Good morning or good afternoon, all, and welcome to the Tele Columbus AG Q1 2025 Results. My name is Adam, and I'll be your operator today. If you'd like to ask a question during the Q&A portion of today's call, please dial in and press star followed by one on your telephone keypad to enter the queue. I'll now hand the floor to Carmen Becker to begin. Carmen, please go ahead when you're ready. Thank you, Adam, for the introduction. Good morning, ladies and gentlemen. This is Carmen Becker speaking, and it's my pleasure to welcome you on the name of the Tele Columbus Management Team to today's conference call following the release of our first quarter results for fiscal year 2025, which ended on the 31st of March. This call is limited to 120 minutes. In case of any follow-up questions, please let me know. I'm here today with Markus Oswald, Chief Executive Officer, and Nicolai Oswald, 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 it if you were leaving the conference call now. Press representatives are welcome to call my colleague, Sebastian Artymiak, to discuss any outstanding questions. Having said that, it's my pleasure to hand over to you, Markus. The floor is yours. Thanks, Carmen, and good morning into the round to our Q1 2025 result presentation. Yeah, let's dive in directly into page seven, I would say, because the tableau is the same like always. Oh, sorry, five. Yeah. To the key remarks. Yeah, sorry, I just messed up my paper here. On the operational side, it is a pleasure to see how our internet sales continue to grow despite we performed a price increase in February 2025. Again, TC remains the fastest growing internet operator in Germany, increase of 10.6% year on year and quarter on quarter, 18.5% revenue growth despite a really overheated competition in the market. I will comment on that later on. When we are looking at our deep diver in deep a little bit nearer to our IP performance, it is again that we performed on 50% gross ads, which opt for 500 Mb and more. It is near to 80% with now going for 250 Mb and more. Our sweet pea share slightly declined a little bit, but this is complete in the range of what we expected. 47% retained TV customer after migration. Coming to the financial comparisons, revenues Q1 2025, EUR 104.9 million. One of regulatory TV losses due to bulk migrations are not yet fully offset by our internet growth, but back to growing revenues on a quarter-on-quarter comparison. Reported EBITDA slightly increased, 1% to EUR 32.5 million based on operational performance and significantly decreasing non-recurring expenses. Normalized EBITDA, 18% down, EUR 39.1 million. This is reflected by the TV bulk migration or impacted, of course, by the TV bulk migration losses. CapEx, excluding leasing, decreased by 13%, EUR 35.9 million, mainly driven by lower investments in network infrastructure and CPEs. Coming to liquidity, cash position of EUR 88.5 million as of March 31, 2025, and with the information that the shareholder loan was fully drawn by end of March 2025. That also to our CapEx, what I mentioned before, selective capital allocation focused on operational excellence and networking capital to manage our liquidity. Now coming to the comparison again, you know that chart of our internet performance. What we see here is strongest performance compared to our competitors. The gap to our competitors is again really significant. I would say if you normalize our growth rate by one-off impacts like the price increase, you will be back again near to 12% growth on a year-on-year comparison. Let's stick a little bit to that slide or give me some comments on that. What we see in Q1 2025 in the market, and I will later show you also, I will comment our gross ad performance because this is what we are also forecasting. Compared Q1 with Q1 the year before, our gross ad performance is nearly the same. We also conduct some decisions during Q1 because what we see in the market was really a tremendous overheating of the market. There are commissions paid by competitors in the market, which, sorry to comment on that, in some cases really went crazy, and we decided not to put in money in non-profitable growth here in that case. This also impacts these slides and also conclude our analysis or analyses are going on, what will happen in the market? Because when you see competitors' performances compared to what they invest in that Q, in that first quarter, we would expect that this, not first analysis, our expression was, okay, these are one-offs or it will happen now and then they ended. What we are expecting during the course of the year is that this will continue, and yeah, that this will continue, and we have to see how we can compare to that growth. Right now, really, really good. Coming to the next page, this is what I meant. When we distract the one-off effect because actually we had a growth of net adds by 6,100, but when you normalize it without the one-off, the gross adds are nearly the same. We only have a decrease of -7.3% normalized by these one-offs. The one-offs, you also can see on the right side, the positive side of the one-offs because we see that EUR 57.5 million on service revenue on internet and telephony revenues, which is really an increase here when compared to quarter one 2024, EUR 9 million is