DGAP-News: freenet AG / Key word(s): Preliminary Results freenet AG achieves guidance for 2015 based on further rise of customer base and stable ARPU; increases dividend proposal and raises guidance 03.03.2016 / 07:52 The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- freenet AG achieves guidance for 2015 based on further rise of customer base and stable ARPU; increases dividend proposal and raises guidance - Group revenue increases to 3.118 billion euros (previous year: 3.041 billion euros). - Group EBITDA increases to 370.2 million euros (previous year: 365.6 million euros) - Free cash flow up by 6.7 per cent to 284.5 million euros (previous year: 266.6 million euros) - Executive Board announces dividend proposal of 1.55 euros (previous year: 1.50 euros) for the financial year 2015 and plans to propose a dividend of 1.60 euros for the financial year 2016 - Executive Board raises Group revenue, EBITDA and free cash flow forecast for 2016 based on the acquisition of MEDIA BROADCAST Group Büdelsdorf, 3 March 2016 - Preliminary figures indicate that freenet AG [ISIN DE000A0Z2ZZ5] generated Group revenue of 3.118 billion euros, or a year-on-year improvement of 2.5 per cent, in the financial year 2015 (previous year: 3.041 billion euros). Group EBITDA (earnings before interest, taxes, depreciation and amortisation) generated a slight increase to 370.2 million euros (previous year: 365.6 million euros). Free cash flow* increased by 6.7 per cent to 284.5 million euros (previous year: 266.6 million euros). freenet AG has thereby fulfilled or slightly exceeded the business outlook for 2015 that it published in 2014. With a revenue contribution of 3.061 billion euros, the mobile communications segment was again dominant in the freenet Group. The major contributors to the development of revenue within this segment were the performance indicators postpaid ARPU (average monthly revenue per contract customer) and customer ownership (sum total of contract and no-frills customers). The latter is becoming particularly significant as the digital lifestyle business activities expand, since this customer group has particularly high cross-selling potential. In the course of the year, customer ownership increased by 4.2 per cent to 9.30 million participants (31 December 2014: 8.92 million) and has therefore developed in accordance with the outlook for 2015. A disproportionately robust upward trend was shown most notably by the portfolio of particularly high-value contract customers (postpaid customers), which was up by 5.0 per cent to 6.31 million (31 December 2014: 6.01 million). With an increase of 2.91 million to 2.99 million participants as at 31 December 2015, the no-frills customer group - which can be accessed largely via online sales channels - could also be slightly expanded. Further earnings-neutral terminations of inactive SIM cards by network operators and declining activation of new customers, on the other hand, again led to a significant fall in prepaid customer numbers, this time to 2.94 million (31 December 2014: 3.81 million). Average monthly revenue per contract customer (postpaid ARPU) has stabilised at its previous year's level of 21.4 euros and is thereby in line with the expectations communicated by the Executive Board. Against the backdrop of a generally dominant trend towards a slight decline in postpaid ARPU in the mobile communications market, this stabilisation again confirms the success of freenet AG's focus on high-value customer relationships in both the management of existing customers and the acquisition of new ones. As a result of the persistently high pressure on prices in the discount market, average monthly revenue generated with no-frills customers (no-frills ARPU) has decreased from 2.8 euros in the previous year to 2.5 euros in 2015. The main factor in this area was the increased demand for attractive data-based smartphone tariffs without the acquisition of new terminals. At 3.0 euros, prepaid ARPU was almost unchanged compared with the previous year (2.9 euros). Gross profit increased slightly by 12.4 million euros to 790.4 million euros in the financial year 2015 (previous year: 778.1 million euros). The gross profit margin decreased by 0.2 percentage points to 25.4 per cent as a result of higher activation figures, which led to an increase in customer acquisition costs. Group EBITDA totalled 370.2 million euros, which represented an increase of 4.6 million euros compared to the previous year (365.6 million euros). Depreciation and amortisation increased in comparison with the previous year by 7.0 million euros to 71.4 million euros, largely as a result of an increased portfolio of software, licences and rights of use. The Group result decreased from 248.2 million euros in the previous year to 221.5 million euros in the financial year 2015. This trend is mainly attributable to a diversity of effects in deferred and current tax expenses. Net debt decreased from 426.6 million euros as at 31 December 2014 to 369.2 million euros as at 31 December 2015. Due to the positive development of business in 2015 