Hello, and welcome everyone to the Tele Columbus AG Q4 2025 results release call. My name is Becky and I will be your operator today. All lines will be muted throughout the presentation portion of the call with a chance for Q&A at the end. If you wish to ask a question in this time, please press star followed by one on your telephone keypads. I will now hand over to your host, Carmen Becker, to begin. Please go ahead.
Thank you, Becky, for the introduction. Good morning, ladies and gentlemen. This is Carmen Becker speaking, it's my pleasure to welcome you on the name of Tele Columbus management team to today's conference call following the release of our fourth quarter full year results for fiscal year 2025, which ended on 31st of December. This call is limited to 90 minutes. In case of any follow-up question, please let me know. I'm here today with Christoph Lüthe, Chief Executive Officer, and Tim Rhönisch, Chief Financial Officer. Now, I would like to remind you that if any lenders or rating agencies are on the call right now, that this is a public conference call in which only publicly available information will be discussed. I would therefore ask you to refrain from questions containing information not belonging to the public domain.
This conference call is intended for capital markets participants only and not for press representatives. If any journalists are on the line right now, we would highly appreciate if you were leaving the conference call now. Press representatives are welcome to call my colleague, Sebastian Artymiak, to discuss any outstanding questions. Please note that the presentation was uploaded on our website 15 minutes ago. Having said that, it's my pleasure to hand over to you, Christoph. The floor is yours.
Thank you, Carmen. Good morning, ladies and gentlemen, and welcome to today's quarterly earnings call. My name is Christoph Lüthe, and it's my first call as CEO of Tele Columbus following my start six weeks ago, actually. Allow me to begin with a few opening remarks. I accepted the role with a very clear objective. First, to successfully manage the challenging market and financial environment facing Tele Columbus today. Second, to position the company as a strategic, valuable infrastructure asset within the German market, together with a strong and experienced management team. I have spent more than 20 years operating at the forefront of Germany's cable and fiber infrastructure industry. During that time, we built and scaled major platforms such as Unitymedia, formerly the second-largest cable operator in Germany.
Later at ista, with CVC and vitronet, alongside BlackRock, we executed complex transformation programs and highly valuable build strategies across the infrastructure and energy market. As a result, I understand very clearly where the operational and financial levers in this industry are. Tele Columbus has a strong technology foundation and attractive network footprint, and very importantly, a highly capable and committed team. Our priorities over the coming quarters are clear. We will stabilize the organization, sharpen operational efficiency with discipline and urgency, and return the company to a sustainable path of profitable growth. Today's market environment demands two important things above all else. Execution in the monetization of the fiber and HFC network and strict capital discipline. This is exactly where our management focus is going to lie going forward. With that, let us drive into the agenda.
We're going to have four major points today, starting with an executive summary, then running into the operations, and at the end, we're going to do a Q&A. Okay. Let's start by looking at our market positioning. While our primary competitors are currently struggling with declining internet customer bases, TC is maintaining a growth path. We are actively outperforming the market trend, securing a 5.7% year-on-year increase in our customer base. Even more positive is our quarter-on-quarter revenue jump of nearly 9%, providing that we aren't just adding users. We are successfully converting them into high-value revenue customers. We achieved 12,000 internet net adds compared to Q3, with growth was fueled by two main factors. First, the typical year-end seasonality, and secondly, a strong execution during Cyber Week, where our promotional campaigns hit the market perfectly. What's really driving this financial success is the shift towards premium products.
Close to 50% of our gross additions opt for high-speed plans of 500 Mb or higher. Presentation lost. The strong appetite for premium packages is the main driver behind that 8.7% revenue growth I mentioned earlier. It puts us in an excellent future-proof position moving forward. Moving to our financial performance. In the fourth quarter of 2025, we saw a solid revenue increase of nearly 4% year-on-year, bringing total Q4 revenue up to EUR 105 million. This positive momentum was primarily driven by steady expansion in our internet and telephony and B2B segments. Looking at the full-year revenue, which remains stable at EUR 422.7 million, representing a minor decline of just 0.8% year-on-year. Normalized EBITDA experienced a nearly 10% year-on-year decrease.
