11 88 0 Solutions AG — Earnings Release 2009

Jul 30, 2009

News Details

Corporate | 30 July 2009 08:36

Half-year figures telegate AG: transformation of the business model and trend of profitability is according to plan

telegate AG / Half Year Results/Forecast

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.

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* Group sales nearly on previous year's level
* Transformation of the business model is according to plan: Media-sector
generates
more than 14 percent of sales across the group
* EBITDA before one-time effects after the first six months 2009 in the
upper target range of the year-end projection of EUR 32 to EUR 37 m.

Munich, July 30, 2009 - The telegate group is on target to achieve its
objectives for the fiscal year 2009 after the first fiscal half-year,
irrespective of difficult economic conditions. Earnings before interest,
taxes, depreciation and amortization (EBITDA) before one-time effects
amounted to EUR 19.6 m and are indeed approx. 6 percent below previous
year's earnings, however, were in the upper range of the year-end
projection of EUR 32 to EUR 37 m. Half-year sales of the
multichannel-provider of local search remained with approx. EUR 84.6 m
slightly below under the previous year's figure of EUR 86.4 m.

The new business sector Media continues to show a dynamic growth. Sales
rose from approx. EUR 6.8 m in the first half-year of the previous year to
now approx. EUR 12 m. Therefore, the advertising sales business already
generates approx. 14 percent of sales across the group. However, it has to
be taken into consideration, that telegate MEDIA AG (former klickTel AG)
was not consolidated before the second quarter 2008. Adjusted by this
effect, the Media sector showed an organic growth by approx. 12 percent
across the group. Half-year sales of the classic directory assistance
business, which is composed of telephone directory assistance and klickTel
software products, amounted to EUR 72.6 compared to EUR 79.7 m in the
previous year.

Profitability: affected by special items

Half-year EBITDA of the telegate group, unadjusted by special items,
amounted to EUR 17.8 m after EUR 25.1 m in the previous year. However, the
half-year-EBITDA of 2009 and 2008 are affected by one-time effects:
one-time expenses in the course of the integration of telegate MEDIA AG and
the merger of a German Call Center-location with other locations this year
and one-time expenses in connection with the integration of telegate MEDIA
AG and one-time income from successful data cost repayment lawsuits in the
previous year.

EBITDA, adjusted by these special effects, amounts to EUR 19.6 m and is
slightly below previous year's figure in the amount of EUR 20.9 m. The
group's half-year net income after taxes of EUR 6.5 m was significantly
below the previous year's figure (approx. EUR 16 m). Beside the impact of
the decline of sales of the high-margin directory assistance business, this
is primarily caused by the mentioned one-time expenses and higher
depreciations - goodwill-depreciations in France, in particular. Earnings
per share decreased correspondingly from
EUR 0.75 per share to EUR 0.31 per share.

Cash flow and financial position: solid balance sheet structure ensures
growth plans

The telegate group continues to remain independent of difficult refinancing
conditions in the capital market, due to its solid balance sheet structure.
Thus, the equity ratio amounts to approx. 51 percent by June 30, 2009. The
company stabilized its liquid assets at a high level in the first half-year
2009, in spite of the dividend payment of EUR 14.9 m, due to the high free
cash flow of EUR 11.7 m. telegate AG has available a total of net liquid
assets in the amount of approx. EUR 51 m by June 30, 2009.

International segments: profitable in the second quarter and on a half-year
basis

The company moves forward well with regard to the transformation of the
business model and establishment of the advertising sales business in
Germany/Austria, the segment with the highest share of telegate's group
sales. The share of the Media business continued to increase from 17.7
percent by the end of the first quarter to now 18.5 percent and amounted to
a total of approx. EUR 11.4 m in the first fiscal half-year 2009 compared
to EUR 6.7 m in the previous year's period. This corresponds to an organic
growth of approx. 7 percent. The company succeeded partly in compensating
the market decline in the classic directory assistance business - sales in
the amount of EUR 50.1 m were only slightly below the previous year's level
of EUR 52.2 m. The expansion of the business with high-quality
Comfort-Services in particular contributed to this development. The
segment-EBITDA before one-time effects decreased from EUR 19.3 m in the
previous year to now EUR 17.6 m. This is primarily caused by the decline of
sales of the high-margin directory assistance business.

The segment France generated unchanged sales revenues in the amount of EUR
3.1 m in the second quarter compared to the first quarter. In a very
competitive environment for the classic telephone directory assistance
business this results in a decline of sales of the segment on a half-year
basis from EUR 7.7 m to EUR 6.2 m. In this connection, the Media business
made a significant contribution to the business development with EUR 0.5 m
and approx. 8 percent of total sales respectively. Half-year-EBITDA
amounted to EUR 0.3 m, in the previous year there was a deficit in the
amount of EUR -0.2 m.

Business development of the segment Italy/Spain was still affected by the
difficult overall economic market environment in the South European markets
in the first half-year. The declining call volume resulted in a decline of
sales from EUR 19.9 m in the previous year to now EUR 16.8 m. However,
EBITDA of EUR 1.8 m was nearly at previous year's level. This is due to
capacity adjustments and expansion of offshoring-activities, in particular.

Outlook

In light of the business development in the first fiscal half-year, the
management of the telegate group is very confident to achieve the profit
targets for the fiscal year. The company still forecasts EBITDA before
one-time effects in a range from EUR 32 m to EUR 37 m, compared to EUR 40.2
in the fiscal year 2008. This deviation is mainly due to the expected
decline of sales in the classic high-margin directory assistance business,
which presumably cannot be compensated yet by the strong growth of the
Media business, with a currently lower margin, in the current fiscal year.

The company continues to optimize its cost structures and executes its
investments carefully in this environment. In addition, the company will
have its operational focus even more on the German core market and here, on
the further expansion of the media business and mobile internet offers, in
particular.

Joerg Kiveris
telegate AG
Head of Public Relations Department
Fraunhofer Str. 12a
82152 Planegg-Martinsried near Munich
GERMANY
Phone: +49 (89) 8954-1188
Fax: +49 (89) 8954-1189
E-mail: presse@telegate.com

30.07.2009 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, Düsseldorf, Hannover, München, Hamburg,
Stuttgart

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