QSC AG

Earnings Release • Nov 9, 2009

News Details

Corporate | 9 November 2009 07:50

QSC AG: Focus on strengthening profitability and financial position paying off

QSC AG / Quarter Results

09.11.2009

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QSC AG: Focus on strengthening profitability and financial position paying
off

• EBITDA rises to EUR 19.2 million in third quarter of 2009
• Net income reaches EUR 2.1 million
• Positive free cash flow stands at EUR 2.6 million
• Net debts planned to be eliminated entirely by year-end 2009

Cologne, November 9, 2009. QSC AG's strategy of focusing on strengthening
its profitability and financial position in a very difficult economic
environment is paying off. This has prompted the company to correspondingly
revise its guidance for the full fiscal year: QSC now anticipates an EBITDA
at the upper end of the EUR 68- to EUR 78-million corridor that had been
announced at the outset of the year on revenues at the lower end of the EUR
420- to EUR 440-million corridor. At the same time, the company is also
raising its free cash flow forecast: An anticipated free cash flow of at
least EUR 12 million, instead of the previously announced figure of at
least EUR 10 million, will enable net debts to be eliminated entirely by
year-end. Moreover, the company continues to anticipate sustained net
income.

Business develops on positive note in third quarter of 2009

In the third quarter of 2009, QSC grew its EBITDA to EUR 19.2 million on
revenues of EUR 104.4 million, as opposed to an EBITDA of EUR 18.3 million
on revenues of EUR 103.6 million for the same quarter one year earlier; the
EBITDA margin stood at 18 percent. During the first nine months, the
company has succeeded in improving EBITDA by 31 percent to EUR 57.7 million
on a five-percent rise in revenues to EUR 315.7 million.
EBIT advanced to EUR 7.9 million during the first nine months of the
current fiscal year, as opposed to EUR -1.8 million for the corresponding
period the year before; quarterly EBIT rose to EUR 3.1 million, compared to
EUR 2.6 million for the same quarter one year earlier. At EUR 2.1 million,
QSC recorded its highest quarterly net income for the current fiscal year;
after the first nine months of 2009, QSC has already earned net income of
EUR 4.6 million. The year before, a net loss of EUR -3.5 million had still
been incurred for this period.

Sustained positive free cash flow

QSC's good operative development, generating a corresponding cash flow from
operating activities, combined with a significantly lower level of capital
expenditures are enabling the company to earn a sustained positive free
cash flow in the current fiscal year. This metric stood at EUR 2.6 million
in the third quarter of 2009, while reaching a total of EUR 9.2 million for
the first nine months. This has enabled QSC to reduce its net debts from
EUR -12.2 million at the outset of the fiscal year to EUR -3.0 million as
of September 30, 2009.
Capital expenditures were down by one half in the third quarter of 2009 to
EUR 10.3 million, as opposed to EUR 21.1 million for the same quarter one
year earlier, when the picture had been characterized by a large number of
new customers in ADSL2+ business and the resulting capital expenses for
connecting them. QSC anticipates capital expenditures of less than EUR 50
million for the full 2009 fiscal year, as opposed to EUR 91.4 million the
year before. 'Following the conclusion of the capital investment phase, we
are now successfully focusing on marketing higher-margin products and
services to enterprise customers, and are utilizing our nationwide Next
Generation Network, in particular, for this purpose,' explains QSC Chief
Executive Officer Dr. Bernd Schlobohm. 'Thanks to the expansion of our NGN
early on and our unrivaled positioning in the German telecommunications
market as a mid-size company serving mid-size companies, we have been able
to grow our profitability and financial strength from quarter to quarter.'

In EUR millions Q3 2009 Q3 2008 Q1-Q3 2009 Q1-Q3 2008
Revenues 104.4 103.6 315.7 301.3
- Wholesale/Reseller segment 62.8 60.2 189.4 168.5
- Products segment 22.8 25.1 70.4 78.3
- Managed Services segment 18.8 18.4 55.9 54.5
EBITDA 19.2 18.3 57.7 43.9
- Wholesale/Reseller segment 12.1 12.2 37.3 28.8
- Products segment 4.7 4.2 13.4 10.2
- Managed Services segment 2.5 1.9 7.1 4.9
EBIT 3.1 2.6 7.9 -1.8
Net income 2.1 2.1 4.6 -3.5
Free cash flow 2.6 -4.4 9.2 -23.6
CAPEX 10.3 21.1 34.7 69.4
Workforce 660 696 - -

Queries to:

QSC AG
Arne Thull
Investor Relations
Phone: +49 221 6698-724
Fax: +49 221 6698-009
E-mail: invest@qsc.de
Internet: www.qsc.de

Notes:
The nine-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. The
assumptions that may involve material deviations due to unforeseeable
developments include, but are not limited to, the demand for our products
and services, the competitive situation, the development, dissemination and
technical performance of DSL technology and its prices, the development and
dissemination of alternative broadband technologies and their respective
prices, changes in respect of telecommunications regulation, legislation
and adjudication, prices and timely availability of essential third-party
services and products, the timely development of additional marketable
value-added services, the ability to maintain and enlarge upon marketing
and distribution agreements and to conclude new marketing and distribution
agreements, the ability to obtain additional financing in the event that
management's planning targets are not attained, the punctual and full
payment of outstanding debts by sales partners and resellers of QSC AG, and
the availability of sufficient skilled personnel.

09.11.2009 Financial News distributed by DGAP. Media archive at www.dgap-medientreff.de and www.dgap.de

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Language: English
Company: QSC AG
Mathias-Brüggen-Straße 55
50829 Köln
Deutschland
Phone: +49 (0)221 66 98-112
Fax: +49 (0)221 66 98-009
E-mail: invest@qsc.de
Internet: www.qsc.de
ISIN: DE0005137004
WKN: 513700
Indices: TecDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, München, Düsseldorf, Stuttgart

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