freenet AG
XETRA:FNTN
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freenet AG
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Good morning, ladies and gentlemen, and welcome to the freenet AG analyst and investor conference call regarding the third quarter results 2018. [Operator Instructions]Let me now turn the floor over to Christoph Vilanek.
Thank you very much. Hello to everybody, and welcome to our today's conference call.I am going into the document that was published already last night. And I start with page, what is it...
[ Page 11 ]...
Page #3 actually.Obviously, I myself am here on the phone. Ingo Arnold, which the vast majority of you know really well from the past few years, is, after the -- after Joachim Preisig left, operationally already acting as CFO. And part of the new style and the new handwriting here in the document is certainly a result of the way we work together for the last couple of weeks. He will also talk a little bit about transparency later on, and I hope that you appreciate his effort.Going into the document. Page #5, top-down from my point of view.I think overall customer ownership has performed reasonably well during this quarter. I will certainly go into the details of freenet TV, where this was the first quarter where we went into renewals and certainly have now -- well, a, we can see churn. B, we identify early buyers of double vouchers. And this is why we have already introduced the RGU last time, but certainly I hear from some of the articles that there is some disappointment, so I'd like to tell you my view on this. The financial metrics with revenue, EBITDA and free cash flow, from my point of view, is a good one. For the third quarter, we are straight on path for the guidance. We'll talk about the guidance as such as well in more detail a little later on. And on the shareholdings, I'm sure that you will have a couple of questions. Top-down, I'd say positive development in Sunrise. They also published their numbers last night. There is ongoing rumors on the consolidation. Obviously, we'll not comment on rumors, but we have always clarified that we do see that this could be a value driver for the shares, and we still continue to believe like that. And CECONOMY, we have had a lot of turmoil in the last couple of weeks on changing the management. And we are certainly disappointed about the share performance, but we do believe still that this is a strong long-tail shot where we will take a lot of benefits in the near future.Page #6. We'll start with the mobile segment. Postpaid customer base still growing, about 40,000 net adds in Q3. I think, overall, you'll see that the market is getting more and more in a saturation phase. I think it's not a surprise to anybody the growth on postpaids, no matter which of the market participants showed in the last couple of years, was basically a move out of prepaid, into the postpaid arena. And a lot of the -- half that, of that prepaid parts, are switched off. So overall, the valuable piece is still in a growth path. And the ARPU does pretty well in the -- in Q3, as well as the digital lifestyle revenues that we publish every other year, every quarter. You can see with the year-to-date plus 15 million and above 10% growth. It's still in line with what we expected, plus 4.4 million in the third quarter year-on-year. And the EUR 49 million from last year will definitely be beaten again, so we feel very, very comfortable with the development.Then I think there's actually, I think, a little bit of a misorder. I'd like to talk to TV and Media segment on Page 7 (sic) [ 8 ], first, what is the overall development. First, on waipu. waipu has borne another or has reached another milestone with more than 1 million registered customers. Likely about 20% of those are paying subs. And consequently, usage continues to go up, and we see a very -- still a very positive notion from the end consumers. On freenet TV, I will go a bit more detail 2 pages later. Sorry for now jumping back to Page 7.What happened on waipu? Key things that we have achieved in the third quarter. The Samsung TV app is live, which is very important because we address all the Samsung users now finally without the Chromecast or Amazon Fire. We also renewed the Apple AirPlay. We have introduced the voice control on Alexa, which is, to be honest, more marketing and PR element than a definite benefit for the end user. We have relaunched the website. There is -- the new EPG was launched with a way more detailed search, first-time search that is really in its benefits far beyond anything you can imagine from satellite or cable. We have renewed the entire platform so that we can work both platforms iOS and Android out of a combined developer platform, which was kind of a legacy problem that we have finally resolved during this quarter.What are the new things that we are planning to launch during the fourth quarter? There is a new Apple TV version with the new Apple TV combined. The Samsung TV will -- the Samsung TV app, the native app, will be updated so that you can use, again, your smartphone as a remote control for your Samsung TV, including then the NPVR. We have the platform as such. We've made it now available for third party. I was avoiding the word "white label" platform, but it's as -- well, normally I would call it a white label due to the content rights. I avoid that term, but it means that we can deliver the platform to third party and they can manage it on their own brands. And having said that, there is a likelihood of other people adopting the platform within the next 6 months. And we have revitalized and intensified the DRM; as well as we will now launch the next version of search with full-text search, which is in a beta test already launched and shows high interest with our end consumers. Very important is that we will launch a total of new 9 -- 9 new -- what we call new TV channels. These are channels with own libraries. It's a combination of live and VOD. We will have a new Hollywood blockbuster channel launched in November, and there are other exclusive channels ready to be launched. Unfortunately, we cannot disclose the partners yet because they are in final internal negotiations on the launch, but I guess we will be in very good shape with very, very prominent brand owners launching their own TV channels within the next couple of weeks.Going back to Page #9 and talking a little bit on the freenet TV subscribers. The challenge for us on freenet TV from day 1 was that the sole currency that we could count were people that either bought a voucher and we could not identify the individual but only saw that the voucher was sold. And then we could also see whether a voucher was activated or not. The thing that we could not identify, whether these vouchers were kind of bought for the shelf as an early renewal to be on the safe side, which tends to be a very German thing; or whether those vouchers were for a second screen and things alike. And aside of that, we always had direct debit customers or customers that bought e-vouchers so that we could identify. So in order to make this more feasible and better understandable, we have -- on that page, on the upper end, we have the TV, what we called subscribers because we had no better knowledge on it. And on the lower end, left and right, you can see that finally now we can identify out of those ones that we have had by the end of 2017. Today, we know that about 70,000 of those vouchers were vouchers that were bought and never activated. So we did not book them also as revenues, but we knew that we had kind of, well, people that bought it. And finally, 72 out of those are now identified -- or have now been identified as people that have with those vouchers renewed their existing subscription after the first 12 months period. Same goes for the first quarter '18 and again for the -- to the second quarter. So from the third quarter, there is still about 102,000 vouchers that have been sold; and we are not sure, 100% sure yet, how many of those are replacing existing ones that ran out after 12 months and how many of those are actually new ones that have, well, either bought recently a hardware or just came into the business and decided for the service.So we knew about that development, but there was no identifier for us. And finally, the first original subscribers ended early in Q3 their initial subscriptions. So this is why we get more transparent. And whether we like it or not, we will go now to the new KPI, which is revenue-generating unit. By the end of Q3, we have identified 900,000. And we believe that the overall target on these RGUs -- and it is a newly introduced KPI, but it's the valid one. We know it from cable. We still believe and we still guide for 1 million. A couple of those will come out of the 100,000 bought in Q3. And there is a continuous purchase of new vouchers, where we get a weekly reporting, which makes me believe that the 1 million is definitely a solid number for the full year. Again, I think we couldn't do better before. We were not trying to cheat on that, to be very honest with you, but there was no other information, and finally we get a better picture.The second page, on Media Broadcast, is number 10. Again, there is the other topic of the [ Ooklab based ] FM antennas. So