freenet AG (FNTN) Earnings Call Transcript

Ladies and gentlemen, and welcome to the freenet conference call regarding the Q1 2023 results. The floor will be open for your questions following the presentation. Let me now hand the floor over to Christoph Vilanek.

Hello, everybody. Good morning. Thanks for joining this session. Format in everything very much the same, very much as you all know it. We're very happy to present the first quarter results, which came in strong, very happy about the overall development of the company in financial as well as operational KPIs. And I would like to start, as always, with the development of the customer base. You can see that year-over-year, we have a real nice development in mobile net adds of plus 166,000 and TV plus 182. I think it underlines our ambition to equalize these 2 businesses. There is still in absolute terms of subscribers, a big gap to be closed, but you can see that on the net add side, we're doing really well on both ends. I think it is a result of a strong quarter as such, a good ambition with the team. A couple of changes that we have done on the sales side, also in retail. There is not a single event that was changing the picture. But I think it's a lot of little improvements that pay back these days. If we take one step deeper into the mobile business, you can see that we have a total plus of 60,000 during the quarter and plus 51 with the pure postpaid, there is a strong development in unlimited or strong demand on unlimited contracts and also fixed mobile substitution, Internet access. They are incorporated here and they are doing really well. I think there's going to be a little bit of a pushback in the second quarter because we need to limit the ultra-high usage. So we have to -- we will clean out a little bit, but then we're talking about to 3,000 customers. But that is the basic driver is SIMon and Unlimited. Second topic, which is more on the qualitative side, you know that we are constantly trying to improve our customer service. There's 3 elements to it. One is to push more and more of these contracts away from manual to digital. The current ratio of digital contact is 38%, and we're trying to improve on a constant basis. Second key topic is to make the people not even [indiscernible]. We have seen a reduction of contact during the first quarter compared to previous year by about 6%, 7%, which is a result of improvement on processes such as mobile number portability and the like. And overall, we were quite excited that connect has tested the hotline services, and we've done pretty well there, which is also good in terms of communication to the outside world. On retail, the major changes during the first quarter was that by the 1st of January, we have limited the way of paying bills in the Gavi stores, we have excluded any cash payments there from 1st of January, and we have done the same 1st of February with the freenet shops. To be honest, it was a big panic on the side of our sales reps and shop managers, but it turned out that it did not hit the bottom line at all. People fully accept that we are asking for all card, Mastercard or any noncash payment method, which is pretty well and there is more to come. That's what we all say. We are working on a new concept to fully align on and offline to delete any differences between the existing channels. We want our shops to be very focused on not demand -- on real demand-driven sales and going away from still supply-driven sales that we are doing right now. I guess that in the next call in August, we will elaborate a bit more, and we will also share with you what the impact will be on the business side. freenet Internet, we have kind of like added to the portfolio, as you know, by the end of January, we have then better tested the sales and activation in February. Real sales only started now in April on some of the other pages. But we also mentioned that we will increase the price from 29 to 35%. This -- basically, it's driven by the market -- overall, the market conditions and the commission demand that third-party sales partners want from us. So we will increase prices to have more money to spend as commissions to third-party dealers, which we did not include in sales so far. Next page, Page #6, is a bit closer look at on the TV side. I think the outstanding number is that Waipu TV has a net add number of 83,000 during this first quarter. I expect a similar or slightly -- even slightly better net add number for Q2. What is the drivers? Well, I think it's a great product on the one hand side, but on the other hand side, it's the partnerships. In the Q1, we did not include any numbers from Deutsche Glasfaser so far. So this comes in right now. First analysis on the April looks that these people that adapt or change migrate to Waipu have a super high engagement of over 90%. So we're doing really well there. These numbers really mainly coming in Q2 and Q3. So this is why we're expecting, well, anywhere between 80,000 and 100,000 net adds? For the second quarter, that's a continuous range of new partnerships, which I will not elaborate, but I think it's just showing that the product is also improving. We're currently holding 248 channels, 885 are HD. I think is the widest and most attractive portfolio in the market. It's even bigger than the one from cable and Magenta TV. I think this is not really an attractor but more a hygiene and communication factor that we have a super competitive product. On freenet vice versa, we still see a decline, which is expected. We keep the revenues on a stable level due to the price increases that we have very silently implemented in end of next last year and this year. Still, we do a lot of interviews with people that are leaving. And I even personally spoke to a couple of customers, and the basically tell us that the switch technology typically to IP, either when they are upgraded with glass fiber connectivity or improved Internet service and this drives us to test now hybrid offers, meaning that free TV customers will get a Waipu either on top or in a hybrid stick version in order to make them kind of like seamlessly migrate to the new technology and not stepping away then from freenet as the total company. On Media Broadcast B2B is doing really well. We have also -- I think we have mentioned last year that there is a couple of risks on carriage fees. We have signed extended long-term contracts with public television also in Q1, which will give us stability way beyond 2027. And radio is doing really well. So I think overall, you can see them. I'm very positive. I'm happy that we have done. I think the financial is a bit better than we even thought are not onetime effect, but a combination of positive effects that Ingo will give you more detail. So what is the outlook for the full year? We remain bullish and positive on the overall result. We will focus on implementation of AI and [indiscernible] functionalities. We have an internal group working on this. Specifically, we expect midterm very positive impact on the customer service side. As I mentioned, assisted personalized shopping is a big project, which we have kicked off these days within the company, and I will give more details in August when we talk about Q2 and freenet Internet is up and running, and we will increase price to EUR 35 on the TV side, now fully integration and implementation on [indiscernible]. We have also seen demand from other B2B potential B2B partners to talk to us. And none of those conversations at this stage are ready to be either disclosed or concrete enough to be mentioned. But we see that the IPTV market has really kicked off and anybody in Germany who is in the TV access business has a by phone under radar and gives us the strong impression that we will find more partners such as Deutsche Glasfaser still this year. And the hybrid stick I've mentioned as well, we will -- I have a meeting tomorrow where we will start talking about the implementation and the volume, and I'm very positive that in Q4, we will see the first results, which we will again share with you at that stage. Having said that, I'd like to hand over to Ingo for the EBITDA details.

