CAPITAL MARKETS DAY 2021 - Our ambition for 2025 - Freenet
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CAPITAL MARKETS DAY 2021 Our ambition for 2025 04 November 2021
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.
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.
Capital Markets Day 2021 04.11.2021 2
AGENDA 1 Q 3 / 2 1 R E S U LT S 10:00-10:25 (25 MIN) (INGO ARNOLD, CFO) 2 Q & A O N Q 3 / 2 1 R E S U LT S 10:25-10:45 (20 MIN) 3 S T R AT E G I C O U T L O O K 2 0 2 5 10:45-11:30 (45 MIN) (CHRISTOPH VILANEK, CEO) 4 FINANCIAL AMBITION 2025 11:30-11:45 (15 MIN) (INGO ARNOLD, CFO) 5 Q&A ON AMBITION 2025 11:45-12:15 (30 MIN)
I N G O AR N OL D Q3/2021 RESULTS
STEADY EBITDA INCREASE
GROUP REVENUES 9M 2021 – HIGHLIGHTS
in mEUR
+1.1% ▪ Group revenues catching up - with 1,880.8 mEUR almost on par
with previous year (9M 2020: 1,905.5 mEUR)
648.8 670.7
622.1 634.5 619.2 619.9 641.8
▪ Group gross profit at 639.1 mEUR slightly below previous year
(643.9 mEUR), but 1.2% higher adjusted for freenet digital
▪ Group EBITDA already up 3.3% at 339.9 mEUR (9M 2020: 329.2
mEUR) w/o adjusting freenet digital, driven by strong TV and
Media performance, sustained cost efficiencies and effects from
Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 short-time work
GROUP GROSS PROFIT GROUP EBITDA
in mEUR in mEUR
-1.5% +2.0%
218.1 218.2 214.8 117.6
213.2 212.5 214.0 115.2
4.0 210.3 +0.3% 113.5
4.4 4.2 109.7 2.6 +4.4%
108.8
208.8 208.3 214.1 104.2 0.5
0.4
103.9 109.2 112.7 96.7
Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21
Gross profit fn digital (decons. 30/09/2020) EBITDA fn digital (decons. 30/09/2020)
w/o freenet digital (fn digital) w/o fn digital
Capital Markets Day 2021 04.11.2021 5
VALUE SUBSCRIBER BASE FURTHER
GROWING
DEVELOPMENT PER SUBSCRIBER GROUP TOTAL SUBSCRIBER BASE
in ´000s in ´000s
7,005.0 +198.1
P O S T PA I D +1.9%
(+2.3%)
7,138.6
+0.4% +0.3%
+0.4%
50.3 +1.2%
8,704.8
FUNK & FLEX1 +67.8%
8,647.6
8,680.8
84.4 8,609.8
8,506.7
509.5
W A I P U .T V +31.2%
668.5
942.0
FREENET TV -13.7%
813.4
Q3 20 Q4 20 Q1 21 Q2 21 Q3 21
Q3 20 Q3 21
1 ARPU, profitability, and loyalty comparable to postpaid contracts, but not yet counted within postpaid base
Capital Markets Day 2021 04.11.2021 6
MOBILE COMMUNICATIONS BUSINESS
REMAINS ROCK SOLID
REVENUES 9M 2021 – STRONG POSTPAID REVENUES
in mEUR
+0.8% ▪ Mobile Communications revenues slightly down 1.9% yoy at
582.6 602.4 1,671.1 mEUR (9M 2020: 1,703.8 mEUR)
554.2 567.0 548.7 551.1 571.2
30.9 28.3 37.7
37.5
154.0
31.4 29.1 29.0 ▪ Service revenues postpaid (SR postpaid) up 1.3% yoy at
138.0 120.9 117.7 112.0 111.2 121.5
31.3 28.8 29.7 29.9 26.5 26.7 28.2 1,155.7 mEUR (9M 2020: 1,140.5 mEUR)
▪ Both stable, gross profit (+0.2%) and EBITDA (+0.1%) yoy
382.5 376.2 381.9 381.0 378.9 384.2 392.6 due to number of valuable customers growing, cost efficiency
and effects from short-time work
Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 ▪ No significant changes in mobile customers' payment
behavior visible (bad debt remains on low level)
SR Postpaid SR NoFrills/Prepaid Hardware Other
GROSS PROFIT EBITDA
in mEUR in mEUR
+0.8% -0.4%
165.3 160.8 162.8 169.7 163.9 161.8 164.2 91.6 91.0 94.6 91.7 91.5 94.2