really a gap, which we want to outperform now in the same direction. A good sign that also with our price increases, we can really manage our base where possible. Yeah, that's on that slide. Here you see that 6,000 growth on our internet base on quarter one 2025. Looking also what we performed on the FTTH side, and this is a mixture out of that more than 700,000 RGUs, which we are now having. We are now with nearly 200,000 FTTH customers and a penetration of 44%. Completely in line with our strategy, upgrade to FTTH where necessary, where the demand is. We see a good growth pattern also in our DOCSIS 3.1 footprint. This double strategy on DOCSIS combined with FTTH where necessary and asked by housing association is exactly the path we want to follow. The penetration and also service revenue growth, like the slide before says, this strategy is exactly the right one. When we are looking, I referred in my first page onto that this is the mixture of our gross adds here. Below 250, something around 20% like the quarter before with some promo actions. We also worked on the middle one, but this is exactly 250 and higher. It's 80% right now, 50% still strong, and this is now continuous over the last completely year. The demand for 500 Mb or so you can choose between 500 Mb and! Gb. So 45% is the graph below is the sweet play share, which also is completely in line with our expectation here due to the fact that in 2024, of course, it was the TV bulk migration, which influenced the high share rates during the course of the year. Coming to that point, we are now on 47% retained customer rate in Q1. Still work to do, slight decline in penetration, which is also linked to our price increase here in case of the sweet play share, like I mentioned before. Still targeting the corridor 50%-55%. Additional direct sales actions together hand in hand with housing associations are in the pipe, performed in the past, are in the pipe again, and also the disconnect topics are raised and continued to broad it into the market and to our households. This leads, so we lost something around 6,000 customers on the TV side here, especially on the TV individual access. Again, like I mentioned before, also an impact out of the price increase we performed on the IP side. Hand in hand, it goes also with the premium TV, that performance on TV. That's for now from my side, and now I hand over to our CFO, Nicolai Oswald. Thank you, Markus. Looking at page 14, if we talk about the performance on revenue side, I would like to point out that first we are back to growing revenues quarter on quarter. I think this is a strong message that after the downturn on the bulk TV migration, we finally see that the bulk revenues are stabilizing at around EUR 3 million, which is some good news. We can now finally see the underlying IP internet and phone growth that is coming back and going through. As Markus mentioned, the quarter was influenced by the customer-based price increase that we've seen. This is a strong message that hopefully from now on, if we continue to keep bulk stable, we're approaching closely the 200,000 subscriber base that we've always said that this might be the long-term range of those 200,000 that remain. This can be stabilized, and then we'll see the impact on the individual measures to uplift still the TV revenues and then basically, by having the strong impact from the internet and phone growth. In terms of revenue composition below, nothing has changed, very stable numbers. We're well above the 50% and close to 55% now, but that is the constant picture. No news on that line. Go on page 15 towards reported EBITDA bridge, obviously still impacted by the bulk migration. We've mentioned it. We've seen that the revenues are down roughly EUR 7 million, of which a downturn of EUR 15 million in the bulk, but the EUR 9 million growth from internet and phone and then the other related stuff is, as we've mentioned a couple of times, the Marienfeld churn that we've seen in the past, which still had an impact in Q1 last year, which obviously now was felt. On the other operating income, we had one-offs that helped to be better than the last year on the direct costs, also slightly better in terms of the signal fees, also driven by the Marienfeld impact, similar offsetting the revenue downturn. On the personnel side, still increased costs due to FTEs on payroll and salary increases, and that is something that we are going to tackle with our operational excellence focus. We've mentioned it in the last call, and this is now a priority to us. Also, yeah, to look at the cost situation that we have and improve further going forward. On the marketing side, we did have higher costs. There are two things. Also, as we last year saw the possibility of showing some marketing spending in the non-rex because it was related to the TV bulk migration, and some measures also have impact on all the product lines, even though if it's related to the bulk migration, we have seen that one. Also, we had a push in the marketing in Q4, then again, sorry, in Q1 compared to Q4 last quarter and last year where we were a bit more cautious in terms of spending because the Q4 seasonality obviously helps to make more gross adds at lower costs. We know Q1 was a bit of a heated market. Markus mentioned it, and we