Freenet Ag · XETR:FNTN
Freenet — H1/Q2 2019 Earnings Presentation
24 slides from Freenet's earnings presentation, Aug 9, 2019
Slide 1: Management Presentation Results H1/Q2 2019
Management Presentation Results H1/Q2 2019 Christoph Vilanek, CEO and Ingo Arnold, CFO 09 August 2019 | Analyst and Investor Conference Call 1 | Management Presentation H1/Q2 2019 | 09.08.2019
Slide 2: Cautionary statement
Cautionary statement This presentation contains forward-looking statements which involve risks and uncertainties. The actual performance, results and timing of the business of freenet AG could differ materially from the expectations regarding performance, results and timing expressed in this present
Slide 3: H1/2019 results corresponding to full-year guidance 2019
H1/2019 results corresponding to full-year guidance 2019 Revenue in EUR million EBITDA in EUR million 1,389 215.5 Free cash flow in EUR million Subscriber base1 in thousand 126.7 8.224 1 Postpaid customers, freenet FUNK customers, freenet TV RGUs and waipu.tv subscribers 3 | Management Presentation
Slide 4: Group subscriber base growing by +55,730 in Q2
Group subscriber base growing by +55,730 in Q2 Group subscriber base [in ‘000s] +45.6 8,224 8,168 +17.3 +20.4 -27.5 1 1 ARPU comparable to postpaid contracts, but not counted within postpaid base 4 | Management Presentation H1/Q2 2019 | 09.08.2019
Slide 5: Active management of mobile market challenges
Active management of mobile market challenges Market challenges freenet countermeasures Broadening sales cooperations, Fully saturated mobile market bundling DLS options etc. with commoditized products Stability: LTE portfolio completed on all networks New regulation put into force ▪ Customer base (
Slide 6: TV & Media – waipu.tv with remaining strong momentum
TV & Media – waipu.tv with remaining strong momentum Registered customers H1/2019 vs. H1/2018 comparison: [in '000] ▪ waipu.tv added 923,900 registered customers (+112.1%). 1,748 1,515 ▪ Contained subscribers almost doubled to 331,900 in the last twelve 1,264 months (+157,600 or 90.4%). 1,007 ▪ free
Slide 7: Continuous innovation of waipu.tv's best-in-class product features
Continuous innovation of waipu.tv’s best-in-class product features New features launched in Q2/19 Upcoming feature and content extensions H2/19 ✓ Successful launch of O2 sales partnership (O2 TV powered by waipu.tv) Addressable tv programmatic booking • Voice enabled user interface ✓ waipu.tv now av
Slide 8: Stable Group performance as expected
Stable Group performance as expected Revenue H1/2019 vs. H1/2018 comparison: [in mEUR] ▪ Revenue slightly up 2.8 mEUR to 1,389.0 mEUR. ▪ Gross profit and EBITDA impacted by effects from inevitable regulatory 794.2 changes: IFRS 16, international calls/ roaming and analogue radio 696.6 717.0 689.9 69
Slide 9: Mobile – Regulatory effect forming headwind for financial KPIs
Mobile – Regulatory effect forming headwind for financial KPIs Revenue H1/2019 vs. H1/2018 comparison: [in mEUR] ▪ Revenue up 17.8 mEUR to 1,256.0 mEUR due to low-margin hardware sales; high-margin service revenue +2.0 mEUR (772.5 mEUR vs. 770.4 mEUR); details see Appendix. 714.3 ▪ Gross profit adju
Slide 10: Mobile – Net adds impacted by Q1, but trend reversing
Mobile – Net adds impacted by Q1, but trend reversing Postpaid Customers H1/2019 vs. H1/2018 comparison: [in '000] ▪ Postpaid customer -62,000 net adds reaching H1/18 customer level. Negative momentum of Q1/19 slowed down. freenet FUNK customers 6,869 6,896 6,862 6,834 6,828 +20,400 added in Q2/19 n
Slide 11: TV & Media – Analogue radio divestment continues impact
TV & Media – Analogue radio divestment continues impact Revenue H1/2019 vs. H1/2018 comparison: [in mEUR] ▪ Revenue down 24.8 mEUR to 123.9 mEUR mainly based on missing 75.6 analogue radio revenues. 74.7 74.7 77.3 77.3 ▪ Gross profit adjusted by IFRS 16 and without inter-segment allocations 71.5 71.
Slide 12: TV & Media – Without analogue radio effects picture stable in Q2
TV & Media – Without analogue radio effects picture stable in Q2 Gross profit H1/18 vs. H1/19 ▪ Gross profit without IFRS 16 [in mEUR] and inter-segment allocation S -13.8 mEUR decreased by 11.3 mEUR to 13.7 8.1 74.6 mEUR mainly induced by: -4.2 2.5 85.9 (1) MB B2C: Higher content -9.6 -2.9 79.8 72.