what was the situation? Already when we acquired the company, there was the attempt to regulate the antenna market. It was uncertain how the impact it really was, but we have taken that into consideration already during due diligence. It's finally became clear to us early 2018 or end of 2017 that the regulation would hit the business and a business that up until then had a positive EBITDA order of magnitude of 4 million to 6 million a year, depending on the service efforts we had to take. And it turned out that with the new regulated prices this EBITDA profit would turn into a negative, into a loss. So this was the driver for our final decision to stop this business, to sell these antennas to third party. Back in end of 2017 and early '18, when we had to do our guidance for the full year, we were still not really in a decision mode. We did not really know how many of the antennas would be sold during the year. This is why we had to build some comfort for us, and this is why we have given a range. Again, I do not -- I'm not proud of the fact that we could not disclose it back then, but there was a lot of regulatory uncertainties and a lot of rumors around the whole business within the industry of radio. And we had to be careful what -- about what we said back then.So what are the final results? We have sold those antennas in a total of 3 waves in an auctioning procedure. There are some antennas that have been sold to individual radio stations. There is a couple of those that have been sold to institutionals that are in that antenna infrastructure business, and there is a number of private investors that have gone into these -- into this business. We had a total -- we have a total one-off effect out of these selling of the antennas of approximately of EUR 26 million. And we have a negative impact on the revenues, obviously, because we do not get the lease contracts anymore from the regular stations and we also do not generate the full service maintenance revenues that we had done in the past. For the upcoming years, the revenue consequently will go down. 70% of these revenues were the lease for the antennas on the towers. But still it has obviously significant impact like-for-like of minus EUR 8 million compared to -- minus EUR 8 million EBITDA and compared to 2017. And if we take '18 to '19, it has a negative impact of EUR 1.5 million. Reversed, the cash from the sales will drop in over the upcoming years. And I'm sure that Ingo Arnold will explain that to you in more details, also when you have your face-to-face meetings.Overall, I think it is certainly a simplification of the business. It is a clarification of an uncertain regulatory environment. And we had to go through that painful exercise with all kinds of negative headlines, but well, it is like it is. As a consequence of the FM radio going down, the DAB being finally fully established, same as DVB-T2, we have -- about 20% of our service and maintenance capacities are obsolete. And this is why we went with the workers' council. And there we went into negotiations how to reduce either headcount in a one-off effect. We've told them that we have about 160 people onboard which we do not need anymore. And the alternative solution is to bring down the weekly hours from 38 to 30 hours, with a disproportionate compensation on salaries. That is the final solution. And we are hope -- we hope that we'll come to the second version of the proposed solution with the workers. Internally, there is a strong agreement to it. We hope that we can implement it during the second quarter of next year.Page 11. I will not go through the details of the page as such. You are all following the discussions on 5G. We were happy that the regulatory board has included the need for a Diensteanbieterverpflichtung, so a service provider obligation, in there for trust. The things that we have been criticizing are still going on, lobbying for it. It's that we feel that there need to be a sanctioning process. There need to be a short path to escalation. And we feel protected with the wording that is there already, but we are fighting for even more definite protection and even more definite sanctioning process. Those are very important for us, and -- but I'm sure you have a couple of questions there.Before going into the Q&A later on, I'd like to hand over to Ingo to go through the financial reporting.
Yes, good morning, everybody, also from my side.I think, as I know most of you from different occasions, that it's not necessary for my side to introduce myself. The only thing what I can promise now is that I will keep in contact to you. You will reach me. And I think you already get an idea of this since yesterday evening, since we published, because we had different calls in the last 18 hours. And so I will be available for you also in the future.Starting with the figures of the third quarter, I would like to start on Page 13.Here you see the group's performance. And what you see first is the revenue. It is stable, all in before IFRS 15. As you all know, we have some influence out of IFRS 15, which decreases the revenues, but I think it does make more sense to show the revenue without this effect because then you can see that it is really stable during all these quarters. It is even slightly increasing.In the gross profit, we do also have a situation which on the first view, if you would only see the 2018 figures, you'll see a relatively stable gross profit. I think the only thing what could you make a little bit nervous is the comparison with last year. I think I will explain the effects further on. Mostly, it is impacted by the TV and Media segment, where we have some structural changes between gross profit and EBITDA. Because if you watch also the figures of the EBITDA, you see that here it is also slightly increasing comparing the first 9 months '17 with the first 9 months '18. I think we had a small dip in Q3. This is based on some additional investments into marketing on the antenna side because what Christoph already told you is that we had some vouchers which were due in the third quarter. So we had to do some additional marketing to get these customers -- to keep these customers into -- in our base.So then I would like to move to Page 14. Here you'll get a deeper view into the deviations, what I was talking about, on a group level. You see on the revenue side there is the big difference out of the IFRS 15 topic, but what you also can see, that in mobile there's an increase of revenues by EUR 136 million. This is based on hardware sales here. And I think the pity is -- in the mobile business is that these hardware sales do not generate any big profit. It's a very, very small margin what we earn here. So we have higher revenues but without any positive effects on the profit side.We see on the gross profit side what I already mentioned, a very stable mobile business. And we see on the gross profit that TV and Media is based mainly by this sale of the analog radio business. It is lower by EUR 10.6 million, but also from the B2B TV business we see a lower gross profit. Because of some structural changes, because the missing gross profit is partly compensated by lower costs, therefore on the EBITDA side you can see that, again, a stable mobile business; on the other hand, a slightly increasing TV business. Therefore, if we compare year-to-date '17 by year-to-date '18 without Sunrise, without analog radio sales profits, we see an increase by slightly above EUR 3 million.Moving to the free cash flow bridge. If you see the change in working capital by EUR 30 million on a 9-month basis, I think it is important to know that we reduced our factoring activities by something like 15 million. And on the other hand, we had to pay the third part on the Media-Saturn exclusivity agreement by 12.5 million. So this is the deviation in the working capital, what we see here. So it is totally expected from our side. On the other hand, you see the EUR 22 million in tax payments. This is slightly lower than what we expected before. It is based on postponements of the invoices from the financial authorities. So we saw these postponements already in '17. I think I'm not sure at the moment what will happen in the fourth quarter because we do not know when we get the announcement from the financial authority side. I think we have to wait a little bit here to get a better view on this, but I expect definitely that we will not reach the EUR 50 million, what we guided at the beginning of the year. Definitely it will be lower than EUR 50 million.With the CapEx, yes, something similar. We have EUR 33 million at the moment, what we've paid out. I do not expect the EUR 50 million, what we guided at the beginning of the year. It will be something around EUR 40 million to EUR 45 million up to the end of the year. Then we have to deduct the EBITDA of Sunrise, which is not cash generating; and we have to add the Sunrise dividend by EUR 37 million. And then with the analog radio business, the last big bullet here in this bridge, the minus EUR 25.7 million. We will get the money step by step in the next years, EUR 3 million a year, so it will take some time. We have the EBITDA effect in '18, but we will have the cash effect in the next years. Therefore, I have to deduct it here. And therefore, I arrive at