77.6
Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21
Capital Markets Day 2021 04.11.2021 7
ANOTHER STRONG QUARTER FOR DLS
HIGH-VALUE MOBILE CUSTOMER BASE 9M 2021 – STRONG DLS REVENUE
in ‘000s
+2.4% ▪ Growing mobile customer base with comparably high
profitability and loyalty (+2.4% yoy at 7,223.0 k)
7,223.0
7,135.4 7,167.7 7,191.2
84.4
▪ 9M 2021 ARPU almost stable at 18.1 EUR (-0.2 EUR yoy),
77.9
7,055.2 56.8 68.3 qoq increase by 0.4 EUR to 18.4 EUR due to return of
6,960.2 6,981.3 50.3 mobility-related ARPU components
35.3 41.8
7,005.0
7,078.7 7,099.4 7,113.3 7,138.6
▪ Gross margin-strong DLS revenues up 9.5% yoy at 148.0
6,925.0 6,939.4 mEUR (9M 2020: 135.2 mEUR), high DLS subscription share
secures sales contribution
Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21
Postpaid subscribers Subscribers digital/app-based tariffs
ARPU POSTPAID DIGITAL LIFESTYLE (DLS) REVENUES
in EUR in mEUR
+0.7% +5.7%
18.4 18.1 18.3 18.0 17.8 18.0 18.4 49.4 53.4 48.9 52.2
43.0 42.8 46.9
Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21
Capital Markets Day 2021 04.11.2021 8
GROWING CONTRIBUTION FROM
TV AND MEDIA
REVENUES 9M 2021 – WAIPU.TV ADDING VALUE
in mEUR
▪ Strong growth of revenues by 9.7% to 209.4 mEUR (9M 2020:
+8.6%
190.9 mEUR) primarily driven by consistent customer intake at
69.5 69.3 70.6 waipu.tv
65.2 65.0 68.1
60.7 1.5
▪ Gross profit increased by 8.6% yoy to 135.9 mEUR (9M 2020:
125.2 mEUR)
68.0
▪ 9M EBITDA at 72.1 mEUR (+22.2% yoy), with waipu.tv delivering
a remarkable contribution
Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21
Revenue Media Barter Deal (waipu.tv)
GROSS PROFIT EBITDA 9M 2020 AND 9M 2021
in mEUR in mEUR
+4.7% S +13.1 mEUR
72.1
44.1 43.5 45.8 44.0 46.1
43.1 1.5 7.0
38.1 59.0 4.2 1.9
44.3
Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 EBITDA 9M 20 freenet TV MB B2B waipu.tv EBITDA 9M 21
Gross profit Media Barter Deal (waipu.tv)
Capital Markets Day 2021 04.11.2021 9
Q3 FREE CASH FLOW ON UPPER END OF
GUIDED RANGE
EBITDA TO SUSTAINABLE FREE CASH FLOW (FCF) QUARTERLY BREAKDOWN 2021
in mEUR in mEUR (2020 excl. Sunrise dividend and interest payments syndicated bank loan)
59.5 60.8
52.7 50-60
-36.4
-25.6
-28.5
18.9
0.0
-54.1
-22.5
339.9
172.9
Q1 21 Q2 21 Q3 21 Q4 20 Q4 21e
EBITDA Change Tax Net Leases Interest Others FCF
9M 21 NWC payments capex payments 9M 21 FCF Guidance
Q4 21:
9M 20 w/o
Sunrise:
329.2 -22.2 -19.9 -31.3 -50.8 -22.5 -0.1 182.4 50-60 mEUR
9M 2020 negative change in NWC better due to a positive temporarily reporting date effect;
out of this FCF in 9M 2021 higher than in previous year
Capital Markets Day 2021 04.11.2021 10STRONG FINANCIAL KPIs
TOTAL ASSETS & NET DEBT & BANK NET DEBT &
EQUITY RATIO LEVERAGE* B A N K L E V E R A G E */**
(Lower limit: >25%) (Upper limit: ≤3,0x)
in mEUR/ as indicated in mEUR/ as indicated in mEUR/ as indicated
29.6%
40.4%
41.3% 4.3x
3.6x
4,764.9 4,505.6 3,943.8 1,840.0 1.7x 1.9x 1,0x
1,368.1 0.7x
740.6 817.9 390.3
274.0
30.09.20 31.12.20 30.09.21 30.09.20 31.12.20 30.09.21 30.09.20 31.12.20 30.09.21
Equity ratio improves despite impairment of the fibre Slight increase of the leverage/bank leverage ratio based on the dividend paid in mid-June plus additional
