Oddo Nextcap Forum 2016 Paris, 3 May 2016

THE DIGITISER OF THE GERMAN MITTELSTAND

Disclaimer

This presentation contains forward-looking statements based on management estimates and reflects the current views of QSC AG's ("QSC") management board with respect to future events. These forwardlooking statements correspond to the situation at the time this presentation was prepared. Such statements are subject to risks and uncertainties, which often fall outside the sphere of influence of QSC. These risks and uncertainties are covered in detail within the Risk Report section in our financial statements.

Although the forward-looking statements are made with great care, their correctness cannot be guaranteed. Therefore the actual results may deviate from the expected results described herein. QSC does not intend to update or adjust any forward-looking statements after the publication of the presentation.

1. BUSINESS OVERVIEW

QSC: The Digitiser of the German Mittelstand

"With decades of experience and know-how in the areas of Cloud, Consulting, Outsourcing and Telecommunications, QSC accompanies its customers securely into the digital age."

Key figures at a glance

>30,000 SME customers

Revenues of > €400m in 2015

years of experience 30

Proprietary TÜV and ISO-certified data centres on 20,000 m²

Proprietary nationwide All-IP-based network

~1,400 employees in 12 locations across Germany

Certifications ISO 27001:2005

Experton Security Leader 2016
Experton Cloud Leader 2015
- TÜV Service rated "sehr gut"
- ITIL Service Operation

Competitive advantages at a glance

1 30,000 satisifed business customers
2 Respected partner at eye level with the SME sector
3 Real end-to-end quality

QSC is the only SME full-service provider to offer proprietary TÜV- and ISO-certified data centres in Germany, proprietary Cloud/ICT solutions and a proprietary voicedata network.

End-to-end quality!

A full-service provider for the digital age

QSC portfolio covers the key digital technologies

Excellent position in the competitive environment

Digital solutions already in use: Fressnapf & Tchibo

Omni-channel challenge (integration of stationary trade and e-commerce)

Digital solutions already in use: URBANA

PEC: Service portfolio through all QSC disciplines

Customer's view: Modular services

30 550 >90% 70-80% DAX enterprises Large enterprises IT operations

Providers Number of German

companies according to size categories

Pure Enterprise Cloud (PEC): Target market addressed

Degree of use external

Global Players

PEC: Share of wallet in the target market

Digital, highly efficient business model

2. Financial development in 2015

QSC surpassed its ambitious targets

Targets	Results for 2015
Enhanced profitability	Significant rise in earnings despite revenue decline
Cost savings of at least $\epsilon$ 10 million	Cost savings of $\epsilon$ 13.6 million
Staff cuts of 350 by the end of 2016	Some 70% of target already achieved
Revenues $\geq \epsilon$ 400 million	Revenues of €402.4 million
EBITDA > $\epsilon$ 40 million / > $\epsilon$ 42 million	EBITDA of €42.2 million
Free cash flow $\geq \epsilon$ 0 million / $\epsilon$ > 5 million	Free cash flow of $\epsilon$ 7.1 million

Significant rise in profitability

Significant rise in earnings despite revenue decline

in $\epsilon$ million	2014	2015	Δ	$\Delta$ in %
Revenues	431.4	402.4	$-29.0$	$-6.7%$
Cost of revenues	327.1	292.3	$-34.8$	$-10.6%$
Gross profit	104.4	110.1	$+5.7$	$+5.4%$
Sales and marketing expenses	37.8	34.9	$-2.9$	$-7.7%$
General and admin expenses	32.3	32.1	$-0.2$	$-0.6%$
Other operating income	0.8	(1.0)	$-1.8$	nm
EBITDA	35.0	42.2	$+7.2$	$+20.6%$
Depreciation	69.0	53.3	$-15.7$	$-22.8%$
EBIT	(34.0)	(11.2)	$+22.8$	$+67.1%$
Financial result	(6.1)	(6.0)	$+0.1$	$+1.6%$
Income tax	6.2	1.8	$-4.4$	nm
Net income	(33.9)	(15.4)	$+18.5$	$+54.6%$

Revenues

Two-track development: Growth in the Cloud and Consulting segments; decreases in TC and Outsourcing business

Earnings

Cost-cutting programme impacting positively

Staff reductions faster than planned

Main measures

Termination of fixed-term contracts
Natural staff attrition
Socially responsible staff reduction
~70% of planned volume has already been achieved

Improved EBITDA margin

Successes in cost-cutting contribute to an increase in EBITDA
Focus on business fields with higher margins