a free cash flow level of EUR 253 million up to the end of September, which is totally in line with what we guided at the beginning of the year.Next page, Page 15, Mobile Communications segment. I think it looks a little bit boring, but I am happy that it looks that boring because it is, again, very stable. We see pressure in this market. There is a lot of competitions, but up to now it was possible for us to show a slightly increasing revenue, stable service revenues, so we are happy with the revenue here. On the gross profit side, yes, the pattern, what we see here in the first 3 quarters, it's comparable to what we saw in the first 3 quarters of '17. And therefore, we also expect a comparable development in the fourth quarter.On the EBITDA side, a similar picture as in the gross profits. Though we have the pressure in the market, it is relatively stable, what we see here. So on a basis of 9 months, it's only EUR 0.8 million below what we saw last year. So it is the most -- still the most important business for us. It is our core business. And again, we -- the only thing what we can say is that, in these months, even with the pressure, what we have out there, it's very stable.Then I move to Page 16. There we see the TV and Media business. And what I understood from your side. And yes, I understand your comment on our TV business because there we have a lot of positions moving around. This makes it a little bit difficult for you to get a good view on this business. Therefore, I tried on the following pages to go in a little bit more depth to make it more understandable for you. And I hope that this works and that you understand the business much better and you understand much better that it is generating value. And all the decisions what we took here makes a lot of sense on a financial view.So if we see the revenue. Yes, on the first view this looks disappointing, but if you know that we sold the radio business, you know that there will be missing revenues out of this. And this is something what you can see in this slide, especially the drop in the third quarter. I think what you do have to know is that, during the year, as we sold the business to different partner, we had some additional service agreements where we helped them to start the new business. This generated additional revenue for us. It's with additional revenue without any profitabilities, but it was necessary for us to help these investors to start in a business which was new for them. This increased the revenues in the second quarter, and -- but it decreased it even more in the third quarter because, that quarter, we stopped these businesses and we stopped the analog radio business. And therefore, we see the drop.In the gross profit line, here we have different effects. I will follow on the bridge about this, and -- but on the EBITDA side, and I think this is important: If you see it in the first quarter, there was a EUR 7.8 million that time, disappointing. It was that low because we invested additional money into the marketing of EXARING waipu.tv, our IPTV product. And this decreased the EBITDA that time, in the third quarter, again a special, a one-off. This was because we invested additional money into the antenna business to do some marketing because of the due vouchers. So I will say, in a normal quarter, we would have something between EUR 10 million and EUR 15 million also in the future.Then on Page 17, we give some detailed information about the effects in gross profit and in EBITDA to make it easy and understandable for you that I am not nervous about the gross profit development because the gross profit development is not one-to-one seen in the EBITDA because there are a lot of positions in-between which optimize the situation here. So it is more structural. And if you see Page 17, where are these structural effects? On the one side, it is the other B2B business, where we have new contracts with the public TV channels. So it is more or less the broadcasting business, what we are doing there and what we call B2B. And I think you know about it. So there you see a big drop in the gross profit of EUR 19.1 million but only a small drop in the EBITDA of EUR 6.2 million. And this is because we closed a new contract with the public sales channels, so we had to account it in a different way now. I think the effects, what we were talking about also in the past and I was talking about to you, were this EUR 6.2 million. It's something what you could expect. And I think this is something what you see here now. In the analog radio business, a similar effect, EUR 10.6 million in the gross profits, but it is only EUR 5.3 million in the EBITDA, which will be EUR 6.5 million up to the end of the year. I think you see the other markets here in the bridge. Hopefully, these give you more insight and make you -- make the business more understandable for you.Then on Page 18. Here you see that it's based on IFRS 15 and the higher amount of the balance sheet. You see that there is a drop in the equity ratio. It is something which was expected because it is not based on a change in the business. It is only a change because of IFRS 15.The net debt ratio. I think there is the optimistic view of the net debt position, of calculating it. And if you use the assets, what we have in the shares of Sunrise and CECONOMY, to reduce the net debt, then you will get a leverage of 1.2. If you would not do so, you will get a leverage of 3.4. 1.2 is the leverage what we published during the last quarters, so we are definitely in the range of our financial policy.Then I would comment on 2 separate topics. On the one hand, the CECONOMY stake, what we bought some months ago, at the beginning of July. So it was a question how to account this event. What we -- where do not have the opportunity to decide, where we do not have an option, we have to show the first-time loss, which is the difference between the purchase price and the share price as of the 12th of July. So it is the difference between EUR 8.50 and something like EUR 7.20. This is something what we have to show in the third quarter. It's a loss of EUR 47 million, what you see in our financials, in the other financial results. In the future, as it is a strategic investment for us, we will not show the differences in the share price on a quarterly basis in our P&L. We will use the other comprehensive income to show the differences what we see on a quarterly basis in the future.Then Page 20. I think there is not that much to add now to the sale of the analog radio business because Christoph already talked about this. I think it is -- from my point of view, it is important to say that under this regulatory regime it would not make sense to do this business. And therefore, it was a perfect chance for us to sell this business. And it is difficult to calculate multiples now. I know that you like to do so, but as Christoph already described, yes, in the past there was positive EBITDA, but in the future it would be definitely a negative EBITDA. And therefore, I think it is not a fair process if you would say -- if you would do a multiple calculation on the EBITDA, what we generated in the past, because in the future it would not be possible to generate these EBITDAs.Then I move to Page 21. I talked to you very often in the past. We had a lot of discussions. And I took a lot of points on my list where you told me that it will be much easier for you if you would have more information on different topics. It would be much easier for you to understand our business. So I would say it is a first step now and a first attempt from my side to make clear that I would like to change things in the future here with the presentation, what I give you today. I think you already got a lot of more details than in the past. In the future, there will be some additional changes. I think I have one example here. I think the free cash flow definition, it was discussed very often. It was not changed in the past. It will be changed on the 1st of January. I already calculated, for example here on Page 21, how it will look like in the future. And here it is an example of the -- of Q3. I think and in my eyes, it makes much more sense to change the definition here.I have a lot of more points on my list. I think I will talk you through all these points when we meet in the next week. I think we are on a lot of conferences. And then I will you -- give you much more details than this, but I think free cash flow is a good, first example.Then on Page 22 there is a chart about the development of our dividends. I think we have an 8% yield at the moment. Yes, definitely, I will be -- yes, I would be happy if the yield will be lower and the share price will be higher, but the only thing what I can say is that we will pay a stable dividend also in the future. This is, I think, what we will propose at the beginning of next year, to keep the dividend stable. And all what -- we have no budget for the next year now, but all what we -- what I can say is that this dividend and this idea of the dividend will also be in the future covered by enough free cash flow because it is a generating -- a cash flow generating -- still a very high-cash-flow generating business what we have here.So thank you from my side, and I hand over to Christoph again to Page 24.
