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10.11.2011 - 07:30 Uhr

freenet AG improves outlook for full year 2011 after excellent third quarter

• Customer stabilisation almost achieved
• Customer quality improved further
• All relevant key financials better than planned

freenet AG continued its successful course in the first nine months of 2011. During this period, freenet AG achieved recurring Group EBITDA (earnings before interest, taxes and depreciation/amortisation) – adjusted for one-off items – of 263.9 million euros, of which 90.1 million euros in the third quarter of 2011 alone. The Executive Board of freenet AG now expects recurring Group EBITDA of 355 million euros for the full year 2011 (previously: 350 million euros). Free cash flow* improved during the year to 184.3 million euros, a significant year-on-year increase of 35.8 million euros or 24.1 percent. In the third quarter alone free cash flow amounted to 60.1 million euros. “Given these positive key financials, we today raise our forecast, which we have already increased in summer, from over 220 million euros to over 230 million euros in free cash flow, once again demonstrating our company’s strong profitability,” says Joachim Preisig, Chief Financial Officer of freenet AG, commenting on the nine-month figures.

In the first nine months of 2011 freenet generated Group revenue of 2,375.3 million euros (-4.3 percent year-on-year). In the period from July to September 2011 freenet AG's Group result increased by 4.8 million euros or 6.6 percent to 77.8 million euros (Q1-Q3/2010: 73.0 million euros).

“About two years ago we began to focus on valuable customers, and very deliberately took a qualitative sales approach. Our strategy is now bearing fruit. We now expect to lose fewer than 420,000 contract customers for the full financial year. Taking into account the positive trend in the no-frills customer segment, we will see a total loss of fewer than 100,000 customers and therefore will achieve stabilisation of the customer base more quickly than expected,” says Christoph Vilanek, Chief Executive Officer of freenet AG. At the end of Q3/2011 the freenet Group served 15.16 million mobile communications customers. On the same date the customer base in the lucrative contract customer business totalled 5.80 million. The decrease of 45,000 customers in this segment was the lowest figure in nearly three years, and is a significant drop in the attrition rate compared to previous quarters (attrition in Q1/2011: 174,000 and in Q2/2011: 97,000). In the no-frills segment, the freenet Group registered an increase in the number of subscribers by around 170,000 (+8.3%) since the previous quarter, to 2.22 million in Q3/2011. “The total number of over a million gross new contracts in the third quarter is another testament to our distribution power and products,” adds Vilanek. “Of course our exclusive cooperation with GRAVIS is also an important element in achieving future goals,” says Vilanek, referring to the new cooperation signed in October 2011 with Germany's largest independent retail chain for Apple products.

“We are operating very profitably in the mobile communications segment. In the year to date our monthly average revenue per user has increased steadily – especially in the valuable contract customer business – and the share of mobile data services has grown to over 15 percent,” adds Vilanek. In the third quarter of 2011, freenet increased the monthly average revenue per user (ARPU) over the previous quarter 2011 in all segments. ARPU in the contract customer segment rose from 23.3 euros in the first quarter of 2011 to 23.7 euros in the second quarter and to 24.6 euros in Q3/2011. “The development of our customer base and average monthly revenue per user mean that we expect revenues of over 3.1 billion euros for the full year 2011 as of today,” Joachim Preisig concludes his statements regarding freenet AG’s quarterly figures.

At the end of September 2011, the freenet Group had 4,052 employees.

freenet AG’s complete interim report on the third quarter of 2011 will be available for download at www.freenet-group.de/investor soon.

* 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.


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