11 88 0 Solutions AG — Earnings Release 2007

Mar 13, 2008

News Details

Corporate | 13 March 2008 07:54

telegate AG: telegate posts best results in company history – Earnings forecast successfully met – Higher dividend planned

telegate AG / Final Results/Dividend

Release of a Corporate News, transmitted by DGAP - a company of EquityStory
AG.
The issuer / publisher is solely responsible for the content of this announcement.

---

The telegate Group closed fiscal year 2007 with record results in the
company’s history. It proved possible to increase profitability
significantly across all business segments. At the same time, there has
been investment across the Group to expand the multichannel product
portfolio, thus further strengthening the company’s competitive position. A
dividend of €0.70 per share – that is five Eurocent more than in the
previous year – will be proposed. 'We are proud to have attained our
ambitious targets,' is how Dr. Andreas Albath, Chairman of the Management
Board of telegate AG, sums up the fiscal year. '2007 was a year of many
challenges, especially with regard to the strategic realignment of the
company. We have been able to drive things forward decisively, particularly
on the advertising sales business front,' continues Albath.

Annual results 2007:

The year 2007 saw telegate post an annual income after taxes of €33.6
million (fiscal year 2006: €6.0 million). Sales for the period under review
were down slightly year on year to €173.3 million (fiscal year 2006: €178.9
million). Adjusted by outsourcing sales not affecting income from contracts
with the French mobile telephone partners SFR and Bouygues Telecom, which
were also shown during the previous year, sales for 2007 showed a modest
rise of two percent. Increased sales were registered outside Germany. With
a total of €60.5 million, Italy, Spain and France today contribute 35
percent of the telegate Group’s overall sales. (fiscal year 2006: €63.3
million; adjusted figure €53,7 million). Sales for the Segment
Germany/Austria were, however, slightly down, at €112.8 million (fiscal
year 2006: €115.6 million).
Earnings before interest, taxes, depreciation and amortization (EBITDA) for
the entire year of 2007 stand at €48.4 million (fiscal year 2006: €17.0
million), which means that the company has reached the earnings target
range announced already during 2004 for the fiscal year 2007. As of
December 31, 2007 the company holds liquid assets of €66.8 million (fiscal
year 2006: €18.7 million) and has a equity ratio of just on 57 percent
(December 31, 2006: 50 percent).

Dividend payment:

The Management Board and Supervisory Board will be proposing a payment of a
dividend of €0.70 per share at the Shareholders’ Meeting on June 11, 2008.
This represents a total payout amounting to €14,9 million, and is thus more
than nine percent higher than in the previous year. The dividend payment
will be tax-free both for national and international shareholders.

Current business development:

The market and competitive environments for directory assistance media are
changing at a dramatic pace - with ‘Local Search’ the expression on
everyone’s lips. What is meant here is a search for contact data and
offerings of service providers from the user’s local area, representing the
traditional core business of ‘Yellow Pages’ publishers and telephone
directory assistance providers. This market is on the move throughout
Europe. User behavior is shifting, influenced in particular by
technological change: While traditional media are losing importance, the
new access channels, Internet and mobile devices, are gaining ground. Last
year’s strategic realignment of the telegate Group should be seen against
this background: 'With the consistent, pan-European expansion of our
product portfolio into the new media channels, we have put ourselves in the
ideal position to derive the optimum benefit from changed user behavior in
the future,' says Dr. Andreas Albath of this development. 'We are today the
leading alternative ‘Local Search’ provider in Germany,' continues Albath.

The company’s new product strategy is proceeding hand in hand with the
radical realignments of the business model. In future we will be financing
our ‘Local Search’ offering through advertising as well,' says Dr. Andreas
Albath. 'Last year, the building-up of an effective advertising sales
function thus had top priority.' In the wake of the acquisition of a
majority holding in klickTel AG, the company was able to expand its sales
force to a current figure of around 400, and thus cement its position as an
alternative market leader in Germany. Today, telegate boasts one of the
largest sales organizations in Germany, with the focus on small to midsize
enterprises. In France and Spain, on the other hand, telegate is
concentrating on a partnership model as a means of beefing up advertising
sales. Here too, the multichannel product portfolio was massively expanded
over the course of the last year. In the medium term, telegate Group is
looking to generate around one quarter of its total sales from advertising
sales.

Financial outlook:

In the medium term, the transformation of the business model and the
resultant growing contribution from advertising sales will assure telegate
sustainable growth in sales and profitability. In light of further
investment in the advertising sales business, the company is expecting the
current fiscal year 2008 to show a one-off downturn in profits to a level
of around 30 million Euros (EBITDA) – without taking account of the
expected refund from the ongoing data cost actions against Deutsche
Telekom. In the three subsequent years, earnings are set to grow steadily
once again and will be seen back at 2007 structural profitability level,
that means slightly above 40 million Euros. For this three-year period,
telegate is also reckoning on a pre-tax contribution to earnings of a
minimum of 100 million Euros accruing from the successful data cost actions
against Deutsche Telekom.

Claudia Strixner
Head of Public Relations
telegate AG
Fraunhofer Str. 12a - 82152 München-Martinsried
Phone: 089/ 8954-1188 - Fax: 089/ 8954-1189
E-Mail: claudia.strixner@telegate.com

13.03.2008 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: Prime All Share
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Hannover, Düsseldorf, Hamburg, München, Stuttgart

End of News DGAP News-Service

---