New Work SE

Earnings Release • May 22, 2007

News Details

Corporate | 22 May 2007 09:23

OPEN Business Club AG off to good start in first quarter results for 2007

OPEN Business Club AG / Quarter Results

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

---

OPEN Business Club AG off to good start in first quarter results for 2007

• Number of registered members increased in Q1 2007 by 26 percent over
  previous quarter Q4 2006 to approximately 2.13 million, including
  acquisition of eConozco

• Q1 2007 revenues of almost 3.93 million euros – 148 percent increase
  over previous year Q1 2006

• Q1 2007 EBITDA of approximately 529,000 euros – 962,000 euros increase
  over previous year

• Testing phase for 'Marketplace' launched on schedule

Hamburg, Germany, May 22, 2007 – OPEN Business Club AG (ISIN: DE000XNG8888)
reports financial results for the first quarter of the 2007 financial year.
At the reporting date March 31, 2007, the number of registered members of
the company totaled 2.13 million – including members of its subsidiary
eConozco. This represents a growth of approximately 26 percent since
December 31, 2006. In mid-April, OPEN Business Club AG announced the
milestone when it exceeded the 2 million registered members mark. Its
subscription-based business model enabled the Company to generate revenues
of about 3.93 million euros in the first quarter of the current financial
year, compared to approximately 1.59 million euros in the same quarter for
the previous year. This represents an increase of about 148 percent. In the
past quarter, OPEN Business Club AG also continued its course of increased
profitability, generating an EBITDA of approximately 529,000 euros –
including non-recurring charges of approximately 221,000 euros which
resulted from the IPO at the beginning of December 2006 and which are
reflected in the first quarter figures. The consolidated EBT including
non-recurring charges amounted to approximately 467,000 euros. The number
of employees increased in the reporting period to a total of 87 employees
(full-time equivalent). The integration of 'Google Maps' in the first
quarter marked a further expansion of the platform’s popular
business-related functionalities. Meanwhile, the XING 'Marketplace' testing
phase was launched on schedule several days ago, enabling members to post
offers for other members.

In Q1 2007, OPEN Business Club AG increased its membership base, including
the registered members of its subsidiary eConozco by 25.6 percent to
approximately 2.13 million – representing 432,912 new members over the
previous quarter, Q4 2006. In particular, the acquisition of eConozco, one
of the leading Spanish networks, had a positive impact on the development
of the membership base. At the reporting date March 31, 2007, the organic
quarterly growth rate of the platform was 16.6 percent, resulting in a
total of approximately 1.97 million registered members. As of the end of
March, a total of approximately 258,000 members were registered as paying
Premium Members. This constitutes an increase of over 37,500 members
compared to previous quarter and an overall ratio of paying members
worldwide of 12.1 percent. Although the Company’s overall payer ratio
declined in comparison to the last quarter, the apparent reduction comes
from the newly acquired members registered on eConozco who are currently
still non-paying members. When considering solely those members registered
on the XING platform, the ratio of paying members remained constant quarter
on quarter at 13.1 percent.

Once again, the increase in Premium Memberships is also reflected in
revenues: In the first quarter 2007, OPEN Business Club AG generated
revenues from services totaling approximately 3.93 million euros. This
represents a growth of 147.6 percent compared to the same period in the
previous financial year, and a growth of 9.6 percent compared to the
previous quarter, Q4 2006.

As the renewed increase in EBITDA indicates, the Company remains on a
profitable course of growth. The key financial indicator EBITDA increased
before non-recurring charges* to approximately 750,000 euros in Q1 2007.
The EBITDA margin before any non-recurring charge* thereby amounted to 19.1
percent in the first quarter. Non-recurring charge totaling approximately
221,000 euros, which resulted from the IPO at the end of December 2006,
were reflected in the financial figures for Q1 2007. After tax, the Company
generated a net profit of approximately 467,000 euros.

