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euro adhoc: WEB.DE AG
Quarterly or Semiannual Financial Statements
WEB.DE with very positive business development during the first half-year 2005 - Alliance with United Internet about to be implemented

  Disclosure announcement transmitted by euro adhoc.
  The issuer is responsible for the content of this announcement.
21.07.2005
The first half of FY 2005 for WEB.DE AG again was marked by a very
positive business development. Focussed on the goal of becoming a
leading, internationally positioned high-tech provider in the field
of Web Telecommunications, WEB.DE AG entered into a comprehensive
alliance with United Internet AG in the Internet Portal and Web
Telecommunications business lines during the first quarter 2005.
WEB.DE´s Portal business, which is to be sold to United Internet,
again has shown an excellent business development: With revenues of
Euro 13.7 million in Q2/05 (Q2/04: Euro 10.4 million), earnings
before interest and taxes (EBIT) increased by 131% (Q2/04: Euro 1.6
million) to Euro 3.7 million in Q2/05. For the period under review
this results as follows: With revenues of Euro 25.4 million (H1/04:
Euro 19.6 million) and a gross margin amounting to 75.5%, earnings
before interest and taxes (EBIT) increased to Euro 5.7 million
leading to an EBIT-margin of 22% (H1/04: 15%). Earnings before
interest, taxes and amortization (EBITDA) within the portal business
amounted to Euro 8.5 million (H1/04: Euro 6.3 million) so that
EBITDA-margin increased to 33% in the period under review. Including
the portal business, the company generated revenues of Euro 13.8
million in Q2/05 and a gross profit of Euro 10.6 million (gross
margin: 76.8%), the company for the first time reported a positive
EBIT on quarterly basis totaling Euro 0.5 million in Q2/05 (Q2/04:
-0.8 million).
The transaction is to be completed immediately after the entry of the
resolutions of the Annual General Meeting, adopted with a large
majority, in the commercial register. Within the framework of this
alliance United Internet AG is going to pay Euro 200 million in cash
plus 5.8 million shares of United Internet AG. This corresponds to an
actual transaction volume of appr. Euro 353 million. In the future
WEB.DE AG will participate with an almost 10% stake in Germany´s
leading Internetservice- and Portalservices provider in Germany.
Operating profits generated within the Portal business remain in
WEB.DE AG until closing of deal.
Given the above-mentioned sale of the Internet Portal business to
United Internet AG, the international accounting principle IFRS 5
concerning "non-current assets held for sale and discontinued
operations" is applied for the first time. It has a major impact on
the classification and reporting obligations in the financial
statements. This means that the numbers of the current reporting
period are only comparable to a limited extent to those of previous
quarters.
Based on the application of IFRS 5, the company generated during
H1/05 in the Web Telecommunications business line, which is still in
a building phase, revenues in the amount of Euro 0.4 million, which
were on prior year level (H1/04: Euro 0.4 million).
The operating expenses basis during the reporting period encompasses
marketing and advertising, general administrative expenses as well as
research and development, which are marked by the development efforts
for the comBOTS product not yet launched. Operating expenses add up
to a total of Euro 5.9 million in H1/05
Overall, earnings before interest and tax (EBIT) amounted to Euro
-5.6 million in H1/05. During the comparative prior year period, the
EBIT was Euro -4.5 million. With a financial result of Euro 1.8
million, the income for the period H1/05, based on continued
operations, amounts to Euro -3.9 million (H1/04: Euro -2.6 million).
The half-year result for H1/05 from the discontinued Portal business
amounts to Euro +7.9 million. In accordance with IFRS 5, regular
depreciation of assets belonging to the discontinued Portal business
of Euro 2.8 million were eliminated from January 1, 2005 with a
profit-increasing impact. For the comparative value of H1/04 this
elimination of the corresponding depreciation in accordance with IFRS
5 was not made.
The consolidated net result for the first half-year 2005 of Euro 4.0
million is significantly above the comparative prior year value (Euro
0.2 million). This results in earnings per share of Euro 0.11 in
H1/05 or ten Cents above the earnings per share in H1/04 (Euro 0.01).
In order to ensure comparability of the development of earnings with
previous reporting periods, a so-called "as if" income statement is
prepared based on the assumption that the Portal operations had been
continued on group level. This view shows a very positive development
of the Internet Portal in H1/05 on group level: with revenues of Euro
25.8 million (H1/04: Euro 20 million) and a gross margin, which
amounted to 75,6% during the reporting period, the "as if" group
generated for the first time an operating break even (EBIT). The "as
if" result for the reporting period hence amounted to Euro 1.8
million so that the margin on group level amounted to 7%. The "as
if"-EBITDA on group level in H1/05 even reaches Euro 3.2 million, so
that an EBITDA margin of 12% was generated on a group level.
Annex: Table
Group              Group
                                      H1/05              H1/04
(in Euro million)                     IFRS 5             IFRS 5
Revenues                               0.4                0.4
Cost of sales                         -0.1               -0.1
Gross profit                           0.3                0.3
Marketing + Advertising               -0.1               -0.3
General administration cost           -0.7               -0.6
Research + Development                -5.1               -3.9
Operating result (EBIT)               -5.6               -4.5
Financial income                       1.8                1.9
Result
continued operations                  -3.9               -2.6
Result
discontinued operations                7.9                2.8
Net result for the period              4.0                0.2
Portal    Group     Group
                             "as if"   "as if"   "as if"
(in Euro million)             H1/05     H1/05     H1/04
Revenues                       25.4      25.8      20.0
Cost of sales                  -6.2      -6.3      -5.0
Gross profit                   19.2      19.5      15.0
Marketing + Advertising        -7.1      -7.2      -6.3
General administration cost    -1.2      -1.9      -1.3
Research + Development         -5.3     -10.4      -9.0
Operating result (EBIT)         5.7       0        -1.6
Financial income                0         1.8       1.9
Result
continued operations            5.7       1.8       0.3
Contact Person for Press and Media:
Oliver Schwartz, Director Communications,
tel +49 (0)721 94329 5310, Mail  oliver.schwartz@webde-ag.de
http://webde-ag.de
Contact Person for Analysts and for Investors:
Richard Berg, Director Investor Relations,
tel +49 (0)721 94329 2700, Mail  rb@webde-ag.de
http://webde-ag.de
end of announcement                               euro adhoc 21.07.2005 07:32:28

Further inquiry note:

Silvia Teschner
Junior Referentin IR
Tel.: +49 (0)721 943292701
E-Mail: ste@webde-ag.de

Branche: Online
ISIN: DE0005296503
WKN: 529650
Börsen: Frankfurter Wertpapierbörse
Berliner Wertpapierbörse
Hamburger Wertpapierbörse
Baden-Württembergische Wertpapierbörse
Börse Düsseldorf
Niedersächsische Börse zu Hannover
Bayerische Börse
Bremer Wertpapierbörse (BWB)

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