This drop was primarily driven by two accounting factors: lower own work capitalized, and the fact that we didn't have the positive one-off prior year effects from the release of accruals related to signal fees. It's important to highlight that these headwinds were partially mitigated by the structural benefits coming from our ongoing transformation operational excellence initiatives. Let's look at the CapEx development. Our Q4 CapEx expenditure decreased significantly by nearly 70% year-on-year down to EUR 21.2 million. This sharp decline is a direct result of our highly selective approach to network infrastructure investment. It also reflects lower capitalized project costs following our standard year-end capitalization assessment, allowing us to maintain the aforementioned strong capital discipline. Talking about the competitive performance and market leadership. In the fourth quarter of 2025, TC once again delivered the strongest internet growth in the industry, outperforming the competition by a significant margin.
To put this into perspective for the second quarter, all of our major competitors reported a year-on-year decline in their subscriber bases. What makes this achievement even more remarkable is how we achieved it. The growth wasn't bought with aggressive spending. It was delivered despite our continued strict cost discipline and a highly selective approach in the marketing spend. The overall telco market remains challenging. That's characteristic by a general decline across the board for our peers. On page eight, we're just going to talk about our customers and the related revenues. Starting at the left-hand side, our internet base is expected to grow from 702,000 RGUs in Q4 to 740,000 by Q4 in 2025, representing a growth of around 6%. What is particularly encouraging is the increasing contribution from FTTH customers.
Fiber to the home subscribers are projected to grow from 82,000 to 104,000 over the period, reflecting the continued demand for higher speed and more reliable connectivity solutions. We also see consistent quarterly net additions through the year, with especially strong performance expected in Q2 and Q4. Turning to the right side, internet and telephony revenues is projected to increase from EUR 55 million in Q4 to EUR 60 million by Q4 2025, representing a growth of nearly 9%. Importantly, revenue growth is outpacing subscriber growth, which reflects an improving customer mix, increasing fiber penetration, and continued monetization of premium broadband services. Overall, these trends reinforce the strengths of our broadband strategy and demonstrate our ability to drive both customer growth and revenue expansion.
On page nine, a key highlight to our commercial strategy was our ability to maintain a high and stable share of premium product sign-ups, even during intensive promotional periods like Cyber Week. Instead of diluting our value with low-tier discounts, we actively pushed our 250 and 500 Mb offerings. This strategy was successful and compressed the share of low-tier plans. Looking at the infrastructure performance, our fiber to the home footprint continues to show maturity. With our 230,000 FTTH homes connected footprint, we have already secured 104,000 internet RGUs. This represents a 45% penetration rate in fiber, which is significantly higher than on the coax footprint. Finally, we observed a decrease in our triple play bundle share. This shift was driven by two strategic factors. First, our decision to implement less aggressive bundle pricing to protect margins, and second, a higher volume of sales coming through our offline channel.
Historically, the online channel attracts customers who prefer leaner packages, which naturally correlates with a lower 3P share. That gives us a highly efficient, lower-cost acquisition route. Talking about TV access. The development this quarter was impacted by the intentional disposal of non-strategic foreign signal footprint. This transaction affected approximately 70,000 TV subscribers. However, when we look past this one-off portfolio optimization, our underlying RGU development remains healthy and broadly in line with current market trends. In terms of churn, we continue to see steady engagement. Customer churn remains stable, holding at similar levels that we observed during previous quarters.
This consistency demonstrate that our core customers' retention effort remains robust despite a highly competitive broader product mix. In terms of gross adds, looking at the sales pipeline, our gross additions actually improved compared to the third quarter of 2025, which shows a solid market pull. However, because we maintained a relatively low bundle share of 32% this quarter, the new additions could not completely offset the standard B2C churn. Moving forward, balancing this mix will remain a key operational focus. With that, I would hand over to financial part.