as documented in the preliminary figures, the Executive Board is going to propose to the Supervisory Board the distribution of a dividend in the amount of 1.55 euros per share with eligibility for dividends for the financial year 2015. This corresponds to a dividend payout ratio of around 70 per cent of free cash flow generated in the financial year 2015. In connection with this, the Executive Board confirms its existing dividend policy and is still planning to distribute to its shareholders 50 to 75 per cent of the free cash flow that is generated. "The positive preliminary results for the financial year 2015 confirm our successful course of focusing on high-value customer relationships in the mobile communications segment", Christoph Vilanek, CEO of freenet AG is pleased to note. "Our shareholders should participate in this success too, which is why we are going to propose to the Supervisory Board to distribute an attractive dividend amounting to 1.55 euros for the financial year 2015", explained Joachim Preisig, CFO of freenet AG. Based on the positive preliminary business results for 2015 and against the background of the acquisition of MEDIA BROADCAST Group and the investment in EXARING AG, the Executive Board additionally resolved that it would be adjusting the guidance for the financial year 2016 that was communicated in the Group management report pertaining to the consolidated financial statements for the financial year 2014. The company is now aiming for an increase of Group revenue in the ongoing financial year (previously: slight increase), EBITDA of slightly above 400 million euros (previously: around 375 million euros) and free cash flow of some 300 million euros (previously: around 285 million euros). The targets for the development of the performance indicators postpaid ARPU and customer ownership in the financial year 2016 remain unchanged: The company is remaining true to its expectation for a stabilisation of postpaid ARPU at the level of 2015 and a slight increase in customer numbers in the customer ownership area compared to the financial year 2015. To underline the sustainability of the business model, the Executive Board additionally intends to propose to the Supervisory Board and the 2017 Annual General Meeting that they distribute a dividend in the amount of 1.60 euros per share with eligibility for dividends for the financial year 2016. The Executive Board is thereby presenting its shareholders with the prospect of a dividend payout that represents a continuous increase in comparison with the previous years and with the dividend proposal for the financial year 2015. "The acquisition of MEDIA BROADCAST Group and the investment in EXARING AG constitute an important enhancement for our company in its strategic development as a digital-lifestyle provider. With our recently optimised financing structure, we now have sufficient funds to exploit the full growth potential of digital lifestyle in the new area of linear and internet-based television", underlines Christoph Vilanek. "We are therefore optimistic about 2016 and are raising our forecasts for revenue, EBITDA and free cash flow. Furthermore, today, we are already holding out the prospect of a proposal to the Supervisory Board and the Annual General Meeting that we distribute a dividend in the amount of 1.60 euros for the financial year 2016", adds Joachim Preisig. Against the backdrop of the adjustment of the guidance for the financial year 2016, the Executive Board is confirming its current financing strategy and is maintaining its goals of a target corridor of 1.0 to 2.5 as debt factor, interest cover (ratio of EBITDA to the interest balance) of at least 5, a liquidity reserve of around 100 million euros and an equity ratio of more than 50 per cent. Disclaimer: This report contains forward-looking statements based on current assumptions and forecasts made by the Executive Board of freenet AG. Known and unknown risks, uncertainties and other factors can lead to a situation where the actual developments, and in particular the results, financial position and transactions of our company diverge substantially from the forward-looking statements made here. The company assumes no obligation to update these forward-looking statements or to adjust them to future results or developments. All of the disclosures are based on provisional calculations made prior to the final consolidation and the conclusion of the audit. These may therefore diverge from the final corporate figures to be presented on 23 March 2016. ******************* * 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. Investor Relations contact: freenet Aktiengesellschaft Investor Relations Deelbögenkamp 4c 22297 Hamburg Germany Phone: +49 (0) 40 / 513 06 778 Fax: +49 (0) 40 / 513 06 970 Email: [email protected] --------------------------------------------------------------------------- 03.03.2016 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; Terminbörse EUREX End of News DGAP News Service --------------------------------------------------------------------------- 442139 03.03.2016