11.08.2020 freenet AG  DE000A0Z2ZZ5

DGAP-News: freenet Group announces customer growth and increase in earnings in first half of 2020, confirms dividend policy


 

DGAP-News: freenet AG / Key word(s): Half Year Results/Quarter Results
freenet Group announces customer growth and increase in earnings in first half of 2020, confirms dividend policy (news with additional features)

11.08.2020 / 18:00
The issuer is solely responsible for the content of this announcement.


freenet Group announces customer growth and increase in earnings in first half of 2020, confirms dividend policy
 

- Revenue up 1.9 per cent year-on-year to 1,271.0 million euros

- EBITDA without regulatory effects / MOTION TM grows by 3.3 per cent to 223.9 million euros

- Free cash flow up 11 percent on previous year to 140.7 million euros

- Subscriber base grows by 266.7 thousand new additions (+3.2 per cent)

- Guidance issued at end of February 2020 and dividend policy of at least 80 per cent of free cash flow confirmed

- Debt structure optimised significantly with the issuance of a promissory note loan of 345.0 million euros
 

Büdelsdorf, 11 August 2020 - freenet AG [ISIN DE000A0Z2ZZ5] today announced its results for the first half of 2020.
 

COVID-19 is not directly reflected in the consolidated figures

In EUR million/as indicated H1/2020  H1/2019  Change  Q2/2020  Q2/2019  Change
Revenue1 1,271.0 1,246.7 24.3 622.1 624.3 -2.2
EBITDA 213.9 215.5 -1.5 109.7 107.5 2.2
   thereof regulatory effects:            
       International calls/ roaming -10.0 -2.0 -8.0 -5.0 -2.0 -3.0
   thereof MOTION TM --- 0.6 -0.6 --- 0.1 -0.1
EBITDA without regulatory effects/ MOTION TM 223.9 216.9 7.1 114.7 109.5 5.2
Free cash flow 140.7 126.7 13.9 90.8 81.5 9.3
Subscriber base2 (in '000s) 8,490.4 8,223.8 266.7 8,490.4 8,223.8 266.7
 

The freenet Group's business model proved to be extremely robust and remained intact even with the stress test of COVID-19. The strategic focus on long-term customer relationships and a flexible cost structure paid off. Revenue rose to 1,271.0 million euros in the first six months, 24.3 million euros higher than the previous year's revenue adjusted for the sale of MOTION TM (H1/2019: 1,246.7 million euros). This was due to the positive performance in the Mobile Communications segment in particular. EBITDA remained virtually unchanged year-on-year despite delayed regulatory effects (-8.0 million euros) as well as the loss of the contribution from MOTION TM (-0.6 million euros). EBITDA excluding these effects grew by 3.3 per cent to 223.9 million euros. This performance also resulted from cost savings and consistent cost discipline. Free cash flow amounted to 140.7 million euros in the first half of 2020, which corresponded to a significant year-on-year increase of 11.0 per cent despite the challenging COVID-19 environment (H1/2019: 126.7 million euros). This rise was primarily due to an improvement in working capital (+18.2 million euros compared to the previous year), which more than offset the increase in tax payments. However, this positive effect, which results in free cash flow in excess of the quarterly guidance, is expected to level off in the second half of the year. The subscriber base2 recorded a year-on-year net increase of 266.7 thousand customers (+3.2 per cent) to 8.490 million customers in the first half of 2020. More than half of this growth was attributable to the growing TV and Media segment.

 

Postpaid customer base grows despite temporary shop closures

In EUR million/as indicated H1/2020 H1/2019 Change Q2/2020 Q2/2019 Change
Revenue1 1,136.8 1,113.6 23.2 554.2 556.5 -2.4
   thereof revenue from services,Postpaid 758.6 772.5 -13.8 376.2 385.2 -9.1
   thereof revenue from services, No-frills/Prepaid 60.1 67.2 -7.1 28.8 33.8 -5.0
EBITDA 182.6 186.9 -4.3 91.0 90.4 0.6
   thereof regulatory effects:            
       International calls/ roaming -10.0 -2.0 -8.0 -5.0 -2.0 -3.0
   thereof MOTION TM --- 0.6 -0.6 --- 0.1 -0.1
   thereof inter-segment allocation -4.3 -3.8 -0.5 -2.1 -2.0 -0.2
EBITDA without regulatory effects/ MOTION TM/ inter-segment allocation 196.9 192.1 4.8 98.2 94.3 3.9
Postpaid customers (in '000s) 6,939.4 6,834.0 105.5 6,939.4 6,834.0 105.5
Postpaid ARPU without hardware (in euros) 18.3 18.8 -0.5 18.1 18.8 -0.7
freenet FUNK customers (in '000s) 41.8 20.4 21.4 41.8 20.4 21.4
 

