United Internet Ag · XETR:UTDI
United Internet — Ionos — Investor Presentation (November 2022)
58 slides from United Internet's investor presentation, November 2022
Slide 1: #1 European SMB Digitalization Partner & Trusted Cloud Enabler
#1 European SMB Digitalization Partner & Trusted Cloud Enabler COMPANY PRESENTATION | November 2022 Copyright © IONOS SE 2022 1
Slide 2: Management
COMPANY PRESENTATION Management Achim Weiss Britta Schmidt CEO CFO Copyright © IONOS SE 2022 2
Slide 3: A Tech Success Story
COMPANY PRESENTATION A Tech Success Story “Next to sustainable energy, digitalization is the largest macro trend of today. Europe traditionally a digital laggard vs US is now seeing an acceleration in digital adoption and European small and mid-sized businesses (SMBs) urgently need to catch up. The
Slide 4: IONOS at a glance
IONOS at a glance Copyright © IONOS SE 2022 4
Slide 5: #1 European SMB digitalization partner & trusted Cloud enabler
#1 European SMB digitalization partner & trusted Cloud enabler 4 3 Complemented by a self-sustaining Cloud business, growing at ~20%2 Leading brand position boosted further through ~€55mm planned brand investments in 2022 ~€100mm Cloud revenue2 Significant EBITDA reinvested into investments in growt
Slide 6: 2021 delivered strong and sustainable growth, profitability and cash generation
2021 delivered strong and sustainable growth, profitability and cash generation Leading partner for digitalization, active in 18 markets across Europe and €1.1bn total revenue2 (12% yoy growth) ~90% recurring revenue3 North America, accessible worldwide High revenue visibility and predictability Sub
Slide 7: Successful transformation into the leading enabler for European SMBs
Successful transformation into the leading enabler for European SMBs 1998 2000-2007 2006-2008 2016 2017 2018 2021 2022 1&1 became shareholder of internet 1&1 Hosting launched Acquisition of fasthosts STRATO entered Warburg Pincus invested Expansion we22 STRATO entered pioneer Schlund + Partner (foun
Slide 8: Comprehensive product portfolio, first class customer care and infrastructure
Comprehensive product portfolio, first class customer care and infrastructure Strong customer support organisation (Personal Service Agent & 24/7 multi-channel support) v WEB PRESENCE & PRODUCTIVITY CLOUD SOLUTIONS One-stop-shop for all digitalization needs of SMBs Trusted European Cloud provider fo
Slide 9: The IONOS One-Stop-Shop portfolio enables end-to-end digitisation journey
The IONOS One-Stop-Shop portfolio enables end-to-end digitisation journey for our customers Protect your brand with a domain Communicate your professional identity with company branded email 1 ccTLDs 2 Business Mail “My customers can now find my business details anytime!” Anmut.Bar (cafe,´ bar) Set
Slide 10: Deep-dive into the IONOS story
Deep-dive into the IONOS story Copyright © IONOS SE 2022 10
Slide 11: Easy-to-use, intuitive and scalable platform offering mission critical products
Easy-to-use, intuitive and scalable platform offering mission critical products across the customer lifecycle MARKET Large, resilient and fast-growing SMB market, fuelled by digitalization and shift to Cloud #1 European digitalization partner & trusted cloud enabler for SMBs with leading1 positions
Slide 12: A large and fast growing market
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E A large and fast growing market Large and untapped IONOS addressable market ’15-262, EURbn SMB core target group1 19% CAGR 89 >90mm SMBs in North America 34 15% and Europe CAGR 38 16 22 55 >58mm 14 15
Slide 13: Sustained growth across all major markets of IONOS
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E Sustained growth across all major markets of IONOS Web Presence & Productivity: Addressable market by geography ’15-26, CAGR, % €bn ’15–21 ’21–26 34 Germany 6% 8% 4 4 UK 6% 8% 22 2 2 1 Spain 9% 8% 3 3
Slide 14: Number of SMBs are resilient even in times of market downturn
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E Number of SMBs are resilient even in times of market downturn, with IONOS having performed well in previous market crises Number of SMBs in Europe and North America (in millions) Growth during Growth
Slide 15: Significant online penetration potential for solo-preneurs and micro SMBs
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E Significant online penetration potential for solo-preneurs and micro SMBs Only ~50% of European companies have a website1… …which is a key constituent of online presence 100% • Growth driven by future
Slide 16: Aftermarket has been a strong driver of growth
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E Aftermarket has been a strong driver of growth Aftermarket growth CAGR Key drivers of accelerated Aftermarket growth at IONOS +65% 2019-2021 A 1.B In domain trading, we have increased the number of do