Thank you, and good morning, everybody, from my side. I start on Page 8 with the group view. I think Christoph already summarized a little bit. I think it's very promising what we saw here or what we see. And I think it is -- yes, I think Christoph is right. In all dimensions, no extraordinary effects, but in all dimensions, slightly more positive than expected. So it's not the big effect, but a lot of very small effects and these positive effects lead to the EBITDA growth of 8.5% here. What is also very positive, I think, is that the performance is not based on cost savings but it is based on better quality of the business. And I think this is shown in the gross profit growth of EUR 10 million, and this is very equal to the EUR 10 million of growth in the EBITDA. What is also positive is that in both segments in the TV and Media segment and in the mobile segment. There is a strong development. And so I think all in a very positive picture, also driven by an increased revenue, which is not so usual for us, but it was also in terms of revenue, a very good first quarter here. Moving to Page 9 to the mobile view here. Yes. And here, we speak of a steady growth of EBITDA, which is totally correct. If you compare it with the last quarter. In this quarter, yes, it's even bigger, the positive effect on the one hand, and this is also very positive. It is driven by the higher service revenues, which is the most profitable part of our business. And the share of the service revenue is again near to 75%. So the quality of the revenues is quite fine. We see the positive gross profit effect. And on the EBITDA side, the effect is relatively comparable to the gross profit because we have a strong cost control, which keeps the cost on the level where they were last year, even with all the inflationary effects and so on. Moving to the some KPIs of the mobile business on Page 10. Yes, we are happy that DLS revenues are still on track. We saw some increase in the third and fourth quarter last year. And as usual, the first quarter of the year is slightly lower, but it's definitely much, much higher than the first quarter of '22. So I would say, yes, we are back on track since Q3, and this is something which shows it here again. ARPU stable and the subscriber base growing, as Christoph already described. Moving to the TV and Media business. I think a comparable picture to mobile. We see the increase in revenue based on the growing customer base at Waipu TV. And I would ask you not to forget that in Q4 '22, where the revenue was even higher than in the first quarter now, we had some extraordinary revenues from parted deals and from some sticks what we sold separately. So I think this was definitely extraordinary. The EUR 80.8 million revenue in the first quarter are very strong. Moving to the gross profit. It is an increase in gross profit mainly driven by Waipu TV, again, because of the growing number of customers and the service revenues that we generate here. On the other hand, freenet TV, it is stable, and this is the target to keep it stable because we see the decreasing number of customers in freenet TV. But on the other side, we increased prices during '22. And this is what we promised that we try to keep it on a similar level. And I think here, we deliver what we promised. On the B2B side, Media Broadcast, maybe a little bit surprisingly strong, but this is driven especially by the digital radio business. I think we invested a lot in CapEx also last year into the infrastructure of digital radio. And so therefore, now we generate the gross profit out of the network, what we built there. And on EBITDA terms, -- what is obvious here, freenet TV still on the same level as gross profit on the B2B side, also a very good cost control. And in Waipu TV, I think this is not surprising that the EBITDA growth in Waipu TV is lower than the gross profit growth because if you want to grow the business, then you have to invest in the marketing, and this is what we did in the first quarter. And this leads to a lower EBITDA effect on the shorter time. But on the long term, this will pay in also on an EBITDA level. Moving to the free cash flow. I think what is important to do if you compare it with last year's free cash flow. Last year, we received an economy dividend -- so if you normalize the free cash flow of last year, it was only EUR 57.2 million. And if you compare the EUR 64.6 million of the first quarter '23, this is an increase of 13%. And therefore, the free cash flow even outperforms the EBITDA growth. If we look into the bucket here, a change in net working capital, this is influenced by a further decrease of factoring from something like EUR 26 million at the end of the year to EUR 13 million, EUR 14 million, something around this in the first -- at the end of the first quarter '23 and therefore, this is something why the change in net working capital is bigger, the negative effect here than last year because the factoring reduction last year was much lower. Tax payments, comparable level than last year. CapEx higher than last year. Here, again, some investments in digital radio. What we did in the first quarter, I think we could see from the Media Broadcast B2B figures that this makes a lot of sense because we get the money back afterwards. In the other, I think, interest payment slightly lower, so nothing surprising in the other buckets here. Moving to KPIs on Page 13. Yes. I think here in the headline, I think the balance sheet is under control. It is still very healthy. I think we have a -- we will have a usual effect because in May, we will pay out the dividend. Afterwards, the leverage will be higher again, but definitely still on a very low level, and it will -- the balance sheet will stay on in a very healthy level with an equity ratio above 40%. My last page 14 is the guidance. We reiterate it. I read in some of your comments that maybe the guidance is too low and maybe it's too conservative. I think today, definitely, it is much too early to discuss the guidance here. I think we are early in the year. We have to see what happens. And therefore, we reiterate the guidance today. And then during the year, we have to see what happens and what will be possible. So therefore, I hand over to Christoph again.

