Earnings Release • Aug 6, 2013
Earnings Release
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Corporate | 6 August 2013 18:00
freenet AG closes second quarter with solid business performance and renews exclusivity agreement with Media-Saturn Deutschland GmbH
freenet AG / Key word(s): Interim Report/Half Year Results
06.08.2013 / 18:00
– Group revenue rises by about 7 percent to 809.6 million euros (previous year: 755.9 million euros), First-half revenues increase to 1,584.9 million euros (H1 2012: 1,513.1 million euros)
– Customer ownership increases by around 4 percent to 8.56 million customers (previous year: 8.23 million customers)
– Group result increases by around 33 percent to 55.4 million euros (previous year: 41.6 million euros), first-half result rises to 115.6 million euros (H1 2012: 82.2 million euros)
– Early extension of sales partnership secures exclusivity for mobilcom-debitel in German Media Markt and Saturn stores with offers in the T-Mobile, Vodafone and E-Plus networks
Büdelsdorf, 6 August 2013 – freenet AG today published its interim report for the second quarter of 2013, renewed the sales cooperation agreement with Media-Saturn Deutschland GmbH, and confirmed its outlook for the financial years 2013 and 2014 years.
In the second quarter, the company generated Group revenues of 809.6 million euros (previous year: 755.9 million euros). For the first time, GRAVIS, Germany’s leading digital lifestyle provider for Apple products, and MOTION TM, a leading online retailer in the mobile communications and telecommunications sector, fully contributed to the quarterly revenue figures. With a revenue contribution of 801.6 million euros (previous year: 740.5 million euros), Mobile Communications remained the dominant business segment in the Group. Thus the first half of the year saw an increase in Group revenue to 1,584.9 million euros (H1 2012: 1,513.1 million euros).
The ‘Customer ownership’ customer base, an essential performance indicator for high-value customer relationships in the freenet Group’s Mobile Communications business was increased by 0.33 million year-on-year to 8.56 million (previous year: 8.23 million). Of this increase, 0.208 million are highly price-conscious no-frills customers, who are largely reached with discount brands through online sales channels. The particularly valuable postpaid inventory also showed a positive development year-on-year, growing by 0.122 million. A key growth driver, apart from an augmented range of smartphone tariffs, was a further improvement in the customer consultation provided in the 550 mobilcom-debitel and GRAVIS-branded shops.
The average monthly revenue per postpaid user (ARPU) fell to 22.5 euros in the quarter under review (previous year: 23.5 euros), indicating that freenet was able to partially avoid the declining market trend seen among its direct competitors. At 3.6 euros, the no-frills ARPU was also down year-on-year (previous year: 4.0 euros).
Gross profit for the first half of 2013 in the core segment of Mobile Communications rose to 339.3 million euros (previous year: 320.9 million euros), mainly due to the continued dynamic proliferation of high-end smartphones – with the corresponding tariffs – and to the further expansion of the digital lifestyle and accessories product range.
‘From our proven position as resellers, we are increasingly serving the growth segment digital lifestyle with attractive products and services. The first half shows that this strategy is paying off,’ says freenet AG CEO Christoph Vilanek. ‘We have every reason to be proud of our good results in this dynamic competitive environment.’
All in all, first-half Group EBITDA (Earnings before interest, taxes, depreciation and amortization) remained stable at 170.4 million euros (previous year: 170.7 million euros).
Depreciation and amortization in the second quarter were down by 23.5 million euros to 13.5 million euros (previous year: 37.0 million euros), which is due almost exclusively to lower amortization of intangible assets related to the purchase price allocation from the debitel acquisition in financial year 2008. The change in income taxes, from tax income of 2.9 million euros in Q2/2012 to tax expenditure of 6.1 million euros during the quarter under review, is also related to this.
Thus, Group result for the quarter under review increased by around 33 percent to 55.4 million euros (previous year: 41.6 million euros), which is equivalent to earnings per share of 0.43 euro (previous year: 0.32 euros). Group result for the first half came to 115.6 million euros, an increase of approximately 41 percent over the previous year’s figure of 82.2 million euros.
Free cash flow* for the quarter amounted to 70.4 million euros (previous year: 51.6 million euros). This increase is mainly due to the late receipt of the payment from a network operator due in Q1/2013.
‘Based on the good results of the second quarter, we again confirm our forecast for financial years 2013 and 2014 as well as the sustainable dividend policy in line with our financial strategy,’ says freenet AG CFO Joachim Preisig.
Furthermore, freenet AG today renewed the existing cooperation agreement governing the exclusive sales partnership between its wholly owned subsidiary mobilcom-debitel GmbH and Media-Saturn Deutschland GmbH by a minimum of another three years.
Under the established exclusive cooperation, mobilcom-debitel GmbH sells own tariffs and the original tariffs of the mobile network operators T-Mobile, Vodafone and E-Plus as well as its own mobile communications products and services in all Media Markt and Saturn stores across Germany. The products of Telefonica Germany AG (formerly Telefonica O₂ Germany) continue to remain exempt from this cooperation.
Through the contract extension, freenet AG strengthens its own stationary retail channel, strategically complementing its own retail business and digital lifestyle.
The full interim report on the second quarter of 2013 is available for download from the freenet AG website: www.freenet-group.de/investor/index, and the conference call will be webcast on the site on 7 August, from 14:00 CEST
* Free cash flow is defined as cash flow from operating activities, minus investments in property, plant and equipment and intangible assets, plus proceeds from the disposal of property, plant and equipment and intangible assets.
End of Corporate News
06.08.2013 Dissemination of a Corporate News, transmitted by DGAP – a company of EQS Group AG.
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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: | Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover, München, Stuttgart |
| End of News | DGAP News-Service |
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| 224493 06.08.2013 |
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