had to carefully allocate costs, but still were forced to compensate churn on the price increase side. We wanted to perform on the gross ad side, which we've done on a similar level compared to last year, but that required a bit more marketing power to reach that performance. On the EBITDA side, down the 18% on normalized and then again reported EBITDA at EUR 32 million. As we've seen non-rex coming down significantly, that was mentioned throughout the last calls that 2023 and 2024 were substantially higher and on very high levels, close to the EUR 50 million. We do see significant improvements on that for the current fiscal year. In terms of CapEx on page 16, we've seen a strong decrease, 13% year- on- year, coming from EUR 41 million down to EUR 36 million. The pattern in comparison to a strong Q4 is the normal pattern that usually Q1 is much lower, and then during the summertime you build up, and Q4 should be stronger in terms of finalization of projects and interim cutoff of projects that will be finalized. That is the normal pattern. Q1 is expected to be lower, but also it is slightly lower compared to last year, Q1. We have seen slightly lower numbers on the infrastructure and customer-related CapEx, which on the network side is mainly related to backbone, DOCSIS 3.1 and maintenance CapEx, while we still maintain a high fiber rollout. On customer CapEx, we spoke about it. It is mainly related to the CPE spend, and the commissions are in line with gross adds, so that is mainly related to the CPEs. Finally, on IT and operations, we basically maintain a high capitalization ratio with the project, so therefore not too many changes here, but pretty much in line with what we expected. Summarizing the financial performance, the decline in revenues is still due to the loss of the bulk migration TV side, and yet not yet fully offset with the individual growth, but as I mentioned, growing quarter on quarter now finally, hopefully coming back into the growth mode and then compensating as of Q3. Once it is fully washed out, the impact from last year, hopefully we see the underlying internet and phone growth that will then eventually, yeah, show and help to improve the numbers. On the reported EBITDA, we mentioned a slight growth, basically driven by the significant decrease in the non-recurrings. We will have to look closely as we are further pushing operational excellence programs. We look into additional FTE programs, so there might be some more severance payments needed throughout the year because we want to accelerate what we've started in December. The first phase has been agreed with the Works Council. We've announced that, and now we are even pushing harder. There might be some additional one-offs coming up, but this would definitely then improve long-term performance in terms of cost ratios and margins going forward. On the investment side, excluding leasing, we mentioned significantly lower. We also decided to take some capital allocation measures as we've done in the past, and then we have the seasonality of Q1, but still lower than last year. On the operating cash flow, there is a significant decrease, and I think it's quite important to mention that this is basically related to a one-off impact prior year. What we have seen is that the usual direct debits that are pulled were last year, no, in 2023, December shifted to January 2024 due to processing issues from the banks. We had a significant one-off impact in January simply because the processing of the bank did something two days later instead of what it normally should have been. That is a direct debit run, EUR 27 million-EUR 30 million is normally the direct debit run that we see, and that is basically the big deviation to the numbers that we see here. It is not really operationally from our side or any networking capital impacts. This is simply driven by a bank issue that happened in Q1 2024. That is basically the explanation for this big deviation. This basically concludes our short presentation today. In the annex, you will find some further information on net debt. I'm not going into details, but I have received many, many questions from the market with regards to what is net debt, what's the debt situation, how does this work with the PIK interest, with the derivatives underlying. Hopefully this will shed some light to you and bring you some more information. If there are still questions, please reach out, but I think this is just helpful for documentation and maybe analysis for you. That basically means we can come to the Q&A session. Maybe before we start the Q&A, just one final information because again, I've been addressed by quite a few people that they are never invited to these calls and are not informed when these calls take place. Please do register and please add, once you register for the investor relations portal, you have to sign up for the newsletter and the information request. Otherwise, you will not be informed about the dates and the registration link. If you are registered, please check that you are on the list. If not, please contact investor relations. Unfortunately, I cannot invite you individually. That does not work. Please sign up and then you will be informed. I am handing over to Adam to basically lead through the Q&A session. Thank you. Thank