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MarketScreener Homepage  >  Equities  >  Xetra  >  Freenet Group    FNTN   DE000A0Z2ZZ5

FREENET GROUP

(FNTN)
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freenet : Business performance remains very stable, with increased postpaid customer base in third quarter

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11/06/2019 | 12:45pm EST

Büdelsdorf, 06. November 2019 - freenet AG [ISIN DE000A0Z2ZZ5] today announced its results for the third quarter of 2019.

Group: overall performance remains in line with expectations

Key performance indicators for the Group

In EUR million/as indicated 9M/2019 9M/2018 restated2 Change Q3/2019 Q3/2018 restated2 Change
Revenue 2,130.0 2,103.3 26.7 741.0 717.0 23.9
EBITDA 325.8 327.9 -2.1 110.3 123.0 -12.7
thereof regulatory effects:
IFRS 16 33.5 --- 33.5 11.2 --- 11.2
International Calls/ Roaming -7.0 --- -7.0 -5.0 --- -5.0
Analogue radio divestment -5.6 25.0 -30.6 -1.9 16.5 -18.4
EBITDA without regulatory effects 304.8 302.9 1.9 106.0 106.5 -0.5
Free cash flow 199.2 210.1 -10.9 72.4 75.0 -2.5
Subscribers1 (in millions) 8.299 7.972 327.0 8.299 7.972 327.0

Revenue was slightly above the previous year's level in the first nine months of 2019 at 2,130.0 million euros (9M/2018: 2,103.3 million euros). In the same period, EBITDA dipped slightly below the prior-year figure at 325.8 million euros (9M/2018: 327.9 million euros), although comparability with previous years is only possible to a limited extent due to regulatory effects (IFRS 16, international calls/roaming und analogue radio divestment). EBITDA adjusted for the effects mentioned rose by around 2.0 million euros year-on-year in the first nine months of 2019 to reach 304.8 million euros (9M/2018: 302.9 million euros). On a quarterly basis, EBITDA remained around 12.7 million euros below the prior-year quarter at 110.3 million euros (Q3/2018: 123.0 million euros). However, after deducting revenue from the sale of the analogue radio infrastructure recorded in the previous year amounting to around 16.5 million euros as well as the positive IFRS 16 effect of 11.2 million euros in the third quarter of 2019 and the negative effect of around 6.9 million euros from other regulatory effects, EBITDA remained virtually stable (Q3/2019: 106.0 million euros; Q3/2018: 106.5 million euros).

Free cash flow for the first nine months of 2019 was 199.2 million euros. Although this was below the previous year's figure (9M/2018: 210.1 million euros), it was exactly in line with expectations for the first nine months of the current year (between 180.0 and 210.0 million euros). Free cash flow of 72.4 million euros was generated in the third quarter of 2019, representing a slight decrease of 2.5 million euros compared with the same quarter of the previous year (Q3/2018: 75.0 million euros) and thus in line with the quarterly forecast (70.0 to 80.0 million euros).

The subscriber base grew by around 75,500 customers to 8.299 million compared to the second quarter of 2019. Compared with 30 September 2018, the number of subscribers rose by 327,000 (7.972 million customers). Most of this positive development in the subscriber base was attributable to waipu.tv subscribers, a figure that grew by 163,400 in the last 12 months.

Mobile Communications: postpaid customers returning to growth

Key performance indicators in the Mobile Communications Segment

In EUR million/as indicated 9M/2019 9M/2018 restated2 Change Q3/2019 Q3/2018 restated2 Change
Revenue 1,928.7 1,892.4 36.3 672.7 654.2 18.6
thereof revenue from services, Postpaid: 1,159.7 1,166.0 -6.3 387.2 395.5 -8.3
thereof revenue from services, No-frills / Prepaid: 102.2 106.5 -4.2 35.1 36.6 -1.5
EBITDA 281.8 281.6 0.2 94.9 99.8 -4.9
thereof regulatory effects:
IFRS 16 17.7 --- 17.7 5.8 --- 5.8
International Calls/ Roaming -7.0 --- -7.0 -5.0 --- -5.0
thereof inter-segment allocation -5.6 13.1 -18.7 -1.8 3.8 -5.6
EBITDA without regulatory effects / inter-segment allocation 276.7 268.4 8.3 95.9 96.0 -0.1
Postpaid customers (in millions) 6.866 6.869 -0.002 6.866 6.869 -0.002
Postpaid ARPU without hardware (in EUR) 18.8 19.1 -0.3 18.8 19.2 -0.4
freenet FUNK customers (in '000s) 30.6 --- 30.6 30.6 --- 30.6

After the number of highly profitable postpaid Mobile Communications customers declined in the first half of 2019 due to a quality-related restructuring of the tariff mix and adjustments to product management, this figure returned to growth in the third quarter of 2019. The number of postpaid customers rose by around 32,000 to 6.866 million to reach the prior-year level (6.869 million postpaid customers). This performance once again shows the strong competitive positioning of the Group and the brands mobilcom-debitel and klarmobil in this fiercely competitive customer segment, and the effectiveness of the measures implemented. The number of users of the completely digital freenet FUNK tariff also grew by around 10,200 to 30,625 customers. Given this highly encouraging performance, the Group is planning to use its innovative app functionality to sell other tariffs until the end of the year.

