Growth
with digital lifestyle
2023 was a very successful year for freenet – this is also reflected by our share price
In 2024 we will invest to further strengthen our core business of Mobile Communications and make our TV brand waipu.tv even better known.
After decades of experience, retail has become part of freenet’s DNA. We are now pooling our in-depth expertise, breaking new ground and rethinking sales: Assisted Personalised Shopping (APS) is an investment in the future. With APS, we are introducing a new shop concept and setting an example in Germany and especially in the telecommunications industry.
We also want to make waipu.tv known to the more than 12 million cable TV households that will be able to decide freely for the first time in mid-2024 for which TV transmission channel they want to pay. This is possible due to the abolition of the so-called “Nebenkostenprivileg”. We want as many of these customers as possible to opt for waipu.tv in future. To achieve this goal, we will continue to invest in the brand awareness of waipu.tv. We are therefore deliberately foregoing financial growth in the short term to lay the foundations for future growth.
As a result, 2024 will be a “Year of Transition”. Accordingly, we expect EBITDA in a range of EUR 495 million to EUR 515 million and free cash flow in a range of EUR 260 million to EUR 280 million. Our ambition for 2025 to achieve an EBITDA of at least EUR 520 million and our high dividend payout power remain unaffected by this. Dividend per share can therefore be expected to remain at least stable.
The 2024 Annual General Meeting of freenet AG will take place on Wednesday, 8 May 2024, in the CCH – Congress Center Hamburg.
Further informationen are available here.
I took over responsibility for ESG as a member of the Executive Board at the beginning of 2023. Since then, I have already been able to implement key milestones on the path to greater environmental and social responsibility at freenet. We have set up an ESG Management team in my department and written an ESG strategy for the first time. The guiding principle of the strategy is that people are always at the centre of our actions and that we shape our business activities in such a way that they are environmental responsible, socially just and economically profitable.
Our ESG strategy comprises clearly defined areas of action with corresponding targets and resulting measures: Among other things, we want to become CO2-neutral by 2030 regarding our own activities, offer sustainable products in self-determined, long-term customer relationships and ensure sustainability in our supply chain. In the “Social” area of action, we ensure a healthy and flexible working environment for employees that reflects the diversity of our society. We also create a learning culture that promotes the continuous professional and personal development of our employees. To this end, we have proclaimed 2023 the “Year of Learning” – and successfully implemented it with numerous offers in the learning management system and several learning blockers.
We have also revised our strategy in my original area of responsibility, Human Resources (HR). We want to establish sustainability as an attitude and make the topic of ESG more present in the company. For example, with ESG roadshows for managers, internal HR/ESG podcasts and the “Knowledge in 30 minutes” lecture series for employees.
In this way, we want to ensure that ESG is not just a responsibility of our team, but a responsibility of all employees in the company.
freenet stands for a special corporate and management culture. We rely on flat hierarchies with open doors, on demanding and promoting, permanent learning, a “fail-fast” approach and room for manoeuvre with responsibilities and creative opportunities for every employee. However, a flat hierarchy does not mean that there are no hierarchical levels. Rather, we create an environment that encourages and demands participation and co-organisation.
One project may prove that we live this culture: the repositioning and rebranding of our previous main brand “mobilcom-debitel” to “freenet”. The decision was not made top-down; rather, the employees were first involved in creating the basis for the repositioning: How do they perceive their company’s brand and identity, what are clear differentiators compared to competitors? The result of this complex, multi-stage process is successful and impressive – the new brand and the new claim “freenet,fertig,los” summarise our identity, our values and vision.
However, identity is only formed by working together on challenges and successes on a daily basis. I am therefore delighted that many colleagues have returned to the office again – because the personal dialogue between employees at all locations is and remains an important cultural element of freenet.
A survey of our employees may prove that our philosophy is right. It was conducted last year in a total of four waves. The result: over 80 per cent of those surveyed would recommend their managers to others and general satisfaction averaged 67 per cent! A result that we are proud of and would like to build on in the future.
EBITDA of half a billion euros, almost 400 thousand new waipu.tv customers and – measured in terms of total shareholder return – an increase in value for our shareholders of 32 per cent. In short: the 2023 financial year was a complete success!