Yes. Thank you, Ingo. Before we go into Q&A, I'd like to make a comment on -- as well on the topic of guidance and target. I think there's a couple of things, which I'd like to mention -- we see that you have all read that Apple has problems with CPU revenues significantly. We also see that in April with GRAVIS both please don't be surprised that revenues in Q2 might take a dip from pure hardware sales. Actually, it's nonprofit revenues. But I think that is one thing I'd like to mention, and you should be aware of no damage, but we would like to avoid a negative surprise. The second thing is that we have decided to do increases in salaries, more significant than we've done in the past. The question was whether we will already implement it in Q1. It will come late Q2, early Q3. So that is part that will make the trajectory a bit flatter than one might expect now in a typical extension of Q1. And the third topic is that we have tested a lot of new advertising, social media, et cetera, et cetera, with Waipu TV. And the team has told us that they feel more comfortable now to spend a bit more money than they did in the past. So I think there are 3 effects, and this is why I was intervening here, I think, the 3 effects that we will see over the year and did also cause the fact that we are not yet in a position to really extrapolate Q1 results and see whether this will have an impact or a need to increase the EBITDA guidance. Having said that, I think that is heading the theme for Q&A and happy to answer your questions.

[Operator Instructions] And first up is Polo Tang from UBS.

Congratulations on a strong set of results. I just have a few different questions. The first one is, can you talk through what you're seeing in terms of competitive dynamics in the German mobile market. Also ARPUs have been broadly stable for you guys, given price rises in the market, do you think that your mobile ARPU can grow going forward? Second question is really just about M&A and use of cash. So just looking at the annual report indicated that the Board had considered M&A given the quantum of the one-off charges that you recognized for due diligence, it sounded like you were considering a large-scale acquisition. So can you talk about how you see your priorities for use of cash? And if you are considering M&A, what type of M&A are you thinking about? And my final question is, what's your view on whether there will be a fourth mobile network build in Germany.

