H1/2023 Half-year report 30 June 2023

freenet shares during the period under review

freenet share performance

The freenet share price made a significant gain of 12.5% during the first six months of the year compared to the end of 2022, with this growth increasing to 20.8% when taking the dividend payment into account. The performance of Germany's major leading indices are calculated according to this logic. The two German leading indices MDAX and TecDAX on which freenet is also listed rose by almost 10% compared to the end of 2022, while the SXKGR, which tracks the 32 largest telecommunications companies in Europe, recorded a smaller gain of around 7%. This means freenet shares performed more than twice as well as these benchmarks. freenet also recorded by far the strongest performance compared to the share prices of other mobile network operators active in the German market. freenet is thus proving to be not only a dependable provider of dividends in challenging times but also a company with growth and price potential. The fast-growing TV and Media segment is a particularly key factor here.

freenet recorded the previous year's annual low of EUR 20.63 on the first XETRA trading day of the year. The share price steadily rose until reaching its annual high to date of EUR 26.42 around a week before the 2023 Annual General meeting on 17 May. The share price then fell slightly the day after the Annual General Meeting due to the ex-dividend date, finishing the first half of the year at EUR 22.98. As of 30 June 2023, freenet had a market capitalisation of EUR 2.73 billion (year-end 2022: EUR 2.43 billion).

Figure 1: Performance of freenet shares in the first half of 2023 vs. the market

Back to contents 04 freenet AG Half-year report 2023 01 Key figures

10 Condensed interim consolidated financial statements
24 Further Information

Shareholder structure

As of 30 June 2023, the free float of freenet AG increased to 86.7% compared to the end of 2022 (year-end 2022: 84.8%). This was primarily due to Dimensional Holdings Inc. falling below the threshold of 3% of voting rights, as reported by freenet AG in a voting rights notification on 18 January 2023. As a result, there are three shareholders (year-end 2022: four shareholders) who each account for more than 3% of voting rights in freenet AG as of the reporting date. Black-Rock Inc. accounts for the largest share of voting rights at 6.8%, followed by Norges Bank with 3.4% and J.P. Morgan at 3.0%. All three of the aforementioned shareholders held similar shares of voting rights at the end of 2022.

The current shareholder structure of freenet AG is shown at fn.de/shareholders.

Figure 2: Shareholder structure according to the WpHG as of 30 June 2023

Analysts

The number of sell-side analysts who regularly publish reports and recommendations on freenet rose to 17 as of 30 June 2023 (year-end 2022: 15), reflecting increased interest in freenet shares from the capital markets. Thirteen analysts rate the stock as a Buy, four advise a Hold, and no analysts have issued a Sell recommendation. One analyst raised their recommendation from Sell to Hold compared to the end of 2022. Two analysts initiated coverage by advising a Buy on the stock. The average target price across all the analysts was EUR 28.39, an increase of 10% compared to the end of 2022 (EUR 25.88). This means that, on average, analysts of freenet shares see price potential of around 24% based on the share price as of 30 June 2023. The highest target price was issued by Goldman Sachs at EUR 33.00 (year-end 2022: EUR 30.00), while the lowest came from UBS at EUR 23.00 (year-end 2022: EUR 15.60).

For the latest analyst estimates on freenet shares, visit fn.de/analysts.

Figure 3: Distribution of analysts' recommendations and avg. target price as of 30 June 2023

2023 Annual General Meeting

On 17 May 2023, the Annual General Meeting of freenet AG returned to the Congress Center Hamburg (CCH) for the first time since 2019 due to the end of the pandemic in Germany. Around 42% (previous year: 40%) of share capital was represented at the event, with approximately 350 shareholders in attendance (prior-year period: 733 virtually).

The Annual General Meeting confirmed the dividend proposal of EUR 1.68 per outstanding share, thus enabling freenet to maintain dividend continuity with a 7.0% increase and distribute almost EUR 200 million to its shareholders for the 2022 financial year. The Annual General Meeting also confirmed all other agenda items.

For detailed voting results, visit fn.de/agm.

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Interim Group management report

Customer figures and results of operations

The number of freenet subscribers rose by 242.7 thousand to 9,285.2 thousand in the first six months of the year (yearend 2022: 9,042.4 thousand), driven by strong growth in TV customers. Revenue increased by 2.7% year-on-year to EUR 1,269.9 million (prior-year period: EUR 1,237.0 million).

Table 1: Revenue and earnings figures for freenet AG1

In EUR million	H1/2023	H1/2022	Change
Revenue	1,269.9 1,237.0		33.0	2.7%
Mobile Communications segment	1,104.9	1,092.1	12.7	1.2%
Revenue from services (total)	840.9	824.0	16.9	2.1%
TV and Media segment	165.9	148.7	17.2	11.6%
Gross profit	460.0	436.8	23.3	5.3%
Overhead	-205.5	-195.8	-9.6	4.9%
EBITDA	254.6	240.9	13.6	5.7%
Adjusted EBIT	177.9	164.3	13.6	8.3%
Financial result	-13.4	-4.0	-9.4	n/a
Adjusted EBT	164.5	160.3	4.2	2.6%
Adjusted consoli dated profit	128.4	139.6	-11.2	-8.0%

1 Earnings figures (EBIT, EBT, consolidated profit) adjusted for effects from the amortisation of the mobilcom-debitel brand

At EUR 1,104.9 million, revenue in the Mobile Communications segment was up slightly on the prior-year period (EUR 1,092.1 million). This increase is primarily due to higher revenue from services in the first half of 2023 totalling EUR 840.9 million (prior-year period: EUR 824.0 million). The main reason for this rise was the growth of the postpaid customer base to 7,362.6 thousand (yearend 2022: 7,273.7 thousand) together with stable ARPU of EUR 17.8 (prior-year period: EUR 17.8). By contrast, subdued consumer sentiment in the German retail sector caused a further decline in the low-margin revenue from freenet's pure hardware business. Overall, revenue in the Mobile Communications segment remained stable as expected.

