Report
Expert Corporate Governance Service (ECGS)
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Freenet - AGM 16 May 2019

General: Supervisory Board member Marc Tüngler is Chief Managing Director of DSW, the local partner of ECGS. This report has been prepared using standard ECGS guidelines.

Freenet offers its approximately 13m customers products for a digital living. The Group's operations can be split into two basic segments: Mobile Communications, and TV and Media. In the Mobile Communications segment, Freenet markets mobile communications products and services relating to mobile contracts. In the TV and Media segment, the business model consists of providing and broadcasting media content, particularly the transmission of TV and radio signals.

As of 31 December 2018, Flossbach von Storch AG held 15.39% and BlackRock Inc. held 5.27% of the Company's shares.

In financial year 2018, Group revenues (without IFRS 15 effects) increased by 4.3% to EUR 3.7bn, EBIT decreased by 9.6% to EUR 337.1m and net income attributable to the shareholders of Freenet AG decreased by 22.2% to EUR 223.1m.

Item 4: The remuneration system for the Management Board was last approved by the AGM 2018 with a majority of 65.58% of the votes cast only. ECGS recommended shareholders to oppose the remuneration system due to the complex structure and intransparent disclosure (on-target remuneration amounts were not disclosed) which made it impossible for shareholders to assess the potential total maximum remuneration of Management Board members. Given the relatively low approval rate at the AGM 2018, we consider that the remuneration system should have been reviewed by the Supervisory Board and put for shareholder approval again at this year's AGM. In line with our guidelines we would in principle recommend opposing the discharge of the Chairman of the Supervisory Board's Personnel Committee ("Remuneration Committee"), Prof. Dr. Helmut Thoma. However, as the discharge is proposed in a bundled resolution we recommend shareholders to oppose the discharge of the Supervisory Board as a whole.

Underlying
Freenet AG

Freenet is a telecommunications provider in Germany. Co. provides its customers a portfolio of services and products, particularly in the field of mobile voice and data services. Co. does not operate its own network, but markets mobile communication services for the mobile network operators Telekom, Vodafone, E-Plus and O2 in Germany, under its own name and on its own account. Apart from its own network-independent postpaid, no-frills and prepaid services, Co. also provides the original network operators' tariffs. Co. operates within two segments: mobile communications and other/holding.

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Analysts
Expert Corporate Governance Service (ECGS)

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