QSC AG

Investor Presentation • May 27, 2019

Analysts Conference Cologne, 27 May 2019

QSC 2020plus – THE GROWTH STRATEGY

QSC AG

Disclaimer

This presentation contains forward-looking statements based on management estimates and reflects the current views of QSC AG's ("QSC's") management board with respect to future events. These forward-looking 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 sections of our financial reports.

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.

QSC AG

Agenda

− Introduction Jürgen Hermann

− QSC 2019 Telecommunications business successfully sold Stefan A. Baustert

− QSC 2020plus The growth strategy Jürgen Hermann

− Questions & answers

3

Successful transaction accelerates growth strategy

Performance of QSC's market segments*

QSC 2019: Telecommunications business successfully sold

Plusnet sale at a glance

Key figures for sale

>	Revenues at Plusnet (2018)	€ 231.5 million
>	No. of employees at Plusnet	387
>	Services procured by QSC from Plusnet	€ 7.9 million (per annum)
>	Services procured by Plusnet from QSC	€ 6.8 million (per annum)
>	Admin. services performed by QSC for Plusnet (other operating income)	€ 7.3 million (per annum)

7

Elements of Plusnet revenues in 2018

Sale serves to implement growth strategy

Cash selling price of € 205 million (enterprise value) primarily to be used for three purposes:

Accelerated implementation of growth strategy

Potential acquisitions for targeted additions to technology portfolio

Complete repayment of debt

− Tranches still outstanding on 2014 promissory note bond € 54 million*

− Syndicated loan € 65 million*

* As of 31 December 2018

Higher EBITDA and higher free cash flow expected

For the current financial year, QSC expects (assuming closing as of 31 July 2019)

Revenues in excess of € 255 million (previously > € 350 million)

EBITDA of more than € 145 million (includes € ~110 million deconsolidation gain) (previously > € 65 million)

Free cash flow of more than € 130 million (previously: low single-digit million euro range)

Plusnet sale shapes new free cash flow forecast

>	Enterprise value (Cash and debt-free)	€ 205 million
>	Transaction, consulting and migration costs (up to)	€ –20 million
>	Tax, interest and other liabilities	€ –15 million
>	Growth financing (up to)	€ –20 million
>	Subtotal	> € 150 million
>	Factoring	€ –10 million
>	Escrow	€ –9 million

Deconsolidation gain drives up EBITDA

Sales performance in 2019

Plusnet's share of revenues for period August to December 2019 (closing assumed at 31 July 2019)

Updated forecast for 2019

QSC 2020plus: The growth strategy

QSC operates in the high-growth IT and IoT market

Sources: Experton 2017; PAC/own research; Deloitte, IoT study 2016

Strategy 2020plus: Focus on profitable growth

"Digitaliser to the SME sector"

Attractive

− Highly scalable

− Recurring

− New technologies

− New combined services

business portfolio Top innovations Effective "go-tomarket" approach

• − Strategic partners
• − Sector focus

New & experienced management team

• − Top expertise
• − Entrepreneurial approach

Future investments and M&A

2022: Revenues of € ~200 million, EBITDA >10%, positive free cash flow

QSC strategy is "up and running" and already successful

Top wins in recent weeks

Migration of entire SAP landscape to SAP HANA and SAP HANA Enterprise Cloud

Migration of all central IT systems – from SAP to digital workplace – to a multi-cloud

Operation of one of Germany's largest IoT platforms for smart energy management

Successes: high-volume contract extensions

Revenue volume of "new contract" significantly higher than volume of "old contract"

Positioning: "Digitaliser to the German SME sector"

"Digitaliser to the SME sector"

OUR MISSION

In times of increasing digitalisation, we are enabling our customers to further develop their business models and business processes with maximum flexibility and efficiently.

OUR EXPERTISE

We have longstanding technological and application experience in the fields of Cloud and Colocation, SAP and the Internet of Things.

