Slide 1: freenet AG FY/Q4 2023 Preliminary results
freenet AG FY/Q4 2023 Preliminary results Christoph Vilanek, CEO Ingo Arnold, CFO 29.02.2024
Slide 2: Disclaimer
Disclaimer 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 presentation. The
Slide 3: Business update
Business update Christoph Vilanek CEO 3
Slide 4: Highlights of the 2023 financial year
Highlights of the 2023 financial year freenet meets all targets along financial and operational KPIs and generates half a billion euros in EBITDA for the first time IPTV is the winning category in TV access and waipu.tv is the fastest growing linear IPTV platform in the German market ESG becomes par
Slide 5: 2023 KPIs meet expectations and guidance
2023 KPIs meet expectations and guidance Subscribers Revenue +5.0% +2.8% in m (end of period) in EURbn 9.0 9.5 2.56 2.63 ✓ ✓ 2023 Guidance: 2023 Guidance: Overall customer Stable growth development FY 22 FY 23 FY 22 FY 23 EBITDA Free cash flow +4.5% +5.3% in EURm in EURm 478.7 500.2 249.2 262.6 ✓ ✓
Slide 6: 2023 postpaid growth 50% higher than in 2022
2023 postpaid growth 50% higher than in 2022 Mobile subscribers Mobile customer base grew with stable ARPU, in k (end of period) brand awareness doubled in 2023 +152,9 (2,1%) Subscriber development 7.539,6 7.514,8 7.489,5 2023 postpaid growth (+145k) higher than in 2022 (+96k) 7.447,6 121,3 127,0
Slide 7: 400k net adds at waipu.tv drive growth in TV
400k net adds at waipu.tv drive growth in TV TV subscribers Media Broadcast provides stable EBITDA basis, in k (end of period) waipu.tv offers future growth potential +297.4 (18.0%) MB: freenet TV and B2B 1,953.0 freenet TV customer base shrinking within expectation significant growth 1,846.9 1,79
Slide 8: What is shaping our strategic agenda 2024?
What is shaping our strategic agenda 2024? Implementing ESG Transforming Scaling as mindset retail IPTV business FY/Q4 23 preliminary results - Analyst and Investor Conference Call 29.02.2024 8
Slide 9: ESG strategy puts people at the centre
ESG strategy puts people at the centre Fields of action 2023 achievements ESG strategy: adopted as part of corporate strategy Customers ESG ratings: MSCI ESG rating improved to „AA“ Employer of Choice: Overall satisfaction remains high (67%), ~80% recommend freenet as employer „Year of Learn
Slide 10: APS unifying captive on- and offline channels
APS unifying captive on- and offline channels Assisted Personalized Shopping (APS) Future focus of our captive channels Same offer no matter which contact point – Shop, Call Center, Online, App, Outbound telemarketing Any user can be sent to retail stores because the offer is the same Hardware
Slide 11: waipu.tv is the fastest growing linear IPTV platform in Germany
waipu.tv is the fastest growing linear IPTV platform in Germany Net adds per quarter in k Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24e 134 >134 98 100 83 81 68 ? 46 51 52 51 50 51 32 36 17 21 -79 -86 -93 -112 -120 -133 -135 -136 ? waipu.tv Peer 1 Peer 2 (cable) FY/Q4 23 preliminary results
Slide 12: Investments in waipu.tv brand pay back
Investments in waipu.tv brand pay back waipu.tv will benefit from high willingness Brand recognition among cable TV to switch among cable customers customers growing Change in TV cable law on the horizon Cable TV customers primary target group 2 of 4 2 of 3 Cable TV customers Cable TV customers with
Slide 13: Financial update
Financial update Ingo Arnold CFO 13
Slide 14: Group: freenet generates EBITDA of half a billion euros for the first time
Group: freenet generates EBITDA of half a billion euros for the first time Revenues FY 23 vs. FY 22 in EURm +20.9 Revenues at 2.627,3 EURm +2.8% yoy (FY 22: 2.556,7 EURm) (+3.1%) with focus on high valuable revenues 667.7 637.8 632.1 668.8 688.6 Gross profit reflects the higher contribution from