network right of use (EXARING) in Q2 21 shareholder return through share buy-backs, which results in a brief liquidity reduction
* EBITDA = EBITDA of last twelve months (i.e., October 2020 to September 2021 or rather October 2019 to September 2020 for the previous year)
** Bank leverage = Bank net debt incl. interest accrual divided by lease-adjusted EBITDA of last twelve months
Capital Markets Day 2021 04.11.2021 11FINANCIAL RESULTS EXPECTED AT UPPER
END OF INCREASED GUIDANCE
SUBSCRIBER GUIDANCE ACTUAL GUIDANCE 2021
in ‘000s
2020 INITIAL UPDATE
▪ Postpaid customer 7,078.7
Moderate
(w/o digital/app-based tariffs) growth
▪ freenet TV RGU 901.9 Moderate
decrease
▪ waipu.tv subscriber 572.5 Solid growth
FINANCIAL GUIDANCE ACTUAL GUIDANCE 2021
in mEUR/ as indicated
2020 INITIAL UPDATE
▪ Revenue 2,576.2 stable
▪ EBITDA 425.9 415-435 430-445 +12.5 to mid point
▪ Free cash flow (w/o Sunrise) 201.3 200-220 215-230 +12.5 to mid point
▪ Payout policy: 80 per cent of FCF distributed to shareholders
Capital Markets Day 2021 04.11.2021 12QUEST IONS? Q&A ON Q3/21 RESULTS
CHRISTOPH VILANEK STRATEGIC OUTLOOK 2025
VISION, MISSION & STRATEGY
FREENET GROUP VISION UNCHANGED
ALWAYS
THE
RIGHT
As freenet Group we want to be the right choice
for all our stakeholders - our employees, our
customers, our partners and our shareholders. We
CHOICE.
are aware of our responsibility to society, and we
take this into account through long-term thinking
and sustainability in all corporate decisions.
Capital Markets Day 2021 04.11.2021 16OUR MISSION ADOPTING DIGITAL ASPECTS
GROWTH THROUGH PRODUCTS, SERVICES AND
CUSTOMER-CENTRIC INTERACTION
Customer Centricity Digital First Demand Driven Customer Proximity
▪ Distribution of selected own ▪ Both for internal business ▪ Competent advice ▪ Making use of the omni-
products or sourced goods processes and operations addressing customers' needs channel platform to serve
serving individual customer ▪ And for the interaction and ▪ Taking benefit of learnings captive and non-captive
requirements transaction with customers from customer contacts for channels
▪ Any activity based on deep and all our stakeholders product development and ▪ Providing service at all
understanding data innovation touchpoints seamlessly
Capital Markets Day 2021 04.11.2021 17OUR DEDICATION AND AMBITION FOR 2025
… TO GROW
… TO CHANGE
WE WANT … TO FOCUS
… TO STAY IN FRONT
… TO GET FASTER
… TO REMAIN THE ONE INDEPENDENT, RELIABLE
AND SUSTAINABLE OMNICHANNEL PLAYER
Capital Markets Day 2021 04.11.2021 18OUR HOLISTIC DIGITAL LIFESTYLE STRATEGY
SUPPORTS…
DIGITAL LIFESTYLE GROWTH
includes telecommunications, Internet, Energy, TV, through continuous optimisation and expansion of
as well as all services, applications and appliances our digital lifestyle product and service portfolio,
that can be controlled or connected to mobile making consistent use of our established strengths
devices or can be used via an intelligent device. and competencies, existing and new distribution
The overall freenet offering is intended to provide channels and the optimization over the customer
customers with a coordinated solution under one life cycle and all customer contacts.
umbrella brand.
