11 88 0 Solutions AG — Earnings Release 2007

Aug 29, 2007

News Details

Corporate | 29 August 2007 08:07

telegate AG: Substantial increase of earnings in first half year 2007. Solid growth rates – profitability and cash flow at record level

telegate AG / Half Year Results

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Following last year’s investment phase, telegate Group bounces back to
impressive results for the first half of 2007. Profit as well as free cash
flow reach record levels, thereby underlining the company’s strategic focus
on growth and profitability.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for
the first half of 2007 climbed sharply to 23.4 million Euro (HY1 2006: -4.5
million Euro). The second quarter 2007 EBITDA of 12.4 million Euro even
outstripped the EBITDA for the first quarter 2007 of 11.0 million Euro. The
company is thus reinforcing its excellent profitability, which had been
prepared by strategic investments mainly into its international business
segments during fiscal year 2006.

Significantly lowered advertisement expenses (minus 55 percent compared
with previous year’s period) and a substantially better gross profit margin
of 59.8 percent (HY1 2006: 47.3 percent) led to increasing profitability.
Year-on-year profit after taxes also improved from a half-year deficit of
-9.4 million Euro in 2006 to 15.6 million Euro for the first half of 2007,
which is tantamount to earnings per share of 0.74 Euro.

The sales performance of telegate Group is equally satisfactory. At 87.5
million Euro, sales remained stable on the level of the previous year (HY1
2006: 88.2 million Euro). Adjusted by the outsourcing sales made with the
French mobile telecommunication partners SFR and Bouygues Telecom - these
do not affect net income but which had been recognized in the comparative
period of last year - sales for the first half year 2007 were significantly
up with 11 percent year-on-year.

Special mention must be made of the free cash flow development. The 20.5
million Euro recorded for the first half year 2007 mark a record figure in
the company’s history (vs. -13.3 million Euro in HY1). As a consequence,
free liquidity as of 30 June, 2007 stood at 26.5 million Euro.

All business segments of telegate Group managed to raise their sales and
profitability over the first six months of 2007.

The segment Germany/Austria recorded sales slightly higher than the
previous year, while earnings improved well above the growth in revenues.
With revenues totaling 56.6 million Euro (HY1: 55.5 million Euro), the
segment generated an EBITDA of 23.1 million Euro (HY1: 16.3 million Euro).

The performance of the business segment Italy/Spain was again very
positive. Sales climbed by 21 percent to 19.4 million Euro (HY1: 16.0
million Euro) with EBITDA up by 55 percent to 3.4 million Euro (HY1: 2.2
million Euro).

Finally, the development of the French segment also gave a positive signal.
Here adjusted sales increased by around 60 percent to 11.4 million Euro
(HY1 - adjusted: 7.0 million Euro), The segment simultaneously made
significant progress toward break-even. Following the negative EBITDA of
–2.4 million Euro for the first quarter, the second quarter of 2007 saw
this minus trimmed down to -0.7 million Euro. In June for the first time
even results on EBITDA-level could be achieved. EBITDA for the full first
half year 2007 thus came to -3.1 million Euro (HY1: -23.0 million Euro),
showing a clearly positive trend toward profitability.

Based on this, telegate Group remains optimistic on the further business
development in the second half of 2007. The strategic expansion of the
Internet-based directory assistance and the associated entry into marketing
advertisement inserts continues positively and according to plan. The
company therefore confirms its forecast for the fiscal year 2007 unchanged
and reckons to make a full year EBITDA of around 50 million Euro.

Claudia Strixner
Head of Public Relations
telegate AG
Fraunhofer Strasse 12a - 82152 Munich-Martinsried/Germany
Tel.: ++49 (0)89/8954-1188 - Fax: 089/ 8954-1189
E-mail: claudia.strixner@telegate.com

29.08.2007 Financial News transmitted by DGAP

Language: English
Issuer: telegate AG
Fraunhofer Str. 12a
82152 München-Martinsried
Deutschland
Phone: +49 089 - 89 54 0
Fax: +49 089 - 89 54 10 10
E-mail: info@telegate.de
Internet: www.telegate.com
ISIN: DE0005118806
WKN: 511880
Indices:
Listed: Geregelter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Hannover, Düsseldorf, Hamburg, München, Stuttgart

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