Table 2: Customer development

In '000s	30.6.2023	31.12.2022	Change
Postpaid
customers	7,362.6	7,273.7	88.9	1.2%
App-based tariffs1	127.0	113.1	13.9	12.3%
Mobile
Communications
segment	7,489.5	7,386.8	102.8	1.4%
freenet TV
subscribers (RGU)	642.0	685.6	-43.6	-6.4%
waipu.tv
subscribers	1,153.6	970.0	183.6	18.9%
TV and Media
segment	1,795.6	1,655.6	140.0	8.5%
Number of sub
scribers (total)	9,285.2	9,042.4	242.7	2.7%

1 Comprises subscribers of freenet FUNK and freenet FLEX

The TV and Media segment recorded significant revenue growth of 11.6% to EUR 165.9 million (prior-year period: EUR 148.7 million). This is due in particular to the marked increase of 183.6 thousand in waipu.tv subscribers to 1,153.6 thousand (year-end 2022: 970.0 thousand), with Media Broadcast's performance also having a positive impact. The continuing decline in freenet TV subscribers to 642.0 thousand (year-end 2022: 685.6 thousand) slowed in the second quarter for the first time in years, contributing to the stable revenue performance of freenet TV. Overall, the number of subscribers in the TV business rose to 1,795.6 thousand in the first six months of 2023 (year-end 2022: 1,655.6 thousand).

The increase in service revenues seen in both segments is also reflected in gross profit, which rose by EUR 23.3 million to EUR 460.0 million compared to the same period in 2022 (EUR 436.8 million). The gross profit margin improved slightly by 0.9 percentage points to 36.2% (prior-year period: 35.3%).

Overhead costs as the difference between gross profit and EBITDA at EUR 205.5 million were up EUR 9.6 million compared to the first six months of 2022 (EUR 195.8 million). Other operating expenses increased by EUR 6.3 million to EUR 130.3 million (prior-year period: EUR 124.1 million) as a result of higher customer service costs (outsourcing costs), higher travel expenses and continuing development for employees as well as higher marketing expenses in the TV and Media segment. Conversely, consistently low loss 01 Key figures

10 Condensed interim consolidated financial statements
24 Further Information

allowances recognised on receivables totalling EUR 7.6 million (prior-year period: EUR 11.5 million) in the Mobile Communications segment had a positive impact on other operating expenses. Personnel expenses also increased by EUR 5.0 million to EUR 111.2 million (prior-year period: EUR 106.2 million), primarily as a result of salary adjustments and a one-off inflation compensation bonus for all employees totalling around EUR 2 million.

Due to the increase in profitability, EBITDA was up 5.7% year-on-year to EUR 254.6 million (prior-year period: EUR 240.9 million). The Mobile Communications segment contributed EUR 205.0 million to EBITDA (prior-year period: EUR 195.2 million) in the first half of 2023, the TV and Media segment EUR 59.2 million (prior-year period: EUR 54.3 million) and the Other/Holding segment EUR –9.7 million (prior-year period: EUR –8.6 million). The Group-wide EBITDA margin improved by 0.6 percentage points to 20.0% (prior-year period: 19.5%).

Depreciation, amortisation and impairment losses increased by EUR 2.2 million to EUR 175.1 million compared with the first half of 2022, solely because amortisation of the mobilcom-debitel brand in connection with the realignment of the freenet Group's brand strategy in the prior-year period was only recognised on a pro rata basis (from 5 January 2022). Having already been amortised by EUR 194.7 million in 2022 financial year, the remaining brand value of EUR 98.5 million was amortised in the first half of 2023.

The earnings figures below EBITDA (EBT and consolidated profit) are shown below adjusted for effects resulting from the amortisation of the mobilcom-debitel brand right to improve comparability with the prior-year period.

The financial result fell by EUR 9.4 million compared with the first half of 2022 (EUR –4.0 million) to EUR –13.4 million, mainly due to the dividend of EUR 5.5 million received in the prior-year period from the investment in CECONOMY AG (H1/2023: EUR 0) and the interest income recognised in the prior-year period from present value adjustments on provisions for dismantling obligations as a result of the sharp rise in interest rates.

Due to the effects explained above, adjusted earnings before tax (adjusted EBT) amounted to EUR 164.5 million. This represents an increase of EUR 4.2 million (prior-year period: EUR 160.3 million).

Income tax expenses of EUR 21.8 million (prior-year period: EUR 6.8 million) were reported in the first half of 2023. This includes current tax expenses of EUR 17.1 million (prior-year period: EUR 20.8 million) and deferred tax expenses of EUR 4.7 million (prior-year period: EUR 14.0 million in deferred tax assets). Deferred tax income of EUR 14.3 million (prior-year period: EUR 13.9 million) resulted from the amortisation of the mobilcom-debitel brand in the first half of 2023. When calculating adjusted consolidated profit, this amount is offset against the amortisation of the mobilcom-debitel brand in the amount of EUR 98.5 million. Deferred tax expenses in the first half of 2023 are mainly attributable to amortisation of deferred tax assets on tax loss carryforwards and to temporary differences between the carrying amounts of assets under IFRS and tax law.

In the first half of 2023, this gives adjusted consolidated profit of EUR 128.4 million (prior-year period: EUR 139.6 million).

In EUR million

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05 Interim Group management report
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Back to contents 07 01 Key figures freenet AG Half-year report 2023

Figure 4: Reconciliation of EBITDA to adjusted consolidated profit in the first half of 2023

Net assets and financial position

Total assets/total equity and liabilities amounted to EUR 3,316.3 million as of 30 June 2023, a decrease of EUR 312.4 million compared with 31 December 2022 (EUR 3,628.7 million).

On the assets side, non-current assets fell by EUR 156.4 million to EUR 2,696.7 million (year-end 2022: EUR 2,853.1 million). This trend is partly attributable to a decrease in intangible assets by EUR 112.1 million to EUR 203.9 million (yearend 2022: EUR 316.0 million), mainly as a result of the EUR 98.5 million amortization of the mobilcom-debitel brand. In addition, lease assets fell by EUR 30.2 million to EUR 320.3 million as of 30 June 2023, mainly as a result of depreciation (year-end 2022: EUR 350.5 million).

