05.11.2020 freenet AG  DE000A0Z2ZZ5

DGAP-News: freenet AG: freenet confirms year-end financial guidance based on growth in subscriber base, EBITDA and free cash flow


DGAP-News: freenet AG / Key word(s): 9 Month figures/Quarterly / Interim Statement
freenet AG: freenet confirms year-end financial guidance based on growth in subscriber base, EBITDA and free cash flow

05.11.2020 / 18:00
The issuer is solely responsible for the content of this announcement.

freenet confirms year-end financial guidance based on growth in subscriber base, EBITDA and free cash flow

- EBITDA without regulatory effects/MOTION TM grows by 12.2 million euros to 344.2 million euros (+3.7 per cent)

- Free cash flow at the end of the first nine months is up 10.6 per cent year-on-year

- Highest quarterly growth in the postpaid customer base in more than two years; subscriber base grows by 207.5 thousand vs. Q3/2019

- All financial key figures of the guidance are confirmed despite a need to reduce the forecast for the freenet TV customer base (RGU)

- Further massive improvement in the debt structure foreseeable as of the end of the year

Büdelsdorf, 05 November 2020 - freenet AG [ISIN DE000A0Z2ZZ5] today announced its results for the first nine months of 2020.

Strong EBITDA and free cash flow performance

In EUR million/as indicated   9M/2020   9M/2019   Change   Q3/2020   Q3/2019   Change
Revenue1 1,905.5 1,903.0 2.5 634.5 656.3 -21.7
EBITDA 329.2 325.8 3.4 115.2 110.3 4.9
     thereof regulatory effects:            
         International calls/ roaming -15.0 -7.0 -8.0 -5.0 -5.0 0.0
     thereof MOTION TM --- 0.8 -0.8 --- 0.2 -0.2
EBITDA without regulatory effects/MOTION TM 344.2 332.0 12.2 120.2 115.1 5.1
Free cash flow 220.2 199.2 21.0 79.5 72.4 7.1
Subscriber base2 (in '000s) 8,506.7 8,299.2 207.5 8,506.7 8,299.2 207.5

The freenet Group's business model, which is based on long-term customer relationships and flexible cost and sales structures, remains robust in Corona year 2020. As expected in our guidance, revenue1performance has been stable (+0.1 per cent compared to the previous year). EBITDA rose by 3.4 million euros to 329.2 million euros year-on-year despite delayed regulatory effects (-8.0 million euros) and the loss of the contribution of the MOTION TM GmbH (-0.8 million euros). Adjusted EBITDA grew by 3.7 per cent to 344.2 million euros. The TV & Media segment and continued strict cost discipline in all areas played a significant role in achieving this improvement.

Working capital continued its positive trend (+23.7 million euros vs. the previous year), resulting in a free cash flow at the end of the first nine months that at 220.2 million euros was significantly higher (+10.6 per cent) than the previous year's figure. The resulting leeway will be used for further investments (CAPEX and Christmas business) in the fourth quarter. Higher tax payments are also expected.

The subscriber base2grew slightly faster in the first nine months than in the same period in 2019 (9M/2020: +140.2 thousand vs. 9M/2019: +137.5 thousand). The subscriber base recorded a net increase of 207.5 thousand customers (+2.5 per cent) to 8.507 million customers since 30 September 2019.


Mobile communications - safe haven in times of crisis

In EUR million/as indicated 9M/2020  9M/2019  Change  Q3/2020  Q3/2019  Change
Revenue1 1,703.8 1,701.7 2.1 567.0 588.0 -21.1
     thereof revenue from services,
1,140.5 1,159.7 -19.2 381.9 387.2 -5.3
     thereof revenue from services,
89.7 102.2 -12.5 29.7 35.1 -5.4
EBITDA 277.2 281.8 -4.6 94.6 94.9 -0.3
     thereof regulatory effects:            
         International calls/roaming -15.0 -7.0 -8.0 -5.0 -5.0 0.0
     thereof MOTION TM --- 0.8 -0.8 --- 0.2 -0.2
     thereof inter-segment allocation -6.8 -5.6 -1.2 -2.5 -1.8 -0.7
EBITDA without regulatory effects/MOTION TM/inter-segment allocation 299.0 293.6 5.4 102.1 101.5 0.6
Postpaid customers (in '000s) 7,005.0 6,866.1 138.8 7,005.0 6,866.1 138.8
Postpaid ARPU without hardware (in euros) 18.3 18.8 -0.5 18.3 18.8 -0.6
freenet FUNK/Flex customers (in '000s) 50.2 30.6 19.6 50.2 30.6 19.6

