QSC AG
Company Presentation
Results Q2 2009
1
Cologne, August 12, 2009
AGENDA
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- Operational Update Dr. Bernd Schlobohm, Chief Executive Officer
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- Financial Results Jürgen Hermann, Chief Financial Officer
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- Outlook Dr. Bernd Schlobohm, Chief Executive Officer
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- Questions & Answers
MAJOR ACHIEVEMENTS IN Q2 2009
- • Positive free cash flow leads to lower net debt (Net debt of € -5.6 million as of June 30, 2009)
- • Rising profitability despite economic and financial crisis (EBITDA +34% in Q2 2009)
- • Focus on high-margin products and services / Cleaning-up of the portfoliois paying off (EBITDA margin rose to 18% in Q2 2009)
- •Positive development of new business (ADAC, ARAG, The Cloud)
- • Sales organization now completely integrated into the three business segments => even more focused sales approach
FINANCIAL OVERVIEW FOR Q2 2009
- • Free cash flow of € 2.6 million (Q2 2008: € -9.0 million)
- • Net profit of € 1.1 million (Q2 2008: € -1.5 million)
- • EBITDA up 34% to € 19.0 million (Q2 2008: € 14.2 million)
- • Revenues up 3% to € 103.7 million (Q2 2008: € 100.2 million)
- • Significant reduction in CAPEX to € 12.9 million (Q2 2008: € 19.7 million)
- ⇒Financial strength and profitability up significantly despite recession
4
BU WHOLESALE/RESELLERSONGOING POSITIVE BUSINESS DEVELOPMENT
Break-up of revenues
- •49% of segment revenues from ADSL2+
- 28% of segment revenues fromvoice wholesale
Major developments
- Demand from congstar and established wholesale partners led to higher growth in ADSL2+ in Q2 2009
- High number of holidays softened growth in the voice wholesale business
- SHDSL wholesale for carriers on stable growth course
BU WHOLESALE/RESELLERSHIGHER NUMBER OF NET ADDS
6
BU PRODUCTSCONSISTENT FOCUS ON HIGH-MARGIN PRODUCTS
- competition in legacy voice business
- Comparatively high number of holidays affected legacy voice business as well
- products => segment EBITDA rose in
- Growth opportunity Q-DSLmax: More bandwidth variety since June 2009
7
HIGH MARGIN PRODUCT IPFONIE CENTRAFLEX
- •Virtual telephone system
- •Won an innovation award at CeBIT 2009
- •Relaunch in August 2009
- •Certification of more than 40 sales partners already in July 2009
- •By year-end, 150 sales partners should be certified
- •Sweet spot customer: approx. 100 seats
- ⇒One-stop shopping for Access + VoIP + IP-Centrex
- ⇒Tremendous potential for upselling in existing customer base
GROWTH POTENTIAL FOR IP-CENTREX
9
BU MANAGED SERVICES SPLIT DEVELOPMENT OF NEW BIZ VS. RENEWALS
Major developments
- • Recession leads to price pressure in connection with contract renewals
- • Upselling opportunity: Cost-saving services like VoIP or Hosted Services (Telco-Software-as-a-Service)
- • Positive development of new business in Q2 2009 with customers like ADAC, ARAG and The Cloud
- • Future: Reduction of structural costs by more automatization / industrialization
FOCUS ON SELECTED ACCOUNTS AND INDUSTRIES
AGENDA
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- Operational Update Dr. Bernd Schlobohm, Chief Executive Officer
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- Financial ResultsJürgen Hermann, Chief Financial Officer
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- Outlook Dr. Bernd Schlobohm, Chief Executive Officer
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- Questions & Answers
RECESSION YEAR 2009: FOCUS ON HIGHER PROFITABILITY AND FINANCIAL STRENGTH
QSC'S STRATEGY HAS WORKED OUT WELLPROFITABILITY HAS RISEN SIGNIFICANTLY
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14
LOWER NETWORK COSTS DESPITE HIGHER REVENUES
- Focus on high-margin products is paying off
- Ongoing optimization of infrastructure has led tocost reductions
EBITDA MARGIN IS RISING SIGNIFICANTLY
ALL 3 SEGMENTS REPORT A POSITIVE EBITDA
17
DEPRECIATION REACHES ITS PEAK IN 2009
18
Drivers
- • High growth in ADSL2+ business in 2008 is in 2009 leading to high depreciation (depreciation period: 2 years)
- • Network rollout has been completed
Consequence
• Depreciation will start declining in 2010
QSC HAS EARNED A SUSTAINABLE NET PROFIT
SIGNIFICANT REDUCTION IN CAPEX IN 2009
Results Q2 2009 –
20
QSC HAS EARNED A POSITIVE FREE CASH FLOW
21
SINCE THE OUTSET OF 2009: QSC HAS REDUCED INTEREST-BEARING DEBT BY € 11.7 MILLION
€
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AGENDA
-
- Operational Update Dr. Bernd Schlobohm, Chief Executive Officer
-
- Financial Results Jürgen Hermann, Chief Financial Officer
-
- Outlook Dr. Bernd Schlobohm, Chief Executive Officer
-
- Questions & Answers
OUTLOOK 2009QSC REITERATES GUIDANCE EXPRESSLY
- •Focus 2009: Improvement of cash flow and earnings
- •Free cash flow > € 10 million
- •EBITDA of between € 68 – € 78 million
- •Sustainable positive net income
- •Revenues of between € 420 – € 440 million
- •Higher profitability has priority over higher revenues
OUTLOOK 2009QSC IS MOVING UP THE VALUE CHAIN
25
AGENDA
-
- Operational Update Dr. Bernd Schlobohm, Chief Executive Officer
-
- Financial ResultsJürgen Hermann, Chief Financial Officer
-
- Outlook Dr. Bernd Schlobohm, Chief Executive Officer
- 4.Questions & Answers
FINANCIAL CALENDAR 2009
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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 [email protected] 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
31