QSC AG

Investor Presentation • Jan 7, 2016

19th Oddo Forum Lyon, 7–8 January 2016

THE DIGITISER OF THE GERMAN MITTELSTAND

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."

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Strong partner of the German Mittelstand

QSC is the only full-service provider for the German Mittelstand with a proprietary network as well as TÜV/ISO-certified data centres in Germany plus ICT expertise and end-to-end-quality.

Key figures at a glance

>30,000 SME customers

Revenues of > €400m in 2015

years of experience and (since 2004) TecDAX member 30

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

Proprietary nationwide All-IP-based network

~1,450 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

A full-service provider for the digital age

QSC's strategy for the digital age

QSC supports people, things and companies in being successful in the new digital world.

People e.g. Workplace from the cloud, e-mail encryption, collaboration

Things e.g. Internet of Things (gate automation, heating systems, energy solutions, sensors)

Companies Pure Enterprise Cloud (PEC) as an integration platform for standardised services

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How QSC is leading people into the digital age

Case study: FTAPI/VODAFONE

• In December 2015, Vodafone launched Secure E-Mail
• This innovation is based on technology from FTAPI, a QSC subsidiary
• The technology enables the convenient and secure transmission of encrypted e-mails and documents
• Huge market potential, as only a minority of SMEs are already using e-mail encryption tools
• White label solution of FTAPI is available to other service providers

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FTAPI already has more than 300 direct customers

How QSC is leading things into the digital age

Case study: Heating control with QSC's IoT platform SOLUCON

• Automated recording, storage, handling and transfer of measured data
• Prompt identification of atypical usage, movement profiles, invoices 2.0
• Further business cases: Fleet management, M2M communication, remote control

The centrepiece of digitisation: Pure Enterprise Cloud

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PEC: An easy way to handle digital workplaces

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• Pure Enterprise Cloud (PEC) offers virtual, dynamic workplaces
• Secure and individual data and software access from any devices
• Enterprise Workplace enables access to the entire enterprise IT

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• Low up-front investments necessary
• Quick implementation of additional workplaces

QSC itself is heading for a new era

• Pure Enterprise Cloud (PEC) will be launched in early 2016 First contract already signed / a new era in cloud-based Outsourcing will begin
• New cloud-based products gaining ground Use of FTAPI technology by Vodafone is just one example
• New leadership team complete since 1 January 2016 Felix Höger, the former CEO of Pironet NDH AG, has started as QSC's new COO
• Clear focus on higher margin revenues Shift in focus, especially in Outsourcing
• Successful implementation of the cost-cutting programme QSC is on a good way to reaching its ambitious target of reducing costs by €25m by 2017

2. Financial Update and Outlook 2015

QSC improved earnings in Q3 2015 significantly

Cost reduction programme ahead of schedule

Major actions to reduce staff

• Termination of fixed-term contracts
• Natural staff attrition
• Socially responsible staff reduction

• More than 65% already agreed

* Agreed terminations (As of 30/09/2015)

Q3 2015 with strong performance

in $\epsilon$ million	Q3 2014	Q3 2015	$\Delta$ in $\bm{\epsilon}$ m	$\Delta$ in %
Revenues	106.6	100.0	$-6.6$	$-6.2%$
Cost of revenues	80.5	72.4	$-8.1$	$-10.1%$
Gross profit	26.1	27.6	$+1.5$	$+5.7%$
Sales and marketing expenses	9.3	8.1	$-1.2$	$-12.9%$
General and admin expenses	8.2	7.6	$-0.6$	$-7.3%$
Other operating income	0.2	0.1	$-0.1$	nm
EBITDA	8.8	12.0	$+3.2$	$+36.4%$
Depreciation	12.7	12.6	$-0.1$	$-7.9%$
EBIT	(3.9)	(0.6)	$+3.3$	$+84.6%$
Financial result	(1.7)	(1.5)	$+0.2$	nm
Income tax	(0.6)	0.4	$+1.0$	nm
Net income	(6.2)	(1.7)	$+4.5$	$+72.6%$

Revenues

Q3 2015 went slightly better than expected mainly due to temporarily higher TC revenues

