freenet successfully starts 2024 - very dynamic growth in IPTV customers

EQS-News: freenet AG / Key word(s): Quarterly / Interim Statement/Quarterly
/ Interim Statement
freenet successfully starts 2024 - very dynamic growth in IPTV customers

15.05.2024 / 18:02 CET/CEST
The issuer is solely responsible for the content of this announcement.

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freenet successfully starts 2024 - very dynamic growth in IPTV customers

* Service revenues increase noticeably compared to the previous year

  * Subscriber base exceeds 9.6 million on record quarter for waipu.tv
    (+138.6 thousand net new subscribers)

  * EBITDA of EUR 124.2 million down 3.0% yoy as expected due to growth
    investments

* Free cash flow of EUR 71.3 million nevertheless up 10.3% yoy

* Executive Board confirms guidance for 2024 financial year

Büdelsdorf, 15 May 2024 - freenet AG (ISIN DE000A0Z2ZZ5) today published its
results for the first quarter of 2024 after close of trading (Xetra).

Group: Approaching 10 million subscribers

The results for the first quarter of 2024 reflect the expectations of the
2024 guidance for the 'year of transition' formulated at the beginning of
the year. The number of subscribers increased by 136.8 thousand to 9,629.5
thousand (previous year-end: 9,492.7 thousand), mainly driven by record
growth at waipu.tv (+138.6 thousand net new subscribers) and is thus
approaching the 10 million mark. At EUR 638.9 million, Group revenues
remained at the previous year's level (EUR 637.8 million) due to a continued
decline in low-margin hardware revenues. Group EBITDA of EUR 124.2 million
was below the previous year's result (EUR 128.1 million) due to the
announced increase in brand investments in waipu.tv and the expected rise in
personnel expenses. Nevertheless, free cash flow increased significantly by
10.3% to EUR 71.3 million (previous year: EUR 64.6 million). The increase is
mainly due to lower net CapEx in the first quarter of 2024.

Table 1: Key figures of freenet AG

  Non-financial     Unit        31.03.2024  31.12.2023      abs.    rel.
  key figures                                             change  change
  Subscribers1      In '000s       9,629.5     9,492.7     136.8    1.4%

  Financial key     Unit           Q1/2024     Q1/2023      abs.    rel.
  figures                                                 change  change
  Revenues          EUR              638.9       637.8       1.1    0.2%
                    million
  EBITDA            EUR              124.2       128.1      -3.9   -3.0%
                    million
  Free cash flow    EUR               71.3        64.6       6.7   10.3%
                    million

Executive Board confirms guidance for 2024 financial year

Gravis was acquired by freenet in 2013 and was until recently one of the
largest Apple resellers in Germany. Due to Apple's increasingly predatory
pricing policy, the decision was made at the end of March 2024 to cease
operations at Gravis. All 37 Gravis stores and the online shop will now be
largely closed by 15 June 2024. From the time of the complete closure of the
business, all effects will no longer have an impact on freenet's key
financial performance indicators, but will be reported separately due to the
classification as a discontinued operation in accordance with IFRS 5.

Against this backdrop, the Executive Board confirms the guidance for the
2024 financial year, which relates to continuing operations (including
Gravis at that time). EBITDA of between EUR 495 million and EUR 515 million
and free cash flow of between EUR 260 million and EUR 280 million are still
expected.

Mobile Communications: Rising service revenues levelled out at EBITDA level

In the Mobile Communications segment, the number of postpaid customers has
grown by 19.2 thousand to 7,437.6 thousand since the end of the previous
year (7,418.3 thousand). At 122.3 thousand, the number of users of app-based
tariffs (freenet FUNK and FLEX) remained unchanged compared to the end of
2023 (121.3 thousand). Overall, freenet benefited from the ongoing trend of
customers moving from prepaid tariffs to flexible postpaid contracts and
customers' desire for independent advice. At EUR 17.7, postpaid ARPU
remained stable compared to the previous year (EUR 17.7). As a result,
service revenues increased by 2.0% to EUR 424.6 million (previous year: EUR
416.5 million), partially offsetting the decline in low-margin hardware
revenues. Overall, revenues in the Mobile Communications segment fell by EUR
14.4 million to EUR 542.9 million (previous year: EUR 557.3 million).

