QSC AG

Investor Presentation • Dec 14, 2009

QSC AG

Company Presentation

Results Q3 2009

1

Cologne, November 9, 2009

AGENDA

• 1. Financial Results Jürgen Hermann, Chief Financial Officer
• 1. Operational Update & Outlook Dr. Bernd Schlobohm, Chief Executive Officer
• 1. Questions & Answers

DEVELOPMENT DURING ECONOMIC CRISIS COINEDBY FOCUS ON HIGH-MARGIN REVENUES

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Results Q3 2009 –

HIGH-MARGIN REVENUES LEAD TO RISING EBITDA

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Q C C 3 2 0 0 9 H A R A T E R I	Z E D B Y H	G G I H E R R	O S S O P R F
	Q 3 2 0 0 8	Q 3 2 0 0 9
I € i l l i n m o n s R • e e n e s v u	1 0 3. 6	1 0 4 4	% 0 8 +
( 1 ) N k t • e w o r e x p e n s e s	0. 3 7	6 9. 1	1. % 7 -
G f i t • r o s s p r o	3 3. 3 +	3 5. 3 +	6. 0 % +
( ) 1 O t h t i • e r o p e r a n g e p e n s e s x	1 5. 0	1 6 1	% 7. 3 +
E B I T D A f i t • p r o	1 8. 3 +	1 9. 2 +	4. 9 % +
D i i t • e p r e c a o n	1 7 5.	1 6 1	2 % 5 +
f E B I T i t • p r o	2. 6 +	3. 1 +	% 1 9. 2 +
F i i l l t • n a n c a r e s u s	0. 4 -	0. 6 -	0. 0 % 5 -
I t • n c o m e a x e s	0. 1 -	0. 4 -	n m
f N t i t • e p r o	2. 1 +	2. 1 +	-

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(1) Excluding depreciation and non-cash share-based payments

IN THE FIRST NINE MONTHS QSC HAS EARNEDA SUSTAINABLE NET PROFIT

I i l l i n m n	Q 1- Q 3 2 0 0 8	Q 1- Q 3 2 0 0 9
€ o s R • e v e n u e s	3 0 1. 3	3 1 5. 7	8 % 4 +
( 1 ) N t k • e w o r e x p e n s e s	2 0 5. 9	2 0 8. 2	1. 1 % +
G f i t • r o s s p r o	9 5. 5 +	1 0 7. 5 +	% 1 2. 6 +
( 1 ) O h i t t • e r o p e r a n g e x p e n s e s	1. 6 5	4 9. 8	3. % 5 -
E B I T D A f i t • p r o	4 3. 9 +	5 7. 7 +	3 1. 4 % +
D i t i • e p r e c a o n	4 5. 7	4 9. 8	9 0 % +
E B I T f i ( l ) t • p r o o s s	1. 8 -	9 7. +	n m
F i i l l t • n a n c a r e s u s	1. 4 -	2 1 -	5 0. 0 % -
I t • n c o m e a e s x	0. 3 -	1. 2 -	n m
N f i ( l ) t t • e p r o o s s	3. 5 -	4. 6 +	n m

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(1) Excluding depreciation and non-cash share-based payments

CAPEX HALVED IN Q3 2009

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QSC EARNS POSITIVE FREE CASH FLOW …

Drivers of FCF

• • High cash flow fromoperating activities(+14% y-o-y)
• • Lower Capex(-51% y-o-y)

… QUARTER BY QUARTER IN 2009

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Results Q3 2009 –

NET DEBT REDUCTION DUE TO FREE CASH FLOW

N l i i d i ( d b ) t t t t e q u y n e e =	1 2. 2 -	3. 0 -	9. 2 +
F i i l d b t n a n c a e -	6 1. 3 -	4 5. 5 -	1 5. 8 +
L i b i l i i d b k t t a e s u e o a n s -	1 5. 0 -	1 5. 0 -	-
O t h h t- t l i b i l i t i e r s o r e r m a e s -	8. 8 -	3. 7 -	1 5 +
F i l b l i t i n a n c e e a s e o g a o n s -	3 7. 5 -	2 6 8 -	1 0. 7 +
L i i d i t + q u y	4 9. 2 +	4 2. 5 +	6. 7 -
A i l b l f l f i i l t + v a a e- o r- s a e n a n c a a s s e s	0 3 +	0 3 +	-
C h d h d i t- t t + a s a n s o r e r m e p o s s	8. 8 4 +	2 1 4 +	6 7 -
€ I i l l i n m o n s	D 3 1, 2 0 0 8 e c.	S 3 0, 2 0 0 9 e p.

