Earnings Release • Aug 5, 2015
Earnings Release
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Corporate | 5 August 2015 18:00
freenet AG increases revenue in second quarter because of growing number of contract customers and higher digital lifestyle demand
freenet AG / Key word(s): Half Year Results
2015-08-05 / 18:00
freenet AG increases revenue in second quarter because of growing number of contract customers and higher digital lifestyle demand
– Group revenue increases by 3.5 per cent to 752.5 million euros (previous year: 727.2 million euros)
– Customer ownership grows by 3.0 per cent to 9.11 million (previous year: 8.84 million); contract customer base grows by 4.4 per cent to 6.16 million
– Postpaid ARPU remains stable at 21.4 euros (previous year: 21.5 euros)
– EBITDA improves slightly to 89.1 million euros, 1.7 per cent up on previous year (87.6 million euros)
– Free cash flow* of 74.1 million euros (previous year: 74.2 million euros)
– Guidance for the financial years 2015 and 2016 confirmed
Büdelsdorf, 5 August 2015 – freenet AG [ISIN DE000A0Z2ZZ5] published its interim report for the second quarter of 2015 today and confirmed its outlook for the financial years 2015 and 2016.
Group revenue amounting to 752.5 million euros was generated in the second quarter (previous year: 727.2 million euros). This development was possible thanks first and foremost to the significant increase in the contract customer base, accompanied by almost constant postpaid ARPU, and to higher revenue in the digital lifestyle field. The mobile communications business segment remained dominant within the Group with revenue amounting to 739.0 million euros (previous year: 714.5 million euros).
The customer ownership base – in which the strategically important postpaid and no-frills customer groups are concentrated and which serve as an important control parameter in the company – was increased by around 264 thousand customers to 9.11 million (previous year: 8.84 million), representing an increase of 3.0 per cent. The upward trend originates primarily from the disproportionate increase (of 4.4 per cent to 6.16 million) in the postpaid customer base, in which all of the mobile communications contracts with a term of 24 months that are marketed in the Group are consolidated. The no-frills customer segment, which includes all of the mobile communications tariffs with a term of less than 24 months that are marketed via discount brands belonging to the Group, likewise improved slightly with growth of 3 thousand participants compared to last year.
The freenet Group was again able to sustainably benefit from its strategic position as a digital lifestyle provider – focused on high-value customer relations in the acquisition of new customers and the management of existing ones. This orientation is reflected clearly in the development of ARPU in the most recent quarters: in the second quarter of 2015, average monthly revenue per contract customer (postpaid ARPU) is 0.3 euros higher than in the previous quarter at 21.4 euros (previous year: 21.5 euros).
At 186.4 million euros, gross profit is slightly lower than in the second quarter of 2014 (190.5 million euros). The gross profit margin amounts to 24.8 per cent. This downward trend is attributable largely to higher activation figures respectively the resultant increase in subscriber acquisition costs.
Group EBITDA (earnings before interest, taxes, depreciation and amortisation) nevertheless increased slightly by 1.5 million euros to 89.1 million euros (previous year: 87.6 million euros) and was therefore in line with expectations.
Depreciation and amortisation increased by 2.3 million euros to 18.8 million euros in the second quarter (previous year: 16.4 million euros) and, as in the previous year, were accounted for primarily by distribution rights, intangible assets in relation to purchase price allocations from corporate acquisitions, and internally generated software.
Taking account of the increase in the taxes on income to 5.7 million euros (previous year: 3.4 million euros), the Group result decreased in the quarter under review by 2.2 million euros to 54.9 million euros (previous year: 57.1 million euros). This corresponds to earnings per share of 0.42 euros (previous year: 0.44 euros).
The free cash flow* remained around its previous year’s level (74.2 million euros) with 74.1 million euros. This development results on the one hand from the slight increase in cash flow from operating activities to 80.7 million euros (previous year: 78.8 million euros), which can be attributed mainly to improved working capital management. On the other hand, cash flow from investing activities, which primarily comprise investments in internally generated software as well as office equipment, changed from -4.3 million euros to -6.5 million euros compared to the previous year.
Finally, cash flow from financing activities in the quarter under review amounted to -123.1 million euros (previous year: -215.9 million euros), influenced predominantly by the inflow of 99.4 million euros from the taking up of a promissory note loan. This sum was exceeded by the higher dividend payout in the current financial year which amounted to 192.0 million euros (previous year: 185.6 million euros).
“Despite the substantial investments in our customer base and in the quality of these customers, we were able to achieve very good business results in the first half of 2015. As these results were also generally in line with our expectations at the beginning of the year, we hereby confirm our earnings and cash flow forecast for the current financial year and also for 2016”, adds Joachim Preisig, CFO of freenet AG.
According to this, the Executive Board is aiming for EBITDA in the amount of some 370 million euros and free cash flow* of around 280 million euros for the Group in the financial year 2015, as well as further growth in customer ownership, stable postpaid ARPU and stable revenue. At the same time, the results establish the foundation for a constant, shareholder-value-oriented dividend policy that provides for a distribution comprising between 50 and 75 per cent of the free cash flow. Accordingly, freenet AG’s Annual General Meeting in May passed a resolution to pay out dividends of 1.50 euros for each share entitled to dividends, or alternatively 72.1 per cent of the free cash flow from 2014.
The full interim report as of30 June 2015 is available for download at www.freenet-group.de/investor-relations and the conference call will be streamed there by webcast starting at 10:00 CEST on 6 August 2015.
* Free cash flow is defined as cash flow from current operating activities, less investments in property, plant and equipment and intangible assets, plus the cash inflows from disposals of intangible assets and property, plant and equipment.
Investor Relations contact:
freenet Aktiengesellschaft
Investor Relations
Deelbögenkamp 4c
22297 Hamburg
Germany
Tel.: +49 (0)40 5130 6778
Fax: +49 (0)40 5130 6970
Email: [email protected]
2015-08-05 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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| Language: | English |
| Company: | freenet AG |
| Hollerstraße 126 | |
| 24782 Büdelsdorf | |
| Germany | |
| Phone: | +49 (0)40 51306-778 |
| Fax: | +49 (0)40 51306-970 |
| E-mail: | [email protected] |
| Internet: | www.freenet-group.de |
| ISIN: | DE000A0Z2ZZ5, DE000A1KQXU0 |
| WKN: | A0Z2ZZ , A1KQXU |
| Indices: | TecDAX |
| Listed: | Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart |
| End of News | DGAP News-Service |
| - - - |
| 383931 2015-08-05 |
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