EANS-Adhoc: freenet AG / freenet Group announces preliminary results for 2012, dividend policy and outlook until 2014

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Financial Figures/Balance Sheet 28.02.2013

freenet Group announces preliminary results for 2012, dividend policy and outlook until 2014

Büdelsdorf, 28 February 2013 - According to the preliminary figures, the company achieved Group EBITDA (earnings before interest, taxes and depreciation/amortisation) of 357.8 million euros (prior year: 337.4 million euros) and free cash flow of 260.0 million euros (prior year: 241.0 million euros). freenet AG has thereby exceeded its guidance, which was increased in November 2012, of 355.0 million euros for Group EBITDA and of 255.0 million euros for free cash flow*.

Based on preliminary figures, freenet AG generated Group revenue of 3.09 billion euros (previous year, adjusted: 3.27 billion euros), slightly above the last forecast minimum value of 3.0 billion euros. The Mobile Communications segment was again the dominant contributor in the freenet Group, accounting for 3.03 billion euros in revenue. The decline in revenue against near-stable ARPU results from reduced hardware sales with lower margins; lower revenue from prepaid customers due to the elimination of inactive SIM cards, which did not affect net income; and from a year-on-year reduction in the average contract customer base as a result of the strategic focus on high-value customer relationships.

In the second half of the year, the contract customer base grew again for the first time, and at the balance sheet date amounted to 5.79 million customers (previous year: 5.75 million). The no-frills area, which is primarily comprised of mobile contracts completed online in the discount market, showed a particularly dynamic development with an increase of 2.71 million customers (previous year: 2.37 million). As a result, freenet increased its customer ownership - a key indicator defined as the cumulative customer base in the contract and no-frills sectors - by 4.7 percent to 8.50 million customers (previous year: 8.12 million).

In the financial year 2012 freenet AG generated Group EBITDA of 357.8 million euros (2011: 337.4 million euros). The freenet Group incurred no further restructuring-related one-off effects (2011: 22.9 million euros).

The company achieved a Group profit before tax of 166.9 million euros in 2012 - a year-on-year increase of 49.6 million euros or 42.3 percent (2011: 117.3 million euros). The main reasons for this development were the increase in EBITDA compared to 2011 (+ 20.4 million euros); lower depreciation (+ 20.1 million euros), primarily of intangible assets; and an improved net interest income (+ 9.1 million euros).

freenet AG's Group result increased by 20.3 percent to 173.2 million euros (previous year: 144.0 million euros).

freenet reduced net debt by 14.8 percent to 451.3 million euros at year-end 2012 (previous year: 529.4 million euros). As a result, the debt factor, the ratio of net debt to EBITDA, decreased to 1.26 (previous year: 1.57).

Alignment of financial strategy and dividend policy due to positive business development: Based on the preliminary business results, which are above the most recent forecast, the Executive Board is adjusting the dividend policy originally announced for the 2012 financial year, and is increasing its range for dividend payments to between 50 and 75 percent of free cash flow (previously: 40 to 60 percent).

For an earnings-oriented optimisation of its capital structure, the Executive Board has also decided to adjust the target corridor of the debt factor originally announced for the financial year 2012, to between 1.0 and 2.5 (previously: 1.5 to 2.5). The target values for the other parameters of the financial strategy (interest cover, equity ratio and cash reserve) remain unchanged.

Furthermore, in future between 50 and 75 percent of free cash flow is to be distributed as dividend.

Outlook: In 2013 the freenet Group aims to increase its consolidated revenue, which should show modest growth again in 2014. This is driven by the first-time consolidation of Gravis - Computervertriebsgesellschaft mbH ("GRAVIS"); expectations of a slight increase in the contract customer base; the continued successful marketing of valuable postpaid contracts in conjunction with data products; and the marketing of high-end devices. As a result, we expect an ARPU in the contract customer base of around 23 euros, depending on developments in the market.

The acquisition of GRAVIS in the first quarter of 2013 represents an important enhancement of the company's strategic development into a digital lifestyle provider of high-quality Apple products.

For the financial years 2013 and 2014, the company is aiming for Group EBITDA of 355.0 million euros and of 360.0 million euros, and free cash flow of 255.0 million euros and of 260.0 million euros.

*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.

Disclaimer: This announcement contains forward-looking statements based on current assumptions and forecasts made by the management of freenet AG. Known and unknown risks, uncertainties and other factors could cause the actual development, in particular the results, financial condition and performance of our company, to differ materially from the forward-looking statements given above. The company assumes no obligation to update these forward-looking statements or to adjust them to future events or developments. All figures are based on preliminary calculations before final consolidation and completion of the audit. There may therefore be discrepancies to the final financial figures to be presented on 26 March 2013.

end of announcement euro adhoc =-------------------------------------------------------------------------------

(END) Dow Jones Newswires

   February 28, 2013 13:03 ET (18:03 GMT)- - 01 03 PM EST 02-28-13