09.08.2011 - 21:00 Uhr

freenet AG raises its full-year guidance for 2011 after good first half

• Recurring Group EBITDA expected to reach 350 m€ (+ 25 m€)
• Free cash flow* expected to exceed 220 m€ (+ 20 m€)
• Contract customer losses to remain below 450,000 (before: 500,000)

freenet AG regards the present figures for the first half of 2011 as confirmation for its focus on profitable customer relationships and is consequently raising its guidance for the full financial year 2011: “Based on our strong performance and good results of the first six months of the current year, we now expect recurring Group EBITDA – adjusted for one-off items – to reach 350 million euros and free cash flow to exceed 220 million euros for 2011,” says Joachim Preisig, freenet AG’s Chief Financial Officer, commenting on the half-year results. The major drivers behind this significantly improved outlook are the company’s strengthening of its own distribution channels, improved conditions from suppliers, successful new tariffs and a very strong new-customer business in July.

freenet AG generated recurring Group EBITDA (earnings before interest, taxes and depreciation/ amortisation) of 173.9 million euros for the first half of 2011; 89.7 million euros of this in the successful second quarter alone. The Group’s free cash flow also showed a positive development during this period and amounts to 124.2 million euros.

Due to a year-on-year reduction in its customer base, Group revenue fell as expected in the first half of 2011, to 1,546.3 million euros (-5.6 percent year-on-year). The Group result from continued operations grew by 0.8 million euros to a high level of 46.7 million euros for the first half of 2011; the Group result including discontinued operations amounted to 46.9 million euros (first half of 2010: 44.4 million euros).

The number of mobile communications customers developed in line with the current year planning and stood at 15.20 million at the end of the first half of 2011. The customer base in the important postpaid contract customer segment decreased by 97,000 compared with the prior quarter as a result of the continued qualitative alignment, thus declining at a markedly slower pace than was the case in previous quarters (decline in Q1/2011: 174,000). At the end of Q2/2011, there were 7.32 million prepaid customers. Meanwhile, at 2.05 million, the number of no-frills customers is on par with that of the previous quarter; compared with Q2/2010, the freenet Group has grown by approx. 200,000 customers or nearly 11 percent in this segment.

After a very good new-customer business in July, freenet AG now expects to lose less than 450,000 contract customers (postpaid customers) in the full financial year 2011. Previously, the company expected a loss of 500,000 customers in this segment.

Compared with the previous quarter, the monthly average revenue per user (ARPU) in the second quarter of 2011 increased across all business segments. Cumulative postpaid ARPU for the first half year stabilised at 23.5 euros, exactly the same as in the comparable period last year. Cumulative ARPU for the first half of 2011 was 3.1 euros in the prepaid segment and 4.6 euros in the no-frills segment.

“The half-year figures prove that our strategy, which emphasises creating and preserving value and systematically expanding the product range, our service expertise and distribution power, is successful – even in an internationally tense economy,” concludes freenet AG Chief Executive Officer Christoph Vilanek. “Thanks to good planning and the excellent efforts of everyone involved, our migration to a single system platform, which is of key importance to us, has gone very well. We are setting accents in the market with attractive flat-rate offers, show year-on-year growth of nearly 11 percent in the no-frills segment, and are seizing opportunities in the field of mobile internet, which contributes 14.4 percent of revenue. All good reason for confidence,” adds Vilanek.

At the end of June 2011, the freenet Group had 4,069 employees.

freenet AG’s complete interim report on the first half 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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