Table 2: Key figures Mobile Communications segment

  Non-financial key    Unit        31.03.2024  31.12.2023      abs.    rel.
  figures                                                    change  change
  Mobile               In '000s       7,559.9     7,539.6      20.3    0.3%
  Communications
  subscribers
  Thereof postpaid     In '000s       7,437.6     7,418.3      19.2    0.3%
  customers
  Thereof app-based    In '000s         122.3       121.3       1.0    0.8%
  tariffs2

  Financial key        Unit           Q1/2024     Q1/2023      abs.    rel.
  figures                                                    change  change
  Revenues             EUR              542.9       557.3     -14.4   -2.6%
                       million
  Thereof service      EUR              424.6       416.5       8.1    2.0%
  revenues             million
  EBITDA               EUR              101.2       103.8      -2.6   -2.5%
                       million

Segment EBITDA totalled EUR 101.2 million in the first quarter of 2024
(previous year: EUR 103.8 million). The continued positive development of
monthly recurring service revenues was offset by salary increases
implemented over the course of the past year and one-off lower collection
income at EBITDA level. In view of the continued increase in service
revenue, an increase in segment EBITDA is nevertheless expected over the
course of the year.

TV and Media: brand investments in waipu.tv pay off

In the TV and Media segment, the number of TV subscribers increased to over
2 million. The investments in waipu.tv's brand awareness in light of the
abolition of the ancillary cost privilege ('Nebenkostenprivileg') in the
cable TV sector in the middle of this year continue to pay off. At 138.6
thousand net new subscribers, waipu.tv's number of subscribers grew faster
than ever before in the past quarter. At the end of March 2024, the number
of subscribers had risen to 1,507.9 thousand (previous year-end: 1,369.3
thousand). As expected, the number of revenue-generating users (RGU) of
freenet TV decreased by 22.1 thousand to 561.7 thousand in Q1 2024 (end of
previous year: 583.8 thousand). Due to the continued effects of the price
increase at the end of 2022, the revenues generated by freenet TV remained
stable compared to the previous year.

Table 3: Key figures for the TV and Media segment

  Non-financial key     Unit       31.03.2024  31.12.2023      abs.    rel.
  figures                                                    change  change
  TV subscribers        In            2,069.6     1,953.0     116.5    6.0%
                        '000s.
  Thereof waipu.tv      In            1,507.9     1,369.3     138.6   10.1%
  subscribers           '000s.
  Thereof freenet TV    In              561.7       583.8     -22.1   -3.8%
  subscribers (RGU)     '000s.

  Financial key         Unit          Q1/2024     Q1/2023      abs.    rel.
  figures                                                    change  change
  Revenues              EUR              93.4        80.8      12.6   15.6%
                        million
  EBITDA                EUR              27.4        28.8      -1.4   -5.0%
                        million

The strong growth in waipu.tv subscribers and the associated increase in
revenues at Exaring as well as the stable revenue development at Media
Broadcast (B2C and B2B) led to an increase in segment revenues of 15.6% to
EUR 93.4 million in Q1 2024 (previous year: EUR 80.8 million). As expected,
segment EBITDA of EUR 27.4 million was down on the same quarter of the
previous year (EUR 28.8 million) due to the temporary increase in
investments in waipu.tv's brand awareness.

Conference Call

The conference call on the results for the first quarter of 2024 will take
place on Thursday, 16 May 2024 at 10:00 a.m. (CEST). All interested parties
can follow the conference call via webcast (listen-only mode). A recording
will be made available afterwards.

Further documents for publication

Quarterly statement for the 1st quarter of 2024

Presentation Q1 2024 (in English)

1 Total of Postpaid customers, freenet FUNK, freenet FLEX, waipu.tv
subscribers and freenet TV subscribers (RGU)

2 freenet FUNK and freenet FLEX customers

Note

In the interests of clear and transparent presentation, alternative
performance measures (APMs) are used in the financial statements of freenet
AG and in ad hoc disclosures in accordance with Art. 17 MAR in addition to
the disclosures defined by the International Financial Reporting Standards
(IFRS). Information on the use, definition and calculation of APMs can be
found in the 2023 Annual report.

Contact us

freenet AG

Investor Relations & ESG Reporting

Phone: +49 (0) 40/ 513 06 778

Mail: ir@freenet.ag

Internet: fn.de/investors


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15.05.2024 CET/CEST Dissemination of a Corporate News, transmitted by EQS
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   Language:       English
   Company:        freenet AG
                   Hollerstrasse 126
                   24782 Buedelsdorf
                   Germany
   Phone:          +49 (0)40 51306-778
   Fax:            +49 (0)40 51306-970
   E-mail:         ir@freenet.ag
   Internet:       www.freenet.ag
   ISIN:           DE000A0Z2ZZ5, DE000A1KQXU0
   WKN:            A0Z2ZZ , A1KQXU
   Indices:        MDAX, TecDAX
   Listed:         Regulated Market in Frankfurt (Prime Standard);
                   Regulated Unofficial Market in Berlin, Dusseldorf,
                   Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange
   EQS News ID:    1904245

End of News EQS News Service
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1904245 15.05.2024 CET/CEST