Slide 1: Management presentation: Results for H1/Q2 2023
Management presentation Results for H1/Q2 2023 Christoph Vilanek, CEO Ingo Arnold, CFO 04.08.2023 Analyst and Investor Conference Call
Slide 2: Cautionary statement
Cautionary statement This presentation contains forward-looking statements which involve risks and uncertainties. The actual performance, results and timing of the business of freenet AG could differ materially from the expectations regarding performance, results and timing expressed in this present
Slide 3: Agenda
Agenda 1 Business C. Vilanek, CEO 2 Financials I. Arnold, CFO 3 Q&A H1 23 results - Analyst and Investor Conference Call 04.08.2023 3
Slide 4: freenet is on track to meet all 2023 targets
freenet is on track to meet all 2023 targets Subscribers Revenue EBITDA Free cash flow in m in bnEUR in mEUR in mEUR 8.9 9.3 1.2 1.3 240.9 254.6 124.6 131.5 End of End of H1 22 H1 23 H1 22 H1 23 H1 22 H1 23 June 22 June 23 +4.7% +2.7% +5.7% +5.5% H1 23 results - Analyst and Investor Conference Call
Slide 5: TV outpaces mobile subscriber growth again
TV outpaces mobile subscriber growth again Subscribers LTM in ´000s (end of period) 8,868.1 +417.1 Total subscribers 9,285.2 (+4.7%) 7,200.3 +162.2 Postpaid (+2.3%) 7,362.6 Mobile net adds 106.2 +20.8 +183.0 Funk & Flex1 (+19.6%) 127.0 820.2 333.4 waipu.tv (+40.6%) 1,153.6 TV net adds 741.3 -99.3 +2
Slide 6: Mobile subscriber base maintains moderate growth
Mobile subscriber base maintains moderate growth Mobile subscribers Highlights in H1 23 in ‘000s (end of period) 183.0 2023 growth on satisfactory level (2.5%) Strong net adds in Q1 (+52k; Q1 22: +5k) 7,447.6 7,489.5 7,386.8 7,306.5 7,347.1 122.3 127.0 Good net adds in Q2 (+37k; Q2 22: +18k) 1
Slide 7: waipu.tv reports strongest quarterly growth ever
waipu.tv reports strongest quarterly growth ever TV subscribers Highlights in H1 23 in ‘000s (end of period) waipu.tv +234.0 ATL marketing measures accelerate waipu.tv growth in Q2 23 again (+15.0%) (>100k net adds in Q2 23) 1,795.6 1,711.9 1,561.6 1,583.5 1,655.6 Migration of DGF existing cus
Slide 8: waipu.tv set to benefit from change in TV law
waipu.tv set to benefit from change in TV law Expected behaviour among cable TV households Change in TV law in m 12.5 From end of July 2024 (at the latest): tenants no longer obliged to pay for cable 12.5m households affected in Germany Raising media awareness of changes in TV law 6.6 IPTV i
Slide 9: Outlook H2 2023
Outlook H2 2023 Mobile Communications TV and Media Improvement of service quality: enhanced customer waipu.tv: experience & satisfaction level by support of ATL campaigning to raise brand recognition (ATL technology-based interactions (e.g., AI) Marketing) in order to take advantage of end of
Slide 10: Group: Financials at upper end of own expectations
Group: Financials at upper end of own expectations Revenues H1 23 vs. H1 22 in EURm +11.9 Revenues at 1,269.9 EURm +2.7% yoy (H1 22: 1,237.0 EURm) (+1.9%) reflecting subscriber growth in Mobile and TV 620.1 652.1 667.7 637.8 632.1 Gross profit development reflects the higher contribution of serv
Slide 11: Mobile: Steady EBITDA growth yoy continues
Mobile: Steady EBITDA growth yoy continues Revenues H1 23 vs. H1 22 in EURm +0.1 Revenues exceed prior year (+1.2% yoy). Higher service and DLS (0.0%) revenues (higher margin) offset by hardware sales with low-margin 547.5 578.3 580.9 557.3 547.6 Gross profit yet increases +3.8% yoy to 344.8 EUR
Slide 12: Mobile: DLS revenues significantly up yoy
Mobile: DLS revenues significantly up yoy Digital lifestyle (DLS) revenues H1 23 vs. H1 22 in EURm +4.8 DLS revenues growing significantly; up +16.3% yoy to 108.3 (+10.0%) EURm (H1 22: 93.1 EURm) 61.7 55.3 Stable Postpaid ARPU (H1 23: 17,8 EUR; H1 22: 17,8 EUR) 52.4 53.0 48.2 and moderate growth
Slide 13: TV and Media: Strong growth continued
TV and Media: Strong growth continued Revenues +17.2 H1 23 vs. H1 22 in EURm (+11.6%) Revenues increase by +11.6% yoy to 165.9 EURm (H1 22: 148.7 165.9 EURm) driven by strong customer growth of waipu.tv; all other 148.7 stable Gross profit up +12.7% yoy to 107.3 EURm (H1 22: 95.2 EURm) 73.9 74.8
Slide 14: EBITDA to FCF conversion remains high (>50%)
EBITDA to FCF conversion remains high (>50%) EBITDA-to-FCF bridge H1 23 vs. H1 22 in EURm NWC affected by further reduction of factoring programme -41.9 Tax payments lower amid phasing effects -11.4 CapEx at normal run rate incl. investments in digital -25.1 radio (DAB+) and waipu.tv platform
Slide 15: Balance sheet under control: High equity ratio and low leverage
Balance sheet under control: High equity ratio and low leverage Maturity structure as of 30 June 2023 in EURm Roughly 43% of promissory note loans have variable interest 178.5 192.0 rates and are subject to interest rate risk 36.5 Utilization of RCF (50 EURm) in May; full redemption in July 148.
Slide 16: Guidance 2023 reiterated after H1 results
Guidance 2023 reiterated after H1 results Financial guidance Results Guidance in EURm 2022 2023 Revenue 2,556.7 stable EBITDA 478.7 480 - 500 Free cash flow 249.2 250 - 270 Subscriber guidance in ‘000s Postpaid customers Moderate 7,273.7 (w/o app-based tariffs) growth Significant waipu.tv
Slide 17: Management Q&A
Management Q&A For further questions please contact: Investor Relations & ESG Reporting • Preliminary +49 results (0)40 513 06 778 for FY/Q4 2022 ir@freenet.ag IR website Upcoming events 9 Nov 2023: Conference Call 9M/Q3 2023 IR events
Slide 18: Adjusted earnings figures excluding mobilcom-debitel brand amortisation
Adjusted earnings figures excluding mobilcom- debitel brand amortisation Reconciliation for H1 2023 in EURm 254.6 177.9 -13.4 164.5 -175.1 -21.8 -14.3 128.4 98.5 1.07 Net effect 84.2 from adjustments EUR 44.2 Adjusted EPS EBITDA Depreciation Amortisation Adjusted EBIT Financial result Adjusted EBT I
Slide 19: EBITDA-to-FCF bridge 2023
EBITDA-to-FCF bridge 2023 EBITDA-to-FCF bridge 2023 FCF quarterly breakdown in EURm in EURm 55-75 55-75 55-75 55-75 -50 -35 Mid point guidance: -50 >50.0% EBITDA-to-FCF conversion -75 Q1 23e Q2 23e Q3 23e Q4 23e -20 0 447.3 480 - 500 250 - 270 Even quarterly distribution without major deviations exp