The widespread lockdown in Germany, which included the closure of many mobilcom-debitel shops and GRAVIS stores from mid-March until the end of April, as well as the full closure of all MediaMarkt-Saturn markets until mid-May, posed particular challenges for the sales team. As a result, we expanded our online activities and stepped up our efforts to retain customers. Fortunately, we were able to increase our base of postpaid customers by 14.5 thousand compared to the first quarter of 2020 to 6.939 million customers at the end of the period under review thanks in particular to the strength of our online-based sales channels. Accordingly, this customer base grew by 105.5 thousand customers compared to the same period in 2019 and by 36.6 thousand customers since the start of the year. As a result, the business model in our core Mobile Communications segment proved to be sound and extremely crisis-resistant in a highly dynamic yet still rational environment. The response to the app-based freenet FUNK tariff, which is not yet included in the postpaid customer base, also remained encouraging and even grew further. The customer base for this tariff rose by 18.6 per cent (+6.5 thousand customers) to 41.8 thousand customers compared to the previous quarter (30 June 2019: 20.4 thousand customers), returning to accelerated growth.

Postpaid ARPU fell by 2.7 per cent year-on-year to 18.3 euros (H1/2019: 18.8 euros). This development was primarily the result of known regulatory effects (international calls / fee reduction [MNP]) as well as a coronavirus-related decline in roaming (without a relevant EBITDA effect). Revenue from postpaid services fell accordingly by 1.8 per cent to 758.6 million euros in the period under review (H1/2019: 772.5 million euros). Overall, however, Mobile Communications revenue grew by 23.2 million euros to 1,136.8 million euros in total (H1/2019: 1,113.6 million euros adjusted for MOTION TM) due to the GRAVIS chain's strong sales performance in the first quarter, followed by a near-stable revenue trend in the second quarter. EBITDA totalled 182.6 million euros - a slight decline compared to the prior-year period (H1/2019: 186.9 million euros). Excluding regulatory effects, however, the earnings contribution of MOTION TM and segment allocations, EBITDA rose by 2.5 per cent to 196.9 million euros (H1/2019: 192.1 million euros). This development was primarily due to the realisation of potential cost savings but not at the expense of (future) operating performance.

 

TV and Media segment remains on track for growth

In EUR million/as indicated H1/2020 H1/2019 Change Q2/2020 Q2/2019 Change
Revenue 125.9 123.9 2.0 65.2 62.9 2.3
EBITDA 36.5 33.2 3.3 20.9 18.9 2.1
   thereof inter-segment allocation -3.6 -3.5 -0.1 -1.9 -1.8 -0.1
EBITDA without inter-segment allocation 40.1 36.7 3.3 22.9 20.7 2.2
waipu.tv subscribers3 (in '000s) 504.1 331.9 172.2 504.1 331.9 172.2
freenet TV subscribers (RGU)
(in '000s)
1,005.0 1,037.5 -32.4 1,005.0 1,037.5 -32.4
 

waipu.tv continued along its growth trajectory even in the second quarter with its successful "[email protected]" campaign during lockdown. The service reached a new record high with more than half a million paying customers. The number of subscribers rose by around 172.2 thousand (+51.9 per cent) compared to the prior-year quarter and by around 95.8 thousand (+23.5 per cent) compared to the end of 2019. As expected, the number of revenue-generating users of freenet TV fell slightly to the current figure of 1.005 million customers. This development was due to disconnected satellite customers and a slight increase in churn caused by the price increase applicable since 1 May 2020. Churn is expected to increase again in the second half of the year as the price increase will only become apparent to many voucher customers at that point. Overall, however, the customer reaction to date shows that the price increase is having a positive effect on the bottom line.

Revenue in the TV and Media segment rose by 2.0 million euros to 125.9 million euros compared to the previous year, primarily driven by the operating performance of EXARING AG (waipu.tv). Thanks to the virtually unchanged cost base, this positive revenue trend continued at the level of EBITDA, which grew by 3.3 million euros to 36.5 million euros (H1/2019: 33.2 million euros). As a result, this more than compensated for the slightly negative effects of lower market (Media Barter) and event-based revenues from Media Broadcast overall. Due to the prevailing stability of segment allocation over the last few quarters, the same development applies to EBITDA when adjusted for these allocations.

Debt structure optimised considerably
Although COVID-19 has been rocking the world's capital markets, they remain fundamentally intact. With this in mind, the freenet Group took the opportunity to refinance its promissory note loans. On 27 July 2020, freenet successfully placed a promissory note loan with a total volume of 345.0 million euros. The bullet financing instrument consists of three tranches with one 3.5-year term (166.5 million euros), one five-year term (168.5 million euros) and one six-year term (10.0 million euros) and bears interest with an average margin (plus 6-month EURIBOR) of 1.6 per cent. The funds received are offset directly against the maturing tranches due for repayment, resulting in a maturity transformation from 2020/21 to 2024/25. This transaction has substantially eased the freenet Group's financial position, which means that the dividend policy of distributing at least 80 per cent of free cash flow that was already confirmed in the first quarter of 2020 can now be confirmed with even greater confidence.

