QSC AG

Earnings Release • Mar 3, 2010

News Details

Corporate | 3 March 2010 07:50

QSC significantly improves financial position and profitability in 2009

QSC AG / Preliminary Results

03.03.2010 07:50

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

---

QSC significantly improves financial position and profitability in 2009

Preliminary results for 2009
- Free cash flow totals EUR 12.9 million
- Net debts entirely eliminated
- EBITDA advances to EUR 76.9 million
- EBITDA margin improves to 18 percent

Outlook for 2010
- Free cash flow of more than EUR 22 million
- Further rise in revenues, EBITDA and net income

Cologne, March 3, 2010. QSC's strategy of focusing on strengthening its
financial position and profitability in view of the extremely difficult
environment during the past fiscal year has paid off: The company was able
to improve all key figures and eliminate its net debts entirely with a
positive free cash flow of EUR 12.9 million.

Higher profitability

Preliminary results show that QSC increased its revenues to EUR 420.5
million in fiscal year 2009, as opposed to EUR 413.3 million the year
before. Given the economic and financial crisis, the company focused on
lines of business that offer a sufficiently high contribution margin, while
taking a cautious attitude toward markets that are characterized by price
competition.
This focus on profitable growth and strict cost discipline led to
significantly improved results in 2009 according to preliminary results.
EBITDA rose by EUR 9.6 million to EUR 76.9 million, while revenues were up
by EUR 7.2 million during the same period. In this connection, QSC
increased its EBITDA in all segments. Overall, the company was able to
improve its EBITDA margin to 18 percent for the past fiscal year, as
opposed to 16 percent in 2008.
At EUR 66.7 million, as opposed to EUR 60.6 million the year before,
depreciation expense reached its high water mark in 2009. Nevertheless QSC
also succeeded in further improving its EBIT to EUR 9.7 million during the
past fiscal year, as opposed to EUR 6.1 million in 2008. Net income rose to
EUR 5.5 million, as opposed to EUR 0.8 million one year earlier.

Capital expenditures down by more than half

As planned, following the conclusion of the network expansion project, QSC
reduced its capital expenditures to EUR 42.2 million in fiscal year 2009,
as opposed to EUR 91.4 million the year before. Merely EUR 10.0 million was
attributable to ongoing replacement investments in QSC's nationwide network
as well as evolving its nationwide Next Generation Network (NGN).

The bottom line: QSC is debt free

The good development of QSC's operations, which generated a corresponding
level of cash from operating activities, as well as the lower level of
capital expenditures, enabled the company to earn a sustained positive free
cash flow of EUR 12.9 million in 2009; the year before, there had still
been a negative free cash flow of EUR -32.3 million. This enabled QSC to
entirely eliminate its net debts by year-end 2009, which had stood at EUR
-12.2 million at the outset of the year, and to record net liquidity in the
amount of EUR 0.7 million. In this connection, liquid assets totaling EUR
41.3 million were offset by interest-bearing payables and liabilities in
the amount of only EUR 40.6 million; QSC had reduced this figure by EUR
20.8 million during 2009.

Financial position and profitability to see further growth in 2010

Given the to some extent weak state of the market, in fiscal year 2010 QSC
is sustaining its strategy of focusing on lines of business with
sufficiently high contribution margins, which involves further
strengthening its financial position and profitability. The company is
planning on improving free cash flow to more than EUR 22 million, as
opposed to EUR 12.9 million in 2009. QSC additionally anticipates a further
rise in revenues, EBITDA and net income.
QSC Chief Executive Officer, Dr. Bernd Schlobohm, explains: 'In 2010, QSC
will continue its evolution from a network operator to a solutions
provider. In doing so, we will intentionally be foregoing revenues with
low-margin standard products, preferring instead to concentrate on
broadening our unrivaled positioning as a mid-size company serving mid-size
companies in the telco market.'

In EUR millions 2009 2008
Revenues 420.5 413.3
- Managed Services segment 74.3 73.3
- Products segment 92.1 103.8
- Wholesale/Reseller segment 254.2 236.2
EBITDA 76.9 67.3
- Managed Services segment 12.1 8.1
- Products segment 19.4 15.2
- Wholesale/Reseller segment 45.4 44.0
EBIT 9.7 6.1
Net income +5.5 +0.8
Capital expenditures 42.2 91.4
Liquid assets* 41.3 49.2
Net liquidity* +0.7 -12.2
Free cash flow +12.9 -32.3

*As of December 31

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 annual report will be available for download at
www.qsc.de/en/qsc-ag/investor-relations.html at March 31, 2010. 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.

03.03.2010 Ad hoc announcement, Financial News and Media Release distributed by DGAP.
Media archive at www.dgap-medientreff.de and www.dgap.de

---

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

End of News DGAP News-Service

---