freenet AG

euro adhoc: freenet AG
quarterly or semiannual financial statement
freenet AG begins new "era" as merged company with gratifying first-quarter results

@@start.t1@@--------------------------------------------------------------------------------   Disclosure announcement transmitted by euro adhoc. The issuer is responsible   for the content of this announcement. --------------------------------------------------------------------------------@@end@@

3-month report

14.05.2007

@@start.t2@@freenet AG begins new "era" as merged company with gratifying first-quarter
results
•          Customer basis enlarged in all growth segments
•          EUR452.4 million in revenue
•          Gross profits on the rise: EUR142 million
•          All results improved year on year (vs. Q1/2006): EBITDA EUR65.5 million;
EBIT EUR50.9 million; EBT EUR55.8 million; consolidated profits EUR49.9 million@@end@@

Hamburg, 14 May 2007 -freenet AG delivered a positive first-quarter performance despite an intense competitive environment. Its results underscore the group´s excellent positioning in Germany´s Internet and telecommunications market. The company improved its customer numbers in all growth segments - to 5.12 million mobile telephony customers (+ 24´000 customers vs. Q4/2006), 1.59 million customers in paid services (+ 80´000 customers vs. Q4/2006) and 1.17 million DSL users - an increase by 165´000 new DSL customers, including Tiscali customer relationships acquired at the beginning of the year. In all, freenet had roughly 12.7 million customers throughout the group, of which 6.13 million were permanent subscribers (contract customers). Changes in commission and settlement models with Deutsche Telekom over the course of the year, and the partial recognition of customer recruitment and customer loyalty costs, limit the comparability of indexes with prior and comparable quarters. As a result of these adjustments, the quarterly results show lower revenues against rising gross profits and results. The above-described circumstances caused first-quarter revenue to decline by 13.3 percent year on year, from EUR522.9 million in 2006 to EUR452.4 million in 2007. The decline was more marked in Mobile Telephony, where revenue dropped by 14.3 percent to EUR278.8 million; Fixed-line/Internet revenue declined by 11.6 percent to EUR173.7 million. Mobile telephony is still the group´s strongest revenue mainstay. The group´s gross profit and earnings showed significant year-on-year growth. At the group level, gross profit for the first quarter of 2007 reached EUR141.9 million, EUR29.4 million or approx. 26 percent above that of Q1/2006. EBITDA increased to EUR65.5 million, a 71.9-percent year-on-year increase (Q1/2006: EUR38.1 million) and 164 percent above the previous quarter (24.8 million EUR). freenet AG generated EUR50.9 million in earnings before interest and taxes (EBIT), representing a more than 272 percent improvement over the previous quarter or roughly 88 percent over Q1/2006. Earnings before taxes (EBT) were up by more than 200 percent over the previous quarter, to EUR55.8 million; this represents a nearly 90-percent improvement over the first quarter of 2006 lag. First-quarter group profits rose by approx. 177 percent year on year, to EUR49.9 million. Despite the acquisition of Tiscali´s customer relationships during the first quarter, cash and cash equivalents continued to grow, reaching EUR538 million. "One challenge will be to optimize our company´s capital structure - for this we will come to a decision still in May", so freenet AG CEO Eckhard Spoerr.

Year-on-year Key financials of the freenet group: Accounting method: IAS/IFRS

In EUR millions                                          Q1/2007 Q4/2006 Q1/2006
Consolidated revenue                                  452.4    530.2    522.9
Mobile Telephony revenue                            278.8    348.3    325.4
Fixed-line/Internet revenue                        173.7    181.9    196.6
Consolidated gross profits                         141.9    112.5    112.4
Group EBITDA                                                65.5      24.8      38.1
Group EBIT                                                  50.9      13.7      27.9
EBT                                                              55.8      18.5      29.7
Group profits                                              49.9      n.a.*    18.9
Earnings per share                                      0.52      n.a.*    0.19
Cash & cash equivalents                              538.9    534.9    458.5
Total customers                                          12.67    12.68    14.94
Of which subscribers (contract customers) 6.13      5.81      5.40

* not comparable due to merger-related effects in Q4/2006

@@start.t3@@end of announcement                                                 euro adhoc 14.05.2007 07:24:46
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ots Originaltext: freenet AG
Im Internet recherchierbar: http://www.presseportal.ch

Further inquiry note:
IR-Manager
Andreas Neumann
Tel.: +49 (0)40 51306-778
Patrick Moeller
Tel.: +49 (0)4331 691173
E-Mail: ir@freenet.ag

Branche: Online
ISIN:      DE000A0EAMM0
WKN:        A0EAMM
Index:    TecDAX, CDAX, Prime All Share, HDAX, Midcap Market Index,
              Technologie All Share
Börsen:  Frankfurter Wertpapierbörse / regulated dealing/prime
              standard
              Börse Berlin-Bremen / 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



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