Capital Markets Day 2021 04.11.2021 19… A TRANSFORMATION FROM A SALES MACHINE
TO THE MANAGEMENT OF A CUSTOMER BASE
2010-2016 2016-2020 2021-2025
SAC (subscriber LCE = CLTV =
Major KPI acquisition cost) & SRC Product lifecycle Customer Lifetime Value
(subscriber retention cost) (12/24-months-view) (long-term, cross-product)
Distribution with focus Balance between gross Management of
Proposition adds and renewals customer base
on gross adds
Organisational Systems and Competences and Functional organization
design principle processes legacy along value chain
Capital Markets Day 2021 04.11.2021 20NECESSARY MINDSHIFT FOR ALL FUNCTIONS
Active customer base management across entire customer lifecycle
…Instead of pure sales machine with focus on new customers
Data-driven and creative customer approach across all touch points
…Instead of manual and classic sales approach
Awareness of corporate responsibility as a central decisive criterion
…Instead of solitary focus on profit maximisation
Capital Markets Day 2021 04.11.2021 21CHANGE FROM MIDTERM TO LONG-TERM VIEW
Product Lifecycle (LCE) Customer Lifetime Value (CLTV)
Mobile
LCE Consumer
Internet
Mobile Electronics
LCE Mobility
TV &
TV Entertainment
CLTV
LCE
DLS Finance Energy
Insurance
Product profitability (24 months) Compound margin optimisation on customer level
across all products, touchpoints and many years
Capital Markets Day 2021 04.11.2021 22DATA SOURCES FOR THE FREENET
SMART PRICING MODEL
DETERMANTS WITHIN THE REALTIME MODELLING
PERIOD – tenure and total lifetime instead of contract length
Individual combination of
▪ Offer - such as promotion,
BEHAVIOUR – service calls, touch points used, location and time preferences hardware, tariff plan
▪ Channel - and channel specific
USAGE – data, speed, products, services, incentive
▪ Timing - day, hour, of interaction or
within the contract period
TRANSACTIONS – response, conversion, termination ▪ Pricing on service, activation fee,
hardware, digital lifestyle
CHANNELS – preference, frequency, duplications ▪ And any other terms
PERSONAL AND META DATA – ZIP, income, purchase power
Capital Markets Day 2021 04.11.2021 23DATA DRIVEN ONE-TO-ONE MARKETING
TRANSFORMATION FROM “ONE-TO-MANY” TO “ONE-TO-ONE” COMMUNICATION AND OFFERING
One size fits all Addressing segments One-to-one in all dimensions
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statt XX,99 €
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Gutaben
⌀ max max
⌀⌀
⌀
Capital Markets Day 2021 04.11.2021 24SMART PRICING WORKS NOT ONLY IN THEORY
LIFECYCLE UPLIFT THROUGH FREENET SMART PRICING MODEL
Gross adds Retention Prevention
105% 125% 110%
100%
100%
100% TARGET FOR
+5% +10% FULL BASE:
>20%
+25%
Non-smart Smart Non-smart Smart Non-smart Smart
SMART
PRICING
UPLIFT IN
LIFECYCLE
Capital Markets Day 2021 04.11.2021 25MAKING USE OF A NEW PARADIGM
DIGITALISATION STANDARDISATION & GUIDELINES &
SIMPLIFICATION CONTROL
Adapt the existing organisation Establish consistent practices for all More focused guidelines in which
and working methods, e.g.: transactional processes. the organization can act quickly
and autonomously.
▪ Use of virtual meetings has ▪ Establishment based on an E2E
impact on sales force view of customer experience ▪ Further acceleration of work
dimensioning or staffing in shops optimization processes and avoidance of
correction in situations of high
▪ Digital training replaces on-site ▪ Continuous process of complexity and confusion
coaching and training improvement through a higher degree of
preliminary decisions and
▪ Approval processes drive ▪ Quick prioritization and determinations at central level
acceleration and save capacity implementation of standard