Current assets fell by EUR 156.0 million to EUR 619.7 million as of the reporting date (year-end 2022: EUR 775.6 million), with liquid assets decreasing by EUR 98.5 million to EUR 79.6 million as of the reporting date (year-end 2022: EUR 178.0 million) being the main reason. This change mainly resulted from the dividend payment of EUR 199.7 million made on 22 May 2023, the scheduled repayment of a 2016 promissory note loan in the amount of EUR 78.5 million, plus the EUR 50.0 million drawdown on the revolving credit facility, and the free cash flow of EUR 131.5 million generated in the first half of 2023. The EUR 47.6 million decrease in trade receivables to EUR 248.7 million (yearend 2022: EUR 296.3 million) was mainly due to payments received for receivables from network operators resulting from annual bonuses for the 2022 billing period.

Table 3: Condensed balance sheet of freenet AG

In EUR million	30.6.2023	31.12.2022	Change
Non-current assets	2,696.7	2,853.1	-156.4	-5.5%
Current assets	619.7	775.6	-156.0	-20.1%
Assets	3,316.3	3,628.7	-312.4	-8.6%
Equity	1,323.1	1,469.2	-146.1	-9.9%
Non-current liabilities	819.6	1,052.9	-233.3	-22.2%
Current liabilities	1,173.6	1,106.6	67.1	6.1%
Equity and liabilities	3,316.3	3,628.7	-312.4	-8.6%
Equity ratio	39.9%	40.5%	-0.6pp	-1.5%

On the equity and liabilities side, equity fell by EUR 146.1 million to EUR 1,323.1 million as of 30 June 2023 (year-end 2022: EUR 1,469.2 million). With consolidated profit coming in at EUR 44.2 million, this change is mainly attributable to the EUR 199.7 million dividend payment. The equity ratio decreased slightly from 40.5% at the end of December 2022 to 39.9% at the end of June 2023, still clearly exceeding the target of at least 25% defined by freenet.

The decrease in borrowings by EUR 28.1 million to EUR 481.5 million (year-end 2022: EUR 509.6 million) is attributable to the repayment of a promissory note loan tranche in the nominal amount of EUR 78.5 million. The short-term drawdown on the revolving credit facility in the amount of EUR 50.0 million had an offsetting effect. Other liabilities and deferrals decreased by EUR 50.9 million to EUR 526.7 million, mainly due to the cash realisation

Back to contents 08 freenet AG Half-year report 2023 01 Key figures

of deferred bonuses and premium rights received from network operators. Furthermore, lease liabilities fell by EUR 36.5 million to EUR 382.1 million as of the reporting date, primarily as a result of scheduled repayments (yearend 2022: EUR 418.6 million). Factoring in the lease receivables, net lease liabilities as of 30 June 2023 amounted to EUR 341.9 million (year-end 2022: EUR 373.8 million).

Leverage based on the net debt shown in table 4 was 1.51 at the end of June 2023, on the level seen at the end of 2022 (1.47) and well below the limit of 3.0 defied by freenet.

In EUR million			30.6.2023 31.12.2022	Change
+	Long-term borrowings	226.9	393.4	-166.5	-42.3%
+	Short-term borrowings	254.6	116.1	138.5	119.2%
+	Net lease liabilities	341.9	373.8	-31.9	-8.5%
–	Liquid assets	79.6	178.0	-98.5	-55.3%
=	Net debt	743.8	705.3	38.5	5.5%
=	Leverage	1.51	1.47	0.04	2.5%
–	Equity investments	79.1	68.1	10.9	16.0%
=	Adjusted net debt	664.7	637.1	27.6	4.3%
=	Adjusted leverage	1.35	1.33	0.02	1.4%

Table 4: Net debt and leverage of freenet AG

Cash flows

Cash flows from operating activities increased by EUR 4.0 million year-on-year to EUR 198.9 million in the first half of 2023 (prior-year period: EUR 194.9 million). In addition to a EUR 13.6 million increase in EBITDA, lower tax payments (H1/2023: EUR 11.4 million; H1/2022: EUR 14.6 million) had a positive impact in this context. The main factors reducing the increase in cash flow from operations were the aggregate year-on-year increase of EUR 6.9 million in net working capital (net current assets) and contract acquisition costs as well as the prior-year effect related to the dividend received from CECONOMY (H1/2023: EUR 0; H1/2022: EUR 5.5 million).

Table 5: Liquidity indicators of freenet AG

In EUR million	H1/2023	H1/2022	Change
Cash flows from operating activities (1)	198.9	194.9	4.0	2.1%
Cash flows from investing activities	-26.9	-37.4	10.6	-28.2%
Net investments (CapEx) (2)	-25.1	-26.7	1.6	-5.8%
Cash flows from financing activities	-320.5	-298.8	-21.8	7.3%
Cash repayments of lease liabilities (3)	-42.4	-43.6	1.3	-2.9%
Net change in cash funds	-148.5	-141.3	-7.2	5.1%
Free cash flow (1)+(2)+(3)	131.5	124.6	6.8	5.5%

Cash flows from investing activities amounted to EUR –26.9 million in the first half of 2023 compared to EUR –37.4 million in the prior-year period. This change is mainly attributable to the payment of EUR 10.0 million made to the former shareholders of The Cloud Group in the prior-year period. Net cash investments (net CapEx) decreased by EUR 1.6 million to EUR 25.1 million compared to the first half of 2022 (EUR 26.7 million). The investments were financed entirely out of the company's retained earnings.

Cash flows from financing activities changed from EUR –298.8 million in the first six months of 2022 to EUR –320.5 million in the first six months of 2023. The higher level of financing activities is mainly due to the repayment of a promissory note loan tranche (H1/2023: EUR 78.5 million; H1/2022: EUR 50.0 million), while the effects of the increased dividend payment (H1/2023: EUR 199.7 million; H1/2022: EUR 186.6 million) and the share buyback programme in 2022 (H1/2023: EUR 0; H1/2022: EUR 14.7 million) almost offset each other.

Free cash flow of EUR 131.5 million was generated in the first half of 2023, representing an increase of EUR 6.8 million compared with the same period in 2022 (EUR 124.6 million). Excluding the CECONOMY dividend received in 2022, free cash flow increased by EUR 12.4 million, reflecting the positive EBITDA trend.