Thank you, Christoph, and good morning everyone on the line. It's a pleasure to join my first analyst call as CFO of Tele Columbus, having started in the role at the beginning of 2026. A couple of words about myself. I bring many years of experience in finance and transformation, including situations that required strong financial discipline, operational focus, and careful stakeholder management. That experience is highly relevant for Tele Columbus at the current stage. I'm excited to partner with Christoph and the leadership team as we execute our strategy with discipline and clear focus on sustainable value creation and financial discipline. I also look forward to engaging with many of you over time and hopefully meeting you in person over the coming months. With that, let me take you through the financial highlights.
On slide 12, you see our revenue development in EUR million quarter-by-quarter, starting with Q4 2024, and the last quarter as reported Q4 2025. As usual, our split by internet and telephony, TV, B2B, construction work, and other. The main driver of our year-over-year development in Q4 2025, were again, internet and telephony and B2B revenues, as stated by Christoph before. Growth is mainly driven by our customer base price effects and also a higher volume in these categories. Construction work saw a decline quarter-over-quarter, reflecting project-related revenue recognition and timing at year-end. With that, we reached EUR 105 million in Q4 2025, EUR 60 million in internet and telephony, EUR 27 million in TV revenues and B2B EUR 12.6 million. Asset growth mainly driven by internet and B2B offsetting decline in TV revenues. On the next slide, you see our CapEx overview.
Q4 2025 on a quarterly split until Q4 2025. Especially, we saw a decline of -70% in terms of CapEx excluding leases. That was mainly driven by high cost discipline in network infrastructure investments, which decreased due to spending on selected network areas, and backbone and DOCSIS 3.1, as well as a more streamlined deployment approach. Moreover, our end-customer related CapEx, including commissions and CPEs, remained broadly stable, with EUR 14.6 million in Q4, coming from EUR 15 million in Q4 2024. One number you see here, which let's say an unusual sign, is the -EUR 3.3 million in other CapEx, which is mainly driven by IT CapEx and own work capitalized. Here's some more remarks. Basically, during the year-end closing process and in discussion with our auditors, we assessed certain capitalization items, mainly asset own work capitalized and IT CapEx, under a more conservative approach.
This formed part of a broader balance sheet cleanup and is aligned with our updated cash preserving business plan. Around EUR 15 million previously classified as CapEx were therefore recognized as operating expenses in Q4, also cleaning up the three quarters before that. This impact EBITDA obviously had no additional cash impact. Our 2026 planning now reflects the stricter requirements from the outset. As of now, we aim for around 14% in terms of personnel costs in own work capitalized. Coming to the next slide, you see our four financial KPIs in an overview. Always 12 months 2024, 12 months 2025. Revenue reported EBITDA, CapEx, excluding leases as on the page before, and operational cash flow. As Christoph stated, revenues remained broadly stable year-over-year with -0.8%, especially as also outlined by me, driven by internet and telephony and B2B growth.
Our reported EBITDA decreased year-over-year, which mainly reflects, as stated before, and you see on the next slide. On the next graph you see also our bars. You see the CapEx impact, mainly driven by own work capitalized and IT CapEx, which is then offset in CapEx, excluding leases. Coming to our operational cash flow of - 33%. Coming from EUR 183 million last 12 months, 2024, down to EUR 120.7 million last 12 months 2025. That is mainly driven by a phasing impact back in 2023, where we had an extraordinary upside in 2024 of EUR 30 million in our accounts receivables cash in. On top of that, simply driven by our reduced expense levels in 2025, driven by our stricter cash management and cost management. Maybe really quick, and sorry for that confusion, since we had some technical problems.
Coming back to slide 13, coming back to our normalized EBITDA. 12 months 2024 normalized EBITDA versus 12 months 2025 normalized EBITDA, with that the EBITDA bridge. The first main driver, as outlined before, our operating revenues reduced by EUR 3.6 million. Our operating income benefited from the asset sale in Q3, Q4, which was already announced in the Q3 conference call. Where we sold around 100,000 units with an upside of EUR 6 million. Our own work capitalized, that I already mentioned on the CapEx slide and also deep dived on the overview slide, decreased by around EUR 50 million, as outlined before. Our direct costs reflect an absence of prior year post litigation settlement gain. I think that was also stated in the Q3 call, where we had an accrual release of around EUR 6.7 million. Personnel costs.
