In This Article:
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Revenue Growth: Slight growth in revenue for 2024, leading to a guidance change from stable to moderate growth.
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Gross Margin: Improved gross margin in Q3, reflecting new M&O contracts and increased customer numbers.
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EBITDA Guidance: Narrowed to EUR 500 million to EUR 550 million for 2024.
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Mobile Business Revenue: Slightly lower service revenue in Q3 2024 compared to 2023, mainly due to lower roaming revenues.
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Gross Profit in Mobile: Strong increase due to higher customer numbers.
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TV Business Revenue: Strong revenue growth driven by additional customers at waipu TV.
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Free Cash Flow Guidance: Increased to EUR 270 million to EUR 285 million for 2024.
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Dividend Policy: Commitment to pay 80% of free cash flow as dividends, with an expected increase in the next dividend.
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Subscriber Growth: Expected to reach 2 million subscribers by the end of the year.
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Personnel Costs: Anticipated increase of approximately 3% per year.
Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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freenet AG (FRTAY) reported a strong Q3 with a notable increase in net subscribers, indicating a positive growth trajectory.
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The company has successfully launched new tariff plans and secured a partnership with Disney Plus, enhancing its service offerings.
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freenet AG (FRTAY) has improved its gross margin, reflecting the benefits of new MNO contracts and an increase in customer numbers.
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The company has increased its free cash flow guidance, demonstrating strong financial health and operational efficiency.
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freenet AG (FRTAY) continues to maintain a stable mobile business with a resilient market share, supported by a diverse range of tariff plans.
Negative Points
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The mobile service revenue showed a slight decline in Q3, primarily due to lower roaming revenues, which could be a concern if the trend continues.
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freenet TV's customer base is expected to decrease, which may impact the company's overall revenue from this segment.
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High marketing costs, particularly in waipu TV, are affecting EBITDA, indicating a need for careful cost management.
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The company anticipates a decrease in EBITDA from the media broadcast segment by 2028, due to expected reductions in TV customers.
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There is an anticipated increase in personnel and SG&A costs, which could pressure margins if not managed effectively.
Q & A Highlights
Q: Can you discuss the competitive dynamics in the German market and the impact of the Black Friday sales period on growth? A: Christoph Vilanek, CEO, noted that while there are occasional attempts by competitors to change the market dynamics, such as Deutsche Telekom's family and friends offerings, these have not been significantly successful. He mentioned that freenet AG is focusing on SIM-only tariff plans through various white-label shops, which have been performing well.