Slide 13: 2019 EBITDA impacted by regulation with persisting effect in mobile
2019 EBITDA impacted by regulation with persisting effect in mobile ▪ Missing operational results in Q1/2019 ▪ Follow-up costs from divestment ▪ EBITDA effects (yoy) in 2019 w/o book profits Analogue radio sale (mEUR): (TV & Media) Q1 Q2 Q3e Q4e FYe -3 -2 +/-0 +/-0 -5 ▪ EU international calls/ roami
Slide 14: Free cash flow fully in guided range
Free cash flow fully in guided range Free cash flow (FCF) H1/19 Guided quarterly breakdown 2019 [in mEUR] [in mEUR] H1 110-130 H2 120-140 41.5 -50.8 75-85 -3.5 -33.6 0.8 -15.6 215.5 70-80 -27.5 126.7 50-60 35-45 EBITDA Chang e in Tax pa yments Net capex Sun rise Lea sin g Inte rest Other FCF H1/19 n
Slide 15: Main financial KPIs: Equity ratio, net debt & leverage
Main financial KPIs: Equity ratio, net debt & leverage Total assets & Equity ratio Net debt & Leverage* Adj. Net debt & Leverage* [in mEUR] [in mEUR] [in mEUR] 25.3% 4.8x 29.5% 4.0x 2.8x 4,911.6 2.2x 4,495.8 1,699.6 2,175.1 1,272.1 928.7 30.6.18 30.6.19 30.6.18 30.6.19 30.6.18 30.6.19 Higher total a
Slide 16: Results H1/Q2 2019 – Q&A session
Results H1/Q2 2019 – Q&A session For any follow-up questions reach out to: Investor Relations +49 (0) 40 513 06 778 [email protected] www.freenet-group.de 16 | Management Presentation H1/Q2 2019 | 09.08.2019
Slide 17: Appendix
Appendix 17 | Management Presentation H1/Q2 2019 | 09.08.2019
Slide 18: Mobile – detailed revenue split, service revenues stable
Mobile – detailed revenue split, service revenues stable Revenue split [in mEUR] 714.3 654.2 22.1 624.7 631.3 621.0 617.2 30.6 26.2 29.5 32.2 30.2 267.2 191.5 177.8 182.8 171.4 164.1 34.6 35.3 36.6 35.6 33.4 33.8 H1/19 1,256.0 382.8 387.6 395.5 389.5 387.2 385.2 H1/18 1,238.2 Q1 18 Q2 18 Q3 18 Q4 18
Slide 19: Financial statements – P&L (shortened)
Financial statements – P&L (shortened) [in mEUR] H1 2019 H1 2018 Q2 2019 Q2 2018 Revenue 1,389.0 1,386.2 699.1 696.6 Gross profit 446.7 445.8 219.4 222.2 EBITDA 215.5 204.9 107.5 108.1 EBIT 138.2 138.1 68.8 77.9 EBT 123.1 125.1 62.0 70.8 Group result 111.6 108.0 55.5 61.3 Earnings per share (EUR) 0.
Slide 20: Segment changes evaporate at adjusted level, stability given
Segment changes evaporate at adjusted level, stability given As of June [in mEUR] Mobile TV & Media Other/ holding Group EBITDA 186.9 204.9 215.5 181.8 33.2 (reported) 28.0 2018 2019 2018 2019 2018 2019 -4.9 -4.7 2018 2019 IFRS16 11.8 9.5 1.0 22.3 Analogue radio divestment 8.5 -3.7 8.5 -3.7 Internat
Slide 21: Financial statements – Cashflow statement (shortened)
Financial statements – Cashflow statement (shortened) [in mEUR] H1 2019 H1 2018 Q2 2019 Q2 2018 Cash flows from operating 182.2 169.5 109.5 114.8 activities Cash flows from investing -12.6 -23.8 -8.8 -12.6 activities thereof net capex -15.6 -23.5 -8.7 -12.5 Cash flows from financing -267.4 -222.1 -2
Slide 22: Financing and maturity structure end of H1/19
Financing and maturity structure end of H1/19 2017 2018 H1/19 Maturity mEUR % Maturity mEUR % Maturity mEUR % 2018 0.0 0 2019 15.0 1 2019 0.0 0 2019 54.5 3 2020 274.5 16 2020 274.5 16 2020 274.5 16 2021 428.0 25 2021 428.0 25 2021 443.0 26 2022 163.5 10 2022 163.5 10 2022 773.5 46 2023 780.0 45 2023
Slide 23: KPI Guidance & Financial Policy (1/2)
KPI Guidance & Financial Policy (1/2) Group Dividend Revenue EBITDA Free cash flow in mEUR/ Payout as indicated Guidance stablea 420 - 440b 240 - 260c 1.65 EUR/shared 2019 Results 2,897.5 Adj. EBITDA: 402.2 New FCF logic: 263.8 1.65 EUR/sharee 2018 (excl. IFRS 15: 3,659.2) (excl. Sunrise: 441.3) (ex
Slide 24: KPI Guidance & Financial Policy (2/2)
KPI Guidance & Financial Policy (2/2) Mobile TV and Media Financial Policy Communications freenet TV Postpaid Postpaid waipu.tv subscriber Leverage Equity ratio in EUR/ customer ARPU subscriber as indicated (RGU) Guidance moderate stablea > 350,000 > 1,000,000 < 3.5b > 25%c 2019 increase 1.3 Results