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Corporate | 22 February 2017 15:08

Drillisch AG: EBITDA forecast exceeded – significant improvement in all major KPIs striking proof of successful corporate strategy – EBITDA forecast for 2017 confirmed

DGAP-News: Drillisch AG / Key word(s): Preliminary Results/Dividend

22.02.2017 / 15:08

The issuer is solely responsible for the content of this announcement.

Drillisch AG: EBITDA forecast exceeded – significant improvement in all major KPIs striking proof of successful corporate strategy – EBITDA forecast for 2017 confirmed

Highlights of fiscal year 2016

– MVNO clientele grows by 772,000 to 3.359 million (+29.8% over previous year)

– Revenues rise by EUR80.4 million to EUR710.0 million (+12.8% over previous year)

– Service revenue rises by EUR117.6 million to EUR551.3 million (+27.1% over previous year)

– Gross profit rises by EUR24.4 million to EUR278.9 million (+9.6% over previous year)

– EBITDA rises by EUR14.6 million to EUR120.2 million (+13.9% over previous year)

– Operating cash flow rises by EUR4.3 million to EUR80.5 million (+5.6% over previous year)

Maintal, 22 February 2017

Drillisch AG (ISIN DE 0005545503) has brought fiscal year 2016 to a highly successfully close, significantly improving all of the major KPIs in comparison with the previous year and once again exceeding the EBITDA forecast.

The good start to fiscal year 2017 adds to Drillisch’s confidence that it is holding to a consistently profitable course of growth. Although the recently announced regulatory changes (such as the reduction in termination charges and roam like at home) will tend to reduce earnings for all companies in the mobile services industry, Drillisch confirms its EBITDA forecast for 2017 in the amount of EUR160 million to EUR170 million; this will mean an increase of more than 40% over fiscal year 2016 and a sustained continuation of the Company’s successful history.

**Strong development in revenue and service revenue

**Revenue in fiscal year 2016 grew by a total of EUR80.4 million (12.8%) to EUR710.0 million (2015: EUR629.5 million). Thanks to the number of subscribers, which once again rose sharply in comparison with the previous year, Drillisch was able to increase significantly the service revenue in particular by EUR117.6 million (27.1%) to EUR551.3 million (2015: EUR433.7 million).

**Excellent development in subscriber base

**The total number of MVNO subscribers grew by 772,000 (29.8%) to 3.359 million subscribers (2015: 2.587 million subscribers). The driver behind this positive development was once again the extremely dynamic growth in the highly profitable budget subscribers. The number of subscribers in this sector grew by 931,000 (48.2%) to 2.863 million subscribers (2015: 1.932 million subscribers). The number of subscribers in the significantly lower-margin volume segment, on the other hand, declined further to 496,000 (2015: 655,000 subscribers). The average gross profit per MVNO customer increased over the previous year by EUR0.24 (3.3%) to EUR7.58 (2015: EUR7.34).

**Substantial increase in gross profit and EBITDA despite high investments promoting clientele growth

**Although investments in the previously mentioned subscriber growth continued to be high, gross profit and the EBITDA rose significantly in the past fiscal year 2016. While gross profit increased by EUR24.4 million (9.6%) to EUR278.9 million (2015: EUR254.4 million) and the gross profit margin reached 39.3% (2015: 40.4%), the EBITDA (earnings before interest, taxes, depreciation and amortisation) rose by EUR14.6 million (13.9%) to EUR120.2 million (2015: EUR105.6 million). The EBITDA margin improved slightly to 16.9% (2015: 16.8%).

**Positive development continues on a quarterly basis as well

**On a quarterly basis, service revenue rose by EUR26.6 million (22.2%) to EUR146.9 million (Q4 2015: EUR120.2 million).

While gross profit declined slightly by EUR1.9 million (2.5%) to EUR73.2 million (Q4 2015: EUR75.0 million), the EBITDA in Q4 2016, in contrast, increased significantly by EUR20.2 million (115.9%) to EUR37.5 million (Q4 2015: EUR17.4 million). The EBITDA margin in Q4 2016 amounted to 20.0% (Q4 2015: 10.0%).