you. As a reminder, if you'd like to ask a question on today's call, please dial in and press star followed by one on your telephone keypad to enter the queue. When preparing to ask your question, please ensure you are unmuted locally. If you've joined us online, your dial-in details can be found to the left of the slides. Our first question today comes from James Ratzer at New Street Research. James, your line is open. Please go ahead. Yes, good morning, Markus and Nicolai. Thank you for taking the questions. I could ask lots, but I will keep it to two, please. The first question I had was I was wondering if you could give us some outlook or thoughts around EBITDA for the full year. I notice in the report you seem to be saying you have pulled formal EBITDA guidance at this stage, but a month ago at the Q4 call, I think you had led us to believe that at this stage you might have been in a position to give guidance on normalized EBITDA. Any comments on the kind of change you have seen over the past month would be helpful. If you can give us any comments around normalized EBITDA outlook for this year, that would be very helpful. The second question, kind of bigger picture, is just around the pricing strategy on internet. Because if I take your comments from the last earnings call, I think you said you were putting through a kind of EUR 2 increase on around 150,000 customers. So that's about a 7% price increase for them. But it looks like you've lost about 8,000 customers on price-related churn, which is about 5% of that 150,000 base that were affected. The question I'm really kind of angling at here is, is therefore it really worth it if it's led to you then having to spend more on retention? Is a price-up strategy something that is NPV positive for you at this stage? How are you thinking then about future pricing moves for the rest of this year, given what you've just seen happen in Q1? Thank you. Yeah, James, happy to, and Nicolai, please add to take your questions. First of all, what we also said to our guidance is that we are now analyzing again what we saw in quarter one and do our assumptions on the following quarters. The pressure in the market is right now really heating up. We have really now do it on a not weekly basis, but at least when we are looking at our promo actions and so on, what is done by the competitors. We really had just one week ago a decision taken, okay, we saw promos in the market, which we do not want to go because they are definitely coming now to your action also on the price increase. They are really cash negative on a single gross ad. That led us to our decision to say, okay, let's wait and see what happens in the market for the next quarters because it continued in more than we expected to have that commissions, promos from competitors in the market, what we also saw in April, for example, or also now beginning again. This is the first point on what is our growth pattern on service revenue growth on the IP side. Point number one, what will happen in the market for us? Also astonishing after our call, seeing some quarterly results on our competitors, compare this pressure in the market with what they reached on growth. To be said honest, we would expect it more and see now in our comparison sheet here on page seven what was the result. Out of that, we lead into the expectation that they will continue to improve also their business. They have different pockets like Tele Columbus to say that compared on their marketing spending. When we look at our price increase, I would definitely say it is worth doing it because what we actually do, it is not just putting here in euro and here in euro because we bring cost rises in our structure to our customer where it's possible by law, and this is what we need to do. We will continue doing that over the, I think I explained it here in that as well. When we speak about price increases and a column of 150,000 or a pocket or a package, sorry, a package of 150,000, this is what we mention. It is happening during the year as well, but then in smaller slices of our customer base. Price increase, I would say every competitor is doing it compared to our churn. We still are really confident to continue on that and will do that. That's great. Thank you. Just one follow-up just from that. Does that mean based on what you're seeing from these promos in the market, you've seen a kind of weaker level of internet net adds continue into April and May as well? A little bit, yes. This is because we are now taking actions on both sides. We look at our product portfolio as well. We also have ideas of answering that. We will add to that just as a caution measure or more than a caution measure on our operational excellence program in the company to be prepared for the future, a stricter and more razor-sharp measures here in that state. We have to look at our costs. Every euro going out of the company is now, yeah, looked again. We also on the operational excellence side, like I mentioned before, last year we agreed with our Workers Council on the social plan of doing that. We will take additional FTE measures in that case of operational excellence from now on. This, which Nicolai just quoted on, will also lead to a better cost performance in the future. Got it. Okay. Thank you very much. My