Corporate | 9 November 2010 08:15
telegate AG / Key word(s): Quarter Results/Forecast 09.11.2010 08:15 --------------------------------------------------------------------------- - Company confirms achievement of the full-year profit guidance in the forecasted range of EUR 23 m to EUR 27 m EUR EBITDA before non-recurring items, though in its lower end - Business sector Media with 26 percent growth of revenues - Q3/2010 shows highest operational quarterly profit of the year. Nine-months group EBITDA before non-recurring items declines. Due to non-operating items nine-months-net income almost stable compared to the previous year. Planegg-Martinsried near Munich, November 09, 2010 - Business figures of telegate AG for the first nine months 2010 develop in the trend of the yearly target up to now. The business sector Media furthermore shows a dynamic growth with a rate of growth of 26 percent. A decline in revenues of 14 percent must be recorded in the classic DA business due to the continuous market trend towards digital DA and search. As the business sector DA solutions with a high margin generates approx. 75 percent of the business volume and the new business sector Media is still established with higher expenses, group earnings before depreciation and amortization, interest and taxes (EBITDA) before non-recurring items of EUR 17.3 m after nine months are significantly lower compared to EUR 26.4 m in the previous year, though in line with the current year target. Besides, the nine-months net income after taxes of the telegate group was almost at the previous year's level due to non-operating items. Nine-months revenues of the telegate group amounted to EUR 93.7 m compared to EUR 101.0 m in the previous year. Here, it should be considered, that the group's quarterly revenues increased steadily over the course of the year and thus the decline in revenues could be increasingly limited. The telegate group generated 91 percent or EUR 85.2 m (previous year: EUR 92.2 m) of group revenues in the core market Germany. Revenues of the segment Spain in the amount of EUR 8.5 m were almost stable at previous year's level (EUR 8.8 m), in spite of a very challenging market environment. The revenues trend shows significant differences at business sector level. Accordingly, significant investments in the establishment and expansion of the Media business result in a growth of revenues of 26 percent to EUR 22.4 m compared to EUR 17.7 m in the previous year. However, the positive proceeds trend in the Media sector was overall offset by the declining development in the classic DA business - revenues of the business sector DA solutions declined by approx. 14 percent from EUR 83.3 m to EUR 71.3 m. The continuous shift of DA and search requests to the digital channels is still the reason for this development. telegate benefits from the digital channels in its new business sector Media. Profit situation: highest quarterly profit of the annual year, total profit trend still affected by different margins of the business-mix The company generated EBITDA before non-recurring items in the amount of EUR 6.2 m in the third quarter and thus the highest operational quarterly profit of the year. Nine-months-EBITDA before non-recurring items of the telegate group amount to EUR 17.3 m compared to 26.4 m in the previous year. All in all, there were no non-recurring items accrued in the annual year 2010 so far. In the previous year the non-recurring items amounted to approx. EUR -0.2 m. Sustainable investments in the expansion of the Media sales force and profit share shifts from the highly profitable DA business to the Media business with a weaker margin are reasons for the drop in profits of the telegate group. The company took countermeasures by cost optimizations and reductions respectively across the structural costs. As a result, the company saved costs in the amount of approx. EUR 2.5 m compared to the previous year period and thus partly eased the profit pressure. Group's nine-months net earnings after taxes of EUR 11.2 m and EUR 0.53 m per share respectively were only slightly below the previous year's figure of EUR 12.5 m and EUR 0.59 m per share respectively. This was due to the different non-operating items concerning the discontinued operations in Italy and France - negative items during the first nine months 2009 and positive items during the first nine months 2010. telegate group's net worth and financial situation is furthermore excellent. The equity ratio increased from 50.4 percent as of September 30, 2009 to 64.3 percent now. In particular, this trend based on the decrease of the balance sheet total from EUR 185.6 m to EUR 145.7 m with a slightly higher equity at the same time. This development is primarily attributable to the sale of the Italian and French subsidiary. Liquid assets of the telegate group free from debt amounted to EUR 57.9 m by the end of the reporting period and thus nearly reached again the previous year's level (EUR 60.1 m), also after the dividend payment in the amount of EUR 14.9 m. The company intends to distribute a part of the surplus liquidity to both main and minority shareholders shortly by means of a share repurchase program. Outlook: focus on efficiency in the DA and Media business as well as cost reductions The management board expects the main business trend - decline in the DA business with a high margin as well as dynamic growth in the Media business with a lower margin - having an unchanged influence on the company's business development and trend of profits. Against this background, the company nevertheless expects to fulfil its profit guidance delivered in the spring of this year. The guidance stated EBITDA before non-recurring items of EUR 23 m to EUR 27 m. telegate expects to be in the lower end of the guidance range - even lacking the contribution to earnings of the Italian business, which was sold in the meantime. telegate AG is progressing in the company's transformation process. Thus, it will focus more on the topics 'sales efficiency' and 'customer management and retention'. The company will continue to concentrate on operating the DA business economically. Therefore, the company will adjust its capacities according to the market development and plans in this context to merge the German Call Center Wismar with the locations Rostock and Guestrow. In addition, a program for the optimization of business processes is already being implemented currently.Business figures telegate AG, Januar-September of the corresponding fiscal year 2010 2009 +/- in % Group revenues 93.7 101.0 - 7.2 Revenues business sector DA solutions 71.3 83.3 -14.4 Revenues business sector Media 22.4 17.7 +26.4 EBITDA before possible non-recurring items 17.3 26.4 -34.5 Net income after taxes (including discontinued operations) 11.2 12.5 -10.4 Free cash flow before M&A 7.7 21.4 -64.0 Liquid assets (as of September 30) 57.9 60.1 -3.7 Number of employees (headcount as of September 30) 2,019 2,902 -30.4 All figures stated in EUR m; group figures refer to continued operationsNote: telegate AG's interim report for the first nine months of the fiscal year 2010 is available for download at: http//www.telegate.com > Investor Relations. Contact: Jörg Kiveris telegate AG Head of Public Relations Department Fraunhofer Str. 12a 82152 Planegg-Martinsried Tel.: 089/ 8954-1188 Fax: 089/ 8954-1189 E-Mail: presse@telegate.com 09.11.2010 Dissemination of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: telegate AG Fraunhofer Str. 12a 82152 Planegg-Martinsried Deutschland Phone: +49 089 - 89 54 0 Fax: +49 089 - 89 54 10 10 E-mail: info@telegate.de Internet: www.telegate.com ISIN: DE0005118806 WKN: 511880 Indices: Prime All Share Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Hamburg, München, Berlin, Düsseldorf, Hannover, Stuttgart End of Announcement DGAP News-Service ---------------------------------------------------------------------------