Another record growth in waipu.tv customers - 2024 Guidance confirmed

Another record growth in waipu.tv customers - 2024 Guidance confirmed

• Group revenues increase by 3.3% to EUR 1,198 million (prior year: EUR 1,160 million)
• Net new subscriber growth of waipu.tv in Q2 2024 (191.0 thousand) higher than in the entire first half of 2023 (183.6 thousand)
• Number of freenet subscribers (Mobile + TV/Media) increases to 9.808 million (year-end 2023: 9.493 million)
• Long-term agreements concluded with the three mobile network operators
• EBITDA (EUR 252.2 million) and free cash flow (EUR 151.2 million) not above the previous year's level due to temporary growth investments
• Executive Board confirms 2024 guidance

Büdelsdorf, 7 August 2024 - freenet AG [ISIN DE000A0Z2ZZ5] today published its results for the first half of 2024 after close of trading (Xetra). All key financial figures relate exclusively to the continuing operations. The business activities of Gravis were completely discontinued at the end of June 2024. The earnings components of Gravis are reported separately as discontinued operations in the income statement and cash flow statement (including adjustment of the previous year's figures).

Group: EBITDA and free cash flow not above previous year's level, as expected

The results for the first half of 2024 reflect the expectations of the 2024 guidance for the "year of transition" formulated at the beginning of the year. The number of subscribers increased by 315.3 thousand to 9.808 million (year-end 2023: 9.493 million), mainly driven by the record growth of waipu.tv (329.6 thousand net new customers). As a result, the number of freenet subscribers (Mobile + TV/Media) is steadily approaching the 10 million mark and should exceed it by the end of the year. Due to stable ARPUs (average revenue per user) in both operating segments, Group revenues increased by 3.3% to EUR 1,198 million and was therefore higher than the previous year's figure (EUR 1,160 million). As expected, Group EBITDA of EUR 252.2 million did not exceed the previous year's level (EUR 255.2 million) due to increased investments in growth, particularly in raising waipu.tv's brand awareness. The same applies to free cash flow, which totalled to EUR 151.2 million (prior year: EUR 153.6 million).

The Executive Board confirms the guidance for the 2024 financial year. EBITDA of between EUR 495 million and EUR 515 million and free cash flow of between EUR 260 million and EUR 280 million are still expected.

Table 1: Key figures of freenet AG

Non-financial key figure   Unit   30.06.2024 31.12.2023   abs. Change. rel. Change. Subscribers¹   millions   9.808 9.493   0.315 3.3 %                   Financial key figures   Unit   H1/2024 H1/2023
(adjusted)   abs. Change. rel. Change. Revenues   EUR million   1,197.9 1,159.7   38.2 3.3 % EBITDA   EUR million   252.2 255.2   -3.0 -1.2 % Free cash flow   EUR million   151.2 153.6   -2.5 -1.6 %

 

Mobile Communications: EBITDA recovers over the half-year and is above last year

In the past six months, customer growth in a saturated German mobile market for private customers was comparatively subdued. In the Mobile Communications segment, the number of postpaid customers has grown by 25.3 thousand to 7.444 million since the end of 2023 (7.418 million). At 122.0 thousand, the number of users of app-based tariffs (freenet FUNK and FLEX) remained almost unchanged compared to the end of 2023 (121.3 thousand). Moderate growth is still expected for the year as a whole in light of the new launches and restructuring of individual tariff portfolios planned for the second half of 2024.

As expected, postpaid ARPU remained stable year-on-year at EUR 17.8 (prior year: EUR 17.8). As a result, service revenues increased slightly by 1.3% to EUR 852.0 million (prior year: EUR 840.9 million) and accounted for 85% of segment revenues. Overall, revenues in the Mobile Communications segment rose to EUR 1,002.1 million (prior year: EUR 994.6 million).

Table 2: Key figures for the Mobile Communications segment

Non-financial key figures   Unit   30.06.2024   31.12.2023   abs. Change. rel. Change. Mobile Communication subscribers   millions   7.566 7.540   0.026 0.3 % thereof postpaid customers   millions   7.444 7.418   0.025 0.3 % thereof app-based tariffs²   ´000s   122.0 121.3   0.7 0.6 %                   Financial key figures   Unit   H1/2024 H1/2023
(adjusted)   abs. Change. rel. Change. Revenues   EUR million   1,002.1 994.6   7.5 0.8 % thereof service revenues   EUR million   852.0 840.9   11.1 1.3 % EBITDA   EUR million   209.4 205.7   3.7 1.8 %

 

While there was a slight year-on-year decline in EBITDA in the first quarter of 2024 due to inflation-related salary increases, the figure recovered significantly in the second quarter (EUR 107.2 million) and was 4.8% higher than the previous year's figure (EUR 102.2 million). Overall, segment EBITDA in the first half of 2024 totalled to EUR 209.4 million, exceeding the previous year's figure (EUR 205.7 million) by 1.8 %.

TV and Media: waipu.tv with strong customer and revenue growth

The investments in increasing waipu.tv's brand awareness had a visible effect. In the TV and Media segment, there has been a significant increase in TV subscribers since the beginning of the year to over 2 million customers. waipu.tv significantly exceeded all previous quarters with net customer growth of 191.0 thousand in Q2 2024 and grew by a total of 329.6 thousand customers in the first half of the year (prior year: 183.6 thousand). The increase in the waipu.tv customer base to 1.699 million (year-end 2023: 1.369 million) more than compensated for the expected decline in freenet TV customers by 40.3 thousand to 543.5 thousand (year-end 2023: 583.8 thousand). ARPU for both products remained stable compared to the previous year, despite exceptionally intense competition on the German TV market.

Table 3: Key figures for the TV and Media segment

Non-financial key figures   Unit   30.06.2024   31.12.2023   abs. Change. rel. Change. TV subscribers   millions   2.242 1.953   0.289 14.8 % thereof waipu.tv subscribers   millions   1.699 1.369   0.330 24.1 % thereof freenet TV subscribers (RGU)   millions   0.544 0.584   -0.040 -6.9 %                   Financial key figures   Unit   H1/2024     H1/2023   abs. Change. rel. Change. Revenues   EUR million   192.3 165.9   26.4 15.9 % EBITDA   EUR million   52.8 59.2   -6.4 -10.8 %

As a result, segment revenues increased by 15.9% to EUR 192.3 million in the first half of 2024 (prior year: EUR 165.9 million). The majority of this is attributable to waipu.tv, whose revenue grew by more than 50% compared to the previous year. Against the backdrop of increased investment in waipu.tv's brand awareness, segment EBITDA of EUR 52.8 million was below the previous year's figure (EUR 59.2 million), as expected. It is intended to continue these investments in the dynamically growing IPTV business in the second half of 2024 in order to make the best possible use of the customer acquisition potential in this area.

Conference Call

The conference call on the results for the first half of 2024 will take place on Thursday, 8 August 2024 at 10:00 a.m. (CEST). All interested parties can listen to the conference call via webcast (listen-only mode). A recording will be made available afterwards.

Further documents for the publication

fn.de/downloadsir

 

¹ Total of postpaid customers, freenet FUNK, freenet FLEX, waipu.tv subscribers and freenet TV subscribers (RGU)

² freenet FUNK and freenet FLEX customers

Note

In the interests of clear and transparent presentation, alternative performance measures (APMs) are used in the financial statements of freenet AG and in ad hoc disclosures in accordance with Art. 17 MAR in addition to the disclosures defined by the International Financial Reporting Standards (IFRS). Information on the use, definition and calculation of APMs can be found in the 2023 Annual Report.

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