pleasure, James. The next question comes from Sam Walton from Invesco. Sam, your line is open. Please go ahead. Hi. It's just a couple of questions really related to the balance sheet. I guess we can see liquidity of EUR 88 million at the end of the quarter. I'm just interested to hear how you think that will evolve over the coming quarters. I guess the big change on the balance sheet in Q1 was the increase in shareholder loans, which are now up to EUR 363 million. I think it's during the release that they have a 17% coupon. I was just hoping you could tell us the timings of the cash outflows related to those. Are they quarterly, semi-annual, or annual? Thank you. Sam, let me take that question. First, on the liquidity position, it is what you said. Yes, the shareholder loan was fully drawn. Very important to know, this is fully PIK interest. None of the 17% is being paid out over the time. The target, as it was always mentioned, is still to swap the loan into equity. This is in the doing and the making, basically. We are preparing everything that we need as it was previously agreed last year in the A&E transaction that the shareholder loan eventually would be swapped into equity. No cash-out interest in terms of the loan. The loan itself is EUR 300 million, and the 60-something is now the accrued PIK interest that sits on the balance sheet, including also some derivatives and other stuff. Okay. And then just the liquidity in general, can we just talk about that? Yeah. Liquidity in general, I mean, based on networking capital impact in Q1, that is the normal pattern for this type of business that we always see higher payouts in Q1 after the stronger Q4, especially on investments. We do not expect a lot of impact in terms of networking capital with regards to inventories or receivables, but the payouts that we've seen in Q1 basically also has a lot on payments with regards to deferred expenses. That is what you see that has increased. We also have usually much higher lease payments in the first three, four months compared to the normal average over the year. The current expectation on liquidity is to basically stabilize throughout the summer and then in Q4 work up some of the networking capital impacts to bring back the levels in order to basically fill up payables that then will be paid off again in Q1 2026. We have the seasonal pattern of losing or having cash out, leaving the company stronger in the first couple of months, then over the summer, basically flattening out, and then towards Q4 having positive impact from networking capital. That's the current assumption. Great. Thank you. As a reminder, if you'd like to ask a question on today's call, please dial in and press star followed by one on your telephone keypad to enter the queue. The next question comes from Martino Santicoli from Tikehau Capital. Martino, your line is open. Please go ahead. Hi. Yes, morning. Thank you for taking my question. I just had a quick one in relation to the price increase. I was wondering whether you are expecting additional churn in Q2 or whether the big churn is already behind us. A follow-up from this one is, where do the customers that churn actually migrate to? Do they go back to Deutsche Telekom's copper or anywhere else? I can take that question, Markus here, Martino. No, we did not expect additional churn out of the price increase. This is washed out now because letters were also sent out last year. The impact is really in the Q1. When you look in our building structure, the customers are moving in that case then back to DSL or other possibilities. Mobile maybe as well also a little bit, but this is really in our comparison to competitors, minor, minor, minor. DSL or wholesale partners of Deutsche Telekom who are on the network of DSL because the lines in the building are either Tele Columbus, DOCSIS 3.1 or FTTH, or DSL copper line, which is run by Deutsche Telekom or Vodafone, 1&1, or who else is on the net. We do not know if we transfer a customer to Vodafone, for example, on the DSL, but they are changing to DSL in that case. Effectively, they are going back to an inferior product. Yeah. Yes. Yeah. Okay. Thank you. The next question comes from Vivek Khanna from Deutsche Telekom. Vivek, your line is open. Please go ahead. Hi. Good morning, everyone. Can you hear me okay? Yes. Yeah. Okay. A couple of questions, if I may. I guess the first one is, you talked in the last call about potentially raising additional financing. I was wondering what your thoughts are. Obviously, I've just heard your comment on liquidity and how you expect that to develop over the course of the year due to changes in working capital. I was just wondering, are there any other thoughts to draw on some of the carve-outs within the documentation? If so, when? A second question I have is on CapEx. I mean, clearly, we see it coming down, but could you give us a sort of range as to where you expect full new CapEx for 2025? In this quarter, we're still having the impact of the bulk migration. Margins are now at around 37%. Should we assume this as a run rate going forward? Thank you very much. Thank you, Vivek. Nicolai speaking. Let me take the question. On the additional financing, there is nothing new that we can add to what we've mentioned in the last call four weeks