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05 Interim Group management report

Report on opportunities and risks

Since the beginning of the financial year, there have been no significant changes in relation to the opportunities and risks associated with future business development. The opportunities and risks to which freenet is exposed as part of its ongoing business activities are described in detail in the 2022 Annual Report (page 41 et seq.) and continue to apply in principle.

For more information on the current economic environment and developments in the mobile communications and the TV/video market, please refer to the disclosures on customer trends and on net assets, financial position and results of operations.

The level of competition for marketing Apple products is always high and has risen further over the course of the year, resulting in price pressure for the marketing of Gravis devices and accessories. Conducting an ongoing analysis of customer preferences and market trends and constantly improving our own product range and customer experience should help to minimise any negative impact on revenue, EBITDA and free cash flow. Highly competitive markets continue to represent a medium risk for freenet.

freenet's variable-interest borrowings are subject to interest rate risks. The underlying EURIBOR rose more sharply than expected in the first half of 2023. We expect interest rates to remain high and changes in market interest rates in the second half of the year. This now represents a medium risk for freenet, even though its impact on net interest expense and free cash flow is low.

As of 30 June 2023, there were still no risks in the category "high". In addition, no risks have been identified which, either individually or in combination with other risks, could endanger the continued existence of freenet as a going concern. The potential effects on the current financial year continue to be qualified as minor.

Report on expected developments

In the first half of 2023, there have been no significant changes in relation to the risks and opportunities associated with future business performance. Against this backdrop, the Executive Board confirms the guidance for the current financial year as published in the 2022 Annual Report (page 51 et seq.).

Table 6: Change in guidance

Financial performance indicators In EUR million/as indicated	2022 reference value	Guidance for 2023 (23.2.2023)	Confirmed guid ance for 2023 (3.5.2023)	Confirmed guid ance for 2023 (3.8.2023)	Change in guidance	H1/2023
Revenue	2,556.7	Stable performance	Stable performance	Stable performance	➔	1,269.9
EBITDA	478.7	480-500	480-500	480-500	➔	254.6
Free cash flow	249.2	250-270	250-270	250-270	➔	131.5
Postpaid ARPU (in EUR)	17.9	Stable performance	Stable performance	Stable performance	➔	17.8

Non-financial performance indicators In '000s	2022 reference value	Guidance for 2023 (23.2.2023)	Confirmed guid ance for 2023 (3.5.2023)	Confirmed guid ance for 2023 (3.8.2023)	Change in guidance	30.6.2023
Postpaid customers	7,273.7	moderate growth	moderate growth	moderate growth	➔	7,362.6
freenet TV subscribers (RGU)	685.6	marked decrease	marked decrease	marked decrease	➔	642.0
waipu.tv subscribers	970.0	significant growth	significant growth	significant growth	➔	1,153.6

above previous guidance

unchanged from previous guidance

below previous guidance

Büdelsdorf, 3 August 2023

freenet AG The Executive Board

Christoph Vilanek Ingo Arnold Nicole Engenhardt-Gillé Stephan Esch Antonius Fromme Rickmann v. Platen (CEO) (CFO) (CHRO) (CTO) (CCE) (CCO)

02 To our shareholders 05 Interim Group management report 10 Condensed interim consolidated financial statements 24 Further Information

Condensed interim consolidated financial statements

Income statement

In EUR million/as indicated	H1/2023	H1/2022
Revenue	1,269.9	1,237.0
Other operating income	24.2	23.3
Other own work capitalised	11.8	11.2
Cost of materials	-809.9	-800.2
Personnel expenses	-111.2	-106.2
Other operating expenses	-130.3	-124.1
Thereof loss allowances on financial assets and contract assets	-7.8	-11.8
Thereof without loss allowances on financial assets and contract assets	-122.6	-112.3
EBITDA1	254.6	240.9
Depreciation, amortisation and impairment	-175.1	-172.9
EBIT2	79.5	68.0
Profit or loss of equity-accounted investments	-1.6	-0.6
Interest and similar income	2.2	3.8
Interest and similar expenses	-14.2	-11.2
Other financial result	0.2	4.0
Financial result	-13.4	-4.0
Earnings before taxes	66.0	64.1
Income taxes	-21.8	-6.8
Consolidated profit	44.2	57.3
Consolidated profit attributable to shareholders of freenet AG	42.8	56.4
Consolidated profit attributable to non-controlling interests	1.4	0.8
Earnings per share (EPS), basic and diluted (in EUR)	0.36	0.47
Weighted average number of shares outstanding, basic and diluted (in million)	118.9	119.1

¹ EBITDA represents earnings before depreciation, amortisation and impairment, financial result and income taxes.

2 EBIT is defined as earnings before financial result and income taxes.

05 Interim Group management report

Consolidated statement of comprehensive income

In EUR million	H1/2023	H1/2022
Consolidated profit	44.2	57.3
Currency translation differences	-0.1	0.2
Other comprehensive income/to be reclassified to the income statement in future periods	-0.1	0.2
Change in fair value of investments in equity instruments	10.9	-45.7
Recognition of actuarial gains and losses arising from the accounting for pension plans according to IAS 19 (2011)	-2.0	32.1
Income tax recognised in other comprehensive income	0.4	-9.0
Other comprehensive income/not to be reclassified to the income statement in future periods	9.4	-22.6
Other comprehensive income	9.3	-22.4
Consolidated total comprehensive income	53.6	34.8
Consolidated total comprehensive income attributable to shareholders of freenet AG	52.2	34.0
Consolidated total comprehensive income attributable to non-controlling interests	1.4	0.8

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10 Condensed interim consolidated financial statements

Consolidated balance sheet

ASSETS In EUR million	30.6.2023	31.12.2022
Non-current assets
Intangible assets	203.9	316.0
Lease assets	320.3	350.5
Goodwill	1,382.4	1,382.4
Property, plant and equipment	130.4	134.2
Equity-accounted investments	0.3	0.1
Deferred income tax assets	127.9	132.2
Trade accounts receivable	46.2	45.7
Other receivables and other assets	90.6	99.1
Other financial assets	125.2	118.1
Contract acquisition costs	269.5	274.8
	2,696.7	2,853.1
Current assets
Inventories	78.6	91.1
Current income tax assets	0.5	0.4
Trade accounts receivable	248.7	296.3
Other receivables and other assets	156.1	158.6
Other financial assets	56.1	51.2
Liquid assets	79.6	178.0
	619.7	775.6

