11 88 0 Solutions AG — Interim / Quarterly Report 2011

Aug 14, 2011

telegate group: Financial Results H1 2011

Munich,

August 11, 2011

Agenda

The "new" telegate:

• Transformation towards local search provider
• Financials H1 2011
• Outlook 2011

Key achievements: Audience

• Highlights of the first 9-month z Today we already receive about 75% of all searches via digital platforms (web portals + mobile internet), share is continuously growing
• z Mobile internet searches continue to show extraordinary growth Æ H1 2011 about +100% yoy, driven by both our own mobile apps (close to 1 m downloads as of now) as well as cooperations
• z The share of mobile internet within total digital searches is continuously growing: currently we receive about 3.5 m mobile internet searches p.m. or about 20 - 25 % of our total digital searches (mobile internet + web portals)
• Â Transformation of our search offer towards digital platforms already very advanced, supported by very strong growth of our mobile internet offers

Key achievements: Advertisers

• z Growth: Revenues from business segment Media grow +23% in H1; Share of Media-Revenues of total revenues increased to 31% in H1 2011 from 23% H1 2010
• z Proof of Performance / ROI to our clients:
• Highlights of the first 9-month In use for churning clients since end 2010 Æ +30% improvement of rate at which churning clients are won back
• Usage of ROI reasoning in new client acquisition started some weeks ago
• Roll out of ROI to our existing clients is starting these days
• z Product portfolio: Further enlargement of product portfolio in Q2 with the widening of website products (now "small/medium/large" product, to allow increased market penetration)
• Â Continuous enlargement of product portfolio; Providing our clients with transparency on ROI expected to support new client acquisition and client retention

Data cost-proceedings: Encouraging progress

Reclamation claims

OLG Düsseldorf: Judgment in favor of telegate

• • The Federal High Court has referred the case back to OLG Düsseldorf in October 2009
• • On April 13 & June 8, 2011, OLG Düsseldorf ordered Deutsche Telekom to repay improper excessive costs of subscriber data in an amount of approx. 94 m€ (incl. interest)

Next steps

• The right to appeal was not granted. DTAG raised a non-admission complaint as last remaining remedy. It may take up until mid 2012 for the judgment to become final

94 m € (incl. interest)1 100 m € (incl. interest)

Damage claims

Proceedings:

• • 1st instance: 2nd oral hearing in February 2008 confirms our confidence in a positive ruling
• • Claim set on hold –likely awaiting decision on reclamation claims

1 Cash-impact: minus tax-payment and minus 12.3 m€ already paid by DTAG in 2007 (no P&L impact yet) of approx. 50 m€ expected

Agenda

The "new" telegate:

• Transformation towards local search provider
• Financials H1 2011
• Outlook 2011

Change in revenue recognition: Minor impact to P&L

• z With effect from June 30, 2011, tg has changed the revenue recognition policy in the business segment Media
• z So far: revenues had been realized using the cost to cost method in accordance with IAS 18.21 and 18.24 (c)
• z As of H1 2011, revenues will be realized in accordance with IAS 18.24 (b) where the stage of completion is determined based on performance
• zThis results in marginally lower revenues in the current and prior-year period
• z This change is in line with the group accounting policies of our main shareholder Seat Pagine Gialle SpA who also will apply this change as of H1'11

	I f h l i d d P & L t t t m p a c o c a n g e o c o n s o a e I f h t m p a c o c a n g e
	H 1 ' 1 0			H 1 ' 1 1
	O l d	N e w	D l t e a	O l d	N e w	D l t e a
R e e n e s v u	6 1, 7	6 1, 3	0, 4 -	5 6, 1	5 5 9 ,	0, 2 -
E B I T D A *	1 1, 1	1 1, 0	0, 0 -	7, 4	7, 2	0, 2 -

* before non-recurring item ^s

ÂResult is a slightly lower revenue- & profit-base in the business segment Media

H1 – results in line with full-year guidance

Higher growth rate of Media vs. decrease rate DA. Growth of Media vs. decrease of DA mostly in line with previous quarters

Lower profitability following revenue decline & decrease of high margin DA business.

