MA MANAGEMENT PRESENT GEMENT PRESENTATION TION Q2 Results for 2020 C H R I S T O P H V I L A N E K , C E O I N G O A R N O L D , C F O 12.08.2020 Analyst and Investor Conference Call
CAUTION CA UTIONAR ARY Y ST STATE TEMENT ENT 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 presentation. These statements are subject to many risks and uncertainties, including an adverse development of global economic conditions, in particular a decline of demand in our most important markets; a deterioration of our refinancing possibilities on the credit and financial markets; events of force majeure including natural disasters, pandemics, acts of terrorism, political unrest, armed conflicts, industrial accidents and their effects on our sales, purchasing, services or other activities. This presentation does not constitute an offer to sell or a solicitation to purchase any securities of freenet AG. Any such decision must not be made on the basis of the information provided in this presentation. freenet AG does not undertake any obligation to publicly update or revise information provided during this presentation. 12.08.2020 2
AGEN GENDA 1 1 COVID-19 & ACHIEVEMENTS Q2/H1 C. VILANEK, CEO 2 2 FINANCIALS Q2 I. ARNOLD, CFO 3 3 Q&A SESSION
MAJO MAJOR R KPI KPI S S SH SHOW W RE RESILIEN SILIENCE CE FO FOR R H1 H1 20 20 1,271.0 1,271.0 8,490,00 8,490,000 mEUR REVENUES SUBSCRIBER BASE 213,9 213,9 4,014 4,014 mEUR EBITDA EMPLOYEES 140,7 140,7 mEUR F R E E C A S H F LO W 12.08.2020 4
GR GROUP OUP SUBSCRIBE SUBSCRIBER R BASE ASE GR GROWS WS BY BY +60,800 +60,800 IN Q2 IN Q2 6,9 6,939 39,40 ,400 SUBSCR SU BSCRIBER IBER BASE ASE +51.7 in ´000s 8,490 8,490 P O S T PA I D C U S TO M E R S +6.5 -11.9 +14.5 41,800 F R E E N E T F U N K (active, not pausing) 8,430 8,430 67 8,367 1,005,000 F R E E N E T F U N K 1 F R E E N E T T V 8,3 F R E E N E T T V C U S TO M E R S (revenue generating) P O S T PA I D WA I P U .T V 504,100 WA I P U .T V S U B S C R I B E RS 31.12.19 31.03.20 30.06.20 1 freenet FUNK: ARPU comparable to postpaid contracts, but not yet counted within postpaid base 12.08.2020 5
COVID-19 IMPACTS IN MANY WAYS PO POSIT SITIVE IVE NOTIO TION ▪ Robustness of a business model becomes particularly evident in times of crisis – freenet’s strategic focus on long-term customer/ revenue relationships and a flexible cost structure pay off ▪ Crisis-induced operational unevenness compensated on an ad-hoc ▪ Company and organization proves to be flexible and very transforming basis without jeopardizing future business development ▪ Group revenue and margins developed as expected ▪ More than 50% of customers are gained online - more than 70% of though focus on taking all business opportunities to sales transactions are supported by digital captive channels generate some frontload CR CRITICA ITICAL ASPE ASPECTS CTS ▪ EBITDA overperforming thanks to short-term cost ▪ Digital Lifestyle revenues slightly down due to less physical sales savings ▪ Postpaid ARPU down as a result of lower roaming revenues ▪ Increased bad debt in B2B-business ▪ More competition online drives SACs for the channel 12.08.2020 6
FIRST FUNK, NOW FLEX – DIGITAL TARIFF PORTFOLIO SUPPLEMENTED SUCC SU CCES ESS AT FUNK… in ‘000s: 41.8 35.3 34.3 30.6 20.4 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 ▪ First fully digital tariff and an inhouse solution …USED TO DEVELOP NEW DIGITAL PRODUCT ▪ Digital distribution via App-only (iOS and android) ▪ Tariff structure: 5GB LTE - 10GB LTE - 15GB LTE at 10 EUR - 15 EUR - 18 EUR; one-time-activation fee: 10 EUR ▪ Allnet flat voice and text with EU-data packages ▪ LTE 21.6 (5GB) and LTE 50 (10GB und 15GB) on Vodafone network 12.08.2020 7
PRICES AT FREENET TV INCREASED FREEN REENET ET T TV V SU SUBSCR BSCRIBERS IBERS (R (RGU) in ´000s virtually stable, but churn from direct debit customers New prices as of May 1 st plus 1,24 Euro (gross) ▪ per month with direct debit customers ▪ Exchange of prepaid vouchers not yet finished due 1,037 1,037 1,020 1,021 1,017 1,005 to COVID-19 closing of retail; new price plus 16 Euro (gross) per annum ▪ Detailed analysis on churn only available by end of Q3, early indicators show relevant pay back ▪ Continuous switch-off of Satellite customers (-14,000 before end of 2020) ▪ Additional channel increased program offering of freenet TV: ‘Comedy Central’ Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 12.08.2020 8
