QSC AG

Earnings Release • Mar 29, 2007

News Details

Corporate | 29 March 2007 07:33

QSC AG: QSC focuses on high-margin growth and plans significantly higher profits

QSC AG / Final Results

Release of a Corporate-announcement, transmitted by DGAP - a company of
EquityStory AG.
The issuer is solely responsible for the content of this announcement.

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QSC focuses on high-margin growth and plans significantly higher profits

Cologne, March 29, 2007. Cologne-based QSC AG today presented its 2006
consolidated financial statements. During the past fiscal year, the Company
grew its revenues by 35 percent to € 262.5 million, as opposed to € 194.4
million in 2005. With revenues surging by 115 percent to € 65.4 million,
the Company recorded its strongest growth in the Wholesale/Resellers
segment, especially in the wholesale business with strong branded marketing
partners like HanseNet and freenet. The growth dynamics in this segment
became particularly transparent in a sequential quarter-to-quarter
comparison: Revenues advanced from € 7.6 million in the first quarter of
2006 to € 28.9 million in the fourth quarter of that year, whereupon the
growth in the fourth quarter was further accelerated by one-time effects in
the wholesale business as well as seasonal effects in the reseller business
with voice carriers. 'We focused on expanding our wholesale business in
2006, and have laid the foundation for strong growth in the subsequent
years', notes QSC Chief Executive Officer Dr. Bernd Schlobohm. Particularly
due to strong growth in the wholesale business, QSC’s revenues in the
fourth quarter of 2006 increased by 56 percent to € 83.1 million, as
opposed to € 53.1 million for the same period the year before.

Since revenues were also up significantly in the other two strategic,
high-margin segments of Large Accounts and Business Customers, QSC
succeeded in disproportionately improving its results for the fourth
quarter of 2006 as well as for the entire fiscal year 2006: In 2006, EBITDA
nearly quadrupled to € 21.2 million, as opposed to € 5.8 million the year
before. QSC’s net loss amounted to € -5.3 million, as opposed to € -18.2
million in 2005, and was thus even better than the € -6.7 million loss that
was announced in the release of the preliminary results on February 28,
2007. In the fourth quarter of 2006, the very positive development of the
operating business led to an EBITDA increase to € 9.5 million, as opposed
to € 0.8 million the same quarter a year ago, as well as the first-time
generation of a net income of € 2.8 million as opposed to € -4.4 million.

In the current fiscal year, QSC expects to grow its profitability
significantly and will consequently continue its high-margin growth. The
Company confirms its guidance for 2007, first published on February 28: QSC
is planning revenues of more than € 350 million, an EBITDA of between € 50
million and € 60 million, as well as a net profit between € 15 million and
€ 25 million.

The expansion of the DSL network to nearly 2,000 central offices, which
will be concluded by year-end 2007, is already fully financed and will
further strengthen the company’s competitive position in its three
strategic segments; at the end of this network expansion program QSC will
be able to directly connect some 50 percent of all German households and
some 70 percent of all German VPN locations to its network: 'With this
larger network, QSC will be able to reach even more potential customers,
enhance its attractiveness as a partner and simultaneously improve its cost
structure,' explains Dr. Schlobohm. Overall, through the network expansion
QSC expects a significant increase in the order win rate from large
accounts, as it will then be able to directly connect more locations and
require fewer connections from third-parties. Dr. Schlobohm: 'This network
expansion will open up even better growth opportunities for QSC.'

The complete annual report is available under
http://www.qsc.de/en/investor-relations.html.

Queries to:
QSC AG
Arne Thull
Investor Relations
Fon: +49(0)221-6698-724
Fax: +49(0)221-6698-009
E-mail: invest@qsc.de

Notes:
This corporate news contains forward-looking statements pursuant to the US
'Private Securities Litigation Act' of 1995. 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.

DGAP 29.03.2007

Language: English
Issuer: 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
www: www.qsc.de
ISIN: DE0005137004
WKN: 513700
Indices: TecDAX
Listed: Geregelter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin-Bremen, Hannover, Düsseldorf, München, Stuttgart

End of News DGAP News-Service

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