Midterm: Higher sales efficiency & improved customer retention whilst reducing structural cost will lead to profit stability

*before non-recurring items

Consolidated profit and loss statement

	Qu art ly Re ort er p		6-m t hs ort on re p
in k EU R	Q 2 2 0 1 1	Q 2 2 0 1 0	2 0 1 1	2 0 1 0
Co inu ing ion nt t era s
op Re ve nu es	27 6 7 3	3 0. 8 9 0	5 5. 8 8 9	6 1. 3 4 8
Re DA luti ven ue so ons	18. 938	23 .44 1	38 .64 9	47 .34 6	Co de f tan t ns cre as e o
Re Me dia ven ue	8.7 35	7.4 49	17. 24 0	14. 002	D A bo 1 8 % h i ls Me d t a t - t rev en ue s a u w ly
Co f re st o ve nu es	-11 .8 45	-12 .5 3 8	-23 .41 9	-25 .0 5 4	f + f t h o 2 3 % i t h in H 1 s ig i ica t g row w n n d i f fer d in Q ( ) d Q ( 1 3 2 % 2 1 7 % e + an +
					)
f it Gr os s p ro	15 .8 28	18 .3 5 2	3 2.4 70	3 6. 29 4
Gro fit i n % ss pro	57, 2%	59, 4%	58 1% ,	59, 2%
					Bu i l d u f s les k f ina l ize d, ho tw p o a ne or we ve
Se l l ing d d ist i bu ion t sts an r co	-11 .8 8 0	-11 .10 6	-23 .3 8 4	-22 .12 9	i l l g ing i t ty. y oy s row ca p ac
Ge l a dm in ist ive rat ne ra ex p en se s	-3. 22 8	-4. 22 4	-6. 9 24	-8. 21 7
Ot he ing inc t r o p era om e	1	16 1	1	27 4	f for f s E l c du ion ts tru tur t re t o c a os c
Ot he ing t r o p era ex p en se	-2	4	-45	-25	f f ing are p ay o
Op ing inc t era om e	71 9	3. 18 7	2.1 18	6. 19 7
					No ing f fec in '1 1 o f 1. 0 5 0 k € ts n-r ec urr e
E B I T D A be for ing f fec ts e n on -re cu rr e	3. 5 3 9	5. 6 0 7	7. 2 2 0	1 1. 0 2 4	C C- in ly fro i ing in ty tru tur ma m ca p ac res c
E B I T D A a fte ing f fec ts r n on -re cu rr e	2.7 3 4	5. 6 0 7	6. 17 0	1 1. 0 2 4	Ge Sp & in rm an y a
F ina ia l inc nc om e	5 1 8	5 2 9	1. 0 3 1	1. 0 7 6
Inc e t t om ax - c urr en	-1. 0 17	-1. 6 8 6	-2. 15 4	-3. 5 10
Inc de fer d e t om ax re -	6 41	1.6 9 8	1.2 10	1.6 9 8
fro inu ing ion Inc nt at om e m co op er s	8 6 1	3. 7 2 8	2. 2 0 5	5. 4 6 1
D isc inu d o ion t t on e p era s
fro Inc d isc t inu d o t ion om e m on e p era s	0	2.4 0 7	0	2.4 17	Inc fro le f I l ian bs i d iar ta om e m sa o su y
Ne inc t om e	8 6 1	6. 1 3 5	2. 2 0 5	8 8 7. 7	in 2 0 1 0
Ea ing ha rn s p er s re fo inu ing ion ( in Eu ) t t r c on op era s ro	0, 0 5	0, 1 8	0, 1 1	0, 2 6

Visible progress in company transformation in Germany, Spanish DA market decrease slightly softening

