euro adhoc: freenet AG / quarterly or semiannual financial statement / freenet AG on course for growth with its core mobile telephony business

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6-month report

07.08.2008

freenet AG on course for growth with its core mobile telephony business
• Around 6 million mobile telephony customers
• Sales of EUR 435 million in Q2 2008
• EBITDA of EUR 123 million in H1 2008

Büdelsdorf, 7 August 2008 - freenet AG is on course for growth in its
core mobile telephony business: In the second quarter, the number of
customers increased by 170,000 to approx. 6 million. This is
equivalent to a gain of 749,000 (around 14 percent) compared with the
first half of 2007. Customer growth in the first half is reflected in
the number of contract customers (now running at almost 3.1 million)
as well as prepaid customers (now approx. 2.9 million).

In Mobile Telephony, freenet AG has succeeded in boosting sales by
EUR 6.6 million compared with the previous quarter, namely to EUR
283.3 million. Gross profit in the Mobile Telephony segment has also
improved in the second quarter of 2008 to EUR 82.6 million - a gain
of EUR 8.9 million or 12.1 percent compared with the first quarter of
2008. The company's good positioning in the Mobile Telephony segment
bodes well for the future, particularly in view of the fact that the
acquisition of the debitel Group by freenet was completed at the
beginning of July with the entry in the commercial register.

In the first half of 2008, Group sales declined by EUR 42 million
compared with the corresponding previous year period, namely from EUR
919.3 million to EUR 877.3 million. It has to be borne in mind that
the decline in sales in the Narrowband segment alone (which is
shrinking due to technology reasons) amounted to EUR 43 million. In
the other segments, sales overall were maintained at the previous
year level despite difficult conditions in the German Internet and
telecommunications market, with a continuing erosion of prices,
extremely competitive complete packages and regulatory restrictions.

The forward-looking Mobile Telephony, Portal and Hosting segments
held up well in the second quarter. As was the case with Mobile
Telephony, the segments reported an increase in sales compared with
the previous quarter. The Portal segment reported sales of EUR 14.2
million, a gain of 11.6 percent compared with the first quarter of
2008 (Q2/2007: plus 6.5 percent). Hosting sales increased by 5
percent compared with the previous quarter, to EUR 22 million
(Q2/2007: plus 11.8 percent).

Gross profit of the Group improved this year, to EUR 147.5 million in
Q2 2008 - a slight increase of 2.2 percent compared with the previous
quarter.

EBITDA for the first half is reported as EUR 122.6 million, a decline
of approx. 10 percent compared with the previous year. Compared with
the first quarter of 2008, EBITDA declined by EUR 15.3 million to EUR
53.7 million, a fall of around 20 percent. This decline is mainly
attributable to the EUR 11.4 million increase in personnel expenses;
a non-cash-effective accrual difference for the company's stock
appreciation program was responsible for almost all of this figure
(EUR 10.6 million). Marketing expenses also increased by EUR 2.7
million compared with the previous quarter.

EBIT declined in the first half by around 63 percent to EUR 35.4
million. Of this figure, EUR 9.2 million was attributable to the
second quarter. The downturn in EBIT compared with the previous year
period is mainly due to much higher depreciation in relation to
capitalised customer acquisition costs. This depreciation is not
cash-effective. In the second quarter, cash flow from operating
activities increased by EUR 16.4 million compared with the first
quarter, namely to EUR 64.1 million (plus 34.4 percent).

Important KPI's of freenet group Accounting method: IAS/IFRS

in EURm Q2/2008 Q1/2008 Q2/2007 1stHY08 1stHY07
Third-party revenue 435.0 442.3 466.9 877.3 919.3
Gross profit 147.5 144.3 157.3 291.7 299.2
EBITDA 53.7 69.0 70.5 122.6 136.0
EBIT 9.2 26.2 45.9 35.4 96.7
EBT 8.6 24.5 51.3 33.2 107.1
Group result 10.2 12.3 39.9 22.5 89.8
Third-party revenue for the group* 435.0 442.3 466.9 877.3 919.3
1. Revenue mobile telephony 283.3 276.7 303.1 560.0 582.1
2. Revenue broadband 78.1 80.0 64.8 158.1 122.7
3. Revenue portal 14.2 12.7 13.3 26.9 28.4
4. Revenue hosting 22.0 20.9 19.6 42.9 38.5
5. Revenue B2B 20.9 29.9 29.5 50.8 68.0
6. Revenue narrowband 19.6 24.8 40.0 44.4 87.5
Total customers freenet group (mill.) 10.96 11.36 11.86 10.96 11.86
Thereof contract customers (mill.) 6.33 6.41 6.21 6.33 6.21
Mobile telephony customers (mill.) 5.98 5.82 5.24 5.98 5.24
Thereof contract customers (mill.) 3.09 3.03 2.84 3.09 2.84
Thereof prepaid customers (mill.) 2.89 2.79 2.40 2.89 2.40
Active narrowband customers
(internet+teleph) in million 2.09 2.56 3.76 2.09 3.76
DSL customers in million 1.10 1.19 1.22 1.10 1.22
Paid service customers Hosting (mill.) 1.24 1.23 1.16 1.24 1.16
Paid service customers Portal (mill.) 0.54 0.57 0.48 0.54 0.48

* 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.

end of announcement euro adhoc
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ots Originaltext: freenet AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

freenet AG

Sofia Lazaridou

Telefon: +49(0)40 51306-778

E-Mail: ir@freenet.ag

Branche: Online
ISIN: DE000A0EAMM0
WKN: A0EAMM
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