Total assets	3,316.3	3,628.7

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24 Further Information

EQUITY AND LIABILITIES In EUR million	30.6.2023	31.12.2022
Equity
Share capital	118.9	118.9
Capital reserve	567.5	567.5
Cumulative other comprehensive income	-163.2	-172.5
Consolidated net retained profits	804.0	960.9
Equity attributable to shareholders of freenet AG	1,327.2	1,474.7
Non-controlling interests in equity	-4.1	-5.5
	1,323.1	1,469.2
Non-current liabilities
Lease liabilities	303.4	336.5
Other liabilities and deferrals	99.1	119.8
Other financial liabilities	70.5	86.7
Borrowings	226.9	393.4
Pension provisions	63.1	61.8
Other provisions	56.5	54.7
	819.6	1,052.9
Current liabilities
Lease liabilities	78.7	82.0
Trade accounts payable	302.7	331.2
Other liabilities and deferrals	427.6	457.8
Other financial liabilities	31.0	46.2
Current income tax liabilities	53.5	46.8
Borrowings	254.6	116.1
Other provisions	25.6	26.5
	1,173.6	1,106.6
Total equity and liabilities	3,316.3	3,628.7

10 Condensed interim consolidated financial statements

Statement of changes in equity

1 January to 30 June 2023

					Cumulative other comprehensive income
In EUR million	Share capital	Capital reserve	Treasury shares	Currency translation differences	Change in fair value of invest ments in equity instruments	Revaluation reserve	Consolidated net retained profits	Equity attributable to shareholders of freenet AG	Non controlling interests in equity	Equity
As of 1.1.2023	118.9	567.5	0.0	0.8	-166.9	-6.4	960.9	1,474.7	-5.5	1,469.2
Dividend payment	0.0	0.0	0.0	0.0	0.0	0.0	-199.7	-199.7	0.0	-199.7
Consolidated profit	0.0	0.0	0.0	0.0	0.0	0.0	42.8	42.8	1.4	44.2
Change in fair value of invest ments in equity instruments 1	0.0	0.0	0.0	0.0	10.8	0.0	0.0	10.8	0.0	10.8
Recognition of actuarial gains and losses acc. to IAS 19 (2011)1	0.0	0.0	0.0	0.0	0.0	-1.4	0.0	-1.4	0.0	-1.4
Currency transla tion differences 1	0.0	0.0	0.0	-0.1	0.0	0.0	0.0	-0.1	0.0	-0.1
Subtotal Consolidated total comprehensive income	0.0	0.0	0.0	-0.1	10.8	-1.4	42.8	52.2	1.4	53.6
As of 30.6.2023	118.9	567.5	0.0	0.7	-156.1	-7.8	804.0	1,327.2	-4.1	1,323.1

1 Figures are shown offset against income tax recognised in other comprehensive income.

02 To our shareholders
05 Interim Group management report

1 January to 30 June 2022

		Capital reserve	Treasury shares	Cumulative other comprehensive income
In EUR million	Share capital			Currency translation differences	Change in fair value of invest ments in equity instruments	Revaluation reserve	Consolidated net retained profits	Equity attributable to shareholders of freenet AG	Non controlling interests in equity	Equity
As of 1.1.2022	128.1	737.5	-164.6	0.8	-93.7	-29.5	1,064.5	1,643.1	-4.2	1,638.9
Dividend payment	0.0	0.0	0.0	0.0	0.0	0.0	-186.6	-186.6	0.0	-186.6
Acquisition of further interests in									-3.9
subsidiaries	0.0	0.0	0.0	0.0	0.0	0.0	3.9	3.9		0.0
Adjustment of option liabilities	0.0	0.0	0.0	0.0	0.0	0.0	-0.2	-0.2	0.0	-0.2
Acquisition of treasury shares	0.0	0.0	-14.7	0.0	0.0	0.0	0.0	-14.7	0.0	-14.7
Redemption of treasury shares	-9.2	-170.1	179.2	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Consolidated profit	0.0	0.0	0.0	0.0	0.0	0.0	56.4	56.4	0.8	57.3
Change in fair value of invest ments in equity instruments 1	0.0	0.0	0.0	0.0	-45.0	0.0	0.0	-45.0	0.0	-45.0
Recognition of actuarial gains and losses acc. to IAS 19 (2011) 1	0.0	0.0	0.0	0.0	0.0	22.4	0.0	22.4	0.0	22.4
Currency transla tion differences 1	0.0	0.0	0.0	0.2	0.0	0.0	0.0	0.2	0.0	0.2
Subtotal Consolidated total comprehensive					-45.0
income As of 30.6.2022	0.0 118.9	0.0 567.5	0.0 0.0	0.2 1.0	-138.6	22.4 -7.2	56.4 938.0	34.0 1,479.5	0.8 -7.2	34.8 1,472.3