Yes. Thanks, Polo. The -- on the first one, what I think no big changes in the picture on the market. I think Deutsche Telekom, we really see that they are putting a lot of effort on cross-selling their, what they call next tariff plans. So within families, you try to get whatever SIM-only from children 5 husbands, neighbors and et cetera, et cetera, as long as they have a lead tariff plan with Magenta. Actually, we're doing the same on the Magenta tariff plans, but that's what we see as an activity. And the other one is that Deutsche Telekom thing to do -- let me say, unfortunately, they do a great job in penetrating fiber, open access providers and doing a great job there to do Internet access and accompanied by Magenta TV. I think they finally found the right approach and doing really well. Other than that, the candid in the core business on mobile, they keep prices on their high premium level and it's appreciated by the end consumer. Vodafone, we still see them in, I guess, in less turbulences that we have seen in 6 months. It feels that new management is getting grip on the company, still a lot of open questions on whether they -- what the investment in quality is what they're -- how they're going to treat topic of DOCSIS versus fiber overbuild. I think there's still a lot of uncertainty. We have seen them taking out money from the commissions in the Q4 2022 and Q1. We see them now coming back to do it still with some caution. But in general, return to what we would say, we would call the normal status. We have also done a couple of commission versus revenue shares, which is in the first quarter in accordance with their internal planning. But overall, I think they are, for sure, in the weakest position and the perception and consumer perception is rather weak. At least if we compare it to the period 3, 4 years ago, for us, they remain an important partner, but I think the difference is that for a long period, they were the strongest and most important partner right now. The other 2 are more important for us. But I expect them to have a comeback over the year. And Telefonica, I think Dave Marcus and his team did an excellent job in brand perception in quality perception -- they're doing really well. We are still struggling with them because they don't give us full access or access to their 5G network. We have escalated these discussions. There is a general will to cooperate, but there is still a couple of open questions, which hopefully we can sort out in the next couple of months. I don't see ARPUs going up. These famous price increases happened actually on prepaid tariffs with Telefonica. I think that the message was oversized. It did not really move the needle. But don't expect ARPUs to go up, I would say flat on that level. And I think they are more impacted by the channel and acquisition of SIM-only versus subsidized sets than from any other -- let me also go to the situation with[indiscernible] but I'm not in a position to disclose more than what's publicly available. Anyway, we would hold or public knowledge is that they are still below 2-digit number on active antennas. So I think they have built anywhere between 10 and 15, but active on it, not even 10. I was surprised to read last week that he starts now to offer Internet through 5G. I think that is a very brave statement if you run this with 6 active antennas. And we have also read the same quotes from Tim hedges that he is not -- he does not believe that [indiscernible] is honestly working on building a real network. So that's what I read. That's what you read. My interpretation is still that he is struggling with that infrastructure. From what we know from other projects, even if you sign a deal to put an antenna on top of a building, it typically takes 6 to 8 months. So I cannot see a realistic chance that they will go anywhere near 1,000 antennas by the end of the year. This would then mean that in -- from 1st January of 2024, [indiscernible] would not be in a position to seriously state that they have a 5G access or 5G network for their consumers. And I personally think that tool really need to have -- to take its own decision on the future, whether he is trying to collide once again with either of the networks or find a different solution. So a pure