Even under the current circumstances, competition in the German mobile communications market remains driven by rational behaviour. All sales channels of the freenet Group have adapted to the conditions of the "new normal" and are performing significantly better than in the previous quarter. With 65.5 thousand customers, the net add growth of the third quarter almost doubled compared to the first half of the year (H1/2020: 36.6 thousand customers). This means that the postpaid customer base has grown by 102.1 thousand customers since the start of the year, now exceeding the 7.0 million mark. The app-based freenet FUNK/freenet Flex tariffs, which have not yet been included in the postpaid customer base, continued to register strong demand. The customer base for these tariffs grew by 20.1 per cent (+8.4 thousand customers) to 50.2 thousand customers compared to the previous quarter (+63.9 per cent vs. 30 September 2019: 30.6 thousand customers). This brings the total number of what are high-profitability mobile communications customers by comparison to 7.055 million customers, with growth expected to continue in the coming quarters.

The trend in postpaid ARPU is affected by the travel restrictions triggered by COVID-19 (impacting roaming revenue) and delayed regulatory effects (international calls/fee reduction [MNP]). Compared to the previous quarter, postpaid ARPU shows a slight recovery (+0.8 per cent), growing from 18.1 to 18.3 euros but remaining below the figure registered in the prior-year quarter (-3.1 per cent). In a similar vein, revenue from postpaid services fell by 1.7 per cent to 1,140.5 million euros year-on-year (9M/2019: 1,159.7 million euros) while growing by 1.5 per cent compared with the previous quarter.

At 1,703.8 million euros, mobile communications revenue remained stable overall (9M/2019 (adjusted for MOTION TM): 1,701.7 million euros), although the third quarter was down on the previous year due to lower hardware sales (-8.8 per cent vs. Q3/2019) amid a delay in smartphone launches. EBITDA totalled 277.2 million euros - a marginal decline of 1.6 per cent compared to the prior-year period (9M/2019: 281.8 million euros). Excluding regulatory effects, the contribution of the sold MOTION TM GmbH and segment allocations, EBITDA rose by 1.8 per cent to 299.0 million euros (9M/2019: 293.6 million euros). The main reason for this trend is the continued stable business performance (Q3 EBITDA at prior-year level) at higher cost efficiency.


Contribution of the TV & Media segment to Group EBITDA grows

In EUR million/as indicated   9M/2020   9M/2019   Change   Q3/2020   Q3/2019   Change
Revenue 190.9 187.8 3.2 65.0 63.8 1.2
EBITDA 59.0 52.6 6.4 22.6 19.4 3.2
     thereof inter-segment allocation -5.0 -5.0 0.0 -1.5 -1.5 0.1
EBITDA without inter-segment allocation 64.1 57.6 6.4 24.0 20.9 3.1
waipu.tv subscribers3 (in '000s) 509.5 365.8 143.7 509.5 365.8 143.7
freenet TV subscribers (RGU) (in '000s) 942.0 1,036.6 -94.6 942.0 1,036.6 -94.6

Customer figures in the TV & Media segment are developing also in line with expectations. Growth at waipu.tv, which had been strong, temporarily slowed as major sporting events such as football's European Championships and the Olympic Games were postponed until next year due to the pandemic. TV customers' willingness to switch providers was accordingly restrained, resulting in what is only a slight increase in the number of subscribers to around 509.5 thousand (+5.4 thousand). The number of subscribers rose by around 143.7 thousand (+39.3 per cent) compared to the prior-year quarter and by around 101.2 thousand (+24.8 per cent) compared to the end of 2019. This means that the IPTV product remains on track to repeat the solid growth of the previous year in 2020.