Slide 15: Mobile: Continuously strong during 2023
Mobile: Continuously strong during 2023 Revenues FY 23 vs. FY 22 in EURm +13.8 Revenues slightly exceed prior year (+1.4% yoy); main driver: (+2.4%) mobile service revenue growth (+2.5% yoy) 580.9 557.3 547.6 583.2 594.6 Gross profit nevertheless up +5.9% yoy to 710.4 EURm (FY 22: 162.9 140.8 12
Slide 16: Mobile: Stable ARPU indicates rational market
Mobile: Stable ARPU indicates rational market Digital lifestyle (DLS) revenues FY 23 vs. FY 22 in EURm +9.1 DLS revenues growing significantly; up +13.3% yoy to 234.7 (+14.7%) EURm (FY 22: 207.2 EURm) driven by an equal good 70.8 performance of both, subscription and hardware-related revenues 61.7
Slide 17: TV: Impressive increase of IPTV-customers accompanied by EBITDA-growth
TV: Impressive increase of IPTV-customers accompanied by EBITDA-growth Revenues FY 23 vs. FY 22 in EURm +32.1 Revenues increase double-digit to 345.4 EURm (FY 22: 313.3 (+10.2%) EURm) mainly driven by waipu.tv, whose revenues are up >30% 345.4 Gross profit up +13% yoy to 223.5 EURm (FY 22: 197,7
Slide 18: DPS proposal 5.4% above previous year
DPS proposal 5.4% above previous year EBITDA-to-FCF bridge: Cash conversion >50% Dividend proposal for FY 23 in EURm according to dividend policy -65.5 -30.2 -52.7 80 % of FCF distributed 500.2 210.0 0.0 0.5 -69.1 EURm -20.7 total amount 262.6 1.77 EUR dividend per share (DPS) EBITDA CNWC Taxes CapE
Slide 19: Strong B/S: High equity ratio and low leverage
Strong B/S: High equity ratio and low leverage Target maturity structure KPIs Balance sheet as of 31 Dec 2023 in EURm 42 1.2 0.6 192.0 % x x Equity ratio Leverage Leverage (lower limit: >25%) (Upper limit: ≤3.0) (Bank debt (only)) 113.5 148.0 100.0 36.5 77.0 23.5 160 431 271 Cash Bank debt (gross) B
Slide 20: 2024 Guidance
2024 Guidance Financial KPIs 2023 2024 Guidance in EURm Actuals Revenue 2,627.3 stable EBITDA 500.2 495 - 515 Free cash flow 262.6 260 - 280 Subscriber KPIs in k (end of period) moderate Postpaid customers (w/o app-based tariffs) 7,418.3 growth significant waipu.tv subscribers 1,369.3 growth noticea
Slide 21: 2024 is set to be a transition year for freenet
2024 is set to be a transition year for freenet EBITDA development based on “freenet 2025” freenet’s growth trajectory remains intact in EURm despite temporary investments in 2024… CAGR (est.) >4% …investments in waipu.tv brand awareness …investments in waipu.tv performance marketing CAGR (2020-
Slide 22: Detailed EBITDA-to-FCF bridge 2024
Detailed EBITDA-to-FCF bridge 2024 EBITDA-to-FCF conversion > 50% in EURm -40 -40 Mid-point guidance: >50% EBITDA-to-FCF -65 conversion - 515 -70 -20 447.3 260 - 280 260 - 280 495 EBITDA CNWC Taxes CapEx (net) Lease payments Interest FCF payments FY/Q4 23 preliminary results - Analyst and Investor C
Slide 23: Q & A
Q & A 23
Slide 24: Further questions?
Further questions? Contact Upcoming events Investor Relations & ESG Reporting 01.03.2024 Frankfurt (GER) Roadshow DZ Bank +49 (0)40 513 06 778 07.03.2024 Virtual ODDO BHF TMT Forum ir@freenet.ag 13.03.2024 London (UK) Citi TMT Conference 15.03.2024 Virtual Swiss Roadshow Hauck & Aufhäuser 22.05.2024
Slide 25: Adjusted earnings figures excluding mobilcom-debitel brand amortisation
Adjusted earnings figures excluding mobilcom- debitel brand amortisation Reconciliation for FY 23 in EURm 500.2 -254.1 344.6 -26.4 318.1 98.5 -63.4 240.5 -14.3 84.2 Net effect from adjustments 2.01 156.3 EBITDA Depreciation Amortisation Adjusted Financial Adjusted EBT Income taxes Deferred tax Adjus