Here we see the first benefit of the voluntary leave program and the restructuring efforts reduced by EUR 4.6 million, with that, a run rate between EUR 10 million-EUR 15 million on a yearly basis, as also outlined in Q3. We see that developing in 2026. Our marketing costs are driven by our cost measurements, which also shown in Q3, the reduced growth to still 6%, but reduced growth versus the previous quarters. Nevertheless, a saving of EUR 3.2 million. Other OpEx. That is where basically the remaining IT CapEx, so it's driven mainly by the remaining IT CapEx shift from CapEx to OpEx. On top of that, the capitalization assessment, which we carried out and a couple of other cost increases. Now back in the right order, and before now coming to the Q&A session.
Obviously we would like to address a couple of points, which we didn't see on the slide, but especially impacted our balance sheet. First of all, the goodwill write-off. During our annual impairment test, as of December 31st. The test was based on a detailed long-term business case, the so-called cash preserving case, by management, including a five year planning horizon. Following the update of that plan, expected free cash flows were reduced versus the previous plan. This reduced the goodwill headroom and resulted in a goodwill impairment of around EUR 800 million in 2025. The total adjustment that you see in our balance sheet is around EUR 810 million, and is related to another around EUR 13 million in intangible assets. Importantly, this is a non-cash accounting effect and does not impact our liquidity or operating performance.
The impairment return reported equity negative, which is why we applied in also alignment with our auditors, an extended 24-month going concern assessment. Based on our self-funding cash preserving business plan and liquidity outlook, the financial statements were prepared on a going concern basis and reviewed with our auditors. We see this as a conservative reset of our carrying values and cleaner basis going forward. Further details on the impairment methodology, as usual, are included in the annual financial statements. A couple of words to the currently ongoing refinancing process. As publicly known, certain lenders have formed a coordinated group. We remain in regular dialogue, as also stated during the Q3 call, with our financial stakeholders and shareholders in the ordinary course. In this context, we have engaged Lazard and Freshfields, as stated, to support us in reviewing and optimizing our balance sheet and funding structure.
As part of this work, we have also launched an amended request most recently, which is intended to give the company additional flexibility should we decide to engage further with existing creditor groups or advisors. Since this process is currently ongoing, please understand that we are therefore right now not in a position to comment on specific exchanges with lenders, creditors, and advisors on potential capital structure alternatives, or shareholder-related discussions with our majority shareholder, Morgan Stanley. Given the ongoing balance sheet optimization process, we also, for the time being, refrained from guiding the full year 2026. Of course, as soon as possible, we will update you on the guidance for the full year. What is important that we are comfortable that the liquidity under the cash preserving case can be managed and updated recently.
In addition, the short-term shareholder equity commitment, which also was announced two months ago during March, was put in place purely as a precautionary measure. It has not been drawn, and as of right now, management is not expecting to draw the ECL. Thank you. Thank you for your attention. I think we can move over to the Q&A session.
Thank you. If you would like a question please press star followed by one on your telephone keypad now. If for any reason you want to remove yourself from the queue, please press star followed by two. When preparing to ask your question please ensure your device is unmuted locally. Our first question comes from Jonathan Waite from Ares. Your line is now open. Please go ahead. Jonathan, your line is open. Please go ahead.
Hi there. Is that better? Can you hear me?
Yes.
Great. Thanks for taking the questions. I've got a few, please. First of all, just starting with the capitalization assessment that you did at year-end. Can you just confirm what was the total impact in terms of costs that were shifted from CapEx to OpEx, both for the fiscal year but also for Q4 specifically?
Sure. Thank you, Jonathan. Basically, the full year impact was around EUR 50 million, which was completely recognized in Q4. With that, in Q4, on a singular basis, it is around EUR 17 million and then offset by Q1 to Q3, so in total, around EUR 50 million.
Great. Can you give more rationale as to what drove that reassessment? I guess it's been capitalized that way for a long time, so what was different this time?