Earnings

Positive impact of the cost-cutting programme

Step-by-step improvement in gross margin

• In Q3 2015, QSC increased its gross margin for the third time in a row

• Gross margin has improved by 3.1 basis points since Q3 2014

• Gross margin

• * Excluding restructuring provisions

Double-digit growth in EBITDA margin

• In Q3 2015, QSC earned the highest EBITDA margin in seven quarters
• EBITDA margin now stands at 12%

• For FY 2015, QSC expects EBITDA margin >10%

• EBITDA margin

• * Excluding restructuring provisions

Telecoms: Stable B-B-B business

• TC business impacted by regulatory effect of € 2.5 million
• Stable B-B-B revenues despite stricter regulation
• B-B-C additionally burdened by fierce price competition
• Despite fierce price competition, QSC was able to stabilise the gross margin
• Telecommunications B-B-C
• Telecommunications B-B-B
• Telecommunications B-B-C & B-B-B
• Gross margin

Outsourcing: Significant increase in gross margin

• Focus on SME customers and revenues with an adequate margin
• High commitment of existing customers: TCV of € 58.8 million (Q3 2014: € 55.3 million)
• Ongoing industrialisation and virtualisation
• Reorganisation and cost-cutting programme supported increase in gross profit

Gross margin

Consulting: Strong growth in revenues and margin

• Strong demand for SAP services
• Growing demand for cloud expertise (SAP HANA)

Gross margin

Cloud: Newest segment is starting to earn gross profit

• Increased demand for cloud-based services, i.e. cloud-based telephony
• fonial will open up a new sales channel for cloud-based telephony systems in Q4 2015
• Cloud business still in the early stages

Gross margin

43% increase in free cash flow in Q3 2015

• Compared to Q3 2014, QSC managed to increase free cash flow significantly
• Compared to Q2 2015, QSC more than tripled free cash flow
• For Q4 2015, QSC expects moderate investments in Pure Enterprise Cloud

Equity ratio stands at a solid 35%

• Financing matches maturity: Long-term liabilities and equity cover 131% of long-term assets
• Strong cash position of € 70.5 million

Higher EBITDA and FCF forecast since August 2015

3. 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% Streubesitz

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

As of 31 December 2015

Financial calendar

19 January 2016 15th German Corporate Conference UniCredit/Kepler Chevreux, Frankfurt 30 March 2016 Publication of the 2015 Annual Report 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 21-23 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 invest@qsc.de www.qsc.de

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

Safe harbor statement

This presentation includes forward-looking statements as such term is defined in the U.S. Private Securities Litigation Act of 1995. These forward-looking statements are based on management's current expectations and projections of future events and are subject to risks and uncertainties. Many factors could cause actual results to vary materially from future results expressed or implied by such forward-looking statements, including, but not limited to, changes in the competitive environment, changes in the rate of development and expansion of the technical capabilities of DSL technology, changes in prices of DSL technology and market share of our competitors, changes in the rate of development and expansion of alternative broadband technologies and changes in prices of such alternative broadband technologies, changes in government regulation, legal precedents or court decisions relating, among other things, to line sharing, rent for co-location and unbundled local loops, the pricing and timely availability of leased lines, and other matters that might have an effect on our business, the timely development of value-added services, our ability to maintain and expand current marketing and distribution agreements and enter into new marketing and distribution agreements, our ability to receive additional financing if management planning targets are not met, the timely and complete payment of outstanding receivables from our distribution partners and resellers of QSC services and products, as well as the availability of sufficiently qualified employees.

A complete list of the risks, uncertainties and other factors facing us can be found in our public reports and filings with the U.S. Securities and Exchange Commission.

Disclaimer

This document has been produced by QSC AG (the "Company") and is furnished to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any other person.

No representation or warranty (express or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein and, accordingly, none of the Company or any of its parent or subsidiary undertakings or any of such person's officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.

The information contained in this document does not constitute or form a part of, and should not be construed as, an offer of securities for sale or invitation to subscribe for or purchase any securities and neither this document nor any information contained herein shall form the basis of, or be relied on in connection with, any offer of securities for sale or commitment whatsoever.

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QSC AG QSC AG Mathias-Brüggen-Str. 55 50829 Köln