2020 guidance reaffirmed
Based on the current performance and the current assessment of operating trends - and taking COVID-19 into account - the freenet Group's management still sees no need to adjust its financial and non-financial performance indicator forecasts and confirms the guidance issued for the 2020 financial year.

Although there is now more clarity with regard to the (economic) impact of the first coronavirus wave, the forecast is still subject to greater uncertainty than when the assessment was made at the end of February. This uncertainty remains due to the potential for a second wave of infection in Germany, the impact of which on the economy and society could probably be even more serious.

 

Conference call webcast
freenet AG will host an analysts' conference call at 10:00 CEST on 12 August 2020. All those interested in attending can follow the conference call via webcast at LINK.

A recording of the conference call will be made available following the event.

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1 The Executive Board decided to sell the Group's 51 per cent equity investment in MOTION TM Vertriebs GmbH, Troisdorf, as of the end of December 2019 and return the shares to former shareholders for a sale price of 7.0 million euros (of which 0.0 million euros in free cash flow). The strategic reasons cited by the Executive Board for this step included a lack of purchasing synergies, higher risks of default associated with the increase in trading volumes and the typical low-margin character of the hardware business. The company's external revenue contribution amounted to 142.3 million euros in the first half 2019 (Q2/2019 74.8 million euros), while its EBITDA contribution was approximately 0.6 million euros (Q2/2019: 0.1 million euros). To improve comparability, the previous year's figures for sales and EBITDA are therefore presented adjusted for MOTION TM.
2 Sum total of postpaid customers, active freenet FUNK customers, freenet TV subscribers (RGU) and waipu.tv subscribers.
3 Including customers from the sales cooperation with Telefónica Deutschland (launched in May 2019).

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Contact:

Investor Relations & ESG
freenet Group
Tel.: +49 (0) 40 / 513 06 778
Email: [email protected]
https://www.freenet-group.de


Additional features:

File: 20200811_Corporate News_First Half 2020_results_freenet AG


11.08.2020 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.
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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: [email protected]
Internet: www.freenet-group.de
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: 1115195

 
End of News DGAP News Service

1115195  11.08.2020 

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Die wichtigsten Finanzdaten auf einen Blick
  2015 2016 2017 2018 2019 2020 2021e
Umsatzerlöse1 3.117,89 3.362,41 3.507,26 2.897,47 2.932,54 2.576,23 2.580,00
EBITDA1,2 370,18 438,82 541,20 441,18 426,80 425,88 430,00
EBITDA-Marge3 11,87 13,05 15,43 15,23 14,55 16,53 16,67
EBIT1,4 298,78 298,82 260,83 311,99 269,95 262,98 0,00
EBIT-Marge5 9,58 8,89 7,44 10,77 9,21 10,21 0,00
Jahresüberschuss1 221,46 216,42 275,57 212,16 184,73 561,01 0,00
Netto-Marge6 7,10 6,44 7,86 7,32 6,30 21,78 0,00
Cashflow1,7 314,94 389,65 385,36 369,48 364,23 357,06 0,00
Ergebnis je Aktie8 1,73 1,78 2,24 1,74 1,49 4,44 1,80
Dividende8 1,55 1,60 1,65 1,65 0,04 1,65 1,50
Quelle: boersengefluester.de und Firmenangaben

  Geschäftsbericht 2020 - Kostenfrei herunterladen.  
1 in Mio. Euro; 2 EBITDA = Ergebnis vor Zinsen, Steuern und Abschreibungen; 3 EBITDA in Relation zum Umsatz; 4 EBIT = Ergebnis vor Zinsen und Steuern; 5 EBIT in Relation zum Umsatz; 6 Jahresüberschuss (-fehlbetrag) in Relation zum Umsatz; 7 Cashflow aus der gewöhnlichen Geschäftstätigkeit; 8 in Euro; Quelle: boersengefluester.de

Wirtschaftsprüfer: PricewaterhouseCoopers

INVESTOR-INFORMATIONEN
©boersengefluester.de
Freenet
WKN Kurs in € Einschätzung Börsenwert in Mio. €
A0Z2ZZ 20,290 Halten 2.598,36
KGV 2022e KGV 10Y-Ø BGFL-Ratio Shiller-KGV
10,97 11,98 0,92 10,48
KBV KCV KUV EV/EBITDA
1,61 7,28 1,01 7,11
Dividende '19 in € Dividende '20e in € Div.-Rendite '20e
in %
Hauptversammlung
0,04 1,65 8,13 18.06.2021
Q1-Zahlen Q2-Zahlen Q3-Zahlen Bilanz-PK
06.05.2021 12.08.2021 04.11.2021 26.03.2021
Abstand 60Tage-Linie Abstand 200Tage-Linie Performance YtD Performance 52 Wochen
-3,79% 6,55% 18,00% 43,14%
    
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