Yes, thank you, Ingo, also from my side. I mean I very much appreciate that level of transparency. And I know that certainly it's also on some ends a painful process for us because we also have to shift some internal reportings, et cetera, et cetera, but I think the effort is a good one.And even more important is that we are fully committed to pay out a EUR 1.65 for the year of 2018 at the -- or propose a payout of EUR 1.65 at the upcoming AGM. The cash flow profile does not change even though we'll make things more transparent. And while I never fully understood the accounting on Sunrise participation, I think part of digital lifestyle, ARPU, et cetera, et cetera is still things that cause questions. The entire EMEA staff is a difficult one to handle. So we are really planning to give you way more detail, way more plan-able and forecastable numbers. And this is a process that we start from today, and hopefully, we'll end and give you the full picture when we publish our preliminary figures early March next year.What is on the agenda of the operational business not only for the rest of the year but for the next, let's say, 12 months? I think freenet TV and waipu.tv still remain on my agenda as the key topics to generate further growth. There is some housekeeping on the B2B side. There is a lot of talks, a lot of meetings, a lot of efforts around the CECONOMY. We will -- there is 2 things that run a little against our agenda: first of all, the fact that there is a search -- or there will be a search for a new top management. And we certainly see impacts on the way we can interact right now, but that's a matter of a couple of months. And the same goes that some of the initiatives that we are discussing with the operational team in Ingolstadt are things that we will not implement in the fourth quarter since this is an important quarter for our day-to-day business. But overall, there is relevant ideas, and again, we will talk about that in our next meetings early next year with you.We continue to focus on the postpaid business, and we further extend our digital lifestyle portfolio with a number of new initiatives. So I think my day-to-day agenda is full. And there's a strategic on the new TV business and a strategic on the transparency.Having said that, I'd like to hand over to the organizing team there and go for the Q&A session.
[Operator Instructions] And first question comes from Wolfgang Specht from Bankhaus Lampe.
Three quick questions from my side. First, on Media Broadcast, can you give us some idea, if your idea of lowering the working hours do not work, what kind of restructuring options do you have? Are you somewhat restricted because there are still employees with long-lasting contracts like civil service? Or would you be also free to do, let's say, a wider workforce reduction here? Then on your customer base in postpaid, can you give us an idea how many customers are on 3G contracts and how many on 4G contracts? And then on your guidance for 2019 which still guides for growth on both EBITDA and free cash flow. Do we have to adjust this for the radio sale effects, or is it also valid after the radio sale?
Okay, thank you for those questions. First one, yes, there is a couple other ways to do restructuring. And there are certain limitations for the facts that you have mentioned, that a part of the staff is kind of the old civil servant, but if the -- for the -- or if the 20% hours cut wouldn't work, we'd still have an -- I wouldn't call it an opportunity but the option to go for regular restructuring and layoffs even this is not preferred. Maybe I can elaborate on that. The fact is that we have less work in the field, but still I have on each antenna tower work. So instead of sending one person home, it would be better for us also to reduce the hours so that we can still fulfill the tasks on a daily basis with the same kind of team, they're very specialist. But yes, there is another option even though we are not in favor of it. On the postpaid, a split on 3G and 4G, I cannot really tell because I do not have a definition of -- straight definition of 4G. Well, if we count the ones [ in 3G or 4G ] logo in the display and then reach 4G technology, then I'd say it's anywhere between 10% and 25%, but I cannot tell you for sure. If this is the so-called LTE contracts with 100-plus MB, then it is a very small proportion of 1% or 2% because these are the ones that we sell as what we call the original contracts under our own name but still the Red tariff plans, so again the tariff plans. So if we go for the high capacity, full, full speeds, we're talking about low percentage. If we talk about regular-speed options, then we are -- and I will look it up, but we are above 10% and below 25%.
Wolfgang, yes, you are correct. At the time we published the guidance for '18, we only gave something like a forecast for '19. It was an expectations, and there we forecasted a slight increase in EBITDA. I think we are just in the process of budgeting 2019. From today's point of view, I would say I would stick to what expected that time. But I think we have to do our work here. I think it's what we take into consideration then is, I will say, without adjustments what we saw this year because, if we lose the analog radio business, I think it will be different for me -- it will be difficult for me to compensate this. And so when we did the expectation, it was without the idea of selling the analog radio business. So what I can confirm is I -- let me say we do not have this figure, but it's something like adjusted EBITDA without special or one-off effects of '18. I would say, yes, we stick to the expectation, what we published then.
Next question comes [ Nimi Solana ] from Goldman Sachs.
Sorry. It's Joshua Mills here from Goldman Sachs. I've got three, please. So thank you for the additional transparency you're providing with the report. I thought, from that perspective, it would be useful to get some color on when your mobile service provider contracts with DT, Vodafone and OTT are next up for renewal; and a kind of more specific time line around [ that ]; and whether there's been any activities over the last couple of months on that front. Secondly, just coming back to the guidance. So you're sticking with TV net add guidance -- so RGU guidance, I should say, of over 1 million for the year. That would imply 100,000 or more net adds in Q4. And it looks like organically you lost 100,000 RGUs in 3Q, so what's going to reverse that trend? Is it going to require a lot more advertising spend or something similar? And then finally, the third is just on leverage and use of cash. So I'd be interested to know perhaps from Ingo, if you look at Slide #18, what the leverage impact of fully adjusted leases on your balance sheet would look like. And what impact do you expect IFRS 16 to have? And from that perspective, if leverage is going to be higher, how do you think about the uses of cash you may receive from selling or divesting your stake in Sunrise, as has been talked about in the press?