Slide 17: Customers demanding more sophisticated website design and e-commerce solutions
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E Customers demanding more sophisticated website design and e-commerce solutions, with WordPress emerging as the clear winner Percentages of websites using various content management systems 1 80% 43% 6
Slide 18: Significant whitespace in Cloud Solutions, especially for micro and small SMBs
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E Significant whitespace in Cloud Solutions, especially for micro and small SMBs Share of SMBs using a Cloud offering SMB Cloud adoption ’19-24, % of survey respondents1 % of Cloud infrastructure spendi
Slide 19: IONOS benefits from significant barriers to entry with strong competitive moats
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E IONOS benefits from significant barriers to entry with strong competitive moats… • 25+ years track-record of investing in and developing complex and best-in-class products, Long-standing tailored to S
Slide 20: Scores well across key purchasing criteria for our customers
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E …and scores well across key purchasing criteria for our customers Top customer purchasing criteria1… …with IONOS performing well across the board2 • DIY and DIFY solutions for any skill level 1 Ease o
Slide 21: Strong competitive advantages in the Web Presence & Productivity market
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E IONOS sees strong competitive advantages in the Web Presence & Productivity market in Europe Why we see competitive Why we see competitive 1 overall1 advantages vs digital advantages vs use case platf
Slide 22: Significant whitespace to grow organically in our core markets
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E We have significant whitespace to grow organically in our core markets Other ~24% Webhosting market share is concentrated amongst the 11% 51% market leaders, based on significant network effects Other
Slide 23: Leading IONOS Cloud offering
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E Leading IONOS Cloud offering… Public Cloud – Services and Solutions 2021 2021 ISG Provider Hyperscale Infrastructure and Platform Services Germany Lens Leader Low-latency, fast network and high-perfor
Slide 24: A strong challenger in the Cloud Solutions market
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E … makes us a strong challenger in the Cloud Solutions market Why we see competitive Why we see competitive Multiple customer examples underline our edge against competitors advantages vs advantages vs
Slide 25: Easy-to-use, intuitive and scalable platform across the customer lifecycle
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E Easy-to-use, intuitive and scalable platform offering mission critical products across the customer lifecycle Broad portfolio in the industry … … supported by unique differentiators Proprietary tech 2
Slide 26: IONOS has the most comprehensive product offering compared to selected peers
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E IONOS has the most comprehensive product offering compared to selected peers Web Presence & Productivity Cloud Solutions Geography Website builder Domains & & Private Public Webhosting Aftermarket E-c
Slide 27: IONOS has full control over majority of its core products
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E IONOS has full control over majority of its core products WordPress, MyWebsite SaaS Now, Managed Nextcloud, We leverage open source and build our solutions on top Full-service application Open Xchange
Slide 28: Enterprise Cloud Platform is the largest and fastest growing Cloud product
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E Our Enterprise Cloud Platform is the largest and fastest growing Cloud product Private cloud Public cloud Managed Private Cloud Bare Metal Cloud Virtual Private Server Enterprise Cloud Platform (based
Slide 29: Highly diversified, loyal customer base with strong unit economics
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E Highly diversified, loyal customer base with strong unit economics ~6mm 10x+ ~12-18 ~90% >7y Subscription Average customer Customers CLTV/CAC2 Months payback3 revenue lifetime Diversified customer bas
Slide 30: IONOS generates significant and long-term value from each customer cohort
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E IONOS generates significant and long-term value from each customer cohort IONOS1 2015 Cohort – WP&P revenue by product group evolution New customers are attracted 3 1 and benefit from welcome 2 discou
Slide 31: Effective retention measures have improved customer churn significantly
