Freenet Ag Unsp/Adr

Good morning, ladies and gentlemen, and welcome to the Freenet AG conference call on the Q2 2025 and half-year results. Currently, all participants are in a listen-only mode. After the presentation, there will be an opportunity for you to ask questions. I will now hand over to Robin Harris, who is leading this earnings call for the first time as the new CEO of Freenet AG.

Good morning, everyone. My name is Robin Harris, and I'm honored to speak with you today as the new CEO of Freenet. I joined this exciting company at the beginning of June, and it's been a dynamic and inspiring start. Prior to Freenet, I served as CFO of Trivago, a company. Before that, I was board member at 1&1, where I led marketing and sales for over five years. So I'm no stranger to this industry, and it feels very familiar and energizing to be back. I would like to begin by sharing some of my impressions of Freenet after these initial two months. What stands out immediately is the agility of the company. We have a strong competitive position in both mobile and TV, supported by powerful and well-established sales infrastructure. We are proud to have nearly 500 retail stores, which allow us to maintain daily direct contact with our customers. In addition, we benefit from numerous strong partnerships and a broad market presence, which gives us an excellent position to market our offerings effectively and with impact. Technologically, Freenet is well positioned. We are already leveraging AI in key areas like pricing, customer management, and , and the corporate environment is dynamic and full of potential. The team is highly motivated, and there are numerous opportunities to further develop the business. Culturally, Freenet is built on openness. a willingness to change, a strong desire to grow and deliver. I can feel a lot of entrepreneurial passion in the company, and I really like that. I can tell you that I met a lot of talented, motivated, and hungry people. Financially, we are in a solid position with high cash generation and low leverage. Our guiding principles being customer-centric, demand-driven, and AI first are more important than ever and will continue to shape our strategy moving forward. Looking ahead, we've defined several key focus areas for the future, and I see many opportunities. But first, we are committed to maintaining clear guardrails for change. This includes our 25 guidance, our 28 ambition, shareholder remuneration, and our financial policy. We stick to that. In mobile, our goal is to keep growing. Brick and mortar will remain a vital sales channel but we also changing our online approach. We are proving our user experience and conversion rates on our website. So far, we see a lot of potential here. For example, when it comes to page speed, our websites are at the moment not fast enough. So, for example, when you go to MegaSim and want to order something, you see, to slow loading times. And this also affects our other websites. We are working on that. We will improve that. And when it comes to user experience overall, the conversion rates on our online websites are not good enough. So the market standard is higher and we see huge potential here to further improve. We are preparing for performance sprint performance-based brand marketing. So, we are in the process of that, and we are working on improving our churn rate, especially through AI tools. It will take some time, but we are seeing nice potential down the road. We are strengthening our own marketing channels. We have just restructured our leadership team in the telco pillar, and I'm truly excited to take this step into the future together with the management team. I believe we make a fantastic team and working together has already been a real pleasure. I'm glad to be working alongside some of the most capable people in the industry. Related to TV, we are continuing to support strong B2C growth. We have strong products that customers like a lot and we have amazing teams that will further strive for success. Also here we see a lot of potential and put focus on it. Internally, we are fostering a cost-conscious culture that is focused on performance, experimentation, and scalability. We are empowering our people to take ownership and make decisions. We've been building a flat organization structure with minimal bureaucracy, which supports this and gives us the agility to move fast. Our vision is clear. We want to be the fastest player in the market. In the long run, this will only be possible with the help of AI. And AI is not only the future at the present. At Freenet, we are fully committed to becoming the flagship AI company in the tech industry. This is one of our top strategic priorities, and I can already feel a strong appetite for change and innovation across the organization. We're still at the very beginning of our AI journey, and it's too early to quantify the full impact. But one thing is crystal clear, we see tremendous potential ahead. Now let's look at our performance in the first half of 25. Financially, we are fully on track. Postpaid and TV service revenues are growing. Weibull TV is contributing notably to EBITDA, and we also delivered strong quarterly free cash flow. On the customer side, growth is in line with expectations. Freenet TV is slowing its decline. Weibull TV continues to grow strong in several marketing channels, and postpaid had a particularly strong second quarter. So here in mobile communication, we are seeing a nice development and accelerated growth in postpaid. We added 130,000 postpaid customers in H125 compared to just 25,000 in H124. Q2 added around 80,000 postpaid. This growth reinforces our strong market position. However, we remain focused on profitability, not growth at any cost. Our next steps include scaling online challenges, including scaling online channels, refocusing brand marketing on performance, and continuing to reduce churn. I talked about it earlier. For 25, our guidance for postpaid subscribers remain moderate growth. Turning to TV and media. Waibu TV continues to show strong B2C development. Net ads were impacted by churn from the O2 TV base, but we expect rows to recover in the second half of the year. Our guidance remains unchanged. FreeNet TV saw a churn of just 3,000 in Q2, which gives us hope that we are approaching a stable base. Our next steps include retention and upselling of Waibu TV customers. from the 24 growth phase and the price increase for Freenet TV. For 25, we still expect noticeable growth in buy-through TV subscribers and noticeable decrease in Freenet TV RGUs. With that, I'm happy to hand over to Ingo.