At freenet TV, the number of revenue-generating users (RGU) declined. By the end of September 2020, product provider Media Broadcast was recording around 942.0 thousand users, down 7.7 per cent compared to the start of the year and 9.1 per cent year-on-year. This trend is primarily due to the shutdown of satellite customers for profitability reasons as well as the price increase of around 20 per cent in May 2020. In the case of the latter, direct debit customers were the first to make use of their exceptional termination rights in the second quarter. In the past quarter, the main effect was expiring and non-extended 12-month prepaid cards. This effect might be felt again in the fourth quarter, although the price increase would still be highly profitable overall.

The revenue trend with a year-on-year increase by 3.2 million euros to 190.9 million euros seen in the TV & Media segment reflects both the price increase at freenet TV and the growing customer base of EXARING AG (waipu.tv). Together with the optimisation of the cost base, both revenue/sales-related effects also have an impact on EBITDA, which grew by 6.4 million euros (+12.2 per cent) to 59.0 million euros (9M/2019: 52.6 million euros). Due to the prevailing stability of segment allocation over the last few quarters, the same development applies to EBITDA when adjusted for these allocations.

Guidance confirmed for financial KPIs and updated for freenet TV subscribers (RGU)

The development of freenet TV subscribers (RGU) was originally assumed to be stable. The assumption that customer figures would remain unchanged did not take into account the effects of possible price adjustments for the product during the year. The price of the terrestrial freenet TV product was raised by 20 per cent in May 2020. Market research studies on the price increase provided a rough indication of our customers' potential cancellation behaviour. Due in large part to the extension of existing prepaid cards, it only became clear at the end of the third quarter that customer numbers are expected to decrease significantly by the end of the year in the wake of the price increase. As the price increase remains profitable overall even when taking into account the anticipated significant decrease in the customer base, this will not have any impact on the financial performance indicator forecasts.

freenet continues to expect revenue to remain stable in 2020, with EBITDA coming in between 415 to 435 million euros and free cash flow between 235 to 255 million euros. Growth expectations with regard to the remaining customer groups remain unchanged, i.e. moderate growth for postpaid customers and solid growth for waipu.tv subscribers.


Further massive improvement in the debt structure foreseeable as of the end of the year
On 12 August 2020, Liberty Global announced its intention to make a public offer to purchase Sunrise shares for 110 CHF per share. On the same day, Liberty Global and the freenet Group agreed on a duty to tender in which the freenet Group was obligated to tender all of the Sunrise shares it holds (11,051,578 shares). Since 29 October 2020, it has been known that material conditions for the successful implementation of the transaction have been met. The required minimum acceptance threshold of 66.6 per cent was significantly exceeded and the merger of UPC Switzerland and Sunrise was approved by the Swiss Competition Commission. The freenet Group will receive around 1.1 billion euros in cash by the end of the year from the sale of the Sunrise shares. The majority of this (around 800 million euros) will be used to reduce the company's debt, while the remainder will be reinvested and/or used to benefit freenet shareholders. Overall, the freenet Group is gaining greater financial flexibility and could reduce its leverage from 4.8 at the end of 2019 to below 2.0 by the end of 2020. Together with the refinancing of maturing promissory note loans already carried out, this would significantly improve the company's debt position within one year.

Conference call webcast
freenet AG will host an analysts' conference call at 10:00 CET on 06 November 2020. All those interested in attending can follow the conference call via webcast at LINK.

A recording will be made available following the event.

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. The company's external revenue contribution amounted to 227.0 million euros in the period from January to September 2019 (Q3/2019 84.7 million euros), while its EBITDA contribution was approximately 0.8 million euros (Q3/2019: 0.2 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 Flex customers, freenet TV subscribers (RGU) and waipu.tv subscribers.
3 Including customers from the sales cooperation with Telefónica Deutschland (launched in May 2019).


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

05.11.2020 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
Phone: +49 (0)40 51306-778
Fax: +49 (0)40 51306-970
E-mail: [email protected]
Internet: www.freenet-group.de
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: 1145929

End of News DGAP News Service

1145929  05.11.2020 


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

WKN Kurs in € Einschätzung Börsenwert in Mio. €
A0Z2ZZ 20,200 Halten 2.586,83
KGV 2022e KGV 10Y-Ø BGFL-Ratio Shiller-KGV
10,92 11,97 0,91 10,43
1,61 7,24 1,00 7,08
Dividende '19 in € Dividende '20e in € Div.-Rendite '20e
in %
0,04 1,65 8,17 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
-4,10% 5,85% 17,48% 37,93%
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