Yes, thanks a lot for your questions, Josh. Let me maybe, if you allow me to start with the last question, on the cash, yes. We have a protection on the future leverage, but they're not finished yet. But I think more important is, and I've said that in a couple of statements recently, the Sunrise stake was a financial investment all the time, giving us a variety of options. I personally do believe in a consolidation case in Switzerland, but I also see a strong stand-alone business from Sunrise. And given the changes in -- on the leverage, the likelihood of selling the shares to recover those high leverage is increasing. Let me put it that way. We are not in a hurry, but we are sure that we need to get -- to bring it down because it will cross -- I mean, if we have today a 3.4, you can easily imagine that in the future we will cross the -- a multiple of 4. And that is certainly something which -- where we have the ambition to bring it down the sooner, the better. I think that is as far as we can comment, yes. On the RGUs, there's 2 effects. One is that I see weekly sales. And there is no specific offer. There is a constant flow of new offers right now. There is a bundled offer of a set-top box plus 12 months. There is a couple of ideas on USB sticks for laptops and PCs, but that's kind of like the day-to-day business, so no higher expenses or unexpected disproportional marketing efforts in the Q4. Out of the 102,000 that we have shown for Q3, there is certainly a number that is still being on top of the existing RGUs. And I see weekly sales of several thousands. So I think the 1 million is definitely a number we will reach till the end of the year. On the operators, we have a differentiated picture. There is Telefónica, where given the remedies from the merger with E-Plus, there is a minimum of 2,025. And we are negotiating with them on a constant basis our ongoing contract. There is a still -- I think it's 2023 contract with Vodafone, but there is a regular renewal through the day-to-day contract ongoing, so there is not an end date as such because of the total number of contracts. And on -- the same on Deutsche Telekom. By definition, we have for 25 years now a relationship to Deutsche Telekom which is based on an annual renewed contract, but the original service provider contract says that, whenever any party is changing the substance of the contract, there must be long renegotiations about the customer base. So from a purely framework, we -- you could say we live in an uncertain environment with Deutsche Telekom. At the same time, we have a substantial part of their network users in our customer base. There is a positive and constructive interaction between all the 3 operators and ourselves. And we also see that the operators, all of them, want to switch off 2G, 3G; move to 4G. And they all announced that -- well, there is an obligation for them to continue with us, and we will exchange that for a upgrade on 4G. So I do not see a -- well, I haven't seen and I do not see and I do not see a change of the interaction and the relationship even given the 5G auctions coming up, but we will definitely be more happy if there was a short-term sanctioning mechanism.
Sorry. Can I just follow up on 2 points there? So presumably you're saying we won't get detail on what your lease-adjusted debt looks like until IFRS 16 comes through next year, but it's going to be north of 4x. Are you -- can you give any more detail also on the metrics to help us calculate what your lease-adjusted net debt and leverage would look like today? I think that would be very helpful. And then just on the RGUs, if you were to adjust the figures which you show on Slide #9 to reflect the fact that some of these people who took vouchers which just rolled off after 12 months, what do you think the underlying freenet TV RGU net adds were in Q3 as an idea for Q4?
Well, on that one, I don't know yet, to be honest, yes, because we have -- on a daily basis, we have old contracts running out. And then we have to track whether -- those ID-based reactivations. Are they on the same day? Are they overlapping? Are those people coming back? And typically when we have somebody who's running out, we try to contact them. We can, and we can't do some of them. So let's agree on the goal for the 1 million. And I cannot break it down even further because it's just a day-to-day exercise which is new to us, and it started from July. So I can't tell better than this.
Then about IFRS 16, what we did is we did a calculation on the base of the figures at the end of September, but this will be different to the figure of the end of the year because there will be additional contracts in the fourth quarter. Some contracts will run out and so on. Therefore, we do not want to give a concrete figure because it is possible that there will be a change at the end of the year. And if I would give you the figure today, maybe it will be misleading for you. The thing what I can tell you is we have a lot of rental contracts, especially in the Media Broadcast. And what we saw at the end of September was the increase of the leverage by something like 0.8, 0.9. It is what we saw and -- but it can be -- I think there the difference will not be that high at the end of the year, but the -- in the changes on the EBITDA side and on the side of the debt, maybe there will be some changes there. So I would not want to be that concrete on that side, but it will be something like 0.9.
Next question comes from Ulrich Rathe from Jefferies.
So I have 4 questions. The first one is could you just sort of explain why ultimately you're getting so much churn in there. I understand there are sort of those inactive vouchers out there. Do you really think the step-down has essentially been inactive vouchers? Or do you have any sense of people not being happy with the product for some reason, and that's really the reason? Is there any way for you to sort of split what we saw in the quarter between these 2 big bucket, I suppose? Second question will be sort of a business question on the mobile business. The main-branded 4G prices, [ these are again to ] tariffs and the Red tariffs, are relatively expensive to 4G from Telefónica and sort of the sub brands. Did you think this is a sustainable gap? Or do you think this is potentially something that will get under pressure when and if Telefónica's network sort of improves, as it seems to at least in some regions? My third question is essentially just clarifications on this voucher business. How much information do you actually have on the people who activate vouchers? Do you have their names? Do have their addresses, e-mail addresses? Do you actually -- can sort of individually identify them? If you don't have the actual names and addresses, can you actually tell who it is who activates a particular voucher? And also, when do you book the revenues? I understand you book them when you sell them, but I'm not entirely sure whether it's when you sell them or when you activate them. And my last question is on the guidance. So you guided at the beginning of the year from -- for EUR 410 million to EUR 430 million of EBITDA. And you're now saying you're going to get to the upper end of that, with the various one-offs related to the radio business. Now sort of rationally it sounds as if the net effect of these one-offs is roughly EUR 20 million, so compared to the "beginning of the year" situation, we are probably looking at the bottom end of that guidance on an underlying basis. So I was just wondering what during the year sort of has not happened that was in the more optimistic scenarios that you sort of had in mind when you issued the guidance in the first place? Is this really something that's going on in the mobile business? Or is this something that hasn't quite evolved as well as it could have in the TV business? If you could give any color on that.