Thank you, Robin. So, good morning, everybody, from my side. So, if you allow me, I will start with a few personal words. because I think it was a very successful time what we had together with Christoph. Now a new era starts here. And just to give you my first impressions after two months, I think, again, the organization Freenet was very welcoming, I think. And I think from the first day when Robin started here, he was something like part of the organization. And therefore I'm thankful to all the people working here. And on the other side, I think, yes, life is faster than it was before, clearly. So we see some very fast changes here. I think we gained pace again, which was necessary for the company. We have different views now and a totally different drive. Yeah, I'm very happy that the supervisory board decided here to appoint Robin as the CEO of the company. And I think we are already really a good team here. And so I'm very optimistic that the new era will be as successful as we were before. It will be different, but definitely good. After these words, I would like to start with an overview about the group results. I think everybody saw the share price this morning, so I think some of you or some of the investors are disappointed, but definitely from my point of view, I was not disappointed about the results. I think we are totally on track to reach our guidance for the year and we stick to what we promised and we will not change it. So if you look into the revenues, we see a slight increase only in the revenues, but on the other side, and we are focusing on this every time, this is based on higher margin revenues, we increase the higher margin revenues, and we decrease the lower margin revenues. And as a proof of concept, what you can see if you look into the gross profit, you see for the half year, there is an increase of gross profit by 3%. In the second quarter, there was an increase of 3%. So still, the increase of gross profit is much higher than the increase of revenues, and therefore still, The revenue development is important for us, but it is not as important as the margin what we generate. And this is with 39.8% still very high and higher than before. Looking into the EBITDA, the adjusted EBITDA, it is 257.4 million up to June for 25. Yeah, there is some work to do to reach the guidance, definitely. But because if you multiply the results at the end of June, if you multiply it by two, then you have only 550. This is obvious. But I think what we did in the first half of the year, we did a lot of marketing, spending, in mobile, so 8 million more than last year. If we would just reduce it in the second half, then we are already in the guidance range. So therefore, I'm still optimistic that we will reach the guidance for the group. Moving to the mobile results. I think we stick here to what we published here in the earlier quarters. But we changed it a little bit on the next page because if you look into the revenues, yeah, you see a slight decline of service revenues in the second quarter. For the first half, it is still growing. But I think it is misleading to follow these service revenues here. because we focus our whole business on post-paid, on contract business. And what is here part of these figures is also the prepaid and the no-freeze business. And there we generate low, sometimes negative margins. Therefore, we cleaned here a little bit up. with the lower revenues, and this is what you can see if we move to gross profit, the lower revenues does not translate into lower gross profit. The gross profit is quite fine. We see the increase of 2.4% in the gross profit. And what you also see is that we have a lower RPU. And the whole market does have a lower RPO. You can compare it with all the others. But the difference here in our figures is even with the lower RPO, it translates in a higher gross profit. So from my point of view, this is still a very healthy business, what we do have here. And therefore, I'm quite happy with these results. If we move to the EBITDA, to the adjusted EBITDA. We see the slight decrease in the second quarter and also in the first half of the year. But I would like to repeat what I said on the group level, these nearly 8 million euros, what we spend brand marketing in the first half with no relation to gross ads what we did. So if we could reduce