DGAP-News: freenet AG / Key word(s): Interim Report/Quarter Results freenet AG benefits from stable postpaid ARPU and greater demand for digital lifestyle products in the first quarter 06.05.2015 / 18:00 --------------------------------------------------------------------- freenet AG benefits from stable postpaid ARPU and greater demand for digital lifestyle products in the first quarter - Group revenue increases by 4.3 per cent to 748.5 million euros (previous year: 717.5 million euros) - Gross profit up by 4.9 per cent to 191.4 million euros (previous year: 182.5 million euros) - Customer ownership grows by 2.8 per cent to 9.04 million (previous year: 8.79 million) - Postpaid ARPU stabilises at 21.1 euros (previous year: 21.2 euros) - EBITDA increases slightly to 86.0 million euros in line with expectations (previous year: 85.4 million euros) - Free cash flow* of 62.6 million euros (previous year: 57.1 million euros) - Guidance for the financial years 2015 and 2016 confirmed - Promissory note bond amounting to 100 million euros placed successfully Büdelsdorf, 6 May 2015 - freenet AG [ISIN DE000A0Z2ZZ5] published its interim report for the first quarter of 2015 today and confirmed its outlook for the financial years 2015 and 2016. Group revenue amounting to 748.5 million euros was generated in the first quarter (previous year: 717.5 million euros). This development is attributable not only to the increase in customer ownership accompanied by stable postpaid ARPU, but also, in particular, to the growth in demand for attractive products and services in the field of mobile digital lifestyle. This led to a further increase in gross profit, which climbed by around 8.9 million euros to 191.4 million euros (previous year: 182.5 million euros), representing a current gross profit margin of 25.6 per cent. The mobile communications business segment remained dominant within the Group with revenue amounting to 734.6 million euros (previous year: 704.0 million euros). The customer ownership portfolio - in which the postpaid and no-frills customer groups are concentrated and which serve as an key performance indicator in the company - was increased by around 245 thousand customers to 9.04 million (previous year: 8.79 million), representing an increase of 2.8 per cent. This growth originates primarily from the increase of some 225 thousand new customers in the postpaid customer portfolio, in which all of the mobile communications contracts with a term of 24 months that are marketed in the Group are consolidated. The no-frills customer segment, which comprises all of the mobile communications tariffs with a term of less than 24 months that are marketed via discount brands belonging to the Group, likewise demonstrated a positive year-on-year trend with 19 thousand additional customers. With its business model of competent, needs-based and network-independent customer advice, the freenet Group was therefore able to benefit once again from the ongoing competition among the network operators without any price adjustments being necessary. At 21.10 euros in the first quarter of 2015, the average monthly revenue per contract customer (postpaid ARPU) was on a par with that achieved in the fourth quarter of 2014 (previous year: 21.20 euros). The recently steady process of existing customers switching to up-to-date, more favourably priced offerings had no appreciable further impact on postpaid ARPU in the quarter under review. "In the first quarter, we used the positive market sentiment among consumers to enhance our leading market position as a competent digital lifestyle supplier by implementing targeted marketing measures," explains Christoph Vilanek, CEO of freenet AG, "and this trend makes us optimistic about the rest of the financial year." Group EBITDA (earnings before interest, taxes, depreciation and amortisation) increased slightly to 86.0 million euros (previous year: 85.4 million euros), thereby remaining in line with expectations. Depreciation and amortisation decreased slightly by 0.5 million euros to 15.5 million euros in the first quarter (previous year: 16.0 million euros) and, as in the previous year, were accounted for primarily by distribution rights, intangible assets in relation to purchase price allocations from corporate acquisitions, and internally generated software. Taking account of the increase in the income tax burden to 4.8 million euros (previous year: 2.6 million euros), the Group result decreased in the quarter under review by 1.2 million euros to 56.2 million euros (previous year: 57.4 million euros). This corresponds to earnings per share of 0.44 euros (previous year: 0.45 euros). Free cash flow* increased by 5.1 million euros to 62.2 million euros in the last quarter (previous year: 57.1 million euros). This increase is attributable, on the one hand, to increased cash flow from operating activities totalling 70.5 million euros (previous year: 62.9 million euros), which resulted primarily from improved management of the capital employed (working capital management). Cash flow from investing activities, on the other hand, amounted to -8.0 million euros in light of cash outflows for investment in property, plant and equipment and intangible assets increasing to 8.4 million euros - with the comparative figure of -51.9 million euros from the corresponding quarter last year having resulted mainly from the acquisition of the freenet digital Group. Ultimately, cash flow from financing activities in the quarter under review came to -1.5 million euros (previous year: -0.5 million euros), with both figures being influenced by interest payments. "Thanks to our thoroughly positive business results in the first quarter, we are confirming our guidance for the financial years 2015 and 2016," adds Joachim Preisig, CFO of freenet AG. In its forecast, the Executive Board is aiming to stabilise revenue and generate EBITDA of around 370 million euros, accompanied by free cash flow* of some 280 million euros, for the Group in the financial year 2015. For the financial year 2016, the Executive Board is aiming to generate EBITDA of around 375 million euros and free cash flow* of some 285 million euros, accompanied by a modest increase in revenue. In view of the corporate bond totalling 400 million euros that falls due in April 2016, freenet AG today issued a non-callable promissory note bond amounting to 100 million euros under usual market terms for investment-grade credit standing. The transaction, which was accompanied by Commerzbank AG, Landesbank Baden-Württemberg, Bayerische Landesbank and HSH Nordbank, consists of a five-year tranche totalling 25 million euros with a fixed coupon of 1.325 per cent, a five-year tranche totalling 25 million euros with a variable coupon (expected with 1.05 per cent in the first 6 months) and a seven-year tranche totalling 50 million euros with a fixed coupon of 1.79 per cent p.a. The payout is scheduled for 13 May 2015. The full interim report for the first quarter of 2015 is available for download at www.freenet-group.de/investor and the conference call will be streamed there by webcast starting at 14:00 CEST on 7 May 2015. * Free cash flow is defined as cash flow from current operating activities less investments in property, plant and equipment and intangible assets, plus the cash inflows from disposals of intangible assets and property, plant and equipment. --------------------------------------------------------------------- 06.05.2015 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: freenet AG Hollerstraße 126 24782 Büdelsdorf Germany Phone: +49 (0)40 51306-778 Fax: +49 (0)40 51306-970 E-mail: [email protected] Internet: www.freenet-group.de ISIN: DE000A0Z2ZZ5, DE000A1KQXU0 WKN: A0Z2ZZ , A1KQXU Indices: TecDAX Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart End of News DGAP News-Service --------------------------------------------------------------------- 353983 06.05.2015