The figures emphasise that freenet can defend its good position on the mobile communications market and at the same time has successfully established itself on the German TV market. It is also clear that our investors honour our performance in the same way. Based on the successful past development, we distributed a record dividend of EUR 1.68 last year.
The year 2024 will now bring several novelties. In the area of corporate reporting, the CSRD will massively expand the sustainability transparency of European companies. Creating a “level playing field” for reporting is certainly the right thing to do. Nevertheless, companies must also be able to keep pace with the sheer number of ESG regulations and be given time to build up the necessary competencies. At freenet, we built up our reporting expertise within the finance department at an early stage and will now be working closely with Nicole Engenhardt-Gillé’s ESG Management team to tackle this joint task.
But we also want to make a difference from a financial perspective. We have declared 2024 as the “Year of Transition”: We intend to position ourselves even better for the future! We want to invest massively in the waipu.tv brand to fully benefit from the momentum of the abolition of the so-called “Nebenkostenprivileg”. From mid-2024, tenants in Germany will finally be free to decide which TV transmission channel they want to pay for – and according to estimates, this will be IPTV in particular. As a result of the brand investments, EBITDA and free cash flow growth will be rather muted in 2024 – only to benefit from customer growth in the years thereafter! Irrespective of this, we are sticking to our ambition of achieving EBITDA of at least EUR 520 million by the end of 2025 – and our dividend payment will remain unaffected by this, meaning that our shareholders can also expect a stable dividend in the “Year of Transition”.
Our corporate governance is characterised not only by compliance with relevant laws, guidelines or codes, but also to a very considerable extent by the effective cooperation between Executive Board and Supervisory Board. At freenet, the latter is characterised by mutual respect, great commitment and a high level of effectiveness. The clearly formulated goal is to jointly achieve the best possible result for our company. Thanks to transparent capital market communication, our shareholders always know where their company – the freenet AG – stands and what strategy and goals are being pursued. Based on freenet’s very stable, profitable business model, we formulated the long-term ambition “freenet 2025” and communicated it to the capital market. The long-term outlook was honoured by shareholders and analysts and created further confidence.
In addition to the well-being of shareholders, governance is also inextricably linked to the management of environmental and social aspects. After all, this can only be done sensibly via corporate governance. Accordingly, we have aligned the competences of the Supervisory Board, made ESG factors subject of Executive Board remuneration system and anchored the topic in a separate Executive Board department. Looking back, the successes to date make me proud and allow me to look positively into the future.
Marc Tüngler is Chief Executive Officer of the German Association for the Protection of Securities Holdings and a member of the Government Commission on the German Corporate Governance Code. The lawyer has been Chairman of the freenet Supervisory Board since May 2022.
Media Broadcast, as a representative of the traditional transmission channel for linear television via antenna and with its extensive experience and infrastructure in the production, transmission and distribution of media, contributes to freenet’s high profitability in the TV segment and demonstrates its technological leadership in new forms of transmission – such as 5G. On the other hand, the product “waipu.tv” from our subsidiary EXARING AG impresses with very dynamic growth figures and prospects for the coming years – especially in view of the abolition of the so-calles “Nebenkostenprivileg”. I am equally impressed by the consistency with which freenet addresses the issues of diversity and the promotion of female leaders. And not just on paper, but also in the actual filling of top positions in the companies of the entire Group – such as in the management of Media Broadcast. Sabine Christiansen has helped shape key developments in public service broadcasting and private TV stations in Germany and abroad. She has been a member of the Supervisory Board of freenet AG since 2015.
As a result, the topics of sustainability and personnel development in all their forms are now even more widespread throughout the company. Particularly as a great deal of impetus in this area comes from our employees, which is also amplifying this dynamic.
This led to a number of positive steps and developments. As focused as it is calm, with a clear goal – and far beyond the significant increase in our minimum wage and the additional paid compensation for inflation: fluctuation in the company is falling , and freenet is increasing its attractiveness, future orientation and visibility on the labour market. For a company like freenet, these are key points in its competitive positioning: Our highly committed employees are our greatest asset!
Knut Mackeprang represents the interests of employees on the Supervisory Board of freenet AG as Deputy Chairman. The legal advisor joined the Group in 2000.