it in the second half, then we would be back to see an increase here. So it is based on this football advertising and so what we did. So I think we cannot stop it totally in the second half, but we will definitely reduce it. Moving to some KPIs from the mobile area, on the postpaid side, I think it was a very, very successful quarter. So we could increase the number of postpaid subscribers by 77,000. If you compare it with the second quarter in 24, It is something like 11 times of what we did one year ago. So I think very successful in the second quarter. On the other side, and this is the negative, what you are, well, yeah, where we have to, what is obvious on the other side, you see the ARPU, which is decreasing. I think after in the call after the first quarter, we were still a little bit more optimistic to generate a stable auction during the year. I think there's some truth and there are some real figures. So therefore, I think to be open here and To be fair, this will not be possible to have a stable RPU. Therefore, we changed the guidance. But we are optimistic to find a stabilization on these new levels here. And I think this is what we are working on during the year. Digital lifestyle, back on track. I think we had some problems with accessories in the first quarter. Now we are back on track. So the second quarter was quite fine. Therefore, we are happy. Moving to TV. Yeah, on the revenue side, I think it is still... maybe a little bit misleading that we mix the media broadcast, the antenna TV business and the IPTV business, Vaipu TV, because therefore you do not see the good development clearer from the Vaipu TV. What we plan to do is with starting into the year 26, we plan to separate it to make it more transparent for you. So during this year, We will still report both parts together, but I will give you some hints what is based on the WIPO TV on the IPTV development. So, in the revenue area, you see an increase of 6.5%. Only from WIPO, it is a revenue increase of 25%. I think this is important to know. If we move to gross profit, here we still have a margin of 60%, which remains as high as it was before. Moving to the adjusted EBITDA, here we do see an increase in the first half of the year by nearly 14%. If we would only watch into BiPoTV, There it is an increase, there's an all-in in EBITDA of 15 million in the first half, 15 million higher than last year. So I think all-in very successful still here. Definitely it will not be the big topic to reach the guidance. as we do focus also in IPTV more on profitable growth here. Moving to my last slide, which is the cash flow bridge. As usual, I do also give you some ideas of what I see up to the end of the year. Working capital, we see a need of working capital by nearly 17 million. This is much lower than the figure what we saw last year. But I still stick to the guidance for the full year of 45 million minus year from working capital because we have some provisions to be paid during second half of the year and we are just in some discussions internally if we should do more hardware bundles, which would, well, we would need some working capital. So still $45 million from working capital. On the other hand, in Texas, we guided for the full year minus $50 million. At the moment, we have $22 million, and we have one big effect which we expect to see in the third quarter. It is a tax payment, a post payment, what we do have to pay for the years 2015 to 2018. It's value added tax, what we have to pay here. It was already part of our guidance for the full year. So therefore, we still stick, maybe it is, 55 million at the end of the year instead of the 50 million what we guided. But on the other side, in CapEx at the moment we only spend 16.5 million. There is some phasing, but typically during the year it is not possible to do all the projects which are postponed. So therefore, definitely, I think last year we, or before year, we had a capex of 38 million. And so therefore, I think something around 40 looks possible for me. So I think we have even some room in our free cash flow guidance here. So I'm totally happy with what we have. And on the other side, We have the 13 million what we expect from the sale of some IP addresses. So I think I'm very comfortable here. And therefore, I would hand back now to the operator to start the Q&A.