• • Market decline in classic DA has been compensated only to minor extend by higher revenues per call

• • Lower profitability due to lower topline and underproportional reduction of fix costs

• •Increase of Media revenues +23 %

• • YoY - improvement of profitability is expected to increase in H2 vs. H1

• • Lower call volume has been only partially compensated by higher revenues per call

• • Focus on further increasing flexibility and cost efficiency of CC operations with full effects expected as of end 2011

* before non recurring items, based on full cost

Free cash-flow* impacted by usual higher cash-out due to seasonality

• Net Financial Position (incl. fix term deposit) of 37.4 m€ (30.06.11) vs. 48.8 m€ (31.12.10). Deposit at Seat had been reduced to 13.5 m€ (30.06.11) / 0 m€ (31.07.11). Stop of forfaiting process resulted in 1.2 m€ reduced NFP (cash -1.2 m€; receivables +1,2 m€)
• Dividend payment of 0.50 €/share (or 9.55 m€) as of 30.06.2011

*excluding impact from fixed term deposits & financial assets available for sale Æ changes of fixed term deposits >3 months are reported as part of investing cash-flow (IAS 7.16), 3 months or less as part of operating cash-flow

Agenda

The "new" telegate:

• Transformation towards local search provider
• Financials H1 2011
• Outlook 2011

Outlook 2011 – Audience

• z Steady improvement: of customer satisfaction and product development in voice, software, online & mobile products (Æ user reviews, new favourite function with smart data transfer from website to mobile apps, couponing under review)
• z Directory Assistance: launch of mobile DAservice SMS-Connect (Æ connection to non-public mobile number via SMS-notification); to be expected within 12 month
• z Mobile: Continue pushing mobile-usage via own apps and cooperation partners

Outlook 2011 –Advertisers/Customer acquisition

• z Sales driver "awareness building": telegate participates in industry initiatives such as "Online Motor Deutschland", to increase the awareness for "digital marketing". Road show throughout Germany's 10 biggest cities. Project started in April
• z Sales driver "product portfolio": telegate customizes and diversifies its Media product portfolio in line with market and customer needs (e. g. broader website-offer)
• z Sales driver "proof of performance": telegate uses ROI reasoning in new client acquisition for some weeks now Æ ability to provide transparency to our advertisers about performance via regular reporting

Outlook 2011 –Advertisers/Customer retention

• z "Proof of performance": Demonstrating advertisers success of their investment (ROI). Roll-out for existing customer base during the coming months
• z Re-engineering of after sales organisation & process: Integration of all after sales functions in a best-in-class customer care organisation & process re-engineering to improve customer loyalty and thus customer churn

Profit guidance 2011

¹Before non-recurring items & potential income from data claims

• Profitability 2011 overall affected by ongoing investment to transform the company into a local search providerÆ Revenue growth of Media business not yet able to compensate revenue decline DA
• H1 2011in line with full year guidance
• Change in revenue recognition has slight negative impact on profitability, but profit guidance nevertheless is kept unchanged
• For 2012, we confirm expectation of a stabilization in profitability

Contact telegate AG

Financial calendar

C E O	D A d A l b h t r. n r e a s a
C F O	R l f G ß h b ü a r a e r
I R l i t t n v e s o r e a o n s	F P W b t r a n z e e r e e r
G l A t t e e g a e	f ß F h 1 2 t r a u n o e r s r a e a G 8 2 1 2 M i i d 5 t a r n s r e e r m a n y ,
P h o n e	4 9 ( 0 ) 8 9- 8 9 4- 1 0 5 7 5 +
F a x	( ) 4 9 0 8 9- 8 9 5 4- 1 7 1 0 +
E i l m a	@ I l i l t t t t n v e s o r. r e a o n s e e g a e c o m
H o m e p a g e	l t t w w w e e g a e c o m

November 8, 2011 9-months results 2011 November 21, 2011 German Equity Forum Frankfurt / Main

