freenet.de AG

euro adhoc: freenet.de AG
Quarterly or Semiannual Financial Statements
freenet.de posts outstanding results for Q1/2005

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09.05.2005

freenet.de posts outstanding results for Q1/2005 • New record revenues of 146.3 million euros (+ 22 percent vs. Q1/04)

• Earnings before taxes rise to 28,1 million euros (+ 15 percent vs. Q1/04) • Strong customer growth in DSL (+ 115,000 customers) • Management confirms revenue and profit forecast for 2005 freenet.de AG / Hamburg - freenet.de AG continues to amplify its growth and profitability in the current business year. Revenues rose to a new record high of 146.26 million euros in Q1/2005 - up by 22 percent over Q1/2004 and a 16 percent increase over the company’s previous record in Q4/2004. All four lines of business enhanced their performance both year-on-year and vs. the previous quarter. The results, too, are significantly improved: Gross profits rose by 22 percent over the previous quarter, to 73.84 million euros. After personnel and other expenses, EBITDA amounted to 36.59 million euros - an eight-percent increase vs. Q1/2004 and 41 percent vs. the previous quarter. Any comparison of the quarterly results must consider the new IFRS 2 rules, which mandate that freenet shows its stock option program on the books: IFRS 2 decrees that the cost of any work performed by the beneficiaries acquired by implementing the programme must be shown at the respective balance sheet date for the period under review. This added 2.25 million euros in personnel expense to the Q1/2005 books, and 7.36 million euros in additional personnel expense to Q1/2004. The various quarterly results in 2004 were adjusted accordingly and after the fact. Earnings before taxes (EBT) increased by 15 percent vs. Q1/2004 and by 60 percent over Q4/2004, to 28.06 million euros. After taxes, the group had net income of 17.43 million euros, up by 19 percent since Q1/2004 and by 53 percent over Q4/2004. Cash and cash equivalents declined by 54.42 million euros in Q1/2005, to 90.93 million euros. This reflects payments of 10 million euros to mobilcom as the final instalment in the takeover of its fixed-line business in 2003 and another 80 million euros paid out as part of the acquisition of the STRATO group in late January 2005. Internet Access is still the strongest mainstay of sales, contributing 84.19 million euros to group revenues. One particularly gratifying development is the strong growth in the DSL customer base, which grew by 115,000 customers to 465,000 customers at the end of March 2005 (including the 20,000 DSL customers added by STRATO). At the same time, the total number of active Internet Access customers rose to a new high at 3.87 million. The time our users spent online also increased slightly to 5.10 billion minutes. With revenues of 39.91 million euros (+ 15 percent vs. Q1/2004), Voice Telephony remains the second-largest segment, although freenet had deliberately opted for a strategy of continual low rates in past months, without trying to undercut every discount rate in the extremely volatile and price-sensitive by-call business. The total volume of call minutes rose year-on-year, to 1.35 billion at the end of March 2005. The Portal business - including digital services - and the supplementary B2B Services segment showed the most rapid growth: the Portal business nearly tripled its revenues year on year, to 20.04 million euros. Factors that contributed to this success include a systematic increase in the attractive paid services available on the freenet online service, which currently count approx. 240,000 subscribers, and the integration of the STRATO group acquired with effect from end January 2005, which added about 1 million customer contracts in the Domain Hosting segment. B2B revenues, which increased by 63 percent year on year, to 2.11 million euros, reflects the management’s increasing focus on this income stream. This does not include any revenues from the takeover of Talkline ID, which wasn’t finalized until April 2005. In light of these excellent first-quarter results, the management confirms its revenue forecast of 650 million euros for 2005 and expected EBITDA of between 125 and 140 million euros. At the same time, it will propose to the Annual General Meeting a dividend payout of 0.35 euros (per share) for fiscal 2004.

~

Financial data*                    Q1/2005 Q4/2004 Q1/2004
                                                         adjusted adjusted                        
Revenues                                146,256 126,466 119,476
Segment: Internet access      84,187  73,049  76,760
Segment: Portal                    20,041  12,463  6,790
Segment: Voice                      39,914  39,558  34,630
Segment: B2B services          2,114    1,396    1,296
Gross profit                         73,842  60,327  67,093
EBITDA                                  36,588  25,969  33,969
Earnings before taxes (EBT) 28,056  17,482  24,401
Group result                         17,429  11,409  14,669
Capital and reserves            268,814 185,054 149,116
Balance sheet total              463,664 315,300 320,129
Cahs and cash equivalents    90,925  145,348 144,418
~
*per IFRS; in TEUR / Source: freenet.de AG

end of announcement                                euro adhoc 09.05.2005 06:30:00
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Further inquiry note: Andreas Neumann Investor Relations Tel.: +49 (0)40 51306 778 E-Mail: IR@freenet-ag.de

Branche: Online
ISIN:      DE0005792006
WKN:        579200
Index:    TecDAX, Prime Standard, CDAX, Prime All Share, HDAX, Technologie All Share, Midcap Market Index
Börsen:  Frankfurter Wertpapierbörse / regulated dealing
              Berliner Wertpapierbörse / free trade
              Hamburger Wertpapierbörse / free trade
              Baden-Württembergische Wertpapierbörse / free trade
              Börse Düsseldorf / free trade
              Niedersächsische Börse zu Hannover / free trade
              Bayerische Börse / free trade
              Bremer Wertpapierbörse (BWB) / free trade



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