Thank you. Ladies and gentlemen, if you would like to ask a question, please press 9 and star on your telephone keypad. In case you wish to withdraw a question, press 3 and star on your telephone keypad. And the first question is from Ulrich Rade Bernstein. Please go ahead with your question. Mr. Rade, your line is open. You may ask your question.

Oh, sorry. Okay, I had a problem on my end. Thank you very much. So I have four quick questions, please, if that's all right. The first one would be, Robin, you're saying you're sticking to targets and mid-term targets. One of the mid-term targets was for Waipu to get to 3.5 million subscribers by 2028. So simply mathematically, that would require a quarterly increase customer intake of 125,000 per quarter. Now, again, you have churn from O2D. We know that. But still, it's zero now. It would probably be fairly low in the second half. So how confident are you that you can rack up the YPO intake to that 125,000 per quarter? And what measures would you take to get there? And really related to this, why is it the right management decision to stick to this 35 million EBITDA goal for Waipu when the growth of subscribers has collapsed essentially right now. The second one is what exactly is holding back the mobile ARPU? Could you talk a little bit more whether that's mix or that's retention offers you're giving sort of below the you know, the lines of offers of discounted outputs for contract extension or anything else, really. And my last question to Ingo, the gross margin is up. It has been now, also in the first quarter. But there is a little bit the suspicion that this is a one-off on the new wholesale deals. So this momentum that you have in the margin on relatively weak service revenue growth might just go away next year. if it is just reflecting the new wholesale deals you've closed for this year. So could you comment on the, you know, on the dynamics behind that margin increase? Thank you very much.

Hi, this is Robin. Thanks for your question. Related to your first question with the ambition of Waifu, so regardless of customer development until 28, we assume that Waifu TV's EVTA contribution of 100 million remains a valid benchmark. So, and we stick to this. In terms of the customers, yes, we see at the moment, we see the turn of the O2 users. But in the other market chain channels, we see a strong growth. And so therefore, we are very confident about the outlook of Y2. We believe that this is really a fantastic company, a great opportunity with a very strong team. They built this from scratch. They deliver. And also when you look at the product, it's really good. The reviews are good. They outgrow the competition. So we are very happy about it and very confident that we will reach our long-term EBITDA targets there. So the second question was, so why we believe that the 35 million is good. So why shouldn't it be less or why shouldn't it be more? So I always think that it's always good to show both. On the one hand, to have a company that is growing strongly, that's performing on the other hand. also showing that you can earn money. And for our business, it's important to earn money. So therefore, we believe that this is the right mixture. And we are confident that we are on a good track here. The second question was related to the up-to-development. And when you look into the market, you can see that prices are going down. Competition is tough everywhere in the market. I mean, it's a pressure that all companies in the industry feel at the moment. So when we look at our own business, there are some components that influence it. On the one hand, we have our discount brands, and then we have our bundle business. If you see a shift in mobile plans and bundle businesses also influences the RPU. If you think about shifts between markets where you have, on the one hand, a brand where you have maybe more premium customers, on the other hand, you have brands where you have more price-sensitive customers, this also influences this. At the moment, that's the way how we steer it. I think when you look into the broader market, The development here is reasonable. We believe it will be stabilized. There's some things that you can do to influence it, also to shift budget performance base between brands. So we are looking into it. We are doing this, but we feel quite comfortable at the moment. And I mean, if you look at our subscriber growth, I think it's I mean, the market is tough. You see prices going down, but overall, we are still able to grow. We grew by 130,000 subscribers in the first half of the year, and we increased the revenue with it. So overall, the effect is still positive. And I already said that we see a lot of opportunities down the road, for example, improving our website, improving conversion rates, and starting performance-based brand marketing again. In the past, there was also brand marketing, but I have a little bit different approach. So maybe in the past, we did TV advertising in 50 countries worldwide at the same time. And we always did this where we perform in space. So that means that we look at direct response, reproduce spots that perform where we were, so that bring directly traffic to the websites and traffic. that converts into orders. And then we optimize on that like other companies optimize online marketing. So it's really performance-based. We want to start it again. We want to scale it with a clear target to get more orders and to increase our unaided brand awareness in the mid to long term. But then there are also other opportunities like reducing the churn, Also, when you look at our strongest brand at the moment, it's Freenet. So in the past, we did marketing in the mobile segment for Freenet. But actually, when you type in the browser Freenet, you end up on a Freenet.de, which is a news and a website portal. So it's not the website where we sell mobile phones. So there's also room for improvement. So there's a lot of stuff that we can do so that will help us to further grow our subscribers. And there's a lot of room to, or a lot of stuff that we can do to work on the RPOs. So therefore we are quite confident that