Okay, well, first, let me explain on the voucher. There's 2 types of vouchers. One is a physical voucher. Somebody goes into a shop, buys a voucher, pays the voucher, goes home. And the only thing we know at that very moment is, from a couple of days later, we get a report that the voucher with a unique identifier has been sold. We do not know -- we know where, so let's say MediaMarkt, but we do not know who did it, who it is. We book the cash, obviously, because we get it in, but we do not book the revenues because it's unused. It's an unused voucher. So I think that is the clarification. So the unused vouchers have not been revenue generating as long as they are not in usage. So if one of those people then enters the voucher code into the system, which they can do online or via telephone. Then we are trying to gather any more details, so e-mail address, et cetera, et cetera, but if they do it online, they can do it completely anonymously. And we have learned that -- even though we do a lot of online marketing CRM, that those people obviously want to do it anonymously. So there is -- around 40% of -- those ones that we have, well, call it, subscribers up until Q3, about 40% of those are not known to us at all, yes, whereas people that have direct debit or an e-voucher, we have an e-mail address. We typically have a physical address. We have a name. And in a lot of those cases, we also have the payment information. So that is the -- let's say that this is where we are blindfolded on about 40%. We have churn on those ones which we do not know, but we have also churn on those ones with direct debit or e-vouchers. And consequently, from what I explained before, we can only talk to those people that stop their subscription, as long -- well, if we know them. What is the reason why they do not like or do not continue the service? Almost 2/3 of those claim that they either do not watch the private programs, or they do not consider the necessary payment as beneficially enough to them. So this is nothing that our dear friends from RTL and ProSieben will love to hear, but that is in fact what is the -- well, that's -- in 2 sorts of the cases that's the reason. It doesn't come to me as a big surprise because those people have had DVB-T before. We did not -- the majority only has public channels. They have now tried it and figured out that there is -- well, it doesn't give them a lot -- enough benefit to pay EUR 5.75 a month. So this is as far as we know. And there is another 10% to 15% that say, "Well, even though we like it, we do not use it often enough to pay for it. Or we would prefer to pay because in our summer house we only pay 2 or 3 months," and things like that. That's the combination, but the majority is people that say, well, "There is no reason for us." So it doesn't pay back. That's as far as we can go. The second one, on the guidance again: So when we put together the guidance, we were not sure how we would treat the antenna business. So we said, if there was a onetime effect, which we back then did not, could not properly quantify, we said, well, we do not -- we do not want to disclose that there is. We are uncertain about the continuation. If there was a continuation, well, we had a different -- we had a somewhat different guidance more on the lower end. So we have -- now with the -- if we have the EUR 430 million, we will -- I -- my personal guesswork is that we will -- including that onetime effect, we will end maybe even slightly above EUR 430 million. So we are -- without the special effects, we will be on the lower end. That was always what we intended, but well, the competitive environment, the regulatory environment, the uncertainty about the entire procedure with tons of legal questions did not allow us to disclose that any earlier than now when we have finally finished all the contracts. Some of you that have watched it on the press also knew that there were some accusations of us playing not properly, et cetera, et cetera. So I mean now everything is signed and set in stone, so we are now on the safe side. But without these effects, we are on the EUR 410 million. And I think that is where we are heading for on a kind of a like-for-like basis from the previous year. On the mobile prices, yes, you're right. Telefónica is trying to gain market share through very aggressive pricing on the LTE services. In many locations, they have upgraded their network and are really doing well. The -- at the end of the day, end-consumer perception remains to be improved. And I have not seen any operator going up with its prices alongside with improving the network quality. So I think that we will over the next couple of years still see that Deutsche Telekom will be in a position to charge premium prices compared to the other two. Vodafone is a fast follower with a reasonably good network. And Telefónica, even though they improved in certain locations, their overall perception will remain, that their ones is the weakest ones. This is why they have to speak to lower pricing. And what we'll see in our own customer base, that people are well educated. And some of them know that in their region Telefónica is providing a good service, and then they take advantage of the better prices.
Next question comes from Josh Hallett from Redburn.
The first one, I just want to clarify on the EBITDA drag on the TV business this year and next year. So EUR 6.5 million this year, has that already happened? Could you tell us the split across the quarters in terms of that EBITDA drag? And then for next year, the EBITDA drag is EUR 8 million. Am I right in saying that's only actually an incremental EUR 1.5 million drag to EBITDA for 2019 on the TV side? And then overall you already mentioned about EUR 10 million to EUR 15 million being a kind of run rate for the TV EBITDA. So would it therefore be reasonable to assume that TV EBITDA next year should be around EUR 45 million? And then my next question was are there any CapEx savings from the disposal of the radio business. And my final question was just on you bought the stake in CECONOMY. I wanted to know what benefits you have seen, from the fact you acquired that stake, that you wouldn't have been able to achieve if you hadn't bought that 9% stake.
Yes. Josh, thanks for asking the questions. The first one, straightforward, impact of the disposal. It's minus EUR 5.3 million as of the third quarter and will be a total of minus EUR 6.5 million for the full year. Perfectly well understood, like-for-like, this will be an incremental of minus EUR 1.5 million for '19. Second question, total EBITDA on TV next year. You said EUR 45 million. I'm close on EUR 50 million. And there is some CapEx saving on the antenna, but that is more a maintenance CapEx which is not that huge. Those antennas are really, well, robust. And it's only a couple of replacements that we had to do every year, so talking a low one-digit million amount. On CECONOMY, I think at this stage it is a -- well, given the uncertainties with the management team there, it's all a bit stuck right now but, I think, easy to understand for everybody. Now what is currently the change is more on a qualitative level. It is a natural attitude of a retailer, when they talk to their supplier, that they believe that the supplier is very bad and is trying to steal money from them, whereas the supplier is trying to -- tends to believe that the other party is only taking their money. So they both wish the best from each other, which is money. This is on a qualitative level something which we have kind of reversed. The day-to-day talking to those guys is, well, they know that we also are interested in a good performance of CECONOMY. And I think that changes the way you talk to each other. That changes the way you evaluate opportunities with each other. That changes the discussion of, yes, we do not know yet what the total lifetime contribution of a waipu customer will be in the long term, but we will try, we would love to test it with you. And so they say, okay, well, they will not do something which harms the CECONOMY business. I think that is as far as we can say from today, but it is a qualitative aspect as of today but it will change in a more quantifiable impact next year.
Next question comes from Simon Coles from Barclays.
Simon from Barclays. Just a quick one on your mobile COGS and your OpEx in that division. I'm just trying to understand what the development has been year-on-year and sequentially as well just to get a better handle on what's going on there, so any more color will be super useful.
I think with mobile what we saw in each single part of that business, it is stable. So this is what we saw during last year. There was a lot of pressure. There will be a lot of pressure next year. We try to keep everything as it is, but I think it is not different in separate parts of -- in separate lines there. So my answer is we take -- we try to keep everything stable in each line.
Next question comes from Christian Fangmann from HSBC.