1 Figures are shown offset against income tax recognised in other comprehensive income.

10 Condensed interim consolidated financial statements 24 Further Information

Consolidated statement of cash flows

In EUR million	H1/2023	H1/2022
Earnings before interest and taxes (EBIT)	79.5	68.0
Adjustments:
Depreciation, amortisation and impairment of non-current assets	175.1	172.9
Dividends received from investments	0.0	5.5
Loss on disposal of non-current assets	0.1	0.1
Increase/decrease in net working capital not attributable to investing or financing activities	-47.2	-35.2
Proceeds from the repayment of financial assets under leases	7.1	7.1
Capitalisation of contract acquisition costs	-139.2	-135.9
Amortisation of contract acquisition costs	144.5	136.0
Taxes paid	-11.4	-14.6
Income from interest and other financial result	1.8	0.0
Interest paid	-11.3	-9.2
Cash flows from operating activities	198.9	194.9
Payments to acquire property, plant and equipment and intangible assets	-26.7	-28.5
Proceeds from disposal of intangible assets and property, plant and equipment	1.6	1.8
Payments to acquire subsidiaries	0.0	-10.0
Proceeds from selling equity-accounted investments	0.3	0.1
Payments into equity of equity-accounted investments	-1.8	-0.8
Payments to acquire other equity investments	-0.2	-0.1
Cash flows from investing activities	-26.9	-37.4
Payments to company owners and minority shareholders	-199.7	-186.6
Payments to acquire treasury shares	0.0	-14.7
Payments to acquire minority interests	0.0	-3.9
Cash repayments of borrowings	-78.5	-50.0
Cash repayments of lease liabilities	-42.4	-43.6
Cash flows from financing activities	-320.5	-298.8
Net change in cash funds	-148.5	–141.3
Cash funds at beginning of period	178.0	286.3
Cash funds at end of period	29.6	145.0

Composition of cash funds

In EUR million	30.6.2023	30.6.2022
Liquid assets	79.6	145.0
Liabilities to banks for short-term cash management	-50.0	0.0
Cash funds	29.6	145.0

Composition of free cash flow

In EUR million	H1/2023	H1/2022
Cash flows from operating activities	198.9	194.9
Payments to acquire property, plant and equipment and intangible assets	-26.7	-28.5
Proceeds from disposal of intangible assets and property, plant and equipment	1.6	1.8
Cash repayments of lease liabilities	-42.4	-43.6
Free cash flow	131.5	124.6

02 To our shareholders
05 Interim Group management report

Selected explanatory notes pursuant to IAS 34

Material accounting policies and consolidation principles

These condensed consolidated interim financial statements have been prepared in accordance with Regulation 1606/2002 of the European Parliament and of the Council, International Financial Reporting Standards (IFRSs) adopted by the European Union and IAS 34. The Group has taken into account all IFRSs that have been adopted by the EU and are mandatory. These interim consolidated financial statements have not been reviewed by an auditor.

The Group has adopted all accounting pronouncements required to be applied as of the reporting date and refers to the notes to the consolidated financial statements for the period ended 31 December 2022 (p. 108). None of these amendments have a material effect on these condensed interim consolidated financial statements of freenet AG.

The material estimates and assumptions have remained unchanged compared with the consolidated financial statements for 2022.

Significant events and transactions

As part of the brand transformation, the mobilcom-debitel brand in use since 2009 has been gradually replaced with the freenet umbrella brand. The mobilcom-debitel brand was shown as an intangible asset with an indefinite useful life in the balance sheet until 5 January 2022 at a carrying amount of EUR 293.2 million. As a result of implementing the new brand strategy, the original carrying amount of the mobilcom-debitel brand has been amortised on a straight-line basis over its expected remaining useful life of 18 months until 30 June 2023. Having already been amortised by EUR 194.7 million in financial year 2022, the remaining brand value of EUR 98.5 million was amortised in the first half of 2023.
As of 30 June 2023, receivables originating from the existing factoring agreement regarding receivables from the mobile phone upgrade option amounting to EUR 5.5 million (year-end 2022: EUR 25.3 million) were sold and derecognised but not yet paid.
A promissory note loan tranche from 2016 in the amount of EUR 78.5 million was repaid in full in the first half of 2023.
The following significant transactions took place between the Group and related parties:

In EUR million	1.1.2023– 30.6.2023	1.1.2022– 30.6.2022
Revenue attributable to billing of services
Joint ventures
Antenne Deutschland GmbH & Co. KG, Garching	4.1	0.1
Associates
Bayern Digital Radio GmbH, München	0.3	0.2
Unconsolidated companies
Hessen Digital Radio GmbH, Frankfurt	0.6	0.5
Total	5.0	0.8

In EUR million	1.1.2023– 30.6.2023	1.1.2022– 30.6.2022
Expenses from the purchase of services
Joint ventures
Antenne Deutschland GmbH & Co KG	0.0	0.1
Associates
ad.audio GmbH	0.2	0.0
Bayern Digital Radio GmbH	0.3	0.3
Total	0.5	0.4

The following significant receivables from and liabilities to related parties existed as at 30 June 2023:

In EUR million	30.6.2023	30.6.2022
Expenses from the purchase of services
Joint ventures
Antenne Deutschland GmbH & Co KG	0.1	0.1
Total	0.1	0.1

All transactions were based on arm's length prices.

Back to contents 18 freenet AG Half-year report 2023 01 Key figures

Other disclosures

Fair value disclosures:

The following overview entitled "Fair value hierarchy as of 30 June 2023" shows the major parameters on which the measurement of financial instruments measured at fair value, and of the financial instruments measured at amortised cost whose fair value could not be determined, is based. For the definition of the individual levels in accordance with IFRS 13, please refer to the notes to the consolidated financial statements of freenet AG for the period ended 31 December 2022.

Financial instruments by category as of 30 June 2023

In EUR million	IFRS 9 measurement category	Carrying amount		Measurement		Fair value of financial instruments
		30.6.2023	Amortised cost	Fair value through profit or loss	Fair value through other comprehensive income	30.6.2023
Assets
Cash/liquid assets	AC	79.6	79.6			—1
Trade accounts receivable		294.9
At amortised cost	AC	173.2	173.2			—1
Fair value through profit or loss	FVTPL	121.7		121.7		—1
Other financial assets		181.3
Lease receivables	n/a	40.2
Non-derivative financial assets
At amortised cost	AC	21.4	21.4			—1
Other financial assets
At amortised cost	AC	8.6	8.6			—1
Fair value through profit or loss	FVTPL	29.5		29.5
Other equity instruments
Fair value through profit or loss	FVTPL	2.0		2.0		—1
Fair value through other compre hensive income	FVOCI	79.6			79.6	79.6

1 No fair value has been determined for the items; however, the carrying amount is a reasonable approximation of the fair value. This means that the aggregate fair value for the measurement categories AC and FVTPL are considerably lower than the corresponding aggregate carrying amounts in the balance sheet.

