Small Business segment compared to €1.017 billion in the first quarter of '25, representing an increase of 1.2%. Revenue in the Enterprise segment and Networks segment amounted to €116 million, roughly the same figure as in the previous year.

Cost of sales increased to €896 million in the first quarter of '26. This represents an increase of €31.1 million, or 3.6%, compared to €864.9 million in the first quarter of '25.

Higher cost of sales were mainly driven by increased cost of goods following higher hardware revenues, increased national roaming costs following the slower than expected capacity ramp-up at our national roaming partner Vodafone, as well as an increase of depreciation and amortization due to the ongoing ramp-up of our mobile network. Gross profit in the Consumer and Small Business segment declined from €359 million in the first quarter of '25 to €348 million in the first 3 months of '26.

In the Enterprise and Networks segment, gross profit increased from -€90.7 million in the first 3 months of '25 to -€98.5 million in the first quarter of '26. The slight increase is the result of increased depreciation and amortization due to the ongoing ramp-up and partially compensating for increased savings of external costs given the higher volume of data produced by our own mobile network.

Overall, gross profit from revenue declined from €268.3 million in the first quarter of '25 to €250 million in the first 3 months of '26, representing a decrease of 6.8%. This range was mainly driven by higher national roaming costs.

Selling expenses decreased from €158.5 million in the first quarter of '25 to €133.7 million in the first quarter of '26. The decline is primarily attributable to the expiration of amortization of the customer base capitalized as part of the initial consolidation of Drillisch, which expired in August '25.

Administrative expenses amounted to €42.9 million in the first quarter of '26 compared to €44.4 million in the prior-year period, with moderate savings in personal expenses, depreciation, and amortization as well as other minor changes in various positions. The balance of other operating income and expenses came in at €12.9 million in the first quarter of '26, slightly above the prior-year level of €12.8 million.

Impairment losses on receivables and contract assets declined due to lower payment defaults from €32.7 million in the first quarter of '25 to €28.5 million in the first quarter of '26. As a result, EBIT increased from €45.5 million in the first quarter of '25 to €57.8 million in the first quarter of '26.

This is the result of the elimination of amortization related to the Drillisch customer base as well as higher savings from the own mobile network, partially offset by higher costs for national roaming. The financial result amounted to -€32.1 million in the first quarter of '26, slightly higher than the prior-year level of -€29.6 million.

Profit before tax therefore amounted to €25.7 million in the first quarter of 2026 compared to €15.9 million in the first quarter of '25. Income tax expenses increased year-on-year according to the higher profit before tax from €4.8 million to €7.9 million.

Overall, we generated a net profit of €17.8 million in the first quarter of '26 compared to €11.1 million in the first quarter of '25. Let me now turn to the balance sheet.

The total assets decreased slightly from €11.0 billion at the end of '25 to €10.9 billion as of March '26. Short-term assets decreased by 8.8%, mainly driven by short-term receivables due from associated companies.

In connection with the acquisition of 1&1 Versatel, receivables of €377.1 million were recognized at year end and settled at the beginning of year '26. At the end of first quarter, the receivables due from associated companies now only represent the receivables against United Internet resulting from cash management.

Long-term assets increased by 0.4% given the investment in fixed and tangible assets as well as the increase in right-of-use assets due to new lease agreements related to our network rollout. Short-term liabilities reduced by 27.6%, mainly driven by trade liabilities and liabilities due to associated companies.

At the beginning of year '26, several supplier invoices have been settled, resulting in a reduction of trade payables, which were therefore 32.4% below the year-end level. Liabilities due to associated companies decreased from €204.4 million to €19.8 million.

Liabilities at year-end '25 contained liabilities in connection with 1&1 Versatel acquisition and have been settled at the beginning of the year. Long-term liabilities increased by 4.7% to €3.985 billion, mainly due to an increase of long-term liabilities due to associated companies.