Thank you. And then on this margin question, so there is a margin uplift this year, and you're highlighting that the slow revenue growth is offset by strong gross margin growth. But is that not just a one-off on the new contracts?

Please hold one moment. Just one moment, please. We will get back to the conference in just a moment.

Can you hear us?

Yes, now we can hear you. Thank you.

Can you hear us?

Yes, we can hear you now. Please, you can continue.

The next question then.

Yeah. Mr. had a follow-up to his question, so maybe, Mr. , you could repeat, please.

No, I just repeated the question because I couldn't hear anything. I think was just about to answer that.

Yeah, okay. With your question about the gross margin, The answer would be a no, but definitely the contracts, what we do have with the networks help us to optimize our gross profits. This is clear. But the contracts, what we do have, have a long running time from five to 10 years. So therefore, it's definitely not a one-off. And it already started to help in 24, and it's just ongoing in 25 and in the following years.

Understood. Thank you very much for the answers. Thank you, Ulrich.

The next question is from Polo Tang, UBS. Please go ahead with your question.

Hi, thanks for taking the questions. Firstly, apologies, I missed the earlier part of the call. But in terms of my questions, can you talk through what you're seeing in terms of competitive dynamics in terms of both the mobile and the TV market? And then specifically in terms of Waipu TV net ads and the lack of growth in Q2, could you quantify the headwind from the O2 cancellation? So was it still around the minus 50, minus 60,000 run rate. Was there anything exceptional to call out or unusual in terms of seasonality to call out for YPTV in Q2? And just to kind of follow up in terms of YPTV, prior commentary on net ads was for 300,000 net ads for 2025. So is this still achievable just given the lack of growth in Q2? And my final question is just kind of clarification in terms of the guidance. Because for H1, your EBITDA growth was about flat. So to hit the guidance, you need quite a notable acceleration in terms of H2. So excluding one-off gains from IP sales for your guidance implies 3.5% to 7% EBITDA growth. So could you just basically talk through the main drivers that are kind of leading to this acceleration and what are the risks? I know that you kind of commented quite a lot about lower marketing costs in terms of mobile, but also implicitly YPTV. But can you reduce these costs in the second half, just given the competitive environment? Thanks.

Yeah. This is Robin. Thanks for your question. I would start with the competition in the mobile market. Yes. there's competition, we see competition everywhere, like in all our marketing channels, and also other competitors. I think everybody at the moment has aggressive prices and is trying to get users. So there was a, it's a dynamic market. So I think it has always been a competitive market. At the moment, a lot of pressure, that's true. It's challenging, however, I think we found answers to this. And if you look at the, that we drew 130,000 subscribers in the first half of the year, I think that's impressive. I think there will be also, there will be more, there will be more growth potential in the future so far. We are working on several things. I mentioned this earlier and it will take some time, but the market is difficult. Yes, but we are growing and we see a lot of room to further grow. And maybe you can elaborate on that.

