Release Date: March 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- freenet AG (WBO:FNTN, Financial) reported a record EBITDA of over EUR 520 million for 2024, marking a successful year.
- The company achieved a significant increase in free cash flow, reaching EUR 292 million, up 5.7% from 2023.
- freenet AG's Mobile Communications sector performed well, with strong postpaid net additions and long-term contracts secured.
- The waipu.tv service saw substantial growth, with nearly 600,000 new customers added, contributing positively to EBITDA.
- The company plans to distribute 80% of its free cash flow as dividends and has announced a share buyback program for 2025.
Negative Points
- The freenet TV segment continues to lose subscribers, with no clear floor in sight, impacting overall growth.
- There was a decrease in gross profit in Q4 2024 compared to the previous year, partly due to lower performance bonuses.
- The company faced increased bad debt provisions and higher HR costs due to inflation, affecting EBITDA.
- ARPU (Average Revenue Per User) showed a slight decrease, indicating potential challenges in maintaining revenue per customer.
- The IPTV segment experienced churn from Telefonica customers, impacting net sales despite overall growth.
Q & A Highlights
Q: Can you discuss the competitive dynamics in the German Mobile market and the impact of M&Os using their own channels?
A: Christoph Vilanek, CEO, explained that while there were concerns about unlimited offers from competitors, customer understanding was limited, and it did not significantly impact freenet's churn or intake. He noted that freenet benefits from the current market dynamics, with competitors like Vodafone struggling, allowing freenet to capitalize on the situation.
Q: What drove the strong mobile postpaid net adds in Q4, and how significant was the contribution from the new brand Happy SIM?
A: Christoph Vilanek, CEO, stated that Happy SIM was not a major contributor. The growth was attributed to a broader online service offering and cost-efficient operations, with more visibility through online channels.
Q: What is your view on potential consolidation in the German mobile market?
A: Christoph Vilanek, CEO, expressed skepticism about consolidation in Germany, citing stable market conditions and reasonable performance from major players like Deutsche Telekom and Telefonica. He noted that rumors about United Internet's network plans persist, but no significant consolidation is expected.
Q: Can you explain the impact of accounting changes on Q4 EBITDA and the performance bonuses?
A: Ingo Arnold, CFO, clarified that the restatement had a minimal impact on Q4 EBITDA. The lower performance bonuses in Q4 2024 compared to Q4 2023 were due to an exceptionally high bonification in 2023, which was not repeated in 2024.
Q: What factors will determine the size of the share buyback, and what is the timeline for its execution?
A: Ingo Arnold, CFO, mentioned that the share buyback, up to EUR100 million, will depend on business developments and will be proposed to the Supervisory Board for approval by the end of March. The buyback is expected to start in Q2, with restrictions on daily trade volumes.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