Yeah. As you can understand it, the previous years we were operating under a different business plan. Already based on that, we had in 2025 simply different projects and also carrying value within these projects. On top of that, I think right now it's hard for me to comment on the years before. As said, we went through a dedicated and in-depth exercise internally, but also with our auditors, to go through our projects, which in the end led to that shift from CapEx to OpEx of around EUR 50 million.
Is that 15 or 50?
Sorry, that's 15.
15. Yeah, just checking.
Yeah.
In the annual report, it was mentioned there was a disposal that had been agreed that would raise, I think you said low double-digit millions proceeds in 2026. Able to confirm just the timing of that disposal, and if you can, give a more precise amount in terms of proceeds expected?
As you correctly stated, we are in the process of selling a non-strategic asset. Signing occurred at the end of May. There are a couple of outstanding closing items which we hopefully close, which are mainly on the buyer side, which we hopefully close latest by the end of June. We decided on confidentiality in terms of valuation and proceeds, but I think it's fair that we are expecting somewhere between EUR 25 million-EUR 30 million in relation to that transaction.
Right. Could you give more detail on what the asset is and what the contribution was to EBITDA last year?
Well, as we are bound contractually that the asset is still confidential, it is, as said, non-strategic. We had a co-investor who holds 49.9%. Yeah, as requested by the buyer side, right now it is confidential which asset we are selling exactly. The EBITDA impact was around EUR 14 million, as we fully consolidated the asset in 2025.
Okay. Got it. Thank you. If I could just ask around CapEx. You've obviously decreased a lot this year. In the annual report, there was some guidance for 2026 suggesting a further reduction compared to 2025. Could you just provide more detail in terms of, A, what's driving the reduction? Is it mainly cash preservation? Is it partly housing associations delaying projects, or is it more of an internal reassessment of returns? Do you see or have you seen any other fiber operators potentially taking advantage of that delay, i.e., coming in overbuilding you in these areas where you're now delaying the CapEx? Thanks.
Okay. Maybe we will split the question. I'll start with the CapEx that we are expecting for 2026. We expect another decline, and as previously stated, please bear in mind that it is under the cash preserving case in 2026 of low double-digit million decline in terms of CapEx. That is mainly driven by CPE, it's actually mainly driven by CPE and a slight reduction in terms of IT CapEx and own work capitalized.
There's no change in the actual fiber infrastructure that you're rolling out, that's at the same pace as 2025?
Exactly. We expect a similar pace in 2026. A minimal reduction, but a similar pace as in 2025 in terms of fiber deployment. Yeah.
Second part of your question regarding overbuild or saving CapEx. The team is following the existing business case where reduction of CapEx has been planned, and the team is spending the money very intelligent, just to maintain footprint.
Okay, thanks. I'll go back in the queue. Thank you very much.
Thanks, Jonathan.
Thank you. Just as a reminder, if you did want to ask a question, please press star followed by one on your telephone keypads now. Our next question comes from James Ratzer from New Street Research. Your line is now open. Please go ahead.
Yes, thank you very much indeed for taking the call. A lot of good questions actually already just asked there. I was wondering if I could follow on from those, please. In particular, on the CapEx guidance, you just talked there that it's not really from a reduction in fiber build, but it's from a reduction, you were talking about CPE costs. Does that imply that you are expecting a sharper reduction in the number of customer net adds for this year? I thought CPE tended to be linked to your net adds growth.
Thanks, James. Thank you for the question. In terms of CPE, that is an internal effort that started in Q4, in which we started what we call a CPE recovery project. We systematically call back our CPE, also our customer equipment, and refurbish that with support of an outside company. That drives a reduction in CPE CapEx in higher single-digit million numbers. Now to explicitly answer your question, no, the CPE reduction is not linked to lower efforts in terms of customer base.
Got it. Okay. Fair enough. On the guidance, because I was just intrigued by why in your prepared statements on the conference call, you said you weren't willing to give guidance, but yet there is full guidance written in the annual report. I just wanted to try to understand why then on the earnings call, you just said you weren't prepared to give guidance.
Yes. Basically as said, we are currently in the refinancing process. We are currently operating under the cash preserving case, which we hopefully, depending on the outcome of the refinancing process, can revise and then give you a clearer picture on the year 2026, hopefully within the next two to three months.