processes and IT solutions
Capital Markets Day 2021 04.11.2021 26SIMPLIFIED NEW OPERATING MODEL
FINANCIAL STEERING
MANAGEMENT
CONTROL CUSTOMER
PRODUCT HOUSE ▪ Defines offer, measures success and
INTERACTION
▪ Product development and design optimizes
▪ Has the customer in focus ▪ Takes care of the presentation of
▪ Procurement products and offers
▪ Measured by gross profit of the product ▪ Measured by total revenue of the business
(excluding SG&A) ▪ Has a sales commitment
▪ Measured by efficiency (costs)
CONTINUOUS
IMPROVEMENT
▪ Defines products, processes and components
▪ Assigns the appropriate end-to-end responsibility
▪ Drives and is responsible for standardization
TECHNOLOGY AND PROCESSES
Capital Markets Day 2021 04.11.2021 27EVEN GREATER
INTEGRATION OF ESG INTO
DECISION-MAKING
OUR GENERAL (FUTURE) AMBITION
In all activities, we will place our responsibility in the ESG dimensions
on an equal footing with purely economic considerations
ACHIEVEMENTS NEXT STEPS
▪ Gradual improvement of relevant ESG ▪ Develop net zero timeline for scope 1+2
ratings emissions
▪ >50% reduction of scope 1+2 ▪ Develop action plan for full
emissions since 2015 through digital electrification of Group controlled fleet
broadcasting strategy
▪ Expansion of sustainable product
▪ Electrification of the Group fleet initiated portfolio + digital customer
by installation of charging infrastructure communication
▪ Improvement of customer satisfaction ▪ Integration of ESG into remuneration
levels + increased degree of digital system
customer communication
Capital Markets Day 2021 04.11.2021 28FREENET TO MARKET OWN SUSTAINABLE
AND DURABLE SMARTPHONE ‘REPHONE’
LAUNCH NOVEMBER 2021
2021
Sales start
Fairphone 4 5G
FREENET STARTS REPHONE
2019 Successful sale
Fairphone 3/3+
▪ Produced with 100% green electricity
▪ Replaceable battery
▪ Android operating system
2018
freenet gets
largest distributor ▪ FSC certified packaging made of
in Europe grass paper
Marketing start ▪ Back of device made of recycled material
2016 of Fairphone in
stationary retail
▪ Repair at fixed prices
▪ Local and certified recycling
▪ Hardware deposit
Capital Markets Day 2021 04.11.2021 29OPERATIONAL DEEP DIVES
FREENET BECOMES UMBRELLA BRAND
Mobile
Internet TV Entertainment
Communications
DIETER BOHLEN
SUCCESSFUL GERMAN ENTERTAINER,
MUSICIAN & PRODUCER
AS TESTIMONIAL FOR NEW BRAND
HOUSE
Capital Markets Day 2021 04.11.2021 31STRAIGHT AND CONCISE NEW BRANDING
ALL SHOPS CONSIDERED TO BE “FREENET-DIGITAL.DE“ AS NEW ONLINE
FLAGGED AS “FREENET” SHOPS HUB FOR ALL SERVICES
Capital Markets Day 2021 04.11.2021 32FREENET OMNICHANNEL PROPOSITION
Owned customer journey 3rd party customer journey
Captive channels Non captive channels
(Direct customer access, improved up-selling potential and advertising permission)
▪ Own shops ▪ Owned ▪ Inbound ▪ 3rd party ▪ Ceconomy ▪ 3rd party web
▪ Franchise web customer free ▪ Distributors ▪ Price com-
▪ Partner ▪ Apps service dealers ▪ Retail Chains parison portal
shops ▪ Social ▪ Outbound ▪ Business
Media telemarketing distributors
Non-captive channels 32% 26% SHARE OF CAPTIVE CHANNELS
INCREASED TO ALMOST 75%
Captive channels 68% 74% EXPANDING LEEWAY FOR DATA-
DRIVEN OPTIMISATION
Q4 19 - Q3 20 Q4 20 - Q3 21
Capital Markets Day 2021 04.11.2021 33Mobile Communications
Core I DLS I Internet
MOBILE PORTFOLIO BRANDS ALONG SEGMENTS
SIM-only / flat rates with data packages MOBILE CUSTOMERS
Online distribution only
SIM-only / day or monthly flats / unlimited data packages 2018 7,022.9
App distribution only
SIM-only flats / diverse data packages 2019 7,080.7
App and online distribution +408.6
(+5.8%)
SIM-only flats / diverse data packages / hardware optional 2020 7,309.9