Yeah. So good morning, Polo. I think the biggest problem, I think the competitive environment in TV has not changed that much. It is still Magenta who is the biggest competitor, what we do have here. And you may have seen their figures in the morning. They are also slightly lower compared to the other corridors. So, but there are no big changes. I think in 24, there was some, some backwinds from the Nebenkostenprivileg. This helped, definitely. So I think this push is not there in 2025, but without the effect from Telefonica, we are still growing. So what we did in 2024 was that we gained something like 60,000 to 70,000 gross ads with Telefonica. These gross ads are missing now, definitely. Otherwise, we would show a good growth, not as big as last year, but a very, very good growth. We are still fine, so no changes in the environment here. So it's not based on competition that we are worse. It is based on the loss of Telefonica. And I think up to the end of the year, we hope that we cleared this. And then starting in 26, it will be easier to follow the growth what we have here. Moving to your question about the guidance, this is, you were correct in your intro. This is something what I already tried to explain during my presentation. You are correct. At the moment, we have something like 257 million. If I double it for the whole year linear, then it would be something like 515, so this is, below the guidance range. But on the one hand, we see the increase in customers. On the other hand, we will reduce the marketing spendings. Robin already described that we will focus on performance marketing and that we spend less marketing on brands because from the investments in brand marketing, And it's based in the naming. We do not see any performance. This is what happened during the first half of the year. So, we cannot reduce it to zero because we have some contracts here which are still in place. But we will definitely reduce it very strongly. So, I think subscriber base on the one hand. less marketing spend, which does not have any influence on performance. And then we have some optimizations. And you also see that we have the restructuring on the board level and that we reduce here our personal costs starting on the 1st of September. So I think we have some, I think we will optimize ourselves during the second half. We have some positions here also on the cost side, what we can optimize. So all in, we still stick to the guidance. And even if you just double the result of half year, it is not that far away to reach the guidance range.

And the 300,000 net ads for YPTV for 2025?

I think there will be an increase of, I think there will be what we say, a noticeable increase. I would expect from today's point of view 200,000 up to the end of the year, but because we expect a very strong fourth quarter, or we also saw in the other years, so I think the third quarter, I just do not want to disappoint anybody here, but the summer quarter for TV is difficult every year. But yeah, I think we could also be, this is linked to the question from Ulrich before, I think we are very, very good on the EBITDA side at the moment, and our offers are less aggressive than last year, so it is also possible to be slightly more aggressive here, but we were very, let me call it conservative in the first half. I think without any negative EBITDA effect, I think we could push it in the second half, and this would definitely happen. So I think something like 200,000 for the year still looks reasonable for me.

Clear. Thanks.

And the next question comes from Joshua Mills, BNP Paribas exam. Please start with your question.

Hi, guys. Thanks for the questions. I had a couple, please. The first one on mobile. So you made the point that the market means competitive, which I think all your competitors have done as well. On their conference call, Vodafone seemed to be indicating they would be willing to cede some share on the mobile funds in order to encourage broader price rationality in the markets. And historically, one of the ways that operators have tried to signal that and to deliver that kind of dynamic is by using third-party operators, such as yourselves, less. So I'd just be interested to hear if there's been any change in the kind of volumes being offered by any of the MNOs or any of the commission terms which you're using. And perhaps if they're now restricting some of the premium offers to their own channels and focusing more on the sub-brands through you, that would be very helpful. Secondly, it kind of goes back to what Ulrich was asking at the start of this call, but could you give us a bit more clarity on, firstly, what the overall O2 sub-number was within the Y2 base initially and how many are left? And then at what point do you expect the headwind from O2 sub-churn to be fully out of the base? That would be helpful for our modeling purposes. And finally, Robin, I think in your introductory slide you talk about a priority being to find platform users to replace the O2 brand. How advanced are you in those discussions? I'm going to say I'm not aware of any other big operator that could replace O2 on scale, but any detail you could give about alternatives would be great. Thank you.

Yes, so Joshua, thanks for your questions. Price rationality was the first question, and if I got it correct, if there is a push from the networks in the shift to direct, this is nothing what we can see. important for the networks as we were before. And I think even in situations where the competition is a little bit higher, this is also the experience. What we have from earlier times is that they use us, especially if there is more aggressivity in the market. So I think we have good partnerships with them. We have good contracts with them. We do not see that they are more aggressive in our direction or if anything has changed. So I think this is all fine. Price rationality, I think what everybody is trying to do in the market is to avoid cannibalizing the base, what we do have. So everybody is doing it with separate brands, and this is also us. And so still also the networks are using us because we are something like a separate brand for them. And so is it rational what we see there? Some of the offers definitely no, but I think the market all in, is still rational, and especially, again, in the discount part of the market, it is less rational than in the, let me say, classic part of the market. Then you asked for more clarity about Telefonica and the O2 subs based on ViPool. I think I'm repeating it. I'm sorry about it. but we are not allowed to give the full figures. So the only thing what I can repeat now is that last year in the first half of the year we gained something like 130,000 customers under the O2 brand. And, yeah, as we do not have a partnership in this area now, we do not have these cross ads. This is, I'm sorry about it, but this is the only figure then I can give you.