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E Effective retention measures have improved customer churn significantly Customer churn and average lifetime evolution1 7.7 +0.7 years ✓ Activation: Trigger-based, personalized increase in onboarding t
Slide 32: Attractive and highly predictable unit economics
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E Attractive and highly predictable unit economics demonstrating strong profitability profile Short and highly predictable Exceptional CLTV / CAC across different methodologies payback period 2021A CAC
Slide 33: Strong track record of expanding customer relationships across its product suite
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E IONOS has a strong track record of expanding customer relationships across its product suite €: MONTHLY >7x ARPU SchlaU – Nina Hille, Co-CEO From VPS Server to ■ Started with a VPS Server €70+ E-comme
Slide 34: Subscription-based business model with strong and sustainable revenue growth
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E Subscription-based business model with strong and sustainable revenue growth, high visibility, attractive profitability and cash flow generation Strong revenue growth Cash conversion rate Attractive p
Slide 35: Well positioned to take advantage of multiple growth levers
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E IONOS is well positioned to take advantage of multiple growth levers Driving Accelerated Further Build the International Expand product Platform for digitalization growth via up- accelerate cloud stro
Slide 36: Strong commitment to the environment and people is a clear driver of value
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E IONOS’ strong commitment to the environment and people is a clear driver of value creation We focus on energy efficiency measures … … and people, culture & sense of community 115 ✓ 1.41 ✓ 100% ✓ 23.9%
Slide 37: Go-to-market
Go-to-market Copyright © IONOS SE 2022 37
Slide 38: IONOS House of Brands: Strong footprint with local brand approaches
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E IONOS House of Brands: Strong footprint with local brand approaches Global hero brand #1 European SMB digitalization partner & trusted cloud enabler with strong North America presence Local champions
Slide 39: Our local brand approach allows us to widen our serviceable market
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E Our local brand approach allows us to widen our serviceable market, serve customers with different product offerings and apply diverse price strategies Country Brand presence Rationale and marketing s
Slide 40: In a consolidating market, a strong brand will be the winner in the long run
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E In a consolidating market, a strong brand will be the winner in the long run Launch: September 2021 Launch: May 2022 Launch: September 2022 Launch: September 2022 Building an evergreen brand that is I
Slide 41: IONOS personal consultant is a key differentiator
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E IONOS personal consultant is a key differentiator… Personal support Social Media IONOS customer awards European Contact Centre & Focus CHIP 1 1 Personal consultant Call center 24/7 hotline Live chat C
Slide 42: Contributes meaningfully to business performance and customer satisfaction
M AR K ET LEAD ER S H I P PRODUCT C U S T O M ER S F I NANC I ALS G R O W T H LEV ER S C U LT U R E … and contributes meaningfully to our business performance and customer satisfaction Today, around 43%1 of our Already ~20% of lifetime revenue We have developed an advanced customers are part of the
Slide 43: Financials & guidance
Financials & guidance Copyright © IONOS SE 2022 43
Slide 44: Best-in-class financial profile
Best-in-class financial profile Strong and 12% yoy total revenue growth sustainable revenue growth ~90% of recurring revenue1 44% Rule of Attractive 72% adj. gross profit margin2 40 profitability 32% adj. EBITDA margin3 High cash 90% cash conversion rate4 generation Well invested asset base with low
Slide 45: Both business areas contribute to strong revenue growth and high recurring revenue
F I NANC I ALS G U I D ANC E GROWTH P R O F I T ABI LI T Y C AS H C O NV ER S I O N C AP I T AL S T R U C T U R E Both business areas contribute to strong revenue growth and high recurring revenue Total Total yoy revenue growth 7% 12% 19% Commentary revenue CAGR WP&P (excl. Aftermarket1) (in €mm) re
Slide 46: Healthy adj. gross profit margin driven by ownership of our technology stack
F I NANC I ALS G U I D ANC E GROWTH P R O F I T ABI LI T Y C AS H C O NV ER S I O N C AP I T AL S T R U C T U R E Healthy adj. gross profit margin driven by ownership of our technology stack Adj. gross Adj. gross profit margin2 profit1 Commentary 75.1% 73.6% 72.3% 72.9% 65.9% (in €mm) • Strong adj.