Omnichannel distribution
Tariff plans including hardware Q3/21 7,431.4
Omnichannel distribution (replacing mobilcom-debitel plans)
Capital Markets Day 2021 04.11.2021 34Mobile Communications
MACROECONOMIC FACTORS Core I DLS I Internet
CHALLENGE MOBILE BUSINESS
PRESSURISING EXTERNAL FORCES
100 ▪ Price erosion
▪ Trend to SIM-only
▪ Saturation
▪ Regulation/
100-x
Compliance costs
▪ Minimum wages
▪ Declining society
Capital Markets Day 2021 04.11.2021 35Mobile Communications
INTERNAL MEASURES Core I DLS I Internet
TO COUNTER MACROECONOMIC FACTORS
LAUNCHED INTERNAL COUNTERMEASURES
100+x TARGET:
AT LEAST
▪ CLTV concept
SLIGHT ▪ Smart pricing
GROWTH
IN MOBILE ▪ Captive channel
CORE
expansion
100-x
▪ Digitalisation
▪ Cost efficiency
▪ Marketing simplification
Capital Markets Day 2021 04.11.2021 36Mobile Communications
DIGITAL LIFESTYLE STRATEGY Core I DLS I Internet
AND TARGETS
Valorization and monetarization of the customer relationship
Added
value through cross- and upselling to increase share of wallet
Consolidation of relevant revenue streams driving customer
Options lifetime value and loyalty
Review and expansion of the Digital Lifestyle portfolio by early
Trend/
Ambition identification of new products and services and extensive testing
Capital Markets Day 2021 04.11.2021 37Mobile Communications
DIGITAL LIFESTYLE – Core I DLS I Internet
STAYING ON THE PULSE OF TIME
News/ Security/
Fitness Smart Home Gadgets
Entertainment Insurance/Finance
DRIVING VALUE BY INCREASING PENETRATION,
WIDENING PORTFOLIO AND FOCUSSING ON SUBSCRIPTION
Capital Markets Day 2021 04.11.2021 38Mobile Communications
Core I DLS I Internet
10-20 PERCENT UPSIDE IN DLS UNTIL 2025
DIGITAL LIFESTYLE REVENUE CONTRIBUTION
in mEUR
CAGR
+12% 220-230
>60%
(2015-2020)
189.9 188.6
179.8
SUBSCRIPTION
164.2
137.1
BASED DIGITAL
106.0 LIFESTYLE
OPTIONS
2015 2016 2017 2018 2019 2020 2025e
Capital Markets Day 2021 04.11.2021 39Mobile Communications
EVOLUTION OF FREENET ACCESS
Core I DLS I Internet
AGNOSTIC INTERNET OFFERING
KEY FEATURES
2022
Full Rollout VDSL
Existing
Mobile LTE
Internet Flats based freenet ▪ Asset-light (no CapEx)
incl. Hardware Internet
▪ Internet access only
Omnichannel
Online/Shops
▪ Technology-agnostic
H2/ 15-25
2021
2023
Pilot VDSL based
Fixed Network
Launch of additional
technologies (i.e.,
mEUR
Internet Access Cable, FTTH, …) EBITDA
Selected Shops, Omnichannel CONTRIBUTION
UNTIL 2025
10/
expansion in 2022
From
Capital Markets Day 2021 04.11.2021 40AS BEST PREREQUISITE FOR
CONVERGENCE OPPORTUNITIES
MOBILE INTERNET T V E N T E R TA I N M E N T
T-Mobile Mobile LTE IP
Vodafone Fixed line (VDSL) OTT
Telefonica Deutschland Cable Terrestrial
1&1 AG Fibre VBI
Satellite 5G
5G
Not yet part of portfolio
Capital Markets Day 2021 04.11.2021 41TV and Media
DIVERSIFIED TV AND MEDIA waipu.tv I MB I DAB+
PORTFOLIO WITH STRONG GROWTH POTENTIAL
TV AND MEDIA
▪ IP/OTT TV is an ▪ DVB-T2 is a classic ▪ Wide B2B services in ▪ DAB is gaining
undisputed megatrend longtail business with CDN, transmission penetration and
▪ Our current 40% a loyal customer base service, DAB, DVB-T, market share
market share is an delivering high margin 5G Campus solutions ▪ Regional multiplexes
excellent starting due to minimal SG&A etc. delivers stepwise replace
position for future ▪ Mid-term transfer or constantly new existing FM base
growth convergence with opportunities ▪ Own channels open
▪ Programmatic ad IP/OTT to be verified ▪ Efficiency gains new sources of
income as 2nd revenue and exploited guarantee free cash revenues and profits
stream to come flow contribution
Capital Markets Day 2021 04.11.2021 42TV and Media
TV MARKET TODAY DOMINATED waipu.tv I MB I DAB+