Yeah, and this is Robin to your third question. I'm not sure if I really got it. It would be great. Can you repeat it, please?

Yeah, I think on slide four, not four, it's slide number five, you talk about looking for platform users to replace Telefonica on the IPTV side, and my question was how advanced are those talks, and are there other players in the German market which are big enough to make that replacement for tests or do you need to find several partners to make up for the lower O2 numbers?

So we don't talk about specific discussions with partners and what we are doing there. I mean, we have partnerships with the TACO providers and we try our best to offer great products to our users, to give a wide range of products. So therefore, for us, it's important to have good relationships to them to get good products. Yeah.

But maybe one follow up, Joshua, because I think i'm sorry but i think it was a slight misunderstanding here on our side i think you asked about the the waipu platform and so we we lost telefonica and i think we we definitely in talks with some other players in the market to to replace it but today we are not in a situation to to publish anything but I think it is still promising, the talks, what we do have, and we do not only talk with one possible partner. So, but it's also something which would not, which could not be realized in the next two or three months. If it works, and yeah, we are hopeful here, it would start at the beginning of 26 or something like this.

Okay, thank you.

And the next question is from Lars von Klaas Deutsche Bank. Please start with your question.

Yes, thank you very much. Good morning. Apologies, but one more question on WIPO and net ads and cross ads. Completely understood that you're not allowed to give us the exact figures, but nevertheless, WIPO's customer base grew by 2,000 customers quarter on quarter. Could the reason be that more O2 customers left or is it, was it about the same level of O2 customers leaving like in Q2 and only the new customer base going slower than in the past?

Yeah, it would be an easy answer for me to say yes, but I think I'm honest in these calls. the reduction of cross-edge from Telefonica, it is slightly higher, but it is not significantly higher, the cross-edge figure, what we lose here. So it is still, it is a lower figure than in the first quarter, all in, and from all in, but from Telefonica, I already said It is something like 130,000 in the first half. So it was more or less 50,000 in the first quarter and 80,000 in the second quarter. So I think this is more or less the split of it.

Fifty thousand, 80,000. That is the number of customers leaving the platform or the number of customers you are missing if they were coming on the platform last year?

This is the number of customers what we gained last year and what we have not gained this year.

But then we would need to add the number of customers that are leaving the platform.

This is what I'm only allowed to tell you the gross as figures.

Ah, okay. Understood. Okay, perfect. Thank you. And then... Your guidance unchanged, profitability guidance unchanged, much appreciated, while ARPU is lower and now expected to also be lower for the remainder of the year. As we see, you're increasing the number of your customers or the customer base, but are you also focusing more on unbundled and unlimited tariffs than during the last two to three quarters, or is it the name of the game still changing discount tariff customers?

No, it's the name of the game that we do both bundled and unbundled tariffs. We are just, as we have some room in our working capital, we just discussing if we do more bundled tariffs in the second quarter. This would definitely help to stabilize or slightly increase the RPU. But all in for the whole year, even with doing more bundles in the second half, we see a decrease in the RPU.

Okay, understood. And then I guess marketing spend you already talked about, and that includes TV and media, where you said that a decision on the autumn spending will be taken during the summer break. So, I guess you already covered that with your comments. Okay, perfect. Thank you very much. I'll go back to the line. Thank you, Lars.

The next question is from Simon Stipe, Warwick Research. Please go ahead with your question.