ago. Still exploring options, what is available opportunistically, looking at possibilities that may or may not arise, but there is nothing clearly showing up on the horizon that we can communicate to the market. There is nothing to add as of today. On CapEx, I mean, as we suspended guidance, I mean, yeah, this is basically more on the top line. And EBITDA on CapEx, we will look at what it is, but we've given an outlook in the last call and in the annual report going for the current fiscal year. As we are now putting back all measures on basically looking at them and seeing if they're necessary, how we can shift them, we would probably try to lower investments where not needed to offset any potential pressures that may arise from the market that we've previously discussed. The last question, I wasn't 100% sure what you referred to. You said 37%. I think you probably mentioned the 47% on the bulk retained customers. Can you please specify, Vivek? I'm just talking about what do you think post-bulk migration, what do you think your sort of profitability levels, margins should be going forward? Not the retention, but just talking about the group level. You're talking profitability margins, EBITDA margins, or what? Correct. Yes. Yeah. Also, no true guidance here today. I mean, if we look at the current levels and bulk is basically more or less washed out. This is what we currently see in terms of profitability. Now what we do is we tackle the cost side. We mentioned it. If we do take out quite an aggressive approach here and increase and accelerate these measures, this will hopefully then have a long-term improvement going forward. If we scale back the structure and the operational costs in relation to the top line, this should substantially improve where we need to go. As a reminder, that's star followed by one on your telephone keypad to ask a question today. We have a question from Jean-Yves Guibert from BlueBay. Your line is now open. Please go ahead. Hi. Good morning. Just as a follow-up, reformulating your comment about the profitability and also the fact that Q1 2025, the revenue were up sequentially. The fact that the TV access bulk revenue were flat sequentially, and representing only now 10% of the TV revenue. Just trying to understand the dynamics behind the drop in profitability in Q1 2025 versus Q4 2024, given the bulk migration impact was already the same in Q4 versus Q1. If you can work out the reason why the profitability is down 7 percentage points, why actually your normalized margin, whatever gross margin or contribution margin, is actually stable at 70%+. That is something into the OpEx. If you can work out, please. Thank you. What we did see in Q1 compared to Q1 last year is that on the other direction. I'm sorry. No. I'm No. I'm No. I'm afraid. I want to compare Q1 Q. So Q1 2025 versus Q4 2024. Are you on the same TV access bulk revenue basis? Yeah. Okay. I'll need to take that question. I don't have the answer out of my head here. Sorry. Okay. Nothing further in the queue at this time. As a final reminder, that is star followed by one on your telephone keypad to ask a question today. If you have joined us online, please use the dial-in details to the left of your slides. We have a follow-up from James at New Street Research. James, please go ahead. Yes. Hi. Yes. I forgot to ask a follow-up question. Thank you. One thing you kind of highlight in the kind of XLS pack is that you have changed your ARPU definition. It looks like one of the main drivers actually of the ARPU growth is coming from the increased fees you're getting on hardware, whereas the kind of ARPU on the old basis was reasonably flat. Looking at the hardware side, I mean, it looks like you made a major increase on that in Q2 last year. Are we going to be getting to a position where we're going to kind of lap some of the price increases on hardware? That could potentially put some of the ARPU growth rates you're seeing slightly at risk. If I could just follow up from one of the earlier questions, Nicolai, could you confirm that over the whole year, you're expecting the working capital number to be broadly zero for 2025? In other words, you can claw back the EUR 26 million Q1 outflow by the time we end the year. Thank you. Sure. James, on the ARPU and the additional information we gave in the toolkit, basically, I inherited an ARPU calculation, which was very long ago defined almost 10 years ago. Some of it, it always was difficult to reconcile these ARPU numbers if you took P x Q to come up to the product segment revenue numbers. What I asked the team is to basically come up that it would be easier for the market to understand P x Q subscriber numbers on average x the ARPU would get you much closer to the revenues we show. Why do we include hardware into ARPUs? It is part of the product, and it is a recurring revenue because people rent this, and they pay EUR 3, EUR 5, EUR 6 depending on whatever hardware they choose. It is a continuous part of ARPU. Therefore, it is part of the whole package. If you say headline price is EUR 30, but you always have EUR 3, EUR 5 on top for hardware, then the customer is paying EUR 35. That is what is a recurring revenue from the customer. Therefore, it is legit to really put it in and like-for-like comparison. That is why we