BY ‘ONE TO MANY’ BROADCAST TECHNOLOGY
in 000‘
TV households Cable Satellite DVB-T IPTV OTT-TV
2016 17,477 17,705 3,427 2,361 0
(45.9%) (46.5%) (9.0%) (6.2%)
2020 16,795 16,987 2,427 4,083 1,117
(43.6%) (44.1%) (6.3%) (10.6%) (2.9%)
2021 16,935 16,858 2,596 3,914 1,821
(43.7%) (43.5%) (6.7%) (10.1%) (4.7%)
…
…
2030
Source 2016-2021: Digitalisation Report Video 2020 and 2021, die medienanstalten
Basis: 38.076 (2016); 38.306 (2017); 38.697 (2018); 38.491 (2019); 38.520 (2020); 38.753 (2021) million TV households in Germany
Sum >100% due to multiple reception
Capital Markets Day 2021 04.11.2021 43TV and Media
FUTURE IS CLEARLY TAKING waipu.tv I MB I DAB+
PLACE IN THE OTT UNICAST WORLD
Technology shift
BROADCAST (one-to-many) UNICAST (one-to-one)
Capital Markets Day 2021 04.11.2021 44TV and Media
IP AS FASTEST GROWING ACCESS waipu.tv I MB I DAB+
TECHNOLOGY
IP TRANSMISSION IN GERMANY
in m households
35 Exponential growth scenario
> 30 in m subscribers
≥6.0
mn
30
≥1.6
0.6
25
2020 2025e 2030e
> 13.0 mn
20 IPTV/OTT
15 Linear scenario
in m subscribers ≥2.2
> 11
10 ≥1.1
mn 0.6
5.2 5.7
5 4.0
2.4 2.6 3.3 2020 2025e 2030e
0
2016 2017 2018 2019 2020 2021 2025e 2030e Market share (OTT only)
Total IPTV/OTT households IPTV linear growth scenario
IPTV exponential growth scenario
~40% ~25% ~20%
Source 2016-2021: Digitalisation Report Video 2020 and 2021, die medienanstalten, own expectations
Capital Markets Day 2021 04.11.2021 45TV and Media
FOR 30 MN POTENTIAL SWITCHERS waipu.tv I MB I DAB+
WAIPU.TV GETS EVEN MORE ATTRACTIVE
TV TRANSMISSON IN GERMANY LAUNCH OF WAIPU.TV 4K STICK
in m households
38.6 37.9
37.3 36.8 ▪ waipu.tv gets a permanent place in the
36.2 36.4
living room
▪ Cable and Satellite replacement with
waipu.tv becomes tangible
▪ Live TV and streaming services
seamlessly integrated
5.2 5.7 ▪ Platform with 2022 technical standards
3.3 4.0
2.4 2.6
2016 2017 2018 2019 2020 2021 2025e 2030e
Total DVB households (cable, satellite & terrestrial TV) Total IPTV/OTT households
DVB households decline scenario IPTV exponential growth scenario
Source 2016-2021: Digitalisation Report Video 2020 and 2021, die medienanstalten, own expectations
Capital Markets Day 2021 04.11.2021 46TV and Media
FREENET TV (B2B/B2C) LONGTAIL waipu.tv I MB I DAB+
BUSINESS WITH LOYAL CUSTOMER BASE
FREENET TV: STYLISED EXAMPLE OF
MANAGING PROFITABILITY EXPECTATION
freenet TV
100%
EBITDA ▪ freenet TV (DVB-T2) entered
maturity phase
▪ Expansion of relative market share
is not expected
freenet TV
subscriber ▪ Clear focus on profitability-oriented
base (RGU) management of business, i.e. price
adjustments, cost sensitivity and
low investments to generate stable
EBITDA and cash contributions in
the future
2016 2017 2018 2019 2020 2021e 2022e 2023e 2024e 2025e
Capital Markets Day 2021 04.11.2021 47MEDIA BROADCAST - GERMANY'S LARGEST
SERVICE PROVIDER IN THE MEDIA INDUSTRY
▪ Event broadcasting, e.g., Bundesliga or Basketball
▪ Operation of nationwide TV and radio infrastructures
with availability of up to 99.95% on SLA
▪ Management and operation of distribution networks
based on different technologies, e.g., ARD Disnet,
Integrated National Performance Network (INL) and
ZDF data networks
Capital Markets Day 2021 04.11.2021 48TV and Media
PLAN, BUILD & RUN OF waipu.tv I MB I DAB+
INDEPENDENT 5G CAMPUS SOLUTIONS
▪ Media Broadcast has set up a private 5G
standalone campus network near Berlin
(Nauen)
▪ Test environment for 5G applications for
Media Broadcast, other service providers
and customers
▪ Provider-independent "5G Blue-Box"
offers high bandwidth, highest security
level and is mobile applicable
Capital Markets Day 2021 04.11.2021 49TV and Media
