euro adhoc: freenet.de AG
Financial Figures/Balance Sheet
freenet continues
growing business and profits in 3rd quarter
Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement.
08.11.2005
New revenues record at EUR185.7 million Operating EBITDA hits EUR32 million before one-off special charges Number of customers soars past 10 million Accelerated growth in the DSL sector Cash and cash equivalents rise to EUR135 million Hamburg / freenet.de AG - freenet.de AG set a new revenue record in Q3/2005, generating EUR185.7 million in revenues - a 60 percent increase vs. the same quarter last year, and a 4 percent improvement on the previous quarter, which was already excellent. This brings revenues for the first nine months of the year to EUR510.2 million, a 48 percent year-on-year rise. Gross profit also rose during the third quarter, to currently EUR78.3 million; this translates to a 42 percent gross margin. The third-quarter EBITDA of nearly EUR32 million (EUR99.75 million for the first nine months) - adjusted for one-off special charges related to the merger with mobilcom AG - shows that freenet continues to do business profitably, despite sustained aggressive growth in a tougher competitive landscape. "We are well on plan for making our target EBITDA corridor of EUR125-140 million for all of 2005," confirms freenet.de AG CEO Eckhard Spoerr. Adjusted pre-tax earnings for the third quarter amounted to EUR23.87 million or EUR72.28 million for the first nine months. During the third quarter, merger-related costs totaling a good EUR3.3 million were posted under Other Operating Expenses. In addition, all owners of options in the freenet groups stock option program signed an agreement with the company waiving their options and all rights arising therefrom in return for a cash compensation; this is contingent upon the merger becoming effect. As the Executive Board assumes that the merger with mobilcom will conclude as planned, freenet already created reserves for projected expenditures arising from this agreement, in an analogous application of IFRS 2.28a and effective September 30, 2005, in the amount of a good EUR8.4 million. Accordingly, this caused third-quarter personnel expenses to rise to EUR23.8 million. Including these one-off special charges totaling about EUR11.7 million, reported EBITDA came to EUR20.3 million for the third quarter, or EUR88.1 million for the first nine months of 2005. Pre-tax profits, reduced by the special charges, amounted to EUR12.2 million for the third quarter and EUR60.59 million for the first three quarters of the year. At the same time, freenets cash and cash equivalents increased to EUR135 million at the end of September, despite a EUR19.80 million dividend payout performed this summer. All four of freenets income pillars delivered a very positive third-quarter performance. Internet Access continues to be the strongest revenues mainstay, having contributed EUR82.2 million in the third quarter, and is followed by fixed-line telephony (EUR39.3 million), and B2B Services (EUR38.1 million), and the Portal Business (EUR26.1 million). The two latter segments in particular benefited very strongly from the acquisitions of the STRATO group and the Talkline ID GmbH which were completed during the first half of 2005: The Portal Business more than tripled year-on-year, and a number of customers now rely on freenets online expertise and sales power, including "klarmobil.de," a wireless discounter and mobilcom AG subsidiary whose business model is based primarily on the online and hotline business. B2B services grew by a factor of more than 30 compared with the same period last year. The company´s successful efforts in the keenly contested Internet and fixed-line telephony markets is also evident from freenet´s total customer base: During the third quarter, the total number of customers soared past 10 million for the first time ever. This figure includes nearly 2.5 million contract customers - mainly in the DSL, Preselection Telephony, Domain Hosting and Paid Services segments. freenet registered an increase in the number of active telephony customers, by 565,000 to currently 5.3 million. One especially gratifying development is growth in the broadband sector, which accelerated again: During the third quarter, freenet DSL customer base rose by 80,000 to currently well over 600,000 - the company availed itself of some new distribution channels for the first time, and began selling freenetDSL through mobilcom AGs numerous shops and retailers. freenet.de AG aims to further push this growth in Q4/2005.
Q3/2005 Q2/2005 Q3/2004 Q1-Q3 2005 Q1-Q3 2004
adjusted** adjusted**
Revenues 185,656 178,279 116,016 510,191 345,116
Segment: Internet
access 82,173 79,876 68,563 246,236 209,678
Segment: Portal
business 26,079 24,129 8,248 70,249 23,129
Segment: Voice 39,276 39,709 38,000 118,899 108,574
Segment: B2B Services 38,128 34,565 1,205 74,807 3,735
Gross profit 78,267 77,627 58,136 229,736 178,633
EBITDA 20,323 31,150 41,228 88,061 104,484
EBITDA (adjusted)* 32,007 99,745
Earnings before
taxes (EBT) 12,190 20,346 32,944 60,592 77,264
Earnings before
taxes (EBT) (adjusted)* 23,874 72,276
Group result 7,491 12,490 19,891 37,410 46,961
Capital and reserves 268,735 281,304 174,196 268,735 174,196
Balance sheet total 521,020 516,432 313,539 521,020 313,539
Cash and cash
equivalents 134,962 121,891 150,229 134,962 150,229Financial data per IFRS; in TEUR / Source: freenet.de AG *Adjusted for one-off items totaling 11.7 million euros. **Adjustments as part of the first-time application of IFRS2.
end of announcement euro adhoc 08.11.2005 07:30:00
Further inquiry note:
Andreas Neumann
Investor Relations
Tel.: +49 (0)40 51306 778
E-Mail: IR@freenet-ag.de
Branche: Online
ISIN: DE0005792006
WKN: 579200
Index: TecDAX, Prime Standard, CDAX, Prime All Share, HDAX,
Technologie All Share, Midcap Market Index
Börsen: Frankfurter Wertpapierbörse / regulated dealing
Berliner Wertpapierbörse / free trade
Hamburger Wertpapierbörse / free trade
Baden-Württembergische Wertpapierbörse / free trade
Börse Düsseldorf / free trade
Niedersächsische Börse zu Hannover / free trade
Bayerische Börse / free trade
Bremer Wertpapierbörse (BWB) / free trade