freenet AG

EANS-News: freenet AG
freenet Group presents preliminary results for 2010 and outlook

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Financial Figures/Balance Sheet/preliminary

Büdelsdorf (euro adhoc) - 23 February 2011

Financial year 2010:

-       3.34 billion euros in Group revenue
-       Recurring Group EBITDA at 366.5 million euros
-       Group result at 112.5 million euros
-       Free cash flow* at 211.7 million euros
-       623.1 million euros net debt
-       80 cents dividend proposal for the financial year 2010

Expectations for the financial year 2011:
-       Recurring Group EBITDA of 325 million euros
-       Free cash flow* of over 200 million euros
-       80 cents dividend proposal for the financial year 2011 

Büdelsdorf, 23 February 2011 - freenet AG has achieved its targets for the financial year 2010. According to the preliminary figures, the company generated recurring Group EBITDA (earnings before interest, taxes and depreciation/amortisation) - adjusted for one-off items - of 366.5 million euros. Free cash flow (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) totals 211.7 million euros.

Based on preliminary figures, freenet AG generated Group revenue of 3.34 billion euros in the past financial year, compared to 3.60 billion euros in 2009. The Group result from continued operations increased from 17.7 million euros in 2009 to 118.8 million euros in 2010; Group result including discontinued operations amounted to 112.5 million euros.

The Executive Board has decided to propose to the Supervisory Board a dividend payment for the financial year 2010 in the amount of 80 cents per share from retained earnings. This represents a payout ratio of 48 percent of free cash flow.

In the financial year 2010 the freenet Group improved its Group EBITDA by 2.4 percent or 7.9 million euros over the previous year, to 334.9 million euros. This includes restructuring-related one-off items in the amount of 31.6 million euros for the Group. This corresponds to a 50-percent year-on-year reduction. Recurring Group EBITDA - adjusted for one-offs items - came to 366.5 million euros in the financial year 2010, vs. 392.9 million euros in the previous year.

freenet AG tripled its pre-tax Group earnings (EBT) from 36.7 million euros in 2009 to 102.6 million euros in 2010. In the financial year 2010, the freenet Group generated 211.7 million euros in free cash flow and reduced its net debt by 166.7 million euros compared to year-end 2009, to 623.1 million euros.

With 15.65 million mobile communications customers at the end of the financial year, the Mobile Communications segment generated revenue of 3.27 billion euros, contributing more than 97 percent to total segment revenue. The company participated in the continuing positive trends in the fields of data and smartphones. As a result, the data revenue share in postpaid increased from 8.3 percent at the end of 2009 to 11.4 percent at the end of 2010. By focusing on valuable postpaid contract relationships, the company stabilised its ARPU (monthly average revenue per user) at 24 euros. The main driver for this development is the increase in the share of smartphone sales to 70 percent and the sale of Apple iPhones in the Telekom, Vodafone and O2 networks. The planned quality adjustment in postpaid contract relationships resulted in a customer base of 6.11 million as of 31 December 2010 (6.98 million at the end of 2009).

Outlook With the stabilization of the customer quality and after the completion of integration activities in the course of 2011, the freenet AG Executive Board foresees a positive overall future development for the company. Accordingly, freenet AG expects recurring Group EBITDA of 325 million euros and free cash flow of over 200 million euros for the financial year 2011.

The planning for 2011 takes into account a continued qualitative adjustment of the postpaid customer base by less than 500 thousands and a positive development of the no-frills customer base. The customer base is expected to stabilize in 2012. Accordingly, freenet AG is assuming a recurring Group EBITDA of over 300 million euros and a sustainably strong free cash flow of over 200 million euros for 2012 from today's perspective.

Furthermore, the Executive Board has adopted a financial policy which determines that 40-60 percent of future free cash flow will be distributed as dividends. For the financial year 2011, the Executive Board aims to propose to the Supervisory Board a dividend payment in the amount of 80 cents per share.

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A very slight retrospective adjustment was made to the previous year´s comparable figures concerning the presentation of the "Next ID" business as a discontinued operation in accordance with IFRS 5 in the income statement.

*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 25 March 2011.

end of announcement                               euro adhoc
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Further inquiry note:

Andreas Neumann
Head of Investor Relations
Tel.: +49 (0) 40 51306-778
E-Mail: ir@freenet.ag

Branche: Telecommunications
ISIN: DE000A0Z2ZZ5
WKN: A0Z2ZZ
Index: Midcap Market Index, TecDAX, CDAX, HDAX, Prime All Share,
Technology All Share
Börsen: Frankfurt / regulated dealing/prime standard
Berlin / free trade
Hamburg / free trade
Stuttgart / free trade
Düsseldorf / free trade
Hannover / free trade
München / free trade

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