Hi, good morning. Thank you for the presentation. Firstly, the key focus areas you presented in that regard, I wonder why do you see the biggest lever for Freenet's business on especially revenue and the cost side? And then tied into that question would be time-wise, where do you see the low-hanging fruits and also where do you see the most sustainable change, positive change for the business? And then secondly, I saw that you tendered your stake in the economy, and obviously you will get some liquidity out of that. Is there already a plan to deploy that cache, or would it, for example, be an option to increase your currently running share buyback program? Thank you.

Hi, this is Robin. Thanks for your question. Maybe let me start with the so-called low-hanging fruit. I think it's obvious if you improve the conversion rates on all your websites, that this has a direct impact on your subscriber growth. And since we have some brands and some websites where we do see potential, which are below market standard, I think this is something which maybe is a good opportunity for us. We are already working on this. We already improved one website. Take some time. But we are with full focus working on this. Those are, I think, opportunities that can maybe show impact in the next couple of months. Furthermore, we are shifting budgets from marketing channels or marketing campaigns that were not so performance-based, so where we didn't or where we haven't seen the impact right away. So we take the money, we put it into performance-based channels, Also, I mentioned this, we changed the way how we do brand marketing. So what we don't do is spend money into stuff where we don't see a direct impact. We'd rather start producing TV commercials that drive traffic immediately, that drive sales immediately, and then also have to build the brand awareness. And when we look at our brands, we have a strong aided brand awareness, but if we compare Freenet with our competitors and in terms of unaided brand awareness, there's a lot of room for potential, and that's a huge opportunity. To get there, you need to do performance-based brand marketing. We are preparing for this. We will test this shortly, but this is much more cost-efficient than what we have been doing in the last couple of months. So shifting budgets, improving conversion rates, shifting budgets to performance and marketing channels. And then also in terms of churn, so we are looking into it. We are applying AI tools. So we really try to better understand why we lose customers. So I think there shouldn't be a reason why our customers leave this fantastic company. So we are working on this and try to reduce churn. I think we have really good opportunities here. So this might be also something where we see impact in the near to midterm. And yeah, so, and if you, if we do our work here and work hard and move forward step by step, I think that's a chance to increase the revenues on the cost side. And we also cut costs. So we, as I said, we stuff stuff that doesn't pay in. And so, Yeah, and in terms of your third question, the economy state, yes. So we were approached. We signed a revocable. We followed the recommendation of the management and the other shareholders because they are our partners. We have a very good partnership with them. So we support this. And in terms of the money, so we still don't have the money. So the management expect closing at the beginning of 26. So until then, it's still some time. And if this, like, becomes reality, then we will also inform you.

Okay, thank you. Maybe two follow-up questions. The first one would be in regard to your brand marketing contract. When would they expire or usually how long do they run? And then would you expect a direct cost savings when you reallocate to your performance marketing? Because you mentioned it's just more cost efficient.

Yeah. So we have commitments until next year. So it's also there's no way to get out of it. So we have to spend it. But those brand markets, it's like sponsorships. And it's, yeah, so we have contracts until I think until next year. I think there's also one thing that is a little bit longer. But besides those sponsorships, there was also brand marketing or brand spend invested into, for example, TV campaigns. So this was something that we also stopped at the beginning of June, and now we are optimizing it, trying to produce better performing TV spots, try to find better ways where we can do the advertising. And yeah, so this is also stuff that we shift.

Okay, thank you. And one, if I may, one follow up in regard to economy. And your business relationship with the economy, will it be the same, or do you foresee any changes there?

No, I don't foresee any changes. We have a multi-year contract, so we're happy about the partnership. I think this has been lasting for over 30 years now. We have very good relationships with them, and so it's, I would say, a win-win situation, and so therefore I don't foresee any changes there.

Great. Thank you very much.

Thanks a lot.

So as we do not have any more questions, I thank you for the participation in the call today. I think Tim and team are available for further questions. Robin and me also available if you would like to contact us. I think our lines are basically open. So, yeah, have a good time, have a good day, and thanks a lot.

Thanks.