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freenet AG

euro adhoc: freenet AG
Financial Figures/Balance Sheet
Q3/2008 bears out freenet´s strategy with rising revenues, profits and customer numbers

  Disclosure announcement transmitted by euro adhoc. The issuer is responsible
  for the content of this announcement.
9-month report
14.11.2008
Q3/2008 bears out freenet´s strategy with rising revenues, profits and customer
numbers
•       Quarterly revenue soars past EUR1 billion in mobile telephony core
business for the first time
•       EBITDA Q3/2008 doubles to EUR133.5 million
•       Q1-Q3/2008: Group revenue reaches EUR1.80 billion; Group result at
EUR160.6 million
•       Customer count rises to 24.6 million; over 19 million customers in
mobile telephony alone
Büdelsdorf, 14 November 2008 - freenet AG continues to grow in 
conjunction with the debitel Group, first consolidated in the balance
sheet at 5th July 2008. The Group has underscored its corporate 
strategy geared toward mobile telephony and mobile Internet with 
facts. At EUR1.08 billion for Q3/2008, the Group´s quarterly revenues
first clearly exceeded one billion euros; the new core business of 
mobile telephony alone contributed EUR1.01 billion to this figure. In
Q3/2007, freenet had generated revenue of EUR400.3 million. B2B 
Services contributed EUR22.7 million, Webhosting EUR22.5 million, the
portal business added EUR9.4 million, and the declining narrowband 
business EUR16.3 million to this successful performance. Thus, at 
Group level, total revenue for the first nine months of 2008 came to 
EUR1.80 billion, vs. EUR1.20 billion in the first nine months of 
2007.
The acquisition of the debitel Group has resulted in the 
third-largest mobile telephony provider in Germany. With over 19 
million mobile telephony customers, freenet AG services approx. 20 
percent of the German mobile market, and dominates the segment of 
network-independent providers, where it commands 90 percent of the 
market. "We´ve managed to establish ourselves as a real alternative 
to the carriers and as a constant in the German telecommunications 
market," says freenet AG CEO Eckhard Spoerr, commenting on 
developments in 2008. "At the same time, our experience, expertise 
and market power related to the Web, portal and mobile business puts 
us in an excellent position for the emerging mobile Internet market."
In a first step, freenet recently introduced its debitel-freenet 
Dashboard software, which provides fast, direct access to the key 
mobile applications on the very first level, ensuring maximum 
convenience and user-friendliness for mobile phone users. At the end 
of September, the company had 24.6 million customers in all, 
including nearly 1.8 million paying customers in the Webhosting and 
Portal segments, and 1.05 million DSL customers. Nearly half of all 
freenet customers are contract customers (11.84 million). The debitel
purchase also boosted earnings considerably. Third-quarter gross 
profit came to EUR259.1 million - after EUR120.8 million in Q3/2007 
and EUR129.6 million in the previous quarter. This yields gross 
profit of EUR512.9 million for the first nine months of the year, up 
from EUR382.7 million in 2007. Third-quarter EBITDA, at EUR133.5 
million, nearly doubled year on year; for the first nine months of 
2008, EBITA amounted to EUR278.8 million, after EUR209.2 million in 
2007.
Earnings before taxes (EBT) were down from EUR42.9 million in Q3/2007
to EUR14.3 million; the decline is attributable mainly to a strong 
increase in depreciation and interest expenses resulting from the 
debitel purchase. For the first three quarters of 2008, EBT totalled 
EUR92.3 million, after EUR163.1 million in 2007. Meanwhile, the Group
result rose substantially to EUR138.1 million in the third quarter, 
due to deferred tax revenues as a result of the first-time 
consolidation of debitel.
Mobile Telephony
In line with the company´s strategy, the acquisition of the debitel 
Group has taken the core line of business, mobile telephony, to a new
dimension: freenet boosted its customer count in Germany to 19.28 
million at the end of September 2008; debitel accounted for around 
13.14 million, the old freenet-mobilcom contributed 6.14 million. 
8.67 million of these are contract customers, 10.61 million are 
pre-paid customers; the third quarter also saw a rise in the average 
revenue per contract customer (ARPU), from EUR26.3 to EUR26.5.
The mobile telephony segment also showed an increase in revenue and 
profits. Following the consolidation of the debitel Group at the 
beginning of July, quarterly revenue exceeded the one-billion mark 
for the first time, rising to EUR1.01 billion for Q3/2008. For the 