OUR VALUE PROPOSITION

We offer the utmost end-to-end quality and security – and support our SME customers with an entrepreneurial and service-driven mindset within a partnership of equals.

Unique range of IT & IoT solutions for mid-caps

Services / provider		QSC	Other cloud and IT outsourcing, SAP and industrial IoT providers
	laaS
Cloud	Multi-cloud management
	Cloud transformation
	Application management services
SAP	Integration of IoT in SAP
	SAP cloud business (HEC)
	S/4HANA migration
	loT devices
IoT	loT operations
	Edge computing

Attractive business portfolio

Highly scalable and recurring business in 2022

More than 80% of our business is highly scalable – with recurring revenues

High IP-driven value creation secures margin

Top innovations

We bring innovation to SMEs

Specifically

• − S/4HANA
• − Edge computing Specifically
• − Multi-cloud and DevOps
• − Artificial intelligence
• − Analytics
• − Permissioned Blockchain

• − 5G and NB IoT

• New technologies (examples) New combined services (examples)

• − "Sensor meets business"
• − Digital workplace
• − Smart building technology
• − Digital store

− …

• − Digital supply chain
• − Coupling OT and IT

− …

Innovation #1 - S/4HANA migration

• − To date, only 3% of customers in Germany, Austria, and Switzerland have migrated
• − 8% intend to migrate in 2019
• − 45% plan to convert by 2021

Large and growing market!

QSC: top expertise for S/4HANA migrations

90% of SAP advisors trained Top project expertise SAP Gold Partner QSC specialist literature

Innovation #2 – edge computing

Genuinely autonomous real-time systems (e.g. Cax factories, e-mobility, 5G in industry) need decentralized data processing on the edge of the cloud

Great growth momentum has been forecast for edge computing (Goldman Sachs: € 35 billion worldwide)

QSC is currently Europe's only developer and operator of edge computing – sector focus on mechanical engineering and construction

Innovation #3 – "Sensor meets business"

Example of application "smart freezer", retail

Effective "go-to-market" approach

Clear focus on growth sectors

The three sectors account for almost 50% of the total IT services market in Germany. New technology such as AI and IoT will accelerate growth.

Manufacturing is the sector with the highest volume of IT investments. Key drivers are Industry 4.0 applications for which cloud technologies provide the foundation.

In the energy industry, smart metering and smart grids require new IT services. Furthermore, there is above-average growth in demand for IoT solutions.

Retail is particularly affected by transformation. The conversion to online shopping is largely complete; IoT is now the innovation driver.

Source: IDC, The Market for IT Services in Germany, 2017 – 2022, January 2019

Multiplication in market thanks to strong partners

Effective sales organisation

New and experienced management team

The new management: experts & entrepreneurs

Head of Cloud and IT Outsourcing

Since 2019

Since 2018

Thies Rixen, 47 Dr. Myriam Jahn, 50

Head of SAP and Innovation

Since 2019

Thorsten Raquet, 41

Head of Colocation

Since 2016

Rüdiger Hofer, 52

Head of Strategic Partner Management

Since 2019

Waldemar Gerlach, 50

Head of Finance

Since 2013

Christoph Reif, 39

36

Future investments and M&A

We are investing in our profitable growth

Goal: "Outperformer"

Strategy 2020plus: "above-market" growth

QSC: A highly attractive growth company

"Digitaliser to the SME sector"

Attractive

• − Highly scalable

• − Recurring

• − New technologies

• − New combined services

business portfolio Top innovations Effective "go-tomarket" approach

• − Strategic partners
• − Sector focus

New & experienced management team

• − Top expertise
• − Entrepreneurial approach

Future investments and M&A

2022: Revenues of € ~ 200 million, EBITDA >10%, positive free cash flow

Questions & answers

Contact

QSC AG Arne Thull Head of Investor Relations

T +49 221 669 -8724 F +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

QSC AG Mathias-Brüggen-Str. 55 50829 Cologne