DAB+ RADIO EXPANSION – waipu.tv I MB I DAB+
SOURCE OF NEW REVENUES
1ST NATIONWIDE 2ND NATIONWIDE LOCAL & REGIONAL STRONG TAILWIND
DAB MULTIPLEX DAB MULTIPLEX MULTIPLEX FOR DAB+ RADIO
▪ Number of DAB+ households
(+11% yoy), penetration (+30%
yoy) and usage (+20% yoy)
increased significantly
▪ In 2020 more than 11 million
households listened to DAB+
radio via more than 20 million
DAB+ receiving devices
▪ Growth driver legislation: Since
12/2020, Mandatory digital radio
(DAB+) in new cars and
stationary radios
Constant revenues from digital radio transmitter network operations
Capital Markets Day 2021 04.11.2021 50TV and Media
2ND DAB MULTIPLEX OCCUPIED waipu.tv I MB I DAB+
BY JOINT VENTURE „ANTENNE DEUTSCHLAND“
SECOND NATIONAL
MULTIPLEX
Constant revenue from third party programs
STREAM
MUX 1
Ad marketing own programs (growth opportunity)
Capital Markets Day 2021 04.11.2021 51TV and Media
HIGH REVENUE POTENTIAL waipu.tv I MB I DAB+
FOR ALTERNATIVE ADVERTISING MARKETER
▪ German radio advertising market is dominated by REVENUES RADIO ADVERTISING (GERMANY)
In mEUR
two radio marketers today: RMS and AS&S. 832 841 848
816
784 789 797
768
▪ Annual volume of the radio advertising market is 758
around 800 mEUR, growing steadily. 658
▪ Pure DAB+ programmes are not marketed by
RMS and AS&S so far
▪ Antenne Deutschland operates its 5 DAB stations
as so-called simulcasts (DAB+ radio and web 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
stream) and already three more stream-only radio
stations AS&S AS&S
▪ Antenne Deutschlands sales unit ad.audio, a Joint ad.audio
Venture with Ströer Digital Media, is facing a
growing 800 mEUR market with it´s nationwide
„audio 360 degree“ offers
RMS RMS
Capital Markets Day 2021 04.11.2021 52TV and Media
waipu.tv I MB I DAB+
MEDIA BROADCAST AMBITION 2025
Terrestrial TV
Radio Events/Networks
(B2B/B2C)
Current
EBITDA
contribution
65% 25% 10%
Ambition
2025
(in absolute terms)
Capital Markets Day 2021 04.11.2021 53INGO ARNOLD FINANCIAL AMBITION 2025
BY 2025, WE AIM TO INCREASE
GROUP EBITDA TO AT LEAST
520 MILLION EUROS BASED
ON ORGANIC GROWTH.
CAGR IS EXPECTED
TO B E > 4 P E R C E N T
Capital Markets Day 2021 04.11.2021 55TV AND MEDIA SEGMENT MAIN
CONTRIBUTOR TO GROWTH
EXPECTED EBITDA CONTRIBUTIONS BY SEGMENT
in mEUR
CAGR >4%
≥520
5-15
35-65
426 30-60
2020 Mobile TV & Media Cost efficiency 2025e
Communications
FREE CASH FLOW EXPECTED TO RISE IN LINE WITH EBITDA
Capital Markets Day 2021 04.11.2021 56ORGANIC GROWTH EXPECTED IN ALL
DIVISIONS
MOBILE COMMUNICATIONS TV AND MEDIA
in mEUR in mEUR
Mobile core business 5-15 waipu.tv 25-35
Media Broadcast B2B/
Digital Lifestyle 10-20 0-10
freenet TV
freenet Internet 15-25 DAB+ 10-20
Total Mobile Total
30-60 35-65
Communications TV & Media
Capital Markets Day 2021 04.11.2021 57KEEPING SHAREHOLDER RETURN AT HIGH
LEVEL
FREENET GROUP AMBITION 2025 SHAREHOLDER REMUNERATION POLICY1
>260 mEUR
▪ EBITDA-to-FCF
80% Free cash flow
conversion remains high
>4%
▪ CapEx-light model Distribution scenarios
1 2 3
maintained
▪ Tax payments increase
based on higher net Full payout as Fixed dividend Hybrid model,
income dividend volume + SBB i.e. increasing
▪ NWC remains on dividend +
reasonable level SBB
EBITDA CAGR Free cash flow Longer-term pitch perspective remains intact
2020-2025e 2025e BUSINESS GROWTH COMBINED WITH
HIGH SHAREHOLDER RETURN
1 Subject to AGM approval and Board resolution
Capital Markets Day 2021 04.11.2021 58QUEST IONS? Q&A ON AMBITION 2025
THANK YOU. FOR FOLLOW-UP QUESTIONS REACH OUT TO: freenet AG Investor Relations investor-relations@freenet.ag www.freenet-group.de Tel.: +49 (0) 40 513 06 778
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