At the beginning of the year, an amount of €225 million was drawn under the framework credit facility provided by the Japanese development bank, JBIC. This facility is formerly held by United Internet.

Equity increased slightly as a result of earnings from €5.996 billion as the end of '25 to €6.015 billion as of end of March '26. As a consequence, the equity ratio improved from 54.5% to 55.3%.

Let me now turn to cash flow. Net cash flow inflows from operating activities amounted to €151.3 million in the first quarter of '26 compared to €43.8 million in the first quarter of '25.

The increase is mainly driven by cash inflows from United Internet related to the acquisition of 1&1 Versatel, which I already mentioned in the context of the balance sheet development. Operating cash flow in the first quarter of '26 mainly reflects the following effects: €183.6 million from operating activities, -€29.2 million from changes in contract assets, +€22.6 million from changes in prepaid expenses, +€122.5 million from changes in receivables from liabilities against related parties resulting from the settlement of balances in connection with the acquisition of 1&1 Versatel, -€180.6 million from changes in trade payables due to the settlement of various supplier invoices at the beginning of the year, +€22.9 million from changes in other liabilities, and +€9.5 million from changes in other working capital items.

Cash flow from investing activities amounted to -€250.0 million in the first quarter of '26 compared to -€319.6 million in the first quarter of '25. This mainly consists of -€95.2 million of cash capex, primarily related to investments in the 1&1 mobile network and FTTH network, -€156.0 million from the investment of surplus liquidity with United Internet, and +€1.2 million from interest received, mainly from cash investments with United Internet.

Cash flow from financing activities totaled -€94.7 million in the first quarter of '26 compared to -€274.8 million in the prior-year quarter. The main components were -€39.1 million from the repayment of lease liabilities, -€67.0 million from the repayment of liabilities related to the 5G frequency spectrum, +€225.0 million from new borrowings, and -€23.2 million from interest payments.

Overall, we generated a free cash flow of €56.2 million in the first quarter of '26 compared to €15.8 million in the first quarter of '25. On the next slide, you can see the bridge from EBITDA to free cash flow.

The change in contract assets had a negative impact of €29.2 million. The change in receivables and liabilities vis-à-vis related parties contributed €122.5 million.

The change in prepaid expenses added €22.6 million. The reduction in trade payables had a negative effect of €180.6 million.

The increase in other liabilities contributed €22.9 million. Other working capital items changed by -€6.2 million.

Tax payments amounted to +€7 million. Capital expenditures came in at -€95.2 million.

Overall, this results in a free cash flow of €56.2 million. Let me now turn to the outlook.

Since January 1st, 2026, we have been reporting under a new segment structure. The former Access segment has been replaced by the Consumer and Small Business.

The new Enterprise and Networks segment combines the former 1&1 Mobile Network segment with the figures of 1&1 Versatel. For the '26 financial year, we continue to expect service revenue to remain at prior-year levels at around €3.66 billion.

EBITDA is expected to increase to approximately €800 million in '26. We continue to plan investment spending, our cash capex, for '26 in a range of €500 to €550 million.

Looking ahead to 2027 and 2028, we continue to expect annual operational EBITDA growth of around €100 million. Cash capex is expected to remain at a similar level to that planned for '26.

Thank you for your attention. I would now like to hand over to Oliver to open the Q&A session.

Hi. First question may come from Ganesha Nagesha, Barclays.

Please go ahead. Hello.

A couple of questions from my side. First one on the competitive situation.

Can you provide some color on the competitive situation in the German mobile and the fixed market? Are you seeing any improvement in the pricing environment?

Any detail on that would be helpful. My second question is on your low-band spectrum access discussions.

How is it progressing? Could you provide any update on this, please?

Thank you.

To your first question about the competition: competition in the mobile business remains intensive, but we believe the market is slowly stabilizing. We have decided to focus clearly on value and remain rational.

We are monitoring the market very closely and decided in early April to raise our prices slightly. This will result in a slightly slowdown in mobile growth in Q2, but we are convinced that we are on the right track with a business focused on value.