standalone solution for 2024 might be damaging for the reputation of his brand, and I think he will not let this happen. So you need to ask him what he thinks the way out of the travel situation is. On the cost of M&A, yes, you're right. We have spent money on a big project, which we finally turned down. By definition, we will not -- cannot disclose what actually was the project for the target. I think in -- if we look at M&A, let me exclude a couple of things. I mean, obviously, within the mobile as a service provider market, there is no option in Germany. There is also not really optionality to acquire a big chain of shops or something because there is nothing available. I think a natural organic expansion is there, but not an inorganic move. And we have, over the years, every time when we looked into products accessories, speed, IoT, be it specific app services. We always -- we've always looked at it. But at the end of the day, we always step back and said we are not a product company. We're not good at that. We are a good company in packaging and selling. So -- and that leads to the area of M&A, where I'm busy with -- is to understand how could we accelerate the growth of IPTV. I mean, you know that we are working with Deutsche Glasfaser in a sales cooperation if there would be and trying to avoid any real name, if there was a local network, a city network or somebody who says we would be ready for an exclusive partnership. You are our provider for TV services. I think then we could -- if this was an M&A, I don't know, but that could be combined with an initial down payment exclusivity fee CapEx subsidy for the network, and you're all aware of those dimensions. So if I look at the example, D&S network, Pantenburg, Berlin, they have a couple of hundred thousand subscribers on IP and fiber. They're doing their own TV services. Would it be attractive for us to cooperate with them while first choice would be a cooperation with the revenue share? But they might say, hey, guys, if you give us so and so much money, we would be ready to migrate our customers straight into Waipu TV and then extend it and maybe they have some cash need. That is the type of the type of deal that I am constantly looking at. I think there is -- on an international platform, there's a good example that was the [indiscernible] deal in Spain, we MasMovil has bought them, and then they hand it over the TV business to a third party. IPTV provider. I think that is a model which I like. That is the type of thing that we have had a couple of talks over the past 18 months. Every now and then there is options out there, but at this stage today, there is no concrete projects, but that's the type of thing. And other than the cash deployment and capital deployment, I thinking you want to give a statement there.

Yes. I think nothing new on this side. I think it is the first idea to invest the free cash flow which is not spent as a dividend to invest it into the business. I think this is still our idea and Christoph was already talking about IPTV earlier. And if there would be a chance to invest part of this free cash flow into the business to grow faster, especially in front of the end of the [indiscernible], for example, in 2024, yes, we would be open to do so. But I think we would only invest it reasonable, and I think this is what we do all the time and as you know us. But if there would be a chance to grow faster, yes, definitely, we would invest it. So I think it's still the same priority than in other calls here. What we told you we want to invest it into the business. If there is a good chance to do it in a cooperation with a third party, as Christoph discussed earlier, yes, definitely yes. If it is cost the end of the day, M&A, let's wait and see, maybe it's something in between. But if nothing of this would be possible then, yes, definitely earlier or later, and this is also something that I read in all of your comments. Then earlier or later, we have to discuss if the share buyback would make sense. But I think already in March, we told you that we do not expect it before the second half of the year and we discuss it. And this is still the situation. So nothing new on this side, but we see opportunities and hopefully, we could realize some of that...