Improved cash flow from current business activities

Cash flow from current business activities rose in the past fiscal year 2016 by EUR4.3 million (5.6%) to EUR80.5 million (2015: EUR76.2 million). In Q4 2016, operating cash flow amounted to EUR22.5 million, more than doubling (112.1%) the figure of the same quarter of the previous year (Q4 2015: EUR10.6 million).

**Outlook

**Drillisch is in an excellent position for the future. The Management Board’s outlook for fiscal year 2017 is optimistic; they expect the number of MVNO customers to continue to rise, leading to a parallel continuation of the Company’s successful development, and they confirm the EBITDA forecast for the current year 2017 of EUR160 million to EUR170 million (2016: EUR120.2 million). Moreover, Drillisch expects a steady rise in operating cash flow. Foreseeable changes on the cost side such as the recently announced changes in the roaming regulation have been taken into account in these forecasts.

**Proposed dividend and confirmation of the long-term dividend policy

**In view of the successful course of business, the outstanding market opportunities open to the Company in its position as an MBA MVNO and the expectations of a continued positive development of liquidity and operating cash flow, the Drillisch AG Management Board, subject to the agreement of the Supervisory Board, intends to propose to the Annual General Meeting the eighth successive dividend increase to EUR1.80 per share entitled to dividends.

Provisional performance indicators of Drillisch Group for 2016 (IFRS)


	2016	2015	Change in %
Revenue in EURm	710.0	629.5	+12.8
Service revenue in EURm	551.3	433.7	+27.1
Gross profit in EURm	278.9	254.4	+9.6
Gross profit margin	39.3%	40.4%
AGPPU (average gross profit per MVNO user)	7.58	7.34	+3.3
EBITDA in EURm	120.2	105.6	+13.9
EBITDA margin	16.9%	16.8%

Cash flow from current business operations in EURm	80.5	76.2	+5.6

Subscribers (million)	3.430	2.678	+28.1
Thereof MVNO subscribers	3.359	2.587	+29.8
Thereof budget subscribers	2.863	1.932	+48.2
Thereof volume subscribers	0.496	0.655	-24.3

Provisional performance indicators of Drillisch Group for Q4 2016 (IFRS)


	Q4 16	Q4 15	Change in %
Revenue in EURm	187.7	174.4	+7.7
Service revenue in EURm	146.9	120.2	+22.2
Gross profit in EURm	73.2	75.0	-2.5
Gross profit margin	39.0%	43.0%
AGPPU (average gross profit per MVNO user)	7.38	7.28	+1.4
EBITDA in EURm	37.5	17.4	+115.9
EBITDA margin	20.0%	10.0%
Cash flow from current business operations in EURm	22.5	10.6	+112.1

The complete, audited annual financial statements can be retrieved at the following link as of 23 March 2017: https://www.drillisch.de/investor-relations/reports

Maintal, 22 February 2017

Drillisch AG

The Management Board

Disclaimer: This report contains statements regarding the future which are based on the current assumptions and projections of the Drillisch AG management. Various risks, uncertainties and other factors, both known and unknown, can cause actual developments, especially in the results, financial position, and the business of our Company, to deviate substantially from the projections about the future as they are shown here. The Company does not undertake any obligation to update such future-oriented statements and to adapt them to future events or developments. All of the above information is based on provisional calculations prior to the final consolidation and the conclusion of the audit. It is consequently possible that the final business figures presented on 23 March 2017 will differ from those shown here.

Contact:

Oliver Keil

Head of Investor Relations

Mail: [email protected]

22.02.2017 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.

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Language:	English
Company:	Drillisch AG
	Wilhelm-Röntgen-Straße 1-5
	63477 Maintal
	Germany
Phone:	+49 (0)6181 412 218
Fax:	+49 (0)6181 412 183
E-mail:	[email protected]
Internet:	www.drillisch.de
ISIN:	DE0005545503
WKN:	554550
Indices:	TecDAX
Listed:	Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Munich, Stuttgart, Tradegate Exchange