freenet management issues positive medium-term outlook until 2025 with significant EBITDA growth

- Successful digital lifestyle strategy to continue with stronger focus on digitalisation, customer centricity and sustainability

- Company aiming for EBITDA of at least 520 million euros by the end of 2025

- Free cash flow expected to rise in line with EBITDA to more than 260 million euros

- Distribution level of 80 per cent of free cash flow to be maintained

Büdelsdorf, 4 November 2021 - freenet AG management [ISIN DE000A0Z2ZZ5] presented the strategic direction of the company and its medium-term financial ambitions until the 2025 financial year at today's virtual Capital Markets Day. The main message was that the freenet Group will continue to pursue its successful digital lifestyle strategy and wants to grow significantly across all areas of its business.

With this in mind, EBITDA is anticipated to rise at an average annual growth rate of more than four per cent to at least 520 million euros by 2025. Management expects:

- the TV and Media segment to contribute an additional 35 to 65 million euros to EBITDA compared to 2020,

- a contribution of between 30 and 60 million euros from the Mobile Communications segment, and

- an additional 5 to 15 million euros from cost efficiencies.

Free cash flow is expected to rise in line with EBITDA to more than 260 million euros over the same period.

Management announced a multi-dimensional transformation of the organisation to help achieve these goals. Digitalisation, standardisation and a more uniform management will be used to establish an even more efficient and results-geared operational and organisational structure along the Group's entire integrated value chain. These efforts will focus on further expanding freenet's customer-centric approach and managing its base of more than 8.7 million contract customers in a demand-focused way. The successful omni-channel distribution strategy will be further underpinned by the most modern, data-supported and digital contact with customers, with the concept of customer lifetime value serving as a key performance indicator. freenet will also prioritise the expansion of its customer base via directly manageable distribution channels known as "captive channels".

By expanding the existing product and service portfolio in mobile communications and TV entertainment (through products such as fixed-line Internet) to complement these efforts, management is creating the ideal conditions for participating in the market for convergent products. While freenet has identified additional growth areas in digital lifestyle services and digital radio, management believes that Internet-based television (IPTV/OTT TV) offers the most significant growth potential. Given the ongoing technological shift in TV broadcasting methods, the company assumes that IP-based television represents the future of technology in the German television market. The freenet Group has been present in this area with its product waipu.tv since 2016, and its excellent positioning provides a very strong starting point for participating in the growth expected in this market.

"We are entering a new phase for our company and have begun the process of transitioning from being a sales machine to actively managing our customer base. We have already taken carefully-considered steps in this direction in recent years with initiatives such as the creation of two new Executive Board departments. By building on these foundations, we want to bring our vision of 'Always the Right Choice' to life. We want to offer a comprehensive range of digital lifestyle products and services that allow our customers to live digital lives. We are doing all this to ensure that we can remain an independent and reliable partner to our customers in the future and inspire them with innovative, sustainable products," explained Christoph Vilanek, Chief Executive Officer of freenet AG.

freenet is also strengthening its efforts in the area of sustainability. Sustainability and non-financial aspects are incorporated into every decision and given the same weight as economic decision-making criteria. The aim is to influence the social and environmental sustainability of the freenet Group's business activities at all possible points along the value chain wherever the ability to exert an influence is not restricted by regulatory requirements or specific market conditions. This topic is also viewed as an opportunity when interacting with customers, while the product portfolio is already being expanded to include sustainable solutions.

The increased integration of sustainability aspects into freenet's business activities will not prevent shareholders from participating in its success. freenet Group management continues to stand by its promise of allowing shareholders to participate above average in the company's success and keeping the shareholder return at a high level in the future. With this in mind, freenet will continue to distribute 80 per cent of its free cash flow to shareholders.

"Our financial ambitions for 2025 make it clear that we want to exploit market opportunities for further organic growth across all areas of the business while at the same time creating a more flexible and efficient organisation. We will strive to achieve this growth while maintaining our existing asset-light strategy, which will also ensure a continuously high cash conversion rate. Based on our high distribution rate and low leverage, we offer an attractive profile for the capital markets," explained Ingo Arnold, Chief Financial Officer of freenet AG.

Detailed information on the contents of this corporate news can be found in the presentation on Capital Markets Day 2021 (LINK).