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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 Cautionary statement This presentation contains

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1 | Management Presentation H1/Q2 2019 | 09.08.2019

Management Presentation Results H1/Q2 2019

09 August 2019 | Analyst and Investor Conference Call

Christoph Vilanek, CEO and Ingo Arnold, CFO

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2 | Management Presentation H1/Q2 2019 | 09.08.2019

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 presentation. 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.

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3 | Management Presentation H1/Q2 2019 | 09.08.2019

H1/2019 results corresponding to full-year guidance 2019

Revenue in EUR million

1,389

EBITDA in EUR million

215.5

Free cash flow in EUR million

126.7

Subscriber base1 in thousand

8.224

1 Postpaid customers, freenet FUNK customers, freenet TV RGUs and waipu.tv subscribers
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4 | Management Presentation H1/Q2 2019 | 09.08.2019

Group subscriber base growing by +55,730 in Q2

8,168 8,224

  • 27.5

+17.3 +45.6

1 ARPU comparable to postpaid contracts, but not counted within postpaid base

Group subscriber base

[in ‘000s]

+20.4

1

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5 | Management Presentation H1/Q2 2019 | 09.08.2019

Stability: ▪ Customer base ▪ Postpaid ARPU ▪ Margin

Active management of mobile market challenges

Market challenges

Churn down – Customer loyalty projects (digitalization customer journey)

freenet countermeasures

Fully saturated mobile market with commoditized products Customer acquisition mix focusing on quality and lifetime margin Reduced competition on hardware market (Huawei ban) Broadening sales cooperations, bundling DLS options etc. New regulation put into force (e.g. international calls) Innovative products e.g. freenet FUNK as full digital proposition Longer hardware innovation cycles and usage LTE portfolio completed on all networks

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6 | Management Presentation H1/Q2 2019 | 09.08.2019

Q1 19 Q2 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 18 Q2 18 Q3 18 Q4 18

Subscribers (RGU1)

TV & Media – waipu.tv with remaining strong momentum

Registered customers Subscribers

[in '000]

1 RGU as the abbreviation for “Revenue Generating Unit” refers to freenet TV subscribers who purchased and also activated the freenet TV access

H1/2019 vs. H1/2018 comparison: ▪ waipu.tv added 923,900 registered customers (+112.1%). ▪ Contained subscribers almost doubled to 331,900 in the last twelve months (+157,600 or 90.4%). ▪ freenet TV with 1,037,500 freenet TV subscribers (RGU1) – stable and slightly above long-term target (> 1.0 million RGUs).

[in '000] [in '000]

1,007 1,264 Q1 18 Q2 18 Q3 18 Q4 18 945 1,001 901 1,014 824 609 133 174 202 252 1,020 Q1 19 Q2 19 Q1 19 Q2 19 286 332 1,515 1,748 1,037

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7 | Management Presentation H1/Q2 2019 | 09.08.2019

New features launched in Q2/19

Successful launch of O2 sales partnership (O2 TV powered by waipu.tv) waipu.tv now available as Apple TV app and Android TV app Instant restart function launched Extension of proprietary channel assets by popular genres (incl. cooking and childrens’ content) Launch of prototype for content library on Android (“waiputhek”)

Continuous innovation of waipu.tv’s best-in-class product features

Upcoming feature and content extensions H2/19

Addressable tv programmatic booking

  • Voice enabled user interface

Launch of first foreign language and ethnic channel package Launch of further proprietary channel assets (including wellness, fashion and lifestyle, nature and documentaries)

✓ ✓ ✓ ✓ ✓

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8 | Management Presentation H1/Q2 2019 | 09.08.2019

Q1 19 Q2 19 Q1 18 Q2 18 Q3 18 Q4 18 IFRS 16 EBITDA w/o regulatory effects Q1 19 Q2 19 Q1 18 Q2 18 Q3 18 Q4 18

Stable Group performance as expected

Gross profit

[in mEUR]

EBITDA

[in mEUR]

0.8 98.6 223.3 11.4 113.3 108.1 96.8 123.0 International calls/ roaming Analogue radio divestment 218.1 100.2 10.9 107.5 101.6 100.4 96.0 106.5 IFRS 16 107.9

  • 2.1

3.4 4.0 223.5 222.2 235.1 222.9 227.3 219.4 Gross Profit w/o regulatory effects Q1 18 Q2 18 Q3 18 Q4 18

H1/2019 vs. H1/2018 comparison: ▪ Revenue slightly up 2.8 mEUR to 1,389.0 mEUR. ▪ Gross profit and EBITDA impacted by effects from inevitable regulatory changes: IFRS 16, international calls/ roaming and analogue radio divestment. ▪ Adjusted by regulatory effects both, gross profit and EBITDA developed almost steady: Gross profit -4.3 mEUR to 441.4 mEUR and EBITDA +2.4 mEUR to 198.8 mEUR.