In EUR million	IFRS 9 measurement category	Carrying amount		Measurement		Fair value of financial instruments
		30.6.2023	Amortised cost	Fair value through profit or loss	Fair value through other comprehensive income	30.6.2023
Equity and liabilities
Lease liabilities	n/a	382.1
Trade accounts payable	AC	302.7	302.7
Borrowings		481.5	481.5
Borrowings from promissory notes	AC	428.2	428.2			416.0
Other borrowings	AC	53.3	53.3
Other financial liabilities		101.5
At amortised cost	AC	101.3	101.3
Fair value through profit or loss	FVTPL	0.2		0.2		—1
thereof aggregated by IFRS 9 measurement category
Assets
At amortised cost	AC	282.8	282.8			—1
Fair value through profit or loss	FVTPL	153.2		153.2		—1
Fair value through other comprehensive income	FVOCI	79.6			79.6	79.6
Equity and liabilities
At amortised cost	AC	885.5	885.5			416.0 1
Fair value through profit or loss	FVTPL	0.2		0.2		—1

Back to contents 20 freenet AG Half-year report 2023 01 Key figures

Fair value hierarchy as of 30 June 2023

In EUR million	Total	Level 1	Level 2	Level 3
Assets
Trade accounts receivable, at fair value through profit or loss	121.7	0.0	0.0	121.7
Other financial assets, at fair value through profit or loss	29.5	0.0	0.0	29.5
Other equity instruments, at fair value through profit or loss	2.0	0.0	0.0	2.0
Other equity instruments, at fair value through other comprehensive income	79.6	79.6	0.0	0.0
Equity and liabilities
Borrowings from promissory notes	416.0	0.0	0.0	416.0
Other financial liabilities, at fair value through profit or loss	0.2	0.0	0.0	0.2

There have been no changes regarding levels.

Pension provisions were remeasured based on updated interest rates (freenet, debitel programmes: 4.0%, Media Broadcast Group programmes: 4.0%), with premises remaining unchanged otherwise. The resulting actuarial loss of EUR 2.0 million and the offsetting increase in deferred tax assets by EUR 0.4 million were recognised in the statement of comprehensive income. There was a net negative result of EUR 1.5 million from items not to be reclassified to the income statement.
As in the 2022 consolidated financial statements, the calculation of current and deferred income taxes was based on an average tax rate of 30.3% (prior-year period: 30.3%).
No events of material significance occurred after 30 June 2023.
As its main decision-making body, the Executive Board organises and manages the company on the basis of the differences between the individual products and services offered by the company. As the Group performs its business operations almost entirely in Germany, its business is not organised or managed based on geographical regions. The Group was active in the following operating segments in the first six months of 2023:
Mobile Communications:
- Activities as a mobile communications service provider – marketing of mobile communications services (voice and data services) from the mobile communications network operators Deutsche Telekom, Vodafone and Telefónica Deutschland in Germany
- Based on the network operator agreements entered into with these network operators, a range of the company's own network-independent services and tariffs as well as a range of network operator tariffs
- Sale/distribution of mobile communications devices as well as additional services for mobile data communications and digital lifestyle
- "freenet Internet": offering the company's own app-based Internet product
- Rendering of sales services
- Planning, construction, installation and maintenance of WiFi networks
TV and Media:
- Rendering of services, mainly to end users, in the field of IPTV
- Planning, project management, installation, operation, service and marketing of broadcast-related solutions for business clients in the radio and media sectors
- Rendering of services to end users in the field of DVB-T2
Other/Holding:
- Rendering of portal services such as e-commerce/ advertising services (these essentially comprise the offer of online shopping and the marketing of advertising space on websites), of payment services for end customers as well as various digital products and entertainment formats for downloading and displaying and use on mobile devices
02 To our shareholders
05 Interim Group management report
Development of communication solutions, IT solutions and other services for corporate customers
Range of narrowband voice services (call-by-call, preselection) and data services
Rendering of sales services

The "Other/Holding" segment includes other business activities in addition to operating activities. This mainly comprises the holding activities of freenet AG (with the rendering of services within the Group in central areas, such as legal, human resources and finance) as well as areas which cannot be clearly allocated to operating segments. The segment revenue of EUR 19.8 million (prior-year period: EUR 18.4 million) reported for the "Other/Holding" segment in the first six months of 2023 is attributable to operating activities (EUR 20.0 million; prior-year period: EUR 18.7 million) and other business activities (EUR –0.2 million; prior-year period: EUR –0.3 million). The gross profit of EUR 11.7 million (prior-year period: EUR 13.2 million) shown for the "Other/Holding" segment in the first six months of 2023 is attributable to operating activities (EUR 12.0 million; prior-year period: EUR 13.6 million) and other business activities (EUR –0.3 million; prior-year period: EUR –0.4 million). The EBITDA of EUR –9.7 million (previous year: EUR –8.6 million) shown for the "Other/ Holding" segment for the first six months of 2023 was generated by operating activities to the extent of EUR 4.4 million (previous year: EUR 5.5 million) and by other business activities in the amount of EUR –14.1 million (previous year: EUR –14.1 million).

Back to contents 22 freenet AG Half-year report 2023 01 Key figures

Segment report

1 January to 30 June 2023

	Mobile			Elimination of intersegment revenue and
In EUR million	Communications	TV and Media	Other/Holding	costs	Total
Third-party revenue	1,098.4	160.0	11.5	0.0	1,269.9
Intersegment revenue	6.5	5.8	8.2	-20.6	0.0
Total revenue	1,104.9	165.9	19.8	-20.6	1,269.9
Cost of materials, third party	-748.7	-53.5	-7.7	0.0	-809.9
Intersegment cost of materials	-11.4	-5.1	-0.3	16.8	0.0
Total cost of materials	-760.1	-58.6	-8.0	16.8	-809.9
Segment gross profit	344.8	107.3	11.7	-3.8	460.0
Other operating income	24.1	0.3	2.0	-2.2	24.2
Other own work capitalised	7.7	3.2	0.9	0.0	11.8
Personnel expenses	-66.7	-28.0	-16.5	0.0	-111.2
Other operating expenses	-104.9	-23.6	-7.8	6.0	-130.3
Thereof loss allowances on financial assets and contract assets	-7.6	-0.3	0.1	0.0	-7.8
Thereof without loss allowances on financial assets and contract assets	-97.3	-23.3	-8.0	6.0	-122.6
Total overhead1	-139.8	-48.1	-21.4	3.8	-205.5
Thereof intersegment allocation	-4.2	-0.6	1.0	3.8
Segment EBITDA	205.0	59.2	-9.7	0.0	254.6
Depreciation, amortisation and impairment					-175.1
EBIT					79.5
Financial result					-13.4
Income taxes					-21.8
Consolidated profit					44.2
Consolidated profit attributable to shareholders of freenet AG					42.8
Consolidated profit attributable to non-controlling interests					1.4
Net cash investments	11.6	11.0	2.5	0.0	25.1

1 The overhead costs are defined as the difference between gross profit and EBITDA and include the items operating income, other own work capitalised, personnel expenses and other operating expenses.

