Freenet Ag · XETR:FNTN

Freenet — Q3 2016 Earnings Presentation

28 slides from Freenet's earnings presentation, Nov 9, 2016

  1. Slide 1: Management presentation Q3 2016 results

    Management presentation Q3 2016 results Christoph Vilanek, CEO and Joachim Preisig, CFO 9 November 2016| Analyst and Investor conference call 1 | Management presentation Q3 2016 results | 08/11/2016

  2. 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

  3. Slide 3: Financial and operational highlights in Q3 2016

    Financial and operational highlights in Q3 2016  Third quarter showed strong core business performance and valuable contribution from Media Broadcast’s B2B business  Group revenue increases by 59.6 m€ from Q2 to 867.2 m€ in Q3 2016 (+77.2 m€ yoy)  Group EBITDA increases by 13.9 m€ from Q2 to 118.

  4. Slide 4: 2016 is a year of strategic importance for freenet

    2016 is a year of strategic importance for freenet Q1 - Q3 2016 – Building the pillars for the future Q4 2016 – Implementation of winning forces Continuous improvement of the core mobile business Mobile  Sharpening of the tariff portfolio in all segments  Full penetration of LTE offerings and enla

  5. Slide 5: Strong ATL-marketing and retail-sales KPIs

    Strong ATL-marketing and retail-sales KPIs Brand recognition >80% Retail is a driver of loyalty Mystery Shopping results and net-promoter-score June and July 2016  Costa campaign drives prompted brand recognition above 80%  4000 interviews with new customers Top md-retail-partner fulfil expectatio

  6. Slide 6: freenet´s unique proposition becomes more and more a strength

    freenet´s unique proposition becomes more and more a strength Unlimited access to all networks and MNO tariffs Various procurement models secure gross margin  Best network quality anytime, anywhere  Retail-minus model mitigates risk from severe changes  Full access to high-speed LTE (voice and da

  7. Slide 7: freenet is the sole provider covering any needs profitably

    freenet is the sole provider covering any needs profitably MNO ALLNET- and PREPAID NO FRILLS Original tariffs SMART WORLD MNO tariff plans Own portfolio MNO brands leveraging MNO targeting CallYa, Magenta marketing additional needs and channel brands spendings e.g. Media Markt freenet portfolio serv

  8. Slide 8: Procurement model enables best quality at lowest price

    Procurement model enables best quality at lowest price – achieving profitable growth FREEFLAT FREEFLAT FREEFLAT Congstar otelo Allnet 1.000 2.000 4.000 Allnet Flat+ Flat Max Monthly subscription (SIM-Only) 9.95 € 11.95 € 14.95 € 30.00 € 29.99 € Voice Allnet Allnet Allnet Allnet Allnet SMS 0,09 € All

  9. Slide 9: Customer Ownership growth +2.9 per cent year-on-year

    Customer Ownership growth +2.9 per cent year-on-year [in million] 9.42 9.47 9.37 6.43 9.30 6.36 6.39 9.21 6.31 6.23 Q3 2016 3.02 3.04 2.97 2.99 3.01 Q2 2016 Q1 2016 Q4 2015 Q3 2015 Postpaid No frills Customer Ownership  Improvement of customer ownership largely due to increase of postpaid customers

  10. Slide 10: Postpaid ARPU stable on track, +20 cent from Q2

    Postpaid ARPU stable on track, +20 cent from Q2 [EUR/month] -0.50 -0.10 -0.10 +0.20 +0.20 +0.40 0.00 -0.30 Q3 2015 21.9 21,9 Q3 2016 21.6 21.7 21,6 21.5 21.4 21.5 21.4 21.4 21.2 21.3 21.1 21.1 21.1 21.1 3.2 3.2 2.6 2.5 Q4 2013 to Q1 2014 to Q2 2014 to Q3 2014 to Q4 2014 to Q1 2015 to Q2 2015 to Q3 2

  11. Slide 11: Both TV offerings now presented in shops

    Both TV offerings now presented in 280 shops 100% of Media Broadcast Group, Cologne 24,99% of EXARING AG, Munich Conversion to DVB-T2 HD standard in March 2017 12,000 km exclusive fibre-optic infrastructure Potential of roughly 7 million DVB-T1 users 23 million households connected via peering Suppl

  12. Slide 12: Promising marketing and research KPIs for freenet TV

    Promising marketing and research KPIs for freenet TV Within four weeks after launch of end-customer communication at the end of August, spontaneous brand recognition tripled  More than 80 per cent of the TV viewers remember having seen the spot  freenet TV achieved high degree of campaign recognit

  13. Slide 13: Early performance indicators with strong upward trend

    Early performance indicators with strong upward trend Operational KPIs since freenet acquisition and involvement 338 ▪ Our operational performance Contacts 3x indicators point to a considerable 174 customer service rise of consumer interest 100 (Index) k.A. k.A. ▪ This is attributable to the pre-sal

  14. Slide 14: Still months to go for the launch – but all signals positive

    Still 6 months to go for the launch – but all signals positive 3 11 +80% tripling the contact volume website visitors increase of the set-top-box sales since multiplied by 11 times after launch of first campaign August 2016 (August) 4 million 269,000 19 million pieces of hardware in supply chain uni