Revenue

[in mEUR]

689.6 696.6 794.2 717.0 Q1 19 Q2 19 689.9 699.1

  • 2.0
  • 2.0
  • 1.5

International calls/ roaming 7.7 16.5 11.6

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9 | Management Presentation H1/Q2 2019 | 09.08.2019

Q1 19 Q2 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q1 19 Q2 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 18 Q2 18 Q3 18 Q4 18

Mobile – Regulatory effect forming headwind for financial KPIs

EBITDA Gross profit

[in mEUR] [in mEUR]

84.4 179.0 175.7 178.5 185.2 179.6 88.6 89.0 83.4 96.0 92.1 6.9 99.8 91.5 90.3

  • 4.2

3.8 2.4 EBITDA w/o regulatory effects/ inter-segment allocation 6.2 168.9 170.5 171.7 181.0 179.7 171.7 179.5

  • 0.1

0.1

  • 2.5

4.0 8.5 5.5

  • 2.0
  • 0.7

Gross Profit w/o regulatory effects/ inter-segment allocation 96.5 92.1

  • 1.8

90.4 88.7

  • 2.0 5.6
  • 2.0

H1/2019 vs. H1/2018 comparison: ▪ 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. ▪ Gross profit adjusted by regulatory effects and without inter-segment allocation increased by 8.9 mEUR to 351.2 mEUR mainly due to lower subscriber acquisition cost. ▪ EBITDA without extraordinary effects increased by 8.4 mEUR to 180.8 mEUR based on gross profit development.

Revenue

[in mEUR]

621.0 617.2 654.2 714.3 624.7 631.3 Inter-segment allocation International calls/ roaming IFRS 16 Inter-segment allocation International calls/ roaming IFRS 16

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Q1 19 Q2 19 Q1 19 Q2 19 Q1 18 Q2 18 Q3 18 Q4 18

H1/2019 vs. H1/2018 comparison: ▪ Postpaid customer -62,000 net adds reaching H1/18 customer level. Negative momentum of Q1/19 slowed down. freenet FUNK customers +20,400 added in Q2/19 not included. ▪ Postpaid ARPU without hardware stable at 18.8 euros. Enlarged quality initiatives since Q1/19 should show effects during H2/19. ▪ Demand for value added services unchanged. Digital Lifestyle revenues slightly up 1.7 mEUR to 86.7 mEUR.

Q1 18 Q2 18 Q3 18 Q4 18

Digital Lifestyle revenues Postpaid Customers

Mobile – Net adds impacted by Q1, but trend reversing

[in '000]

Postpaid ARPU

[in EUR] [in mEUR]

Q1 18 Q2 18 Q3 18 Q4 18 6,770 6,828 6,896 6,869 ARPU without hardware ARPU incl. hardware 49.4 42.4 42.6 45.4 19.0 19.0 21.4 21.5 21.9 21.7 18.8 19.2 18.9 21.7 6,862 6,834 18.8 Q1 19 Q2 19 42.1 44.6 21.7

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Q1 19 Q2 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 18 Q2 18 Q3 18 Q4 18 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 17.4 18.9 IFRS 16 Inter-segment allocation

TV & Media – Analogue radio divestment continues impact

EBITDA Gross profit

[in mEUR] [in mEUR]

37.4 34.7 46.7 28.6 16.6 17.0 17.5 14.8 7.8 20.3 32.8 25.5 13.4 14.3 EBITDA w/o regulatory effects/ inter-segment allocation 40.7 39.1 44.3 41.5 44.4 34.2 38.1 36.5

  • 1.4
  • 1.4

2.3

  • 6.9
  • 6.8
  • 5.6

4.0 4.1 Inter-segment allocation IFRS 16 Gross Profit w/o regulatory effects/ inter-segment allocation Analogue radio divestment 3.6

  • 5.9
  • 4.5
  • 1.7
  • 1.8
  • 9.7

4.8 4.8 11.6 7.7 16.5 0.8

  • 2.1
  • 1.5

H1/2019 vs. H1/2018 comparison: ▪ Revenue down 24.8 mEUR to 123.9 mEUR mainly based on missing analogue radio revenues. ▪ Gross profit adjusted by IFRS 16 and without inter-segment allocations decreased by 11.3 mEUR to 74.6 mEUR effected by regulatory and

  • perational developments.