02 To our shareholders
05 Interim Group management report

1 January to 30 June 2022

In EUR million	Mobile Communications	TV and Media	Other/Holding	Elimination of intersegment revenue and costs	Total
Third-party revenue	1,083.4	143.2	10.4	0.0	1,237.0
Intersegment revenue	8.7	5.5	8.0	-22.3	0.0
Total revenue	1,092.1	148.7	18.4	-22.3	1,237.0
Cost of materials, third party	-749.5	-45.9	-4.8	0.0	-800.2
Intersegment cost of materials	-10.6	-7.6	-0.4	18.5	0.0
Total cost of materials	-760.1	-53.5	-5.2	18.5	-800.2
Segment gross profit	332.1	95.2	13.2	-3.7	436.8
Other operating income	23.5	0.2	0.8	-1.1	23.3
Other own work capitalised	7.4	3.1	0.7	0.0	11.2
Personnel expenses	-64.3	-26.7	-15.2	0.0	-106.2
Other operating expenses	-103.4	-17.5	-8.0	4.9	-124.1
Thereof loss allowances on financial assets and contract assets	-11.5	-0.3	-0.0	0.0	-11.8
Thereof without loss allowances on financial assets and contract assets	-91.9	-17.3	-8.0	4.9	-112.3
Total overhead1	-136.9	-40.9	-21.8	3.7	-195.8
Thereof intersegment allocation	-3.2	-0.5	-0.0	3.7
Segment EBITDA	195.2	54.3	-8.6	0.0	240.9
Depreciation, amortisation and impairment					-172.9
EBIT					68.0
Financial result					-4.0
Income taxes					-6.8
Consolidated profit					57.3
Consolidated profit attributable to shareholders of freenet AG					56.4
Consolidated profit attributable to non-con trolling interests					0.8
Net cash investments	12.7	7.9	6.0	0.0	26.7

1 The overhead costs are defined as the difference between gross profit and EBITDA and include the items operating income, other own work capitalised, personnel expenses and other operating expenses.

01 Key figures

¹⁰ Condensed interim consolidated financial statements 24 ²⁴ Further Information

Further information

Responsibility statement

To the best of our knowledge and belief, and in accordance with the applicable reporting principles and in compliance with generally accepted accounting principles, the condensed interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the Group interim management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the material opportunities and risks associated with the expected development of the Group.

Büdelsdorf, 3 August 2023

freenet AG The Executive Board

Back to contents

freenet AG Half-year report 2023

Christoph Vilanek Ingo Arnold Nicole Engenhardt-Gillé Stephan Esch Antonius Fromme Rickmann v. Platen (CEO) (CFO) (CHRO) (CTO) (CCE) (CCO)

02 To our shareholders
05 Interim Group management report

Quarterly overview

Income statement

In EUR million	Q2/2022	Q3/2022	Q4/2022	Q1/2023	Q2/2023
Revenue	620.1	652.1	667.7	637.8	632.1
Other operating income	12.6	11.0	15.2	11.3	12.9
Other own work capitalised	5.9	6.5	7.3	6.1	5.7
Cost of materials	-401.5	-431.4	-438.4	-409.1	-400.9
Personnel expenses	-53.2	-54.9	-68.5	-54.5	-56.7
Other operating expenses	-61.0	-62.0	-66.9	-63.6	-66.7
Thereof loss allowances on financial assets and contract assets	-5.5	-4.3	-5.1	-2.1	-5.6
Thereof without loss allowances on financial assets and contract assets	-55.5	-57.7	-61.8	-61.5	-61.1
EBITDA	122.9	121.4	116.4	128.1	126.5
Depreciation, amortisation and impairment	-88.0	-87.8	-88.6	-88.0	-87.1
EBIT	34.9	33.6	27.8	40.1	39.4
Profit or loss of equity-accounted investments	-0.7	-0.5	-0.8	-0.4	-1.2
Interest and similar income	2.8	1.1	1.6	1.1	1.1
Interest and similar expenses	-5.7	-6.1	-6.3	-6.7	-7.5
Other financial result	-0.8	-0.3	0.0	0.0	0.2
Financial result	-4.4	-5.9	-5.6	-6.0	-7.4
Earnings before taxes	30.5	27.7	22.2	34.1	32.0
Income taxes	4.2	-3.8	-21.6	-15.9	-6.0
Consolidated profit	34.7	23.9	0.7	18.2	26.0
Consolidated profit attributable to shareholders of freenet AG	34.1	23.4	-0.6	18.0	24.9
Consolidated profit attributable to non-controlling interests	0.6	0.5	1.2	0.2	1.2

Free cash flow

In EUR million	Q2/2022	Q3/2022	Q4/2022	Q1/2023	Q2/2023
Cash flow from operating activities	97.6	97.3	103.5	99.6	99.4
Payments to acquire property, plant and equipment and intangible assets	-15.1	-14.1	-20.4	-14.9	-11.8
Proceeds from disposal of intangible assets and property, plant and equipment	1.2	1.0	0.1	0.5	1.1
Cash repayments of lease liabilities	-21.9	-21.6	-21.2	-20.6	-21.8
Free cash flow	61.9	62.6	62.0	64.6	66.8

01 Key figures

10 Condensed interim consolidated financial statements