It's Christian, HSBC. 2 questions, if I may. So the other ones have been answered. So first, Christoph, a question to you regarding the -- what you think long term what the potential of the freenet TV business is in terms of subscribers and the German market as a whole. Is 1.5 million kind of a ceiling, or is it more 1.2 million? Is it 2 million? Just to have your view on this whole segment and the whole market. And related to that maybe, also Deutsche Telekom launched this Magenta TV product. And your OTT product, that is now also available for non-Deutsche Telekom customers, so basically an app similar to kind of waipu. I want to have your view on that one compared to your own product. And then lastly, on mobile postpaid, I think a very strong performance, but what was really remarkable was the very strong ARPU in Q3. Is that kind of the new normal, or is it more a short-term thing driven by a specific factor?
Well, thanks. Yes, on the first one, I mean, freenet TV, I think, well, if I do a hard guess for next year, I will say the 1 million stable is a -- is something that I would put in the books. There is a potential on some DVB-T2. There is also a potential on the satellite, but we have also learned that it's way more difficult to access. We have also seen HD+ losing HD customers, so I am more on the realistic sides to assume that we stick around an average of 1 million paying subs for next year. On the OTT and Internet-delivered TV in Germany, I am actually very happy about the Magenta TV launch. I think the product is -- I like it from the content base. I think technically our product is more advanced. I think the challenge for the Telekom team is how to -- if they are very successful with Magenta TV, they will basically cannibalize the Entertain. And I have understood, so far, that these are 2 separate things. One is kind of the teaser, and the other one is the real product. So I wonder how they're going handle it in the future, but overall, the potential for OTT, how you called it, is all the users of satellite and cable. So we feel comfortable with Deutsche Telekom launching the product. We feel comfortable with the success of RTL now -- or TV NOW. And we also appreciate the effort of much [ concert ] with ProSieben claiming that they also want to go into the [ treat ]. I think the positive effect of an overall broader notion on OTT as a separate access or type of access is something which is very positive. On postpaid, well, I think that is some special effects. I would see it more on these -- I would call these stable and these onetime effects might be caused by short-term deviations, number of days and months, et cetera, et cetera. That is always -- that has always impacted Q3 is twice 31 days. And these things have effects of 2% to 3%, anyway. So I would -- and I would also believe that when we go -- when we fully apply the major app, we will see changes in the ARPU, anyway. So don't extrapolate the Q3, please.
And the next question comes from Usman Ghazi from Berenberg.
Just want to credit the move to give more transparency. We really appreciate that from our side. With that having said, I've got 3 questions. Firstly, just some housekeeping on factoring. So you indicated that year-to-date it had been reduced by EUR 15 million. Is there further unwind expected in Q4 and then into 2019, or is this just this year? And also, why are you looking to unwind the factoring? Is it that interest rates on this specifically are going up? That was the first one. Secondly, in your comments around leverage, like you said, I mean, there are 2 ways of looking at leverage: the optimistic way, which is how you define your capital structure in the report, i.e., 1.2x net debt-to-EBITDA; and then the pessimistic way. In your comments around selling the Sunrise stake, you're taking the more pessimistic view on leverage, and I was wondering why you're doing that. Is it because your -- I don't know, the bonds that you have, they defined leverage a certain way which makes it more relevant? So any clarity on that would be appreciated. And then finally, just on the ongoing 5G consultations, discussions, et cetera. Is -- would you expect any big change in the auction conditions over the next 2, 3 weeks until the document is finalized? Or any kind of color on that will be interesting.
Well, I like your last questions. If I could -- if I would know what they do, then I would either lean back or I will freak out. We're talking to 32 members of the cancellation (sic) [ consultation ] table. 16 come from the individual member states of the federal union of Germany, and 16 come from the central parliament. And we are in exchange and discussions with all of them. The past few days, there were a couple of comments that more and more of those people have understood that the argumentation of the network operators was practically wrong. What did they say? They said, "If we open our network for service providers, the service providers hitchhike the network for free. And this is why it impairs our investment." Well, finally, we make the politicians understand that this is just not true. It's fake news because we will be charged for this, and a service provider obligation does not regulate the prices. So I see positive momentum there, yes. And I am -- we are not tired from trying to convince them, but it's hard for me to predict what the outcome was. On the other one, I'd like to answer on. You said the pessimistic view. I don't think that the high leverage view is a pessimistic one. It's we see an overall uncertainty on how the capital markets will evaluate KPIs in the future, especially in our industry. There will be higher-lease contracts. There will be changes in the EBITDA. And I think till the fact that the entire matrix is readjusted to the new regime, it will be -- well, it might be smarter to try to get on the lower end of it than to the higher end of it. So I don't take a pessimistic view. I only listen to the bankers and analysts and the consultants. And they all believe that it might be better to deleverage, but again, I mean, having said that, I'd love to -- I see that Sunrise is doing an operationally good performance. They have announced that they will increase their dividend payout for the next couple of years, so there's a lot of reasons to keep the stake, but at the same time, we need to see whether the -- maybe a partial sale of the stake would bring us to a certain ratio. So I wouldn't differentiate pessimistic and optimistic. I will differentiate between cautious and less cautious.
Can I just follow up on that? So sorry. On that, just to clarify. So are you uncertain about how the equity markets will evaluate the debt ratios post IFRS 16? Or are you uncertain about how the debt markets will -- because ultimately, I mean, the debt markets value more -- or are more important, right, because it will have an impact on your -- the interest rate you're paying, et cetera. So where is the uncertainty on your part?
I think it is the idea to, I think -- we will have both figures in the future. You will see both figures. It's just the question what is our starting point. And as we told you, we wanted to be, let me say, more fair here. I think, in the future, we will start from the higher figures, and then we will deduct the assets what we have. And we think this is a fairer view. I would not say it is based on an equity view. Or is it based on a debt view? I would only say we want to have a fair view. I would not say that it's -- 1.2 is wrong, but I would like to say we want to have a fair view. And we want to devise a fair view with you, and this is the idea behind it. So on the factoring, Usman: During this year, we reviewed the figures step by step. So we have the reduction of something like 15 million now. There would be the possibility to do more because, as you saw, the hardware sales on the mobile side increased, but we decided to decrease its size slightly. If they change in the fourth quarter, I would be nearer to reduce it further slightly than to increase it because this was the idea during the year, but definitely, there would be more volume to do so but we decided not to increase it further.
Any particular reason for it, for deciding not to do it, do more?
I think we had the room to do so, and that's what we decided to do so.
Next question comes from [ Nimi Solana ] from Goldman Sachs.