Slide 47: Well invested platform with investments across S&M and T&D
F I NANC I ALS G U I D ANC E GROWTH P R O F I T ABI LI T Y C AS H C O NV ER S I O N C AP I T AL S T R U C T U R E Well invested platform with investments across S&M and T&D Operating % total revenue expenses 12% 12% 14% 14% 13% Commentary (in €mm) 7% 6% 6% 6% 6% • S&M driven by: 22% 21% 21% 21% 19%
Slide 48: Attractive adj. EBITDA margin despite significant growth investments
F I NANC I ALS G U I D ANC E GROWTH P R O F I T ABI LI T Y C AS H C O NV ER S I O N C AP I T AL S T R U C T U R E Attractive adj. EBITDA margin despite significant growth investments Adj. Adj. EBITDA margin2 EBITDA Commentary 36% 36% 32% 34% 29% (in €mm)1 • Attractive adj. EBITDA margins Growth 32%
Slide 49: Well invested asset base with low and predictable maintenance capex
F I NANC I ALS G U I D ANC E GROWTH P R O F I T ABI LI T Y C AS H C O NV ER S I O N C AP I T AL S T R U C T U R E Well invested asset base with low and predictable maintenance capex requirements Total % total revenue Capex1 Commentary 2% 2% 5% 5% 5% (in €mm) 5% 5% 3% 3% 3% • Low and predictable main
Slide 50: Highly cash generative model
F I NANC I ALS G U I D ANC E GROWTH P R O F I T ABI LI T Y C AS H C O NV ER S I O N C AP I T AL S T R U C T U R E Highly cash generative model Adjusted Cash conversion rate 2 cash Commentary 86% 87% 90% 90% 89% contribution1 (in €mm) 90% cash conversion rate • High profitability with low capex exclu
Slide 51: Long term debt at fixed interest rates without refinancing risk
F I NANC I ALS G U I D ANC E GROWTH P R O F I T ABI LI T Y C AS H C O NV ER S I O N C AP I T AL S T R U C T U R E Long term debt at fixed interest rates without refinancing risk Net Debt as of September 2022A (in €mm) Commentary • Gross debt of €1,248mm1 as of September 2022A, mainly comprising a sh
Slide 52: IONOS compares very well to its peers across different operating metrics
F I NANC I ALS G U I D ANC E IONOS compares very well to its peers across different operating metrics Web Presence & Cloud Solutions Recurring Productivity peers peer revenue peer Peer 1 Peer 2 Peer 3 Peer 41 Peer 52 Customers (mm) ~6.0 ~21.2 ~6.05 ~4.27 ~1.69 35+ ca. 95% recurring revenue Revenue s
Slide 53: Our initiatives are aimed at delivering profitable growth going forward
F I NANC I ALS G U I D ANC E Our initiatives are aimed at delivering profitable growth going forward Unit economics Financials Key initiatives Customer ARPU CLTV CAC growth growth 1 Brand marketing ~ 2 Cloud investments 3 Cross-sell / up-sell ~ ~ 4 Churn reduction / retention ~ ~ Source: Company inf
Slide 54: Outlook (1/2)
F I NANC I ALS G U I D ANC E Outlook (1/2) Mid-term target 2022E Commentary (4-5 years) €1,265-1,300mm, 2022E: Consistent growth in our WP&P and Cloud Solutions businesses Group ~10% CAGR 15-18% YoY growth • Aftermarket business expected to grow 75-80% • Cloud Solutions growth expected to be in-line
Slide 55: Outlook (2/2)
F I NANC I ALS G U I D ANC E Outlook (2/2) Mid-term target 2022E Commentary (4-5 years) In-line with 2021 as a % Mid-term: Total revenue outgrowing maintenance capex growth, driven by the mix effect of lower capital- Maintenance ~8% CAGR of total revenue intensive Aftermarket business Capex Mid-term
Slide 56: Copyright © IONOS SE 2022
Copyright © IONOS SE 2022 56
Slide 57: Disclaimer
Disclaimer Important Notice NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANY OTHER JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION IS UNLAWFUL THIS PRESENTATION, INCLUDING ANY PRINTED OR ELECTRONIC COPY O
Slide 58: Disclaimer (cont'd)
Disclaimer (cont’d) The Group and its licensors have proprietary rights to trademarks used in this Presentation. Solely for convenience, trademarks and trade names referred to in this Presentation may appear without the “®” or “™” symbols, but the lack of such references is not intended to indicate,