started to do the backwards calculation to give you a comparison also to 2024 to see what is happening if you had these hardware revenues already included in ARPU. You have a trajectory coming from 2024 and then going onward. I think if you adjust your models basically now with this information, this is much closer and gives you better information on our performance. That was the reasoning behind the ARPUs. I hope that explains the impact. If you said, let's say, the hardware impact on growth is or the hardware share is roughly 9%-10% of total ARPU. That is what this hardware really makes part of it. If you go to the 2027 blended internet and phone ARPU that we show, round about 25 is the underlying true, let's say, service. The remainder is related to the hardware rental that comes on a month-by-month basis. That all makes complete sense to me, but I suppose I was really asking about the kind of phasing. I look, you did disclose the hardware revenue in the past, and that through 2023 was only about EUR 2 million or EUR 1.5 million a quarter. Then it suddenly stepped up during 2024. It was running at EUR 5 million a quarter. A lot of your ARPU growth seems to have come from higher hardware revenues. I suppose my real question is, can you put through a further increase on hardware, or is the EUR 5 million you were exiting 2024 at now a more stable quarterly run rate for that? Yeah. Sorry, I forgot the second part of the question. Exactly. First of all, we introduced it into all the products. That was one decision last year. Secondly, the prices were increased for the hardware. There were two effects in 2024. When When this was introduced, I think it was one of the first things Johan basically decided to do when he joined in the summer. Going forward, he prepared to introduce it on all the products and also to increase levels by, I do not know, EUR 1 or EUR 2 in relation to the hardware being used. That is the reason why there was this jump last year. Now I think it is just part of the normal portfolio. We would see hopefully the steady growth because it is simply one part of the service product to the end customer. On the working capital question, is it going to fully net out to zero? Probably not. I would probably, the latest what I have seen is that we might take out around 80% of the impact from Q1. In the end, there might be some remaining negative impact that we cannot fully offset in Q1. That's clear. Thank you very much. You're welcome. The next question comes from Jacopo Beretta from Graian Capital Management. Your line is now open. Please go ahead. Hey, hi guys. Thanks for the call. I just have one question on the homes upgrade. Open to build have somehow stalled and also the. Jacopo, sorry, we lost you for a second. Can you please repeat the question? We lost you. Yeah. Can you hear me now? Yes. Okay. Perfect. If you can give us an update and an overview on the full year 2025 for contracts one and open to build because it seems to have stalled over the last quarters. Also, an update on the expected network upgrade, particularly on the FTTH side. It seems that you are at 199,000. Just where do you expect to be at the end of the year? Thank you. Yeah. Sure. I mean, in terms of what has happened in the waterfall, if you go to the toolkit, we did see some changes on the numbers that we are currently in negotiation and processing and in the internal, let's say, approval process. We had seen a big jump. I think that came from around 70 to 170. So 100,000 more homes connected for fiberization are in the pipeline being worked on, while, let's say, one and open to build and the waiting for customer approval is more or less the same. It is moving upwards in the food chain. We have basically filled the sales funnel again at the bottom, and now we are processing it through. Building was, I think, 11,000 in terms of internet fiber to the homes connected. That is normally Q1 is normally always, again, lower than Q4. We had a stronger quarter in Q4, which is what I explained previously to seasonality. We're still expecting to build up what we've mentioned previously. Again, we're looking at these measures at the moment, what is needed in terms of demand from the housing association, but the pipeline is filled up, and it's on us and in the discussion with the housing association to decide when it's the right moment in terms of execution of these fiberization projects, basically. The 11,000 additional FTTH customers, is it expected to be at the run rate, or do you expect the end of the year to be 11,000 times 4? I would expect it to be slightly higher than the 11 x 4. We always guide it in the range of, I think, 60,000-70,000 by the end of this year. This might be looked at, and we'll see how the market develops and where we have to or where we may have opportunity to decide on the timing. Okay. Got it. Thank you very much. The next question comes from Antonio Barranco from BlackRock. Antonio, your line is open. Please go ahead. Hi. Thank you very much for taking my two questions. The first question is in relation with the operational excellence, the first phase that was agreed. I want to understand if any impact of that first phase is in the employee cost in quarter one or not, or whether to do spending quarter two and whether you can help us