first three quarters of 2008, total revenue in the segment amounted 
to EUR1.57 billion, up from EUR883.8 million for the comparable 
period in 2007.
Third-quarter gross profit in the segment increased to EUR218.6 
million, which translates to a gross profit margin of 21.6 percent; 
the corresponding values for the first three quarters of 2008 were 
EUR375.0 million and 23.9 percent - after EUR208.5 million (23.6 
percent) in the first nine months of 2007.
Despite these gratifying figures, freenet will have to keep stepping 
up its competitiveness in an increasingly difficult market; with this
in mind, the company will do its utmost to exploit any and all 
synergies and cost-cutting potential in the months and quarters 
ahead. It also remains to be seen how the recession in Germany will 
affect people´s telecommunications behaviour. "Nevertheless, we will 
see an upward movement in sales of data tariffs in the fourth 
quarter," says Spoerr. "We believe there is still enormous future 
potential here."
Since the sale process for the DSL business has already been 
initiated, income and costs related to this segment have been 
factored out of the Group figures and are therefore not included in 
any of the above-mentioned figures. Third-quarter DSL revenues 
amounted to EUR76.2 million, resulting in gross profit of EUR25.7 
million. From an economic viewpoint, i.e. without capitalising the 
costs of customer acquisition - the DSL business would have shown 
losses of EUR46.4 million for the first nine months of 2008, up from 
EUR-73.5 million year on year. The debitel purchase roughly doubled 
the number of employees in the Group, including temporary staff, to 
7,713 at 30th September 2008. "The task in the months ahead," 
comments Eckhard Spoerr, "will be to systematically advance the 
restructuring of the "new" freenet AG. This includes harmonising the 
company´s different locations and sales networks as well as 
developing a new, balanced brand strategy; in doing so, we will 
leverage the strengths of our freenet, mobilcom, debitel brands, 
which are very well established in the market, as well as those of 
our very successful `no frills´ segment." The Group will also 
continue to work on the announced sale of its DSL business.
Q1-Q3/07           Q2/2008   Q3/2007
in EURm                        Q1-Q3/08 adjusted* Q3/2008  adjusted* adjusted*
Third-party revenue            1,800.7  1,202.6   1,079.2  357.7     400.3
Gross profit                   512.9    382.7     259.1    129.6     120.8
EBITDA                         278.8    209.2     133.5    67.8      67.4
EBIT                           131.7    155.8     51.5     32.7      46.0
EBT                            92.3     163.1     14.3     32.1      42.9
Group result from
continued operations           223.0    108.3     161.1    30.8      -4.7
Group result                   160.6    67.2      138.1    10.2      -22.7
in EURm                       Q1-Q3/08 Q1-Q3/07  Q3/2008   Q2/2008  Q3/2007
Revenue for the group**        1,800.7  1,202.6   1,079.2  357.7     400.3
1. Revenue mobile telephony    1,569.9  883.8     1,009.9  283.3     301.7
2. Revenue broadband           234.3    194.9     76.2     78.1      72.2
3. Revenue portal              36.3     40.8      9.4      14.2      12.4
4. Revenue hosting             65.4     58.0      22.5     22.0      19.5
5. Revenue B2B                 73.6     101.5     22.7     20.9      33.5
6. Revenue narrowband          60.7     121.4     16.3     19.6      33.9
Customers in million:
Total customers freenet group  24.56    11.81     24.56    10.96     11.81
Thereof contract customers     11.84    6.32      11.84    6.33      6.32
Mobile telephony customers     19.97    5.45      19.97    5.98      5.45
Thereof contract customers     8.67     2.90      8.67     3.09      2.90
Thereof prepaid customers      10.61    2.55      10.61    2.89      2.55
Thereof Netherlands (debitel)  0.69      -        0.69      -         -
narrowband customers
(internet+telephone)           1.74     3.42      1.74     2.09      3.42
DSL customers                  1.05     1.27      1.05     1.10      1.27
Paid service customers hosting 1.26     1.17      1.26     1.24      1.17
Paid service customers portal  0.53     0.51      0.53     0.54      0.51
* The comparable figures were adjusted due to IFRS 5 (discontinued 
operations). ** Netting between segments is the reason behind the 
difference between the figures shown for sales in the individual 
segments and the corresponding figures for the overall group and 
effects from IFRS 5.
end of announcement                               euro adhoc

Further inquiry note:

freenet AG
Andreas Neumann
IR-Manager
Tel.: +49 (0)40 51306-778
E-Mail: ir@freenet.ag

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