Cash flow from operating activities amounted to approximately 305,000
euros, lying at the same level as the previous year. This can be attributed
to a non-recurring charge resulting from the IPO. Cash flow was reduced
mainly by the outflow of cash resources due to accruals amounting to
approximately 1.87 million euros. The reversal of accruals resulted
predominantly from payments made in the first quarter of 2007 for costs
related to the IPO.

The number of employees increased during the reporting period to a total of
87. Key functional roles were filled and approximately 45 percent of all
recruitments planned for 2007 were realized in the first quarter of the
current financial year.

Lars Hinrichs, Founder and CEO, is optimistic about the further course of
operations in the 2007 financial year: 'We have grown according to plan in
the first quarter of the current financial year, as well as successfully
completing the takeover of eConozco, one of the leading Spanish networks.
Significant progress has also been made in the continued development of the
platform’s functionalities since the beginning of the year. Intensive
efforts have culminated in the punctual launch of the testing phase for
'Marketplace' – a product which offers our members varied opportunities for
added value. This will help boost viral growth of the network in the long
term and contribute above all to increasing the ratio of paying members.
The next strategic steps include the official launch of 'Marketplace' and
our entry on to the US market, which we are planning by the end of the
current financial year.'

Key Financial Figures

                                           Q1 2007   Q1 2006   Q4 2006

in €’000 €’000 €’000
Total revenues 3,926 1,586 3,584
Non-recurring charges resulting from IPO in
Q1 2007 221 0 2,462
EBITDA incl. non-recurring charge 529 Negative -1,707
EBITDA margin before non-recurring charge* 19.1% -27.3% 21.1%
Profit/Loss 467 -459 -1,885

Important notice:

Cautionary note regarding pro forma financial results and forward-looking
statements

This press release notice contains preliminary results, pro forma-results
and forward-looking statements concerning OPEN Business Club AG, its
subsidiaries and affiliated companies as well as economic and political
conditions that could influence the business development of OPEN Business
Club AG. While OPEN Business Club AG believes that its pro forma financial
results marked with an * are reflective of its recurrent trends and the
on-going status of its business, there can be no assurance that its pro
forma results will accurately reflect these trends and status and
therefore, its investors are urged not to rely solely upon the pro forma
results when making their investing decision and the pro forma results
should always be reviewed together with its actual financial results.

Forward-looking statements are based on the current views, expectations and
assumptions of the management of OPEN Business Club AG and involve known
and unknown risks and uncertainties that could cause actual results,
performance or events to differ materially from those expressed or implied
in such statements. OPEN Business Club AG therefore does not assume any
responsibility for such risks, and makes no guarantee as to the accuracy
and completeness of the assumptions and estimates upon which the
forward-looking statements are based, nor does the Company or its bodies
ensure the correctness of the statements contained in this press release.

About XING:

XING makes your professional network an active part of your life. Far more
than a directory of business contacts, XING enables its members to discover
professional people, opportunities and privileges through its unique
discovery capability and advanced contact management tools.

With the successful IPO of XING as the first Web 2.0 company to go public,
OPEN Business Club AG has had a long-term impact on the social networking
trend amongst professionals. By focusing on the target group 'business
people worldwide', the company is able to offer tailored features, thereby
making networking and contact management simpler. Besides Headquarters in
Hamburg, OPEN Business Club AG is also represented with offices in Beijing
and Zurich.

XING. Powering Relationships.

Contact:

Daniela Hinrichs
VP Corporate Communications
Gänsemarkt 43
20354 Hamburg
Germany
Tel. +49 40 419131-19
Fax +49 40 419131-11
daniela.hinrichs@xing.com

DGAP 22.05.2007

Language: English
Issuer: OPEN Business Club AG
Gänsemarkt 43
20354 Hamburg Deutschland
Phone: +49 (0)40 419 131-10
Fax: +49 (0)40 419 131-11
E-mail: investor-relations@xing.com
www: www.xing.com
ISIN: DE000XNG8888
WKN: XNG888
Indices:
Listed: Amtlicher Markt in Frankfurt (Prime Standard); Freiverkehr in
Berlin-Bremen, Düsseldorf, München, Stuttgart

End of News DGAP News-Service

---