Let's say there is a successful outcome on the refinancing. What then would actually change on the guidance? Would you be expecting then to maybe have less of a CapEx reduction because you could deploy more fiber? I just wasn't quite sure what in the guidance metrics you'd given on revenue EBITDA CapEx would change if the refinancing could be completed.
If the refinancing could completed, the management hopes obviously for higher funding, and with that, higher CapEx, especially, for fiber deployment and also for subscriber acquisition.
Got it. Okay.
Yeah.
That's clear. Okay. The last question I had, and I'll go back in the queue, if you've just done EBITDA last year of EUR 128 million, you are guiding here that it should rise by mid-double digit million euros. If I was to add 50 million to that, are we talking around EUR 180 million? What I wasn't quite sure is how the impact of this disposal is taken into account. Does that mean? Yeah. Actually just be helpful to understand more precisely what's implied in that EBITDA guidance in the annual report, especially with the disposal.
Yeah, sure. The guidance is on a like-for-like basis, not assuming a deconsolidation of the non-strategic asset. On top of that, yes, as stated in the annual report, under the cash preserving case, and I think that's really important, we expect a low double-digit million EBITDA growth from 2025 to 2026.
You say low. The annual report says mid double- digits. I just wanted to check, you just said low there.
Okay. Let me double check, James, and we'll come back to you, but I can assure you that currently under the cash preserving case, we expect low double-digit million EBITDA growth.
Got it. Okay. If I were to take that as, let's say, EUR 20 million-EUR 30 million, but I would then to get to a reported figure, I would have to take off a half year impact of this disposal, which could be, let's say, EUR 7 million. We'd be talking about EBITDA going to about EUR 140 million, EUR 130 million, EUR 140 million reported for this year in the cash. Sorry, EUR 140 million-EUR 150 million in the cash preservation case. Is that fair?
James, let's take that, and we will come back to you and comment on that separately on your bridge. Yeah.
Great. Thank you very much.
You're welcome.
Thank you. Our next question comes from Charlotte Peat from Schroders. Your line is now open. Please go ahead.
Hi, just following up on that point, I think it might be useful for the wider group if you could clarify the guidance. I just wanted to ask another question with regard to, Deutsche Telekom has been talking about these possible changes whereby these housing association contracts, if not, sort of started to build within a certain time period, would enable them to come in and roll out fiber. I just wondered where that discussion or change is at. Any update on that would be helpful.
I'm going to take that question. This relates to the potential changing telecom law in Germany going forward, which might push into the direction that an operator may get access to an existing house association. It's not finalized yet, first of all, and our relationship to the house association seems to be so strong that if there is an approach, that we do have enough time to erect and get them secured.
Okay, thanks. Just one follow-up. With regard to this non-strategic asset sale. You say this relates to 17,000 TV subscribers. Could you share the size of the footprint? Is this footprint reported in your data as part of the foreign network? Your homes connected to foreign network?
I believe those disposals were customers which were not on our own signal and has been sold out to Vodafone last year. This also was non-strategic and had also no IP customers, should have not have had any impact.
Okay. Then with regard to the strategic one.
I'm sorry. Just to finish. There's no relation to that other strategic disposal, which is planned for 2026. It's completely different.
Okay. All right. That is still a network that is one way, i.e., is it a foreign network? Where does it fall in your homes connected?
TV.
Okay. When I look on the data sheet, it says that most of it appears to be two way, but is this part of the one way and therefore it's written down as the foreign network?
On the disposal of the end of last year, that is not reflected in our homes connected yet. That will be reflected in Q1. Where it is reflected is in our TV RGUs already in Q4. It's foreign signal TV RGUs.
Only.
Only.
Okay. Understood. Thanks very much.
Thank you. As a final reminder, if you did want to ask a question, please press star followed by one on your telephone keypad now. That is star followed by one. We currently have no further questions, I'll hand back over to Christoph for closing remarks.
Thank you very much for your time. If there are no further questions being asked, we would like to thank you for your time and would close the call for today. Thank you very much.
Thank you. This concludes today's call. Thank you all for joining us. You may now disconnect your lines.