Postpaid ARPU without hardware remained stable compared to the previous quarter in the third quarter of 2019 at 18.8 euros (Q2/2019: 18.8 euros) and is slightly below the previous year's figure due to the regulatory effect of international calls/roaming (Q3/2018: 19.2 euros). Revenue in the Mobile Communications segment reported for the third quarter of 2019 increased by 18.6 million euros to 672.7 million euros, primarily as a result of higher low-margin hardware revenue. In the first nine months of 2019, Mobile Communications revenue amounted to 1,928.7 million euros (9M/2018: 1,892.4 million euros). By contrast, revenue from postpaid services included in this figure fell slightly by 6.3 million euros to 1,159.7 million euros, reflecting the lower revenues from international calls/roaming.

EBITDA totalled 281.8 million euros in the first nine months of the year under review, thus remaining stable year-on-year (9M/2018: 281.6 million euros). Excluding regulatory effects from IFRS 16 and international calls/roaming as well as inter-segment allocation, EBITDA amounted to 276.7 million euros, keeping it around 8.3 million euros above the previous year's figure (9M/2018: 268.4 million euros) due to lower customer acquisition costs in Q1/2019. The corresponding EBITDA figure remained stable on a quarterly basis (Q3/2019: 95.9 million euros; Q3/2018: 96.0 million euros).

TV and Media: full year waipu.tv subscriber target reached by end of September 2019

Key performance indicators in the TV and Media segment

In EUR million/as indicated 9M/2019 9M/2018 Change Q3/2019 Q3/2018 Change
Revenue 187.8 211.3 -23.5 63.8 62.5 1.3
EBITDA 52.6 53.5 -0.9 19.4 25.5 -6.1
thereof regulatory effects:
IFRS 16 14.4 --- 14.4 4.8 --- 4.8
Analogue radio divestment -5.6 25.0 -30.6 -1.9 -1.9 0.0
thereof inter-segment allocation -5.0 -20.0 -15.0 -1.5 -5.9 4.3
EBITDA without regulatory effects / inter-segment allocation 48.8 48.5 0.3 18.0 14.8 3.1
waipu.tv subscribers3 (in '000s) 365.8 202.4 163.4 365.8 202.4 163.4
freenet TV subscribers (RGU) (in '000s) 1,036.6 901.5 135.1 1,036.6 901.5 135.1

In the TV and Media segment, the waipu.tv IPTV product continued its positive performance and exceeded the paying customer target for 2019 of 350,000 by 30 September 2019, with 366,000 subscribers as of the reporting date. This corresponds to an increase of 163,400 customers compared to the previous year (30 September 2018: 202,400 subscribers). The number of revenue-generating freenet TV users also developed encouragingly, remaining stable compared to the previous quarter at around 1.037 million customers (30 June 2019: 1.037 million customers). In the prior-year quarter, the high number of outstanding vouchers had resulted in an exceptionally high rate of churn. A similarly high rate of churn was avoided this year, which ultimately caused the number of customers to rise by 135,100 compared to 30 September 2018 (901,500 freenet TV subscribers (RGUs)).

Revenue in the TV and Media segment underlined the positive trend in TV customer figures on a quarterly basis, growing slightly by 1.3 million euros to 63.8 million euros (Q3/2018: 62.5 million euros). In the first nine months of the year, revenue in this segment remained approximately 23.5 million euros below the prior-year figure (9M/2018: 211.3 million euros); this was primarily due to the sale of the analogue radio business in 2018.

Despite various one-time effects, EBITDA remained in line with the previous year (9M/2019: 52.6 million euros; 9M/2018: 53.5 million euros). Excluding the regulatory effects of IFRS 16 and the analogue radio divestment as well as inter-segment allocation, EBITDA rose by 0.3 million euros to 48.8 million euros (9M/2018: 48.8 million euros), thus offsetting the negative effects of higher content costs in the freenet TV segment in the first half of 2019.

Guidance unchanged for full-year 2019

The freenet Group continues to anticipate stable revenue, EBITDA of between 420.0 and 440.0 million euros and free cash flow of between 240.0 and 260.0 million euros for the full 2019 financial year.

Conference call webcast

freenet AG will host an analysts' conference call at 11:00 CET on 07 November 2019. All those interested in attending can follow the conference call via webcast at link.

1 Summe aus Postpaid-Kunden, freenet FUNK-Kunden, freenet TV-Abo Kunden (RGU) und waipu.tv Abo-Kunden.

2 Die Vergleichszahlen wurden aufgrund der Neufokussierung des ab 2019 gültigen internen Steuerungssystems und der damit einhergegangenen Neudefinition verschiedener Leistungskennzahlen angepasst. Zu den Änderungen verweisen wir insbesondere auf die Abschnitte 'Steuerungssystem' und 'Alternative Leistungskennzahlen' im Geschäftsbericht 2018.

3 Inklusive Kundenbeitrag aus der Vertriebskooperation mit Telefónica Deutschland (gestartet im Mai 2019).

**********************************

Investor Relations Kontakt:

freenet Aktiengesellschaft
Investor Relations

Deelbögenkamp 4c
22297 Hamburg
Tel.: +49 (0) 40 / 513 06 778

Fax: + 49 (0) 40 / 513 06 970

E-Mail: ir@freenet.ag

www.freenet-group.de

Disclaimer

Freenet AG published this content on 06 November 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 November 2019 17:44:03 UTC

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Sales 2019 2 887 M
EBIT 2019 277 M
Net income 2019 218 M
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Yield 2019 8,26%
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