▪ Without inter-segment allocations, IFRS 16 and divestment of analogue radio EBITDA decreased by 2.8 mEUR based on Q1/19 development (content cost path and SAT guarantee payments).

Revenue

[in mEUR]

74.7 74.7 75.6 77.3 71.5 77.3 71.3 62.5 Q1 19 Q2 19 62.9 61.0

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Gross profit H1/18 Inter-segment allocation Gross profit H1/18 w/o inter-segment allocation MB B2C MB B2B EXARING Gross profit H1/19 w/o IFRS 16 & inter-segment allocation Inter-segment allocation IFRS 16 Gross profit H1/19 EBITDA H1/18 Analogue radio sale (book profits) Inter-segment allocation EBITDA H1/18 w/o analogue radio sale & inter-segment allocation MB B2C MB B2B EXARING EBITDA H1/19 w/o IFRS 16 & inter-segment allocation Inter-segment allocation IFRS 16 EBITDA H1/19

▪ Gross profit without IFRS 16 and inter-segment allocation decreased by 11.3 mEUR to 74.6 mEUR mainly induced by: (1) MB B2C: Higher content cost from freenet TV (2) MB B2B: Mainly missing

  • perational results from

analogue radio business ▪ EBITDA without IFRS 16 and inter-segment allocation decreased to 27.2 mEUR (H1/18: 34.9 mEUR). Partly compensation of negative gross profit deviation with reduced marketing spend and lower personnel cost. ▪ EXARING continues to improve in Q2.

TV & Media – Without analogue radio effects picture stable in Q2

[in mEUR]

Gross profit H1/18 vs. H1/19 EBITDA H1/18 vs. H1/19

[in mEUR]

28.0 34.9 27.2 33.2

  • 7.3
  • 3.2
  • 5.6*

1.1

  • 3.5

9.5 72.2 85.9 74.6 79.8 13.7

  • 4.2
  • 9.6

2.5

  • 2.9

S -13.8 mEUR S -8.8 mEUR

8.1 14.2

* Compared to previous slide, MB B2B includes -5.0 mEUR operational result from analogue radio.
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▪ EU international calls/ roaming regulation ▪ International call regulation effective since 15 May 2019 ▪ EBITDA effects (yoy) in 2019 (mEUR):

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 sale (mEUR):

Analogue radio (TV & Media) Q1 Q2 Q3e Q4e FYe

  • 3
  • 2

+/-0 +/-0

  • 5

International Calls/ Roaming (Mobile) Q1 Q2 Q3e Q4e FYe

  • 2
  • 5
  • 5
  • 12
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Q1 Q2 Q3 Q4

35-45 75-85 70-80 50-60

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

▪ Working capital actively managed due to lower tax and net CAPEX in H1/19 ▪ Catch-up effects expected in second-half of 2019 ▪ In general, free cash flow fully within guided range and on track to meet full year guidance

EBITDA H1/19 Change in net working capital Tax payments Net capex Sunrise dividends Leasing Interest payments Other FCF H1/19

215.5

  • 50.8
  • 3.5
  • 15.6
  • 33.6
  • 27.5

0.8 126.7 41.5

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Main financial KPIs: Equity ratio, net debt & leverage

Higher total assets as direct consequence of IFRS 16 caused lower equity ratio

30.6.18 30.6.19 25.3% 29.5%

Leverage increase due to inclusion of net lease liabilities (IFRS 16) Deducting market values of equity investments lowers net debt

4.8x 4.0x

Total assets & Equity ratio

[in mEUR]

Net debt & Leverage*

[in mEUR]

  • Adj. Net debt & Leverage*

[in mEUR]

4,495.8 4,911.6 30.6.18 30.6.19 1,272.1 2.8x 2.2x 30.6.18 30.6.19 1,699.6 2,175.1 928.7

* The last twelve months (i.e. July 2018 to June 2019 or July 2017 to June 2018 for the previous year) are used for the period-related parameter EBITDA (according to the new definition). The last twelve months EBITDA for July 2018 to June 2019 include a linear extrapolation of the current IFRS 16 EBITDA effect in order to improve the informative value of the KPI.