Backup

Consolidated balance sheet H1

i k E U R n	H 1 2 0 1 1	H 1 2 0 1 0
A t s s e s
C h & h i l t a s c a s e q a e n s u v	2 9 2 4	4 9. 1 9 1
f T i b l i i b l & i i l t t a n g e, n a n g e n a n c a a s s e s	3 1. 6 5 0	4 6. 4 7 7
T d i b l t r a e a c c o u n s r e c e v a e	3 4 3 9 5	3 2 3 1 6
F i i l & i l b l f l t t n a n c a a s s e s a s s e s a a a e o r s a e v	3 5 7 8 1	1. 3 8 0
T t a x a s s e s	7. 5 6 9	7. 7 5 9
O h t t e r a s s e s	8 6 4 5	6. 1 1 4
T l A t t o a s s e s	1 1 8. 1 4 7	1 4 3. 2 3 7
L i b i l i i & S h h l d ' i t t a e s a r e o e r s e q u y
C l i b i l i i t t u r r e n a e s	5 0. 4 0 0	4 7. 9 7 5
N l i b i l i i t t o n- c u r r e n a e s	6. 6 1 6	1 0. 6 4 7
S h h l d ' i i b b l h t t t t t t t a r e o e r s e q a r a e o e p a r e n u y u	6 1. 1 3 1	8 4 6 1 5
T l l i b i l i i & h h l d ' i t t t o a a e s s a r e o e r s e q u y	1 1 8. 1 4 7	1 4 3. 2 3 7

Consolidated cash flow statement H1

in k E U R	H 1 2 0 1 1	H 1 2 0 1 0
Ne inc be for inc t tax om e e om e	3. 1 4 9	1 0. 2 4 8
De ia t ion & a t isa t ion p rec mo r	4. 0 5 1	5. 7 8 6
C ha in t ing ts & l ia b i l i t ies ng es op era as se	-3 7 7 5	-4 5 1 6
Inc i d tax om e es p a	-3 3 2 8	-3 7 0 6
O he i t tem r s	-4 8 5	-6 7 1 1
Ca h f low fro ing iv i ies t t t s s m op er a ac	-3 8 7	1. 1 0 1
Ca i l e d i ta tur p xp en es	-2 2 5 0	-1 7 4 1
f ina ia l a i la b le for le & de i ( 3m hs ) ts t t nc ss e av a sa p os on <	-3 4. 4 9 8	0
D isp l o f a bs i d iar os a su y	0	3. 5 0 5
Ca f in inv ing iv i ies h low d t t t s s u se es ac	-3 6. 7 4 8	1. 7 6 4
Pu ha f ha tre rc se o as ury s res	-1 2	0
D iv i de d p i d n a	-9 5 5 5	-1 4. 8 6 4
In ive d ter ts es rec e	8 8 1	1. 2 6 6
In i d ter ts es p a	-2 1	-1 0
Ca h f low i de d by ( d in ) f ina ing iv i ies t t s s p ro us e nc ac v	-8 7 0 7	-1 3. 6 0 8
C ha in h a d c h e iva len ts ng e ca s n as q u	-4 5. 8 4 4	-1 0. 7 4 1
Ca h a d h e iva len be inn ing f r ing io d ts t t s n ca s q u a g o ep or p er	4 8. 7 6 8	5 9. 9 3 2
Ca h a d h e iva len d f r ing io d ts t e t s n ca s q u a n o ep or p er	2. 9 2 4	4 9. 1 9 1
Ca h a d h e iva len ( 3 m hs ), ho f ixe d de i ts t t- te t s n ca s q on s r rm p os u < inv ( 3 m hs ) l l a ho i la b le fo le tm ts t t- ter es en > on as w e s s r m av a r s a f ina ia l a he d f r ing io d ts t t t nc ss e a en o ep or p er	3 7. 4 2 7	4 9. 1 9 1