euro adhoc: AG
Financial Figures/Balance Sheet
freenet continues growing business and profits in 3rd quarter

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


• New revenues record at EUR185.7 million  • Operating EBITDA hits EUR32 million before one-off special charges • Number of customers soars past 10 million  • Accelerated growth in the DSL sector  • Cash and cash equivalents rise to EUR135 million Hamburg / AG - AG set a new revenue record in Q3/2005, generating EUR185.7 million in revenues - a 60 percent increase vs. the same quarter last year, and a 4 percent improvement on the previous quarter, which was already excellent. This brings revenues for the first nine months of the year to EUR510.2 million, a 48 percent year-on-year rise. Gross profit also rose during the third quarter, to currently EUR78.3 million; this translates to a 42 percent gross margin.  The third-quarter EBITDA of nearly EUR32 million (EUR99.75 million for the first nine months) - adjusted for one-off special charges related to the merger with mobilcom AG - shows that freenet continues to do business profitably, despite sustained aggressive growth in a tougher competitive landscape. "We are well on plan for making our target EBITDA corridor of EUR125-140 million for all of 2005," confirms AG CEO Eckhard Spoerr. Adjusted pre-tax earnings for the third quarter amounted to EUR23.87 million or EUR72.28 million for the first nine months. During the third quarter, merger-related costs totaling a good EUR3.3 million were posted under Other Operating Expenses. In addition, all owners of options in the freenet group’s stock option program signed an agreement with the company waiving their options and all rights arising therefrom in return for a cash compensation; this is contingent upon the merger becoming effect. As the Executive Board assumes that the merger with mobilcom will conclude as planned, freenet already created reserves for projected expenditures arising from this agreement, in an analogous application of IFRS 2.28a and effective September 30, 2005, in the amount of a good EUR8.4 million. Accordingly, this caused third-quarter personnel expenses to rise to EUR23.8 million. Including these one-off special charges totaling about EUR11.7 million, reported EBITDA came to EUR20.3 million for the third quarter, or EUR88.1 million for the first nine months of 2005. Pre-tax profits, reduced by the special charges, amounted to EUR12.2 million for the third quarter and EUR60.59 million for the first three quarters of the year. At the same time, freenet’s cash and cash equivalents increased to EUR135 million at the end of September, despite a EUR19.80 million dividend payout performed this summer. All four of freenet’s income pillars delivered a very positive third-quarter performance. Internet Access continues to be the strongest revenues mainstay, having contributed EUR82.2 million in the third quarter, and is followed by fixed-line telephony (EUR39.3 million), and B2B Services (EUR38.1 million), and the Portal Business (EUR26.1 million). The two latter segments in particular benefited very strongly from the acquisitions of the STRATO group and the Talkline ID GmbH which were completed during the first half of 2005: The Portal Business more than tripled year-on-year, and a number of customers now rely on freenet’s online expertise and sales power, including "," a wireless discounter and mobilcom AG subsidiary whose business model is based primarily on the online and hotline business. B2B services grew by a factor of more than 30 compared with the same period last year.  The company´s successful efforts in the keenly contested Internet and fixed-line telephony markets is also evident from freenet´s total customer base: During the third quarter, the total number of customers soared past 10 million for the first time ever. This figure includes nearly 2.5 million contract customers - mainly in the DSL, Preselection Telephony, Domain Hosting and Paid Services segments. freenet registered an increase in the number of active telephony customers, by 565,000 to currently 5.3 million. One especially gratifying development is growth in the broadband sector, which accelerated again: During the third quarter, freenet’ DSL customer base rose by 80,000 to currently well over 600,000 - the company availed itself of some new distribution channels for the first time, and began selling freenetDSL through mobilcom AG’s numerous shops and retailers. AG aims to further push this growth in Q4/2005.

@@start.t2@@                                      Q3/2005 Q2/2005 Q3/2004      Q1-Q3 2005 Q1-Q3 2004
                                                                adjusted**                  adjusted**
Revenues                         185,656 178,279 116,016      510,191      345,116
Segment: Internet
access                            82,173  79,876  68,563        246,236      209,678
Segment: Portal
business                         26,079  24,129  8,248         70,249        23,129
Segment: Voice                39,276  39,709  38,000        118,899      108,574
Segment: B2B Services    38,128  34,565  1,205         74,807        3,735
Gross profit                  78,267  77,627  58,136        229,736      178,633
EBITDA                            20,323  31,150  41,228        88,061        104,484
EBITDA (adjusted)*         32,007                                 99,745
Earnings before
taxes (EBT)                    12,190  20,346  32,944        60,592        77,264
Earnings before
taxes (EBT) (adjusted)* 23,874                                 72,276
Group result                  7,491    12,490  19,891        37,410        46,961
Capital and reserves      268,735 281,304 174,196      268,735      174,196
Balance sheet total        521,020 516,432 313,539      521,020      313,539
Cash and cash
equivalents                    134,962 121,891 150,229      134,962      150,229@@end@@

Financial data per IFRS; in TEUR / Source: AG *Adjusted for one-off items totaling 11.7 million euros. **Adjustments as part of the first-time application of IFRS2.

@@start.t3@@end of announcement                                                 euro adhoc 08.11.2005 07:30:00

ots Originaltext: AG
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Further inquiry note:
Andreas Neumann
Investor Relations
Tel.: +49 (0)40 51306 778

Branche: Online
ISIN:      DE0005792006
WKN:        579200
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