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For any follow-up questions reach out to: Investor Relations +49 (0) 40 513 06 778 investor-relations@freenet.ag www.freenet-group.de

Results H1/Q2 2019 – Q&A session

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17 | Management Presentation H1/Q2 2019 | 09.08.2019

Appendix

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Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19

Mobile – detailed revenue split, service revenues stable

Revenue split

[in mEUR]

171.4 164.1 267.2 191.5 32.2 Hardware Other Service Revenue Postpaid 30.2 30.6 22.1 177.8 26.2 182.8 29.5 34.6 35.3 35.6 36.6 33.4 33.8 382.8 387.6 389.5 395.5 387.2 385.2 621.0 617.2 654.2 714.3 624.7 631.3 Service Revenue NoFrills/ Prepaid H1/19 1,256.0 H1/18 1,238.2

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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) 0.91 0.89 0.45 0.50

[in mEUR]

Financial statements – P&L (shortened)

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2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019

Segment changes evaporate at adjusted level, stability given

EBITDA

w/o regulatory effects/ inter-segment allocation

Mobile TV & Media Other/ holding Group

EBITDA (reported)

IFRS16

Analogue radio divestment
  • 3.5

4.8 7.3 181.8 186.9

  • 4.9
  • 4.7

204.9 215.5 28.0 33.2 172.5 180.8 33.7 30.8

  • 9.7
  • 12.9

196.4 198.8

  • 3.1
  • 2.8

2.4 8.4

International calls/ roaming
  • 2.0
  • 3.7
  • 2.0

As of June

[in mEUR]

11.8 9.5 1.0 22.3 8.5 8.5

Inter-segment allocation

9.3

  • 3.8
  • 14.2
  • 3.7
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H1 2019 H1 2018 Q2 2019 Q2 2018 Cash flows from operating activities 182.2 169.5 109.5 114.8 Cash flows from investing activities

  • 12.6
  • 23.8
  • 8.8
  • 12.6

thereof net capex

  • 15.6
  • 23.5
  • 8.7
  • 12.5

Cash flows from financing activities

  • 267.4
  • 222.1
  • 231.8
  • 216.7

Net change in cash funds

  • 97.7
  • 76.4
  • 131.1
  • 114.5

Free cash flow1 126.7 135.1 81.5 96.8

Financial statements – Cashflow statement (shortened)

1 Free cash flow is defined as cash flows 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, minus repayments of lease liabilities.

[in mEUR]

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H1/19 2018

Maturity mEUR % 2019 15.0 1 2020 274.5 16 2021 428.0 25 2022 163.5 10 2023 780.0 45 beyond 59.0 3 Total 1,720.0 100

2017

Maturity mEUR % 2018 0.0 2019 54.5 3 2020 274.5 16 2021 443.0 26 2022 773.5 46 beyond 129.0 8 Total 1,674.5 100

Financing and maturity structure end of H1/19

Maturity mEUR % 2019 0.0 2020 274.5 16 2021 428.0 25 2022 163.5 10 2023 780.0 46 beyond 59.0 3 Total 1,705.0 100

Note: Figures do not include revolving credit facilities.

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KPI Guidance & Financial Policy (1/2)

Group

in mEUR/ as indicated

Revenue EBITDA Free cash flow Dividend Payout

Guidance 2019

stablea 420 - 440b 240 - 260c 1.65 EUR/shared

Results 2018

2,897.5

(excl. IFRS 15: 3,659.2)

  • Adj. EBITDA: 402.2

(excl. Sunrise: 441.3)

New FCF logic: 263.8

(excl. Sunrise: 289.2)

1.65 EUR/sharee

a Based on revenue including IFRS 15 b Including IFRS 16 (approximately 30-40 mEUR) c Based on new free cash flow definition applicable from 2019 d Dividend proposition of 1.65 euros per dividend-bearing share for the financial year 2019, given that the business runs stable (within Guidance) e Dividend of 1.65 euros per dividend-bearing share for the financial year 2018 to be proposed by the Executive Board
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KPI Guidance & Financial Policy (2/2)

Mobile Communications TV and Media Financial Policy

in EUR/ as indicated

Postpaid customer Postpaid ARPU waipu.tv subscriber freenet TV subscriber (RGU) Leverage Equity ratio Guidance 2019

moderate increase stablea > 350,000 > 1,000,000 < 3.5b > 25%c

Results 2018

+185,000 21.6

(w/o hardware: 19.0)

251,800 1,014,000 1.3

(New leverage definition: 4.2 incl. DFMG)

27.6%

a ARPU without hardware (IFRS 15) b Mid-term target based on new leverage definition including IFRS 16 c Including IFRS 16