Competition in the fixed-line business is similar, but the market is increasingly becoming one where customers switch providers once their initial 24-month contracts expire. This, combined with our ever-expanding fiber-optic infrastructure, is now paying off.

We have signed wholesale agreements with nearly all major fiber-optic infrastructure providers, making us the provider with the largest fiber-optic footprint in Germany. Our online approach to market entry is also helping us return to a growth trajectory.

We are satisfied with the fixed-line business, which is performing increasingly well, even though we have also raised prices slightly here at the beginning of April this year. To your low-band question, the Federal Network Agency has proposed that we should receive €6 million per year over 5 years from Telekom, Vodafone, and Telefónica as compensation for not having been allocated spectrum.

This is currently part of a consultation process. We have submitted our comments, and now we need to see how this develops.

However, this has no impact on our network rollout. We continue to expand our network and are already deploying low-band antennas.

We are continuing to push for access to low-band spectrum in order to operate these antennas accordingly. That is the current status.

We will continue to pursue access to spectrum. If, in the end, the Federal Network Agency opts for a roaming solution, we will try to challenge that.

If we are not successful, we have to accept it, but it does not impact our expansion plans.

Thank you.

Morning. Thanks very much.

Three questions from my side, please. First is on your service revenues.

They are down 1% in Q1, but you've reiterated your guidance, which implies a more stable profile. Can you just talk through the moving parts on what is going to improve through the year for you to achieve your guidance?

I guess within that, your broadband net adds have stabilized after several quarters of decline. What's driving the improvement here?

Is it, as you mentioned, that fiber-optic expansion or is there anything one-off in the quarter or it really is stable to growing what we should expect from Q2? Second question is just on the progress of the network build.

Could you just share how many active sites you now have? Any comments on how we should think about the phasing of capex throughout the year would also be really helpful.

You've only spent €95 million in capex so far versus the budget of €500 to €550 million for the full year. Should we expect capex to be back-end loaded, and what are the big ticket items still left to do in the build?

The final question is just on the new Enterprise and Networks segment. Within that, could you just break out what the network investment opex is in Q1?

Can you give us a sense of what we should expect for the full-year network build opex? Should it be around €165 million given that you have €100 million from last year dropout, which were related to the migration costs?

Thank you very much.

To your first question about the service revenue, in the Q1, the service revenue is lower than last year because the contract base at the beginning of '26 was also smaller than in the previous year. This was in line with our plans.

In the coming quarters, service revenue is expected to increase through sustainable net growth and sustainable portfolio transactions, thereby remaining stable year-over-year. To your second question, the broadband net adds, I mentioned before, there is no one-off.

We are really happy with the performing. We are increasingly well, and at this point, I would say that Q2 will be better as Q1.

We are really, really happy with this performing. To the sites, we add every quarter around 300 antenna sites, and make good progress in that.

Each quarter, we, as I mentioned before, add 300 sites. By the end of '25, we had achieved 27% household coverage.

By the end of the first quarter '26, we recorded household coverage of around 30%. With the ongoing antenna expansion, we expect household coverage to reach out 35% by the end of the year '26, and approximately 40% would be possible with the use of low-band frequencies.

To your capex question, the capex includes mainly the antenna rollout and the connection with fiber. Beside that, the expansion of the fiber-optic network to provide fiber-optic connections for business and corporate customers.

The capex is more backloaded like in the previous years, and there are a number of factors that affect activation and cash out. For example, it doesn't matter what equipment is installed, we activate when the acceptance inspection take place.

There may be delays in this regard. We are maintaining our guidance that we will invest between €500 and €550 million in '26.

We are exactly in our business plan.

Good morning, everyone. Thank you for taking my questions.

I just have one, please, and it's just a follow-up. It's around customers.

I am wondering how you view the prospects for a pickup in net adds on the mobile side for the remainder of this year and what the moving parts are with that in mind, what needs to happen for there to be growth in net adds as we progress through Q2, 3, and 4. Thank you.

