
HALF-YEAR REPORT AS OF 30 JUNE 2020 H1/2020 Contents | Overview of key financials CONTENTS OVERVIEW OF KEY FINANCIALS 01 TO OUR SHAREHOLDERS 04 INTERIM GROUP MANAGEMENT REPORT 11 CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS 27 FURTHER INFORMATION 45 Overview of key financials 01 OVERVIEW OF KEY FINANCIALS ¹ GROUP OPERATIONS In EUR millions / as indicated 1st half 2020 1st half 2019 Q2/2020 Q1/2020 Q2/2019 Revenue 1,271.0 1,389.0 622.1 648.8 699.1 Revenue exclusive of MOTION TM 2 1,271.0 1,246.7 622.1 648.8 624.3 Gross profit 425.7 446.7 212.5 213.2 219.4 EBITDA 213.9 215.5 109.7 104.2 107.5 EBIT 135.4 138.2 70.5 64.9 68.8 EBT 123.1 123.1 65.3 57.8 62.0 Consolidated profit 109.3 111.6 58.1 51.2 55.5 Earnings per share in EUR (diluted / basic) 0.88 0.91 0.46 0.41 0.45 BALANCE SHEET In EUR millions / as indicated 30.6.2020 30.6.2019 30.6.2020 31.3.2020 30.6.2019 Total equity and liabilities 4,721.2 4,911.6 4,721.2 4,764.6 4,911.6 Equity 1,350.7 1,242.0 1,350.7 1,268.4 1,242.0 Equity ratio in % 28.6 25.3 28.6 26.6 25.3 FINANCES AND INVESTMENTS In EUR millions 1st half 2020 1st half 2019 Q2/2020 Q1/2020 Q2/2019 Free cash flow 140.7 126.7 90.8 49.9 81.5 Depreciation, amortisation and impairment 78.5 77.3 39.2 39.3 38.7 Net investments (CAPEX) 17.3 15.6 9.5 7.8 8.7 Net debt 1,891.5 2,175.1 1,891.5 1,987.4 2,175.1 Adjusted net debt 918.0 1,272.1 918.0 1,153.3 1,272.1 SHARE As indicated 30.6.2020 30.6.2019 30.6.2020 31.3.2020 30.6.2019 Closing price Xetra in EUR 14.32 17.60 14.32 16.07 17.60 Number of issued shares in ’000s 128,061 128,061 128,061 128,061 128,061 Market capitalisation in EUR million 1,833.8 2,253.2 1,833.8 2,057.3 2,253.2 EMPLOYEES 3 30.6.2020 30.6.2019 30.6.2020 31.3.2020 30.6.2019 Employees 4,014 4,141 4,014 4,118 4,141 Half-year report H1/2020 | freenet AG 02 Overview of key financials MOBILE COMMUNICATIONS SEGMENT CUSTOMER FIGURES 3 In millions 1st half 2020 1st half 2019 Q2/2020 Q1/2020 Q2/2019 Postpaid 6.939 6.834 6.939 6.925 6.834 Net change postpaid 0.037 -0.062 0.014 0.022 -0.028 freenet FUNK 0.042 0.020 0.042 0.035 0.020 Net change freenet FUNK 0.008 0.020 0.007 0.001 0.020 OPERATIONS In EUR millions 1st half 2020 1st half 2019 Q2/2020 Q1/2020 Q2/2019 Revenue 1,136.8 1,256.0 554.2 582.6 631.3 Gross profit 326.1 348.5 160.8 165.3 168.9 EBITDA 182.6 186.9 91.0 91.6 90.4 MONTHLY AVERAGE REVENUE PER USER (ARPU) In EUR 1st half 2020 1st half 2019 Q2/2020 Q1/2020 Q2/2019 Postpaid 18.3 18.8 18.1 18.4 18.8 freenet AG | Half-year report H1/2020 Overview of key financials 03 TV AND MEDIA SEGMENT CUSTOMER FIGURES 3 In ’000s 1st half 2020 1st half 2019 Q2/2020 Q1/2020 Q2/2019 freenet TV subscribers (RGU) 1,005.0 1,037.5 1,005.0 1,016.9 1,037.5 Net change freenet TV subscribers (RGU) -16.1 23.2 -11.9 -4.2 17.3 waipu.tv subscribers 504.1 331.9 504.1 452.5 331.9 Net change waipu.tv subscribers 95.8 80.1 51.7 44.2 45.6 OPERATIONS In EUR millions 1st half 2020 1st half 2019 Q2/2020 Q1/2020 Q2/2019 Revenue 125.9 123.9 65.2 60.7 62.9 Gross profit 81.1 79.8 43.1 38.1 40.7 EBITDA 36.5 33.2 20.9 15.5 18.9 1 Unless indicated otherwise, key financials are defined in the “Corporate management” section of the 2019 Annual Report. 2 Revenue for the first half and the second quarter of 2019 includes hardware revenue of 142.3 million euros and 74.8 million euros, respectively, from the subsidiary MOTION TM Vertriebs GmbH (MOTION TM), which was sold and deconsolidated at the end of 2019: The subsidiary was sold for strategic reasons. However, to ensure comparability with the previous year, prior-year revenue is also shown adjusted for these figures. 