Next up is Yemi Falana from Goldman Sachs.

Congratulations on another strong quarter. Firstly, I'll start on just volumes across the core business. On the mobile side, your commercial traction remains strong. How are you thinking about the progression through the year? It feels ambitious at this stage to extrapolate such a strong quarter, but given your traction to date, I would want I'd be interested to know what your kind of expectations are as we go through the year. Secondly, I think you've touched on this on the course of this call on the TV side, partnerships will continue to be a tailwind, whether that's with Deutsche Glasfaser or elsewhere on the TV side. So do you think there's still scope for consensus to move upwards towards the kind of 1.4 million to 1.5 million expectation that you have on the Waipu TV volume side for the full year? The second question is just on your new initiatives. Firstly, on freenet Internet, could you comment on the pace of ramp-up and the scale of opportunity there as you see it now? And are things progressing in line with your expectations when you initially set them out at launch? Secondly, your hybrid stick strategy on the TV side does look well-reasoned but there are clearly some risks and opportunities around that. Some of us were around in kind of late 2018 when we saw large step-downs in the TV base. So how are you thinking about managing that commercial deployment? And maybe I have one final question just on factoring. I guess expect the free cash flow performance would have been even stronger. Do you plan to fully unwind this factoring in 2023? And if not, what time line should we be thinking about?

Yes, thanks for the questions. First one, postpaid. Yes, as you said, I think first quarter was stronger than one would expect. I would not take the time for the year. I think anywhere between 100 and 130 net adds over the full year is a fair assumption. We see April was okay. But as I said, on the unlimited, we will have to take volume down a little bit because of the extra cost a big cost. So yes, I would say, plus 100 to 130 would be my estimate for the full year. On Waipu TV, my personal estimate would be, well, anywhere between 1.4 million and 1.5 million. We have had, by yesterday beyond 1.1 million, so already more than 55,000 net adds in the first 5 weeks of the second quarter. So I think second quarter, -- well, I guess my team is a 3-digit number. So plus 100 million would be great if this is doable. I'm not sure yet, but we will get close. Then we will -- and if I take that fact that fourth quarter typically is stronger than I think an assumption beyond the 1.4 million is a fair one, and this is independent from new partnerships. So that is what I would call organic development under given circumstances as of today. On freenet Internet, as I said, we did some better testing. It turned out that still implementation, service delivery remains a challenge. So this is why we were testing intensely. Then in April, we have really launched it in our own shops. We will -- after the first 5 weeks, we have now said that we will take away the other commission-based DSL services, Internet access services that we were still selling and replace them by our own one. So ramp-up so far was reasonable within the plans with effect of 2 or 3 months delay. But in fact, real implementation is starting now. And then I think the volume that we will create it's maybe 2,000 to 3,000 a month. I think that is when we do now, I would say, from June that is the kind of volume. So we do not put money on marketing side, we just take cross-selling opportunities and migrate the volume that we have sold so far on commission based. The TV stick, the hybrid version, yes, I understand your question. Well, simply said, my current hypothesis is we send a hybrid stick to an existing freenet TV customer and tell him to replace his existing set-top box or PCMC card. Connect is private antenna to the stick and then take the opportunity of experiencing the full HD with the channels that he has subscribed with freenet TV and on top, use the Waipu TV. Then we see and make these people are aware that the technology we have in-house is already the latest hottest stuff that is available in the market. So to make them whenever they want to move away from the current antenna to make them aware that there is no need to switch but to stay with us. That would also mean that the subscriber would still be a DBBT subscriber, but would have an additional IPTV service on top. That would, by the way, then and to the fact that we would not see a net add on Waipu side. We would not -- we would just see a, hopefully, a more stable number on the freenet TV side. So no additional revenues for this for them. But lucky enough, we are on the same pricing level anyway. So our investment will basically be the hardware and the shipment and then to make the people understand that we do not cannibalize -- self-cannibalize the product, but we give it to deliver an add-on, which saves them a later migration to anybody else. That is, let's call it, the philosophical idea around it. We have shipped 150 sticks with that kind of ambition last week. And we do -- we start our questionnaires with these customers next week. So once again, I guess, until the Q2 results in August, I will be in a good position to explain how it should work and what the concrete impact was. We definitely saw high engagement and high response on the offer. I send the people personal letter saying, I'm the CEO of both these companies, and I'd like to invite them to experience both. And now we see what the outcome is going to be. And there's a question on factoring. I think Ingo will -- how we will go in with factoring?

