Earnings Release • Nov 11, 2013
Earnings Release
Open in ViewerOpens in native device viewer
News Details
Corporate | 11 November 2013 07:30
QSC reiterates guidance for full fiscal 2013 on heels of good quarter
QSC AG / Key word(s): Quarter Results
11.11.2013 / 07:30
QSC reiterates guidance for full fiscal 2013 on heels of good quarter
– New orders total EUR 44.7 million in third quarter of 2013
– EBITDA margin reaches 17 % on revenues of EUR 113.8 million
– Strong order intake necessitates higher capital expenditures
– Free cash flow stands at EUR 6.5 million in third quarter of 2013
Cologne, November 11, 2013. During the current fiscal year, QSC has been benefiting from its evolution into an integrated ICT provider and has been growing its revenues significantly, especially in IT Outsourcing and IT Consulting business. On the other hand, revenues in conventional TC business are declining as a result of market and regulatory effects; the heightened regulation since December 1, 2012, alone, has resulted in revenue shortfalls of between EUR 7 and EUR 8 million and an EBITDA burden of nearly one million euros each quarter in 2013.
Sustained growth in ICT business
QSC generated revenues of EUR 113.8 million in the third quarter of 2013, compared to EUR 120.5 million for the same quarter the year before. After nine months, this metric aggregates to EUR 340.3 million, in contrast to EUR 353.2 million for the same period one year earlier; growth in operating business is being offset by a regulatory-induced revenue shortfall of nearly EUR 23 million. ICT business in Direct Sales with larger enterprises, in particular, has developed on a positive note during the current fiscal year, with revenues rising by EUR 15.8 million in the first nine months of 2013 to EUR 153.3 million. Outsourcing, Consulting and Networking business have benefited from the sustained high level of new orders: During the third quarter of 2013, alone, QSC won contracts totaling EUR 44.7 million.
At the beginning of these contracts, which run for a term of at least 3 to 5 years, QSC has to make non-recurring investments in connecting these new customers to its own infrastructure. For this reason, too, capital expenditures in the third quarter of 2013 rose to EUR 16.4 million, by comparison with EUR 9.8 million the year before. Moreover, responding to the sustained high level of new orders, QSC had already modernized the storage capacities at its own data centers ahead of schedule in the summer of 2013. In spite of higher investments, though, the company was able to increase free cash flow from EUR 5.9 million for the comparable quarter one year earlier to EUR 6.5 million in the third quarter of 2013; after nine months, this metric stands at EUR 18.1 million, by comparison with EUR 18.2 million the year before.
Investing in future growth
In addition to investments in tangible assets, QSC also invested in future growth during the third quarter of 2013, first and foremost in ICT professionals and innovations. The workforce has risen by 236 since September 30, 2012, to a total of 1,664 people. The presentation of the QSC-Box at the International Radio Exhibition (IFA) in Berlin in September 2013 showed the kinds of opportunities that can be opened up through the combination of IT and TC know-how. Yet these kinds of investments in future growth have hardly any impact on QSC’s strong profitability: Solely as a result of regulatory effects, though, EBITDA amounted to EUR 19.4 million in the third quarter of 2013, in contrast to EUR 20.4 million for the same quarter one year earlier, while the EBITDA margin continued to stand at 17 percent. On a 9-month comparison basis, EBITDA grew to EUR 57.4 million from EUR 56.0 million for the same period one year earlier.
Consolidated net income of EUR 15.0 million after nine months
Following the merger of INFO AG with QSC in August 2013 and the resulting decision to operate jointly under the QSC brand name in the future, it was necessary for QSC to make non-recurring write-downs on the INFO AG brand in the third quarter of 2013. Overall, depreciation expense therefore rose to EUR 13.8 million, as opposed to EUR 13.0 million in the third quarter of 2012. At EUR 5.5 million, operating profit, or EBIT, was down from the previous year’s level of EUR 7.4 million. However, after nine months, the company’s EBIT of EUR 18.4 million is up from the previous year’s level of EUR 16.4 million, as is consolidated net income: This metric stands at EUR 15.0 million, in contrast to EUR 12.4 million for the first nine months of 2012.
Given this development, QSC is reiterating the guidance it had announced in early March 2013 for the full fiscal year: The company anticipates an EBITDA margin of at least 17 percent and a free cash flow in the amount of at least EUR 24 million on revenues of at least EUR 450 million.
| In EUR million | Q3 2013 | Q3 2012 | 9M 2013 | 9M 2012 |
| Total revenues | 113.8 | 120.5 | 340.3 | 353.2 |
| Revenues, Direct Sales (ICT) | 52.4 | 49.5 | 153.3 | 137.5 |
| Revenues, Indirect Sales (ICT/TC) | 30.9 | 32.1 | 92.1 | 89.7 |
| Revenues, Resellers (TC) | 30.5 | 38.9 | 94.8 | 125.9 |
| EBITDA | 19.4 | 20.4 | 57.4 | 56.0 |
| EBIT | 5.5 | 7.4 | 18.4 | 16.4 |
| Consolidated net income | 4.7 | 7.3 | 15.0 | 12.4 |
| Earnings per share (in EUR) | 0.04 | 0.06 | 0.12 | 0.09 |
| Free cash flow | 6.5 | 5.9 | 18.1 | 18.2 |
| Capital expenditures | 16.4 | 9.8 | 34.8 | 29.4 |
| Workforce | 1,664 | 1,428 |
Notes:
The 9-month report is available for download at www.qsc.de/en/qsc-ag/investor-relations.html . This corporate news contains forward-looking statements. These forward-looking statements are based on current expectations and forecasts of future events by the management of QSC AG. Due to risks or mistaken assumptions, actual results may deviate substantially from those made in such forward-looking statements.
Queries to:
QSC AG
Arne Thull
Head of Investor Relations
Phone: +49 221 669-8724
Fax: +49 221 669-8009
E-mail: [email protected]
Internet: www.qsc.de
End of Corporate News
11.11.2013 Dissemination of a Corporate News, transmitted by DGAP – a company of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
DGAP’s Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de
| Language: | English |
| Company: | QSC AG |
| Mathias-Brüggen-Straße 55 | |
| 50829 Köln | |
| Germany | |
| Phone: | +49-221-6698-724 |
| Fax: | +49-221-6698-009 |
| E-mail: | [email protected] |
| Internet: | www.qsc.de |
| ISIN: | DE0005137004 |
| WKN: | 513700 |
| Indices: | TecDAX |
| Listed: | Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover, München, Stuttgart |
| End of News | DGAP News-Service |
| - - - |
| 238973 11.11.2013 |
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.