3 At the end of the period. Half-year report H1/2020 | freenet AG TO OUR SHARE- HOLDERS TO OUR SHAREHOLDERS 04 The Executive Board 05 Report of the Executive Board 06 The freenet share 08 TO OUR SHARE HOLDERS | The Executive Board of freenet AG 05 THE EXECUTIVE BOARD OF FREENET AG From top left to bottom right: Christoph Vilanek (CEO), Stephan Esch (CTO), Rickmann v. Platen (CCO), Ingo Arnold (CFO), Antonius Fromme (CCE) Half-year report H1/2020 | freenet AG 06 TO OUR SHARE HOLDERS | Report of the Executive Board REPORT OF THE EXECUTIVE BOARD Dear shareholders, business partners, customers Daily virtual team meetings, podcasts and webinar train- and friends of the freenet Group, ing sessions all helped to preserve freenet’s unique spirit during lockdown. We also continued to deliver training and As we take stock of the first half of 2020 today, we are education programmes digitally – much like the majority reflecting on some of the most exceptional and challeng- of our other company processes. Although we were unable ing months for companies in recent economic history for to avoid short-time work, we topped up the net salaries of one major reason – coronavirus. Right now, we can say that the affected employees to 100 per cent in each case. This freenet AG has coped well with lockdown and the accom- also helped to foster our team spirit and even boosted staff panying massive disruption so far. In fact, COVID-19 is not motivation within the Group during the crisis. immediately apparent in our figures for the first half of the year. What have been the key factors in this success? Of course, our crisis-resistant business model also helped. We offer our customers services that people find particularly Firstly, as a company we reacted very quickly, efficiently indispensable in times of crisis: digital interaction, Internet and proactively to the emerging developments. As a David access and the consumption of entertainment and informa- among the Goliaths of Germany’s major telecommunication tion via TV and radio. These are areas in which we generate providers, we benefited from our flat hierarchies, manage- the majority of our revenue and an even larger share of our able structures and direct decision-making and communi- margins based on mostly long-term subscriptions. cation channels. At the start of March, when the eventual dramatic scale of the situation was only very gradually This is also reflected in the encouraging figures for the first becoming apparent, freenet had already set up a crisis team half of the year. formed of representatives from the Human Resources and Legal departments, Executive Board and the managing direc- ■ Revenue reached 1,271.0 million euros in the first six tors of our shop chains, led by the head of Internal Auditing. months of 2020. This represents a slight increase of 1.9 per cent compared to the prior-year period adjusted Before long, we reached the second of our four predefined for the MOTION TM equity investment we sold at escalation levels, which opened up the option of working the turn of the year. The second quarter contributed from home. Employee groups were defined based on their 622.1 million euros to this figures, which is on a par with risk levels and needs and provided with essential IT equip- the adjusted revenue generated in Q2 / 2019 (624.3 mil- ment as required. As a result, more than a third of our lion euros). employees worked from home or remotely without any ■ At 109.7 million euros, EBITDA was slightly higher com- major problems, while more than 60 per cent of processes pared to Q2 / 2019 (107.5 million euros). This adds up to kept running at their respective locations. This not only a total of 213.9 million euros for the first half of the year included logistics specialists and staff for office processes – only a slight decrease compared to 215.5 million euros and maintenance but also teams in those of our shops that for the equivalent period in 2019, despite the (delayed) were able to remain open as part of Germany’s critical infra- regulatory effects in mobile communications and the structure in times of crisis – although unfortunately this only exceptional overall situation caused by coronavirus. represented around a third of our stores and with restricted ■ Free cash flow rose by 11.0 per cent to 140.7 million euros opening hours and customer access. in the first half of 2020 compared to 2019. Of this figure, 90.8 million euros is attributable to the second quarter, which, due to reporting date effects, was significantly higher than the prior-year quarter.
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