QSC'S FINANCIAL SOLIDITY OUTPACE THE EUROPEAN TELCO INDUSTRY

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AGENDA

• 1. Financial Results Jürgen Hermann, Chief Financial Officer
• 1. Operational Update & Outlook Dr. Bernd Schlobohm, Chief Executive Officer
• 1. Questions & Answers

MAJOR ACHIEVEMENTS IN Q3 2009

• •Focus on high-margin revenues is paying off
• •Profitability is rising
• •Continued focus on industrialization to increase efficiency
• •Relaunch IPfonie centraflex with new functionalities
• •Development of new distribution channel for IP-based products

BU MANAGED SERVICES INDUSTRIALIZIATION LEADS TO HIGHER EARNINGS

Major developments

• • Positive development of new business with existing and new customers vs. price pressure in connection with contract renewals
• • Customers won: Two high-profile large accountsand several mid-size companies

BU PRODUCTSRISING PROFITS DESPITE LOWER REVENUES

BU WHOLESALE/RESELLERSONGOING POSITIVE BUSINESS DEVELOPMENT

Break-up of revenues

• •+6,600 ADSL2+ lines
• • 48% of segment revenues fromADSL2+
• • 29% of segment revenues fromvoice wholesale

Major developments

• • Despite growing market saturation, especially in urban areas, QSCstill has net adds in ADSL2+ business
• • Voice wholesale is growing year-onyear; NGN is paying off
• • SHDSL wholesale for carriers on stable growth course

OUTLOOK 2009FOCUS ON CASH FLOW AND PROFITABILITY

• •General economic conditions in Germany still gloomy
• • QSC will continue to focus on cash flow and profitability in Q4 2009 and beyond
• •CAPEX will be less than € 50 million, nearly half the amount of 2008

=> the investment period is over!

OUTLOOK 2009QSC REVISED GUIDANCE

• • EBITDA at the upper end of the € 68- to 78-million corridor and revenues at the lower end of the € 420- to € 440-million corridor
• • Free cash flow of at least € 12 million, instead of the previously announced figure of at least € 10 million
• •Sustained net income
• •QSC will be net debt free at year-end 2009

AGENDA

• 1. Financial Results Jürgen Hermann, Chief Financial Officer
• 1. Operational Update & Outlook Dr. Bernd Schlobohm, Chief Executive Officer
• 1. Questions & Answers

FINANCIAL CALENDAR

N b 1 0 1 1 2 0 0 9 o e m e r v - ,	G E i F F l l 2 0 0 9 t e r m a n q o r m a u y u
	f D h B ö F k t t e u s c e r s e r a n u r ,

• March 31, 2010 Publication of Annual Report 2009
• May 20, 2010 Annual Shareholders Meeting

CONTACT

QSC AGArne ThullHead of Investor RelationsMathias-Brüggen-Strasse ⁵⁵ 50829 CologneGermany

Phone +49-(0)221-6698-724 Fax +49-(0)221-6698-009 E-mail invest@qsc.de Web www.qsc.de

SAFE HARBOR STATEMENT

This presentation includes forward-looking statements as such term is defined in the U.S. Private Securities Litigation Act of 1995. These forward-looking statements are based on management's current expectations and projections of future events and are subject to risks and uncertainties. Many factors could cause actual results to vary materially from future results expressed or implied by such forward-looking statements, including, but not limited to, changes in the competitive environment, changes in the rate of development and expansion of the technical capabilities of DSL technology, changes in prices of DSL technology and market share of our competitors, changes in the rate of development and expansion of alternative broadband technologies and changes in prices of such alternative broadband technologies, changes in government regulation, legal precedents or court decisions relating, among other things, to line sharing, rent for colocation and unbundled local loops, the pricing and timely availability of leased lines, and other matters that might have an effect on our business, the timely development of value-added services, our ability to maintain and expand current marketing and distribution agreements and enter into new marketing and distribution agreements, our ability to receive additional financing if management planning targets are not met, the timely and complete payment of outstanding receivables from our distribution partners and resellers of QSC services and products, as well as the availability of sufficiently qualified employees.

A complete list of the risks, uncertainties and other factors facing us can be found in our public reports and filings with the U.S. Securities and Exchange Commission.

DISCLAIMER

• • This document has been produced by QSC AG (the "Company") and is furnished to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any other person
• • No representation or warranty (express or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein and, accordingly, none of the Company or any of its parent or subsidiary undertakings or any of such person's officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document
• • The information contained in this document does not constitute or form a part of, and should not be construed as, an offer of securities for sale or invitation to subscribe for or purchase any securities and neither this document nor any information contained herein shall form the basis of, or be relied on in connection with, any offer of securities for sale or commitment whatsoever

STABLE SHAREHOLDER STRUCTURE SINCE IPO

Results Q3 2009 –