  15. Slide 15: waipu.tv launch in October with promising early indicators

    waipu.tv launch in October with promising early indicators Waipu.tv B2C qualitative results Waipu.tv B2B opportunities  75% of direct entry users swype the TV picture to PR campaign with more than 100 clippings during the their TV-screen within the first couple of days first week caused a number of

  16. Slide 16: Financial statements

    Financial statements Income statement information [in EUR million] Revenue improved by 9.8% yoy Q1-Q3 2016 Q1-Q3 2015 Q3 2016 Q3 2015 mainly due to contribution from Media Broadcast in the amount of Revenue 2,424.1 2,291.1 867.2 790.1 70.1 m€. Gross profit 645.7 574.9 234.1 197.1 EBITDA of 118.2 m€

  17. Slide 17: Nine-months Group and Segment overview

    Nine-months Group and Segment overview [in EUR million] Revenue Gross profit EBITDA Free cash flow +5.8% +12.3% +14.4% +20.8% 2,424.1 262.7 Group 2,291.1 645.7 311.7 574.9 272.4 217.4 +0.4% +0.3% +6.3% Mobile 2,249.6 2,258.6 539.3 540.9 301.61 Communications 283.6 Q1 – Q3 2016 TV and Media 148.1 72.

  18. Slide 18: Financial statements

    Financial statements Balance sheet information [in EUR million] Assets Shareholders‘ equity and liabilities 30.9.2016 30.6.2016 30.9.2016 30.6.2016 adjusted1 adjusted1 532.4 Intangible assets Shareholders' 543.5 equity 1,277.0 1,329.5 Goodwill 1,379.9 Borrowings 1,379.9 1,730.9 485.0 Trade accounts

  19. Slide 19: Development of net debt and debt ratio

    Development of net debt and debt ratio Debt ratio within target range of 1.0 - 2.5 [in EUR million] 2.2 2.3 1.9 Debt ratio1 805.0 898.0 787.7 Net debt2 31.03.2016 30.06.2016 30.09.2016 1) Debt ratio is defined as net debt² divided by the EBITDA of the last twelve months. 2) Financial debt minus cash

  20. Slide 20: Placing of a promissory note loan totaling 350 million euros

    Placing of a promissory note loan totaling 350 million euros for out-financing the existing syndicated bank loan Transaction details  Investment grade structure and pricing Drawing at the lower end of the marketing range at favourable conditions (average initial margin of 1.11% p.a.; maturity struc

  21. Slide 21: Financial statements

    Financial statements Cash flow information [in EUR million] Cash flow from operating activities at Q1-Q3 2016 Q1-Q3 2015 Q3 2016 Q3 2015 80.8 m€ – positive impact from 10.7 m€ EBITDA increase (before Sunrise) and Cash flow from operating 2.1 m€ yoy decline of tax payments; 297.0 237.1 80.8 86.0 nega

  22. Slide 22: Detailed Bridge from EBITDA to free cash flow

    Detailed Bridge from EBITDA to free cash flow Q1 – Q3 2016 [in EUR million] 311.7 -2.6 -26.2 262.7 +0,1 -34.2 -16.2 +30.1 EBITDA Change in net Tax payments Capex Sunrise EBITDA Sunrise Other Free cash flow working capital (no cash) dividends FY 2015 370.2 - 10.3 - 44.3 - 30.4 - 0.6 284.5 FY 2016e >4

  23. Slide 23: Management reiterates guidance for financial year 2016

    Management reiterates guidance for financial year 2016 Customer Postpaid Group Group Free cash flow Dividend ownership ARPU revenue EBITDA (FCF) 1 pay out Guidance 2016 > 400.0 m€ ² ~300.0 m€ 3 1.60 €/share 4 Results 2015 + 376,000 21.4 € 3,117.9 m€ 370.2 m€ 284.5 m€ 1.55 €/share Guidance 2015 370 m

  24. Slide 24: freenet Group management

    freenet Group management We take time for your questions Christoph Vilanek, CEO Joachim Preisig, CFO  CEO of freenet AG since  CFO of freenet AG since 2009 2010  Management positions at  CFO of debitel AG since debitel AG since 2005 2006  Consultant for  CFO of T-Mobile / Head of telecommunica

  25. Slide 25: Thank you.

    Thank you. Hollerstrasse 126 Investor Relations 24782 Büdelsdorf +49 (0) 40 513 06 778 www.freenet-group.de investor.relations@freenet.ag 25 | Management presentation Q3 2016 results | 08/11/2016

  26. Slide 26: BACK UP

    BACK UP 26 | Management presentation Q3 2016 results | 08/11/2016

  27. Slide 27: Shareholder structure

    Shareholder structure Major shareholders of freenet AG As of 30 September 2016 5.55% 5.16% Flossbach von Storch AG* 3.70% 82.54% 3.05% Allianz Global Investors GmbH* The Capital Group Companies, Inc.* Deutsche Asset Management Investment GmbH* Other shareholders / free float** * Including attributio

  28. Slide 28: Overview over current financing and maturity structure

    Overview over current financing and maturity structure Average financing cost below 2.0 per cent p.a. [in EUR million] 800.0 Issue Instrument Volume Maturity Promissory notes Syndicated bank loan 2012 Promissory note 119 m€ 2017, 2019 2015 Promissory note 100 m€ 2020, 2022 443.0 2016 Promissory note

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