Sorry. It's Joshua Mills again just with one quick follow-up. I wondered if you could give us a different way of looking at the EBITDA in the TV business. So I think the bridge you provided gives some clarity, but of the EUR 7 million underlying EBITDA we saw in 3Q, how much positive EBITDA was contributed by the broadcast business? And how much did you spend on advertising waipu and freenet TV? I'm just trying to understand what the kind of cash burn at the TV consumer business is right now. And then a very quick one. I'm just following from Usman's question: What [ piece of lines of the ] financial covenants you have in place are? And how debt is defined within those.
I think, your question on details on the EBITDA of the media segment, as I already told you, there were something like EUR 3 million of additional marketing investments in the third quarter into the antenna TV business and to keep the customer base where it is at the moment. And I think it was necessary because there was something like 500,000 vouchers due in the third quarter, and therefore it was, I think, necessary to talk to the customers outright. And therefore, we needed to increase the investments there. What you also asked is what are the separate effects in the quarter from the other segments. I think what you can say is something like the linear effect from the other segment. I think you see the year-to-date effect on Page 17 of the presentation. And I think it is a possibility to have a linear view on this, and I think this should help you to show the effect of the first quarter. I think, from the analog radio business, maybe it's a little bit different because we have the -- additional contracts will be invested during the year, what I was talking about earlier. And so therefore, this just in the third quarter was on the gross profit side a little bit higher, but on the EBITDA side, it was something like EUR 1.5 million to EUR 2 million in that quarter. And the last question -- again. I'm sorry. Josh?
The last one was just I'm not sure if you've specified what your financial covenants are in terms of the net debt-to-EBITDA ratio or debt-to-equity ratio but if you could give us an idea of where those covenants kick in; and then if possible, whether the lease-adjusted debt that you'll report from next quarter onwards will comply with those covenants, as per your stance?
Yes. I think -- with the covenants in our contracts, I think it is important to know that we have frozen gap inside our contracts. So with the change in accounting principles, we do not have a difference in calculating our figures in terms of the financial contracts. On the other side, in the financial contracts, the only covenant what we do have is the net debt. It's the leverage. And with the leverage, we do not have any default rules. We do only have step-up rules. So the worst thing what could happen to us is that we do have to pay higher interest, but even with higher leverage, it will never be necessary to repay a loan on that.
And the next question comes from Ulrich Rathe from Jefferies.
Just a clarification. On the vouchers, I think, what happened -- or at what point and under what circumstance do you actually book revenues for vouchers that have not been activated over a very extended period of time? Or what -- because I understand you're sort of pulling along a backlog now, and I'm just wondering at what point do these things become revenues because -- were they -- they have paid cash. And then more fundamentally, coming back to that Bundesnetzagentur sort of comment that you made. You sort of said you're sort of more or less happy with the way that the draft looks, but I mean the -- sort of the wording in the draft sort of is -- tells of being a referee. And Bundesnetzagentur say they would supervise negotiations on demand. The network operators seem to be saying the legal basis for such statement is fairly weak, so even if it ends up in the auction rules, they seem to say that this is really sort of on a fairly weak legal basis. Is this something where you have really high degree of confidence? Or are you simply just sort of looking at the statements and sort of say this is good enough for us? Or have you -- or do you have specifically sort of confidence that these statements can actually be enforced, if need be, in a court of law?
Well, what would you expect from the operators to say? I mean, if I was them, I would also say, that is, "Their legal point is a different one." Well, what we see is, and we have a number of legal statements of relevant people stating that, this obligation can be put into the documents. The current one says, "You have to talk, and we are ready to intervene." What we ask for is that this intervention should have a underlying process. That process could be, if we feel discriminated, we can immediately go to the Bundesnetzagentur, show them what it is; and that Bundesnetzagentur should be in a position to say, well, before -- alongside with an in-depth clarification and investigation on it, the discrimination must be hold back. This is what we ask for, and there is a strong legal opinion that this is not only possible but even necessary and in line with the demand that the public authorities have. If I was with Deutsche Telekom, Vodafone or Telefónica, I would certainly try to push back. This is the normal thing in such an environment, but again, I mean, I feel comfortable that it's -- the way it's put into the negotiation or the consolidation paper right now -- or consultation paper right now, it's much better than it was on 4G. And now we fight for the last small print. That's how I see it. And this is why I'm positive. And alongside of that, I am also positive that we -- in many things we are in line with the interests of the network operators. We do not want to have regulated prices on national roaming because we think it's going to harm the entire market. We did not want the intervention of whoever you can imagine as big players coming in overnight into the German market and destroying it. So in many points, we are very much in line with the operators, but we very much appreciated that more and more people involved into the process claim that there need to be a protection. And for us and having said that, there needs to be a protection from a split into the society, into those what -- that can afford premium pricing and have full-speed Internet and those ones that cannot afford premium prices and stick with -- in the analog times. That is definitely what we see. Certainly not everybody can -- buys a Mercedes, but everybody can have access to the Autobahn in Germany. So that's the same thing which we expect from the public authorities to clarify.
And maybe again concerning the vouchers and the accounting of the vouchers. The day the customer buys the voucher, we have the cash in, but we do not see any profit on our books and we do not see any revenue in our books. The day the customer activates the voucher, it is a 12-month voucher or the voucher has a termination period of 12 months. So the day the customer activates the voucher, in that month, we saw -- we will show the first part of the voucher price. And that is 12 times the same amount during the next 12 months, revenue and profits out of the voucher. So I think it's, with the voucher which are not activated, this is a question what we will do and what time the vouchers can be -- they are booked as a liability what we have, but it is a question what time it will be possible to put an order to books. I think there are different views, but it will take years, definitely, to wait if the customer is activating the voucher or not. And -- but this is the question what we have to raise with our auditors earlier or later. But definitely, as long as the vouchers are not activated; and no vouchers, what we do have, out at the moment of the vouchers which are not activated, no revenues are shown up to now and no decisions are taken. In addition, Ulrich, if you have further questions, I think we can also handle it between both of us. Just give me a call, and then I'll give you further explanation.
And another question from Usman Ghazi from Berenberg.
I guess a question for Ingo. And Ingo, sorry to labor this point. I'm just trying to get absolute clarity on this and happy to take this offline, but in an IFRS 16 world where, like you said, your leverage optically is going to go up by 0.9x, in that world, if you did not do anything, let's say, with the Sunrise stakes, you kept the same kind of a leverage and IFRS 16 resulted in a high leverage from today, do you see your interest costs going up? Or it -- will it not have an impact?
No. IFRS 16 would not have an impact.
There are no further questions.
Well, then, thank you very much, everybody, also for your patience and for this long overtime. It was pleasure to answer your questions. Looking forward to see most of you in the next couple of weeks in a number of conferences and road shows.Thanks for listening, and goodbye.
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