Yes. I think we reduced it further. It's -- I think at the moment, we do not add any receivables to the program. So if we would not do so during the year, then it will reduce further in the next month and the next quarter. So I think it is a little bit a possibility to influence the level of free cash flow. But I think basically, the idea is to reduce it further to 0 but the program is still there. It is available. So if you would need it, we could use it. But from today's forecast and based on the guidance, what we gave in free cash flow, there the idea was to reset to 0. And at the moment, we are on this track.

Very clear and reassuring definitely on the hybrid stick side of things.

Next question is Martin Hammerschmidt from Citi.

I have 2. The first one is on the mobile EBITDA and sort of the growth run rate in 2023, I think this quarter, you managed to do EUR 0.6 million on that. If I think about throughout the year, you have customer growth coming from [indiscernible], obviously, your organic customer growth. But on the slide, you also highlighted higher investments in anticipation of the elimination of the meeting cost in [indiscernible]. So how should I think about that 0.6 going forward? Is that something that you think you can maintain improve or because of the investments coming in in the second half that might actually turn negative. And then the second question is, I mean, your comments on the guidance at the end of your remarks were quite helpful. If I think about the mobile business, I think on the previous call, so the indication was that you can minute so you should be able to manage over EUR 100 million of EBITDA per quarter. Now with the salary increase coming in, is that still sort of the case that you see? Or has something changed...

Yes. I think I'll start with the very good question. I think, first of all, maybe to clarify here, the EUR 0.6 million is the increase of EBITDA compared to last year. So it is not the size of the EBITDA in the quarter. So there was this increase of EUR 0.6 million in the first quarter. And -- but on an all-in EBITDA level, I think what we promised in the last call was that it could be possible to have an EBITDA of something between EUR 10 million and EUR 15 million in 2023. So if we would invest additionally, I think it could be possible that we with the EBITDA something like down to 0. This could be possible if there are growth opportunities. I think it is all based -- if we would -- if there is no chance to gain additional customers, there will be no cash out. There will be only a cash out if there is really the availability to grow the base. So I think it is -- I think we are talking about investments of EUR 10 million to EUR 15 million, I would say something like this additionally. And I think we have to see if there is really a realization. But the EBITDA in the first quarter was definitely higher than 0.6% because for the whole year to repeat it, there was a guidance where we gave that the EBITDA will be between EUR 10 million and more EUR 15 million in 2023. Then your question about the guidance and about the mobile EBITDA. Yes, I think we have to think about the sales increases. And I think we do not exactly know the dimension, but I still would say that EUR 100 million a quarter, EUR 400 million a year in the EBIT the mobile EBITDA would be possible. But here, again, I think what I also said discussing the guidance, I think we are early in the year. But from today's point of view, yes, this still looks possible hopefully...

Yes. Can I clarify the first one on the Waipu TV? So, as things stand right now, -- would you sort of stick to that EUR 10 million, EUR 15 million and say you don't necessarily see a big investment coming off this EUR 10 million, EUR 5 million? Or would you sort of walk back on that and say, EUR 10 million, EUR 50 million might not necessarily be something that we can achieve.

I think the 15% is signed I think the 10 million to 15 million is fine because it gives already a span of 5 and we're talking about that kind of level of investment.

And the next question comes from Ulrich Rathe from Societe Generale.