to understand the impact. That's the first question. The second question, I have not seen any reference to the net cost separation either in the slides nor in the call. Can you please give us an update on whether this, I guess, deterioration in the market environment has any impacts on your plans in that front? Thank you. On the first question, Antonio, there is a smaller impact in Q1 on the cost side on our FTE program, and this will be now accelerated month by month and quarter by quarter. This is what we all actually see already and will increase through additional measures I mentioned before. Maybe if I add part of the non-RECs that you see is also related to the restructuring on the personnel side and on the transformation side. Those two topics are basically the non-RECs for the current year and the execution of the first program that has been agreed and signed and where we took the provision in December that is now being executed over the next, that was a program over the two years agreed with the Works Council. We are obviously pulling this forward and accelerating it. The next steps are to be discussed and announced shortly internally, and then we will execute and see impacts coming over the next couple of quarters. In terms of reference to the net cost surf course situation, to be honest, in the last four weeks, not much had changed. Therefore, I simply took it out. Obviously, we are doing the stuff that we mentioned four weeks ago. I can give you one example. This Sunday, we have an integration of the so-called Cottbus entities. It is four legal entities that we finally migrate into our own systems. We connect them to our network. We bring the customers into our billing system. There are projects being executed, and this is all being done and continued as we basically proclaimed four weeks ago. Everything is on track that we continue to do the bits and pieces, the finalization of these outstanding topics. Besides that, there is nothing really new to say compared to four weeks ago. Okay. Thank you. You're welcome. As a reminder, that's star followed by one. We have a follow-up from Martino at Tikehau Capital. Martino, your line is open. Please go ahead. Thank you. Just to follow up from Antonio's question, I was wondering if you could guide to a quantum of the efficiency program. I understand the timing. I was just wondering if you had already a total quantum in mind for fiscal year 2025 and then a run rate for fiscal year 2026. What we've done is that I think we mentioned that based on last year, the program that we announced, the social plan, I think that number we already announced was around 150 FTEs. What we decide now to do is not yet fully visible. I would probably relate to the next quarter when we have decided and started execution. It will be a program of a substantial program, probably at least of the same size, but let's wait and see, please. Thank you. I had a question on the agreement you signed with Eurofiber Netz very recently. I was wondering whether that is going to have any impact on revenues and EBITDA in the short term or whether you could share something about this SERFCO agreement. Yeah. Happy to do so. Martino, sorry. A huge impact, no, because we are in the implementation phase, both sides. On the Eurof iber as well on the Tele Columbus side. There will be no bigger impacts in 2025. At the end, for us, it is together with Euro Fiber to find out what from a SERFCO side, these whole buy relationships are capable for. For that, optionalities for others to follow is the biggest point for us in that decision signing that contract. Thank you. We have a follow-up from Jean-Yves at BlueBay. Your line is now open. Please go ahead. Yeah. Thank you very much. I'll skip in question. In Q1, you reported cash interest payment of EUR 6 million, which seems to be very high in the context of your reinstated debt. My understanding is that you are paying only a 50 basis point cash component on the TLB, while the fixed notes were fully peaking, which would have implied around EUR 3 million of cash interest on an annual basis. If you can help us reconcile the EUR 6 million of cash interest expense in Q1, please. Thank you. Jean-Yves, normally the interest also includes the interest that is paid on the leasing liabilities. That's my understanding. We had an interest payment, I think it's biannual, twice a year, and one is March, one is September. That's what you refer to, the term loan 0.5% cash interest. That's one portion. The rest, my understanding is that the part that we show on lease payments is twofold. It's shown in one line and then in another line, which is the interest. That is my understanding. Okay. Okay. Makes sense. Thank you very much. You're welcome. Nothing further in the queue to the final call, star one. We have no further questions. So I'll hand the call back to Markus for some closing comments. Okay. Thank you for attending our Q1 results. Thank you for your questions. Might be follow-ups. Thank you for the interest in our company. Yeah. I would say we hear us maybe in some one-on-one discussions at the end of August, I think, or August is the next for the Q2 results. Thank you very much for attending and have a good day. Bye. Thank you. Bye. This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.