WAIPU WAIPU.TV .TV GR GROWTH WTH SLIGH SLIGHTL TLY Y ACCE CCELER LERATED TED CON CONTIN TINUOUS IM IMPR PROVEM VEMEN ENT T IN IN Q2 WAI WAIPU PU.T .TV V SU SUBSCR BSCRIBERS IBERS in ‘000s ▪ With addition of RTL‘s HD channels RTL, RTL Zwei, Nitro, 504 453 RTL Plus, N-TV, Super RTL, Toggo Plus, Vox and Vox Up 408 substantial channel line-up now available in HD quality 366 332 286 ▪ Further new channel additions broadening content offering 252 202 include Motorvision TV , travel documentary channel tvtraveller 174 133 and recreational fishing channel Wir Angeln . ▪ Successful ‚stay at home‘ TV campaign during German COVID-19 lock-down may have led to customer front loading Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 May and June were the first EBITDA positive Subscribers slightly above expectations (+172,200 or +51.9% yoy); months in waipu.tv’s history +51,700 subscribers gained in Q2 20 12.08.2020 9
OUT OUTLOOK OOK FOR FOR 3RD 3RD QU QUAR ARTER TER MOBIL BILE E SE SEGMEN ENT ▪ Second half of June and first 2 weeks of July signal a path back to normal though direct channels will remain more important ▪ Churn intake was lower during shutdown, levels normalize as well; overall we perceive a lower rotational churn than before ▪ Up- and cross-selling is more challenging due to more online and shorter sales sessions in the stores as a result of hygiene guidelines ▪ ARPU in Q3 is expected to be impacted by missing roaming revenues again TV V AN AND D MEDIA DIA SEGMENT ▪ freenet TV – price increase will become more visible and measurable since voucher due dates mainly in July and August ▪ In general TV lacks major events such as Olympic Games or Football tournaments which lowers attention and likelihood of cord cutting and dish dismantling ▪ Missing events leads to an almost shut down of event-unit in Media Broadcast ▪ DAB – 2 nd Bundesmux will launch in Q4 with 12-16 new broadcasting customers, technical preparation will happen in Q3 12.08.2020 10
STEAD ST EADY Y AS AS IT GOES IT GOES REVEN REVENUE FIRST HALF FIRST ALF-YEAR YEAR in mEUR 802.5 741.0 699.1 689.9 ▪ 96.4 Revenue w/o Motion TM up 24.3 mEUR to 1.271 mEUR due to strong Q1 sales in 648.8 84.7 622.1 67.5 74.8 Mobile segment; Q2 stable. ▪ Gross profit reported down to 425.7 mEUR (-4.7 per cent yoy) as expected due to different impacts within Mobile segment. ▪ Adjusted EBITDA increased though COVID-19 effects were included. Main driver: 622.4 624.3 656.3 706.1 cost savings and a consequent cost discipline. Q1 20 Q2 20 Q1 19 Q2 19 Q3 19 Q4 19 EBITDA EBITD GROSS SS PR PROFIT IT in mEUR in mEUR 227.3 230.1 219.4 219.4 213.2 212.5 110.3 107.9 107.5 109.7 104.2 101.0 4.2 2.4 2.1 2.2 -5.0 -5.0 0.2 -5.0 -5.0 0.5 0.1 -5.0 -2.0 -5.0 1.8 -5.0 -2.0 -5.0 217.5 224.9 219.3 222.1 230.9 218.2 104.2 114.7 107.4 109.5 115.1 109.2 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Gross Profit w/o Motion and reg. effects EBITDA w/o Motion and reg. effects International calls/ roaming Motion TM 12.08.2020 11
MOBILE SE MOBILE SEGME GMENT PE PERFO RFORM RMED D ST STABLE ABLE REVEN REVENUE NO CO COVID VID-19 IM IMPACT VISIBL CT VISIBLE E in mEUR in mEUR 730.2 672.7 631.3 624.7 ▪ 96.4 Revenue w/o Motion TM up 23.2 mEUR to 1,136.8 mEUR due to strong Q1 582.6 84.7 554.2 67.5 74.8 hardware sales (Gravis); Q2 developed stable. ▪ Reported gross profit declined by 22.3 mEUR (-6.4 per cent yoy) to 326.1 mEUR due to the impact of international calls (-8.0 mEUR), de-consolidated Motion TM (-4.6 mEUR), and an extra-ordinary hardware bonus received in Q1 19 (-6.0 mEUR). ▪ 557.1 556.5 588.0 633.8 Adjusted EBITDA reported at 196.9 mEUR increased by 4.8 mEUR compared to the same period last year (192.1 mEUR) mainly based on cost savings. Q1 20 Q2 20 Q1 19 Q2 19 Q3 19 Q4 19 EBITDA EBITD GROSS SS PR PROFIT IT in mEUR in mEUR 96.5 94.9 174.0 179.6 90.4 91.6 91.0 169.3 85.4 168.9 165.3 160.8 0.2 4.2 0.5 -5.0 0.1 2.4 -5.0 1.8 -5.0 2.1 2.2 -5.0 -1.8 -2.0 -5.0 -2.2 -5.0 -5.0 -2.1 0.1 -0.2 -2.0 -1.8 -5.0 -2.0 -0.6 -0.1 -1.8 -0.1 -0.0 97.8 94.3 101.5 90.5 98.7 98.2 177.0 168.8 172.1 174.8 166.4 170.5 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Gross Profit w/o Motion and reg. effects International calls/ roaming Motion TM EBITDA w/o Motion, reg. effects and inter-segment allocation Inter-segment allocation 12.08.2020 12
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