mobilezone makes robust start into first half of 2020

PRESS RELEASE

Rotkreuz, 21 August 2020

mobilezone makes robust start into first half of 2020

In the first six months, mobilezone increased its revenue by CHF 29 million to CHF 597 million. The EBIT of CHF 9 million and the net profit of CHF 7 million are slightly above the expectations communicated in May 2020. Meanwhile, all business areas impacted by the coronavirus crisis have rebounded.

After the mobilezone Group had made an excellent start into the year, all key figures underwent a double-digit increase above the previous year until this performance came to an abrupt halt due to the coronavirus lockdown in mid-March. Markus Bernhard, CEO of the mobilezone Group, says: "As announced in May, the lockdown sliced CHF 12 million off the EBIT and encumbered the restructuring of the indirect sales business in Germany (offline) with an additional CHF 5.4 million. In Switzerland, the retail business developed positively after the reopening of all physical points of sale, and as expected, the number of contracts concluded over our online platforms sparhandy.de and deinhandy.de continues to be above the figures of the previous year."

Overview of key figures

• The revenue increased by CHF 29 million to CHF 597 million. Adjusted for currency effects, the revenue was 10.9 percent higher than in the previous year. The powwow business unit (formerly SH Telekommunikation Deutschland GmbH) contributed CHF 209 million (previous year: CHF 36 million) of the revenue.
• EBIT of CHF 9.0 million (previous year: CHF 23.6 million) with an EBIT margin of 1.5 percent (previous year: 4.2 percent).
• mobilezone reports net profit of CHF 7.0 million (previous year: CHF 17.1 million).
• In the first six months of 2020, earnings per share amounted to CHF 0.16 (previous year: CHF 0.42).
• As of 30 June 2020, the balance sheet contained cash and cash equivalents totalling CHF 50 million (31.12.2019: CHF 65 million).
• The net debt amounted to CHF 129 million (31.12.2019: CHF 131 million). The ratio of net debt to EBITDA, adjusted for the lockdown effects and the restructuring provision, was 1.80 (31.12.2019: 1.93)

Segment Switzerland and Austria

• The revenue underwent a decline of 13.6 percent from CHF 162 million to CHF 140 million.
• EBIT dropped from CHF 8.7 million to CHF 8.0 million, resulting in a net operating margin of 5.7 percent (previous year: 5.4 percent).
• The performance of the Swiss retail business was very good:
  • With 129,000 contracts concluded (postpaid, internet and TV), the previous year's figures were exceeded by almost 9 percent, taking the lockdown phase (contracts: –32,000) into consideration
  • The revenue generated with services (data transfer, setup of smartphones and other services) performed in the shops amounted to CHF 1.1 million. Adjusted for the lockdown phase (–CHF 321,000), this represents an increase of 1.5 percent.
  • Adjusted for the lockdown phase (–CHF 1.1 million), the revenue generated with accessories increased 10.4 percent to CHF 9.0 million.
• B2B was able to step up fleet management and mobility services to CHF 1.8 million (previous year: CHF 1.6 million).
• In the B2B online business, 10,600 smartphones were sold (previous year: 6,700). This represents an increase of 58 percent.
• In the first half of the year, the repair business in Switzerland and Austria generated negative EBIT of CHF 1 Mio.
• EBIT TalkTalk: CHF 2.4 million (previous year: CHF 2.6 million). The EBIT margin grew from 28.4 percent to 30.2 percent.
• At TalkTalk, the revenue share of mobile customers increased to 75 percent (previous year: 68 percent). In the Postpaid SIM cards segment, the number of customers went up to 29,500 in the last six months (31.12.2019: 26,800).

Segment Germany

• The revenue increased from CHF 410 million to CHF 458 million.
• EBIT fell from CHF 15.2 million to CHF 1.8 million. This decline contains a restructuring provision of CHF 5.4 million.
• The wholesale business accounted for a revenue share of CHF 146 million, with a gross profit margin of 1.8 percent (previous year: CHF 192 million / 3.3 percent)
• The German online business continued to grow.  More than 284,000 (net) mobile phone contracts were concluded online (previous year: 272,000), an increase of 4.4 percent. Adjusted for the lockdown phase, the increase amounted to 6.6 percent.
• For 2020, a total of 600,000 contracts are expected to be concluded online (sparhandy.de, deinhandy.de, via our own TV channel with handystar.de and via sales partners) and more than 500,000 contracts are expected to be concluded offline via B2B sales partners.

Changes in the Board of Directors

After 12 years as Chairman of the Board of Directors, Urs T. Fischer will not stand for re-election at the General Meeting in April 2021. Under his supervision, mobilezone has, in recent years, reached a strong strategic position in the telecommunications industry in Switzerland and Germany. During this time, the Group's revenue and earning power have increased significantly. In the context of the succession arrangements, the Board of Directors will propose Olaf Swantee, an expert in the European telecommunications industry, as the new Chairman of the Board of Directors at the General Meeting 2021.

General Meeting in April 2020

In line with the Ordinance on Measures to Combat the Coronavirus, the shareholders were only able to exercise their voting rights at the General Meeting on 8 April 2020 via the independent proxy. As in previous years, a resolution to pay out a dividend of CHF 0.60 per share was adopted; the dividend was paid out on 17 April 2020.

Outlook for the second half of 2020

In all three countries – Switzerland, Germany and Austria – the business performance in the first half of the year was greatly impeded by the measures to control the coronavirus. The online business remained largely unaffected by these measures.  All impaired business areas have recovered, except for the wholesale business in Germany. We are very confident with regard to the second half of the year, especially as far as the online business in Germany and the Swiss retail and B2B business are concerned.

The strengthening of the strategic focus on the online business by means of the launch of the new online platform with additional sales opportunities (accessories, hardware and insurances) for sparhandy.de and deinhandy.de in the first quarter of 2021 is an important highlight. The further development of the services and recurring income in all business areas continues to be of utmost strategic significance. By 2023, we will convert all points of sale in Switzerland to the current shop layout. We confirm the adjusted EBIT target of CHF 38 to 43 million, which was communicated in May. For the fiscal year 2021, we project EBIT of CHF 61 to 66 million.

Key figures of the mobilezone Group

Segment Switzerland and Austria

Segment Germany

*CHF 1.0 (previous year: CHF 3.2 million) represent intercompany net sales that are eliminated at Group level. CHF –0.8 million Group EBIT (2019: CHF –0.3 million) and investments of CHF 0.1 million (2019: CHF 0) are not allocated to any segment and remain with the holding company.

Media contact

Markus Bernhard

CEO

mobilezone holding ag

mobilezoneholding@mobilezone.ch

About mobilezone

Founded in 1999, mobilezone holding ag (SIX ticker symbol: MOZN) is the leading independent telecommunications specialist in Switzerland and Germany, with revenue of CHF 1,324 million and net profit of CHF 44.4 million in the reporting year 2019.

The mobilezone Group has around 1,300 employees in Rotkreuz, Urnäsch, Zweidlen, Härkingen, Vienna, Obertshausen, Berlin, Cologne, Bochum and Münster. The Group's offering comprises a complete range of mobile phones and rate plans for mobile and fixed-line telephony, digital TV and internet from all providers. Independent advice and services for private and business clients, repair services, wholesale activities and supply to retailers complete the offering. The services and products are offered in approximately 120 company-owned shops in Switzerland, online via various web portals and at about 80 Ashop locations in Germany (partner shops).