EBITDA margin

Cloud: Revenues virtually doubled

Cloud business still in its early stages
Growing demand for Cloud-based services such as Cloud-based telephony
Scalability of the business model enables significantly improved gross profits
The Cloud segment has been generating positive gross profits since Q3 2015

Gross margin

Consulting: Growth in revenues and earnings

High demand for SAP consulting
Growing demand for Cloud expertise (SAP HANA)
Higher share of external service providers (targeted increase in SAP employees planned)
Microsoft
SAP
Microsoft and SAP
Gross margin

Outsourcing: Marked rise in gross margin

Focus on SME customers and strong margin revenues
Existing customers are loyal to QSC: Order intake increases to € 223.2 million (2014: € 177.4 million)
Ongoing industrialisation and virtualisation
Increase in gross profit is based on reorganisation and cost-cutting programme

Gross margin

Telecoms: Stable revenues with business customers

Stricter regulation is burdening the TC business
Business with resellers additionally impaired by fierce price competition
Despite stricter regulation, revenues with business customers remain stable
Improved revenues mix leads to higher gross margin

TC revenues with resellers

TC revenues with business customers
TC revenues (total)
Gross margin

Moderate CAPEX in 2015

Focus

Infrastructure
Development of Pure Enterprise Cloud
Customer projects

Share of CAPEX in revenues as a percentage

Significantly improved free cash flow

FCF of € 7.1 million exceeds raised forecast of € 5 million
Positive FCF enables QSC to pay out a dividend for 2015
Management Board proposes a dividend of 3 cents per share

Equity ratio at a solid 35%

Shareholders' equity and longterm liabilities cover over 100% of long-term assets with matching maturities
High cash and cash equivalents of € 74.0 million

3. Financial outlook 2016

2016: The first year of the Pure Enterprise Cloud

In the current year, QSC is concentrating on
Developing the Cloud business
Marketing the Pure Enterprise Cloud
Completing the cost-cutting programme
For the current year QSC is planning
Revenues of € 380 390 million
EBITDA of € 34 38 million
A positive free cash flow

QSC hires further Cloud experts

Two-track development in 2016

Hiring of Cloud experts for sales and operation of the Pure Enterprise Cloud
Necessary staff custs in order to achieve the target of 1,350 employees by the end of 2016
Staff reorganisation leads to one-off costs in the mid single-digit million range

Staff reorganisation impacting EBITDA 2016

in $\epsilon$ million

2015 revenues (basis)	405.5*
2016 revenue expectation	380 — 390
2016 revenue decline	$-25.5$ -------- -15.5
2016 contribution margin loss (~50%)	$-12.8$ $ -7.8$

2015 EBITDA (basis)	42.2
2016 contribution margin loss	$-12.8$ $ -7.8$
$= 2016$ EBITDA (basis)	$29.4 \longrightarrow 34.4$
+ 2016 savings	$+8-9$
- Staff reorganisation / Pure Enterprise Cloud	- 4-5
$= 2016$ EBITDA range	$34 \rightarrow$ 38

QSC AG

Rising Cloud and Consulting revenues in 2016

	Drivers in 2016	Revenue development in 2016
Cloud	Launching the Pure Enterprise Cloud
Consulting	SAP HANA project
Outsourcing	Starting the migration to the Pure Enterprise Cloud; no new customers in 1:1 outsourcing
TC for business customers	Growing demand for All-IP solutions
TC for resellers	Fierce price competition

4. Appendix

Stable shareholder structure

Founders never sold a single share since the IPO in 2000

12.55% Gerd Eickers¹ 12.50% Dr. Bernd Schlobohm² 74.95% Free float

¹ Founder and Member of the Supervisory Board
² Founder and Chairman of the Supervisory Board

As of 30 April 2016

Financial calendar

9 May 2016 Publication of Quarterly Report I/2016 25 May 2016 Annual Shareholders Meeting 8 August 2016 Publication of Quarterly Report II/2016 1 September 2016 TMT Conference, Commerzbank, Frankfurt 8 September 2016 German Technology Seminar Bankhaus Lampe, Zurich 22 September 2016 5th German Corporate Conference Berenberg/Goldman Sachs, Munich

14 November 2016 Publication of Quarterly Report III/2016

Contact

QSC AG Arne Thull Head of Investor Relations

T +49 221 669 -8724 M +49 221 669 -8009 [email protected] www.qsc.de

Twitter.com/QSCIRde Twitter.com/QSCIRen blog.qsc.de xing.com/companies/QSC AG slideshare.net/QSCAG

QSC AG QSC AG Mathias-Brueggen-Str. 55 50829 Cologne

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