It depends on the competition level. We have a look at the competition level.

We raised our prices, and at this point, we believe the market is slowly stabilizing. I think there's a chance that we have with a focus on value a healthy growth in the next quarters.

Great. Thank you.

Hi there, and thanks for taking the questions. I had two, please.

Firstly, coming back to your capex, the €500 to €550 million. Are you able to say how much of that relates to the mobile network and how much of it relates to Enterprise and fiber?

Just as a rough split would be really helpful. Then second question: you've mentioned that you have now signed wholesale deals with nearly all of the altnets in Germany.

I was just wondering: are those contracts now live? Are you actively adding subscribers on all of those networks or are they going to just go live over the next year or so and, therefore, is that going to drive broadband net adds?

Just anything you can say on that dynamic would be helpful.

To the capex question, I would say around €300 to €350 million is related to the mobile network buildout, also antenna rollout in the 1&1 Mobilfunk GmbH and the connection of the antenna sites with fiber from 1&1 Versatel. To your second question about the fixed-line business and our partnerships, a lot of the partnerships are live, but they are still more to come in the next months and will go live in the next months.

That will help us.

Thank you. On that second question, could we see broadband net adds being positive for the remainder of the year?

Yes, I'm pretty sure that they will get positive.

Thank you.

Good morning. My question is related to the guidance of 2027, 2028.

Do you need any customer growth for this €100 million operational improvement or is this a worst case or even possible without any customer growth?

We should have customer growth, healthy customer growth especially, to get the €100 million, but the €100 million are splitted on all segments, but customer growth is sure important.

Thank you.

Thank you for taking the questions, and I have two, please. Firstly, can you give us a sense of how much traffic you expect to have on your own network with the 35% coverage you expect to have by year end, and that's both with and without low-band access?

Secondly, how should we think about your related payments to Vodafone? Could you give us a sense also of how we should expect these payments to trend this year versus last, but also what you would expect by way of savings by 2028?

Thank you.

To your questions to Vodafone payments, I cannot give you an exactly number, but due to the projection of our own mobile network, I would expect that the payments will slow down, but it depends on many factors. Your first question is about the traffic we have on our own network.

We cannot give you an exactly number of that, but low-band would have a positive impact. Would say would have roundabout 5% more traffic with low-band than without low-band.

Sorry, can you repeat your third question, please?

No, it was just the two questions, which I think you've answered. Thank you for that.

Thank you.

Thank you for taking my question. It's regarding the guidance.

Mr. Dommermuth [unclear] is interested in buying more 1&1 shares [unclear]—

Tim, sorry to step in. Tim, apologies.

We cannot hear you. Sorry to interrupt you, but your line is pretty bad.

Either you have to take the phone directly or there is too much noise around.

Oh, you can hear me now?

We try.

I try again. Can you hear me now?

Is it better? I'm sorry, I'm in the car.

It is a little bit better. Maybe you speak not too fast and we are trying to pick up your questions.

Regarding the guidance, if I do a quick model in terms of €500 million in investment, and therefore, I get a €100 million increase in EBITDA per year. If I have a 10-year lifetime of those capex, this leads to a rough 7% IRR return, and that is pretax.

This does not seem to be very attractive. Where is the thinking wrong or—

Tim, the line is by far too bad, and that is the very first time in over 15 years I have to apologize that we cannot take your question. I will be so kind and send it to us, and we spread it with the attendance of this call and explain it in a very proper way, but you are not understandable.

Not by the sense, but by your words, the quality of volume.

Thank you very much for your attention and apologies for our last question, as I will pick up contact to you, Tim, and spread the answer then in the community and attendancy. As usual, we will be available, and I'm returning now to the operator after a short break, wishing you an interesting meeting in the call with our parent company, United Internet.

Thank you, and stay healthy. Seeing you soon on the next conferences.

Goodbye.