QSC AG

Earnings Release • Aug 12, 2009

News Details

Corporate | 12 August 2009 07:50

QSC boosts profitability sharply in second quarter of 2009

QSC AG / Half Year 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.

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QSC boosts profitability sharply in second quarter of 2009

• EBITDA advances by 34 percent to EUR 19.0 million
• Net profit totals EUR 1.1 million
• Positive free cash flow of EUR 2.6 million
• Guidance for full 2009 fiscal year expressly reiterated

Cologne, August 12, 2009. QSC AG's focus on higher-margin products and
services is paying off in today's extremely difficult economic environment.
In the second quarter of 2009, the company grew its EBITDA by 34 percent
year on year to EUR 19.0 million, with revenues rising by three percent to
EUR 103.7 million during the same period.

The company's ability to successfully grow its profitability and financial
strength can be seen, in particular, in the Products segment: In spite of a
10-percent decline in revenues from the second quarter of 2008 to EUR 22.7
million, segment EBITDA rose by 34 percent to EUR 3.9 million during the
same period. The Managed Services segment continued to be stable: At EUR
18.6 million, revenues in the second quarter of 2009 remained at the
previous year's level, as did the EBITDA of EUR 1.9 million. QSC recorded
the strongest year-on-year revenue and profitability growth in the
Wholesale/Reseller segment, where revenues rose by 10 percent to EUR 62.3
million, EBITDA by 42 percent to EUR 13.2 million.

A half-year comparison underscores QSC's higher profitability: While
revenues advanced by seven percent to EUR 211.3 million in the first half
of 2009, EBITDA soared by 50 percent to EUR 38.5 million. QSC thus
increased its EBITDA margin by five percentage points to 18 percent during
the space of a year.

Thanks to its focus on higher-margin products and services and strict cost
discipline, QSC was also able to improve its operating profit (EBIT) and
its net income in the second quarter of 2009. EBIT rose to EUR 2.3 million,
as opposed to EUR -0.8 million for the comparable quarter the year before;
during the same period, net income rose to EUR 1.1 million, as opposed to
EUR -1.5 million the year before.

Net debt to be eliminated nearly entirely by year-end 2009

In the second quarter of 2009, QSC earned a positive free cash flow of EUR
2.6 million, with this metric standing at EUR 6.6 million for the first six
months. QSC thus reduced its net debt to EUR -5.6 million, in contrast to
EUR -12.2 million at the outset of the fiscal year. The company plans to
eliminate this net indebtedness nearly entirely by year end. QSC Chief
Executive Officer Dr. Bernd Schlobohm notes: 'In spite of the economic
crisis, QSC has thus been able to significantly improve both its financial
strength and its profitability.'

Guidance expressly reiterated

Given the positive development of the first half of 2009, QSC is expressly
reiterating the guidance it had announced in February for the full 2009
fiscal year. The company thus anticipates a positive free cash flow of more
than EUR 10 million and an EBITDA of between EUR 68 and EUR 78 million.
This will go hand in hand with revenues of between EUR 420 and EUR 440
million, as well as a sustained net profit. In a market environment that is
expected to remain difficult, QSC will continue to focus on improving the
quality of its revenues, and will give higher profitability priority over
higher revenues.

In EUR million Q2 2009 Q2 2008 H1 2009 H1 2008
Revenues 103.7 100.2 211.3 197.7
- Wholesale/Reseller segment 62.3 56.6 126.6 108.3
- Products segment 22.7 25.3 47.6 53.2
- Managed Services segment 18.6 18.3 37.1 36.2
EBITDA 19.0 14.2 38.5 25.6
- Wholesale/Reseller segment 13.2 9.3 25.2 16.6
- Products segment 3.9 2.9 8.7 6.0
- Managed Services segment 1.9 2.0 4.6 3.0
EBIT 2.3 -0.8 4.7 -4.4
Net income 1.1 -1.5 2.5 -5.6
Free cash flow 2.6 -9.0 6.6 -19.2
CAPEX 12.9 19.7 24.4 48.3
Workforce 665 733 - -

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 half-year report is available for download at
http://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.
12.08.2009 Financial News transmitted by DGAP

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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
Internet: www.qsc.de
ISIN: DE0005137004
WKN: 513700
Indices: TecDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, München, Düsseldorf, Stuttgart

End of News DGAP News-Service

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