Corporate | 5 May 2011 08:15


Quarterly figures of telegate AG: continued strong revenues dynamics in the business sector Media


telegate AG / Key word(s): Quarter Results/Interim Report

05.05.2011 / 08:15

– Transformation is progressing: share of Media in group revenues increased to 30 percent

– EBITDA before non-recurring items of EUR 3.8 m within profit guidance for the full year 2011, however, significantly below the previous year's level.


Planegg-Martinsried near Munich, May 05, 2011 – The telegate group made good progress with the transformation of its business model in the first quarter 2011. Revenues of the business sector Media increased significantly by 32 percent from EUR 6.5 m to EUR 8.6 m compared to the same period of the previous year. This is a contribution of 30 percent to total group revenues (share in the first quarter of the previous year: 21 percent; share in the fiscal year 2010: 25 percent). Group revenues in the amount of EUR 28.3 m in the first quarter 2011 were approx. 7 percent below the previous year's value of EUR 30.4 m. Here, revenues in the segment Germany/Austria in the amount of EUR 26.0 m and in the segment Spain in the amount EUR 2.3 m contributed to this trend.

The overall declining revenue proceeds are still caused by the trend in demand in the classic DA market. Thus, revenues of the business sector DA solutions amounted to EUR 19.7 m in the first quarter 2011 compared to EUR 23.9 m in the same period of the previous year. This significant decline in revenues was not compensated yet by the strong growth of revenues in the business sector Media in the reporting quarter.

Profit situation: affected by margin differences of the two business sectors

A dynamic growth of the advertising sales business resulted in a improved contribution margin of the business sector Media. However, this was not sufficient to compensate the declining contribution margin of the DA business with a stronger margin. Thus, group EBITDA before non-recurring items amounted to a total of EUR 3.8 m and was below the previous year's value of EUR 5.4 m. At segment level, the segment Germany and the segment Spain contributed to this trend with EUR 3.7 m and EUR 0.1 m respectively. Non-recurring items in the amount of EUR 0.2 m in the first quarter 2011 primarily concerned non-recurring expenses for capacity adjustments of Call Centers in Spain. There were no non-recurring items in the first quarter 2010.

Earnings after taxes amounted to EUR 1.4 m in the reporting period compared to EUR 1.7 m in the previous year. Accordingly, this results in a profit of EUR 0.07 per share compared to EUR 0.08 per share in the same period of the previous year. The lower deviation of net earnings compared to the operating profit trend results from lower amortizations and depreciations as well as a reduced tax burden. This is due to lower income taxes and income of deferred taxes.

Overall, the balance sheet quality of telegate AG is also very solid after the first 3 months of the annual year. Thus, the equity ratio of the company, which is free from debt, amounts to 60.5 percent compared to 58.7 percent by the end of the previous annual year. Liquid assets and short-term deposit investments decreased in the first quarter 2011 to EUR 47.4 m due to a share repurchase program performed in the fourth quarter 2010 compared to EUR 60.5 m by the fixed day of the same period of the previous year. telegate generated a slightly negative free cash flow (before M&A and short-term deposit investment) in the amount of EUR -1.6 m in the first quarter 2011. Usually, the lowest liquid assets are generated in this quarter because of seasonal factors. This ratio amounted to EUR 0.0 m in the first quarter 2010.

Outlook: focus on sales efficiency and existing customer management

The business development of the telegate group presumably will be again affected by a declining trend of the highly profitable classic DA business and a significant dynamic organic growth of the Media business with lower margins in the annual year 2011. Based on the financial figures of the first quarter, the company's management still expects to generate an EBITDA before non-recurring items in the full year within the margin of EUR 13 m to EUR 18 m forecasted at the end of March compared to approx. EUR 23 m in the previous year. The company expects a stabilization of the profit trend for the annual year 2012 – the first time after 4 declining annual years.

Any income from payments by Deutsche Telekom AG from the company's data cost reclamation claims are not taken into consideration in this scenario. The Higher Regional Court Duesseldorf adjudged Deutsche Telekom AG in two actions of datagate GmbH and telegate MEDIA AG to repay approx. EUR 45 m including interest. The judgment is not final yet. Pronouncement of a judgment on telegate AG's data costs reclamation claim of EUR 52 m plus interest is scheduled for May 18, 2011.

The company will primarily work in the operational sector on increasing its advertising sales efficiency and generating higher margins here. In particular, this shall be achieved by an optimization of sales processes, an expanded product portfolio and an improved existing customer management. Furthermore, structural potentials for cost reduction shall be identified and realized unchanged.


Business figures of telegate AG,
January – March of the corresponding year
2011
2010

+/- in %

Group revenues
28.3
30.4
–   6.9

Revenues business sector DA solutions
19.7
23.9
– 17.5

Revenues business sector Media
8.6
6.5
+32.0

EBITDA before non-recurring items
3.8
5.4
– 29.5

Annual net income after taxes of continuing operations
1.4
1.7
– 17.4

Free cash flow before M&A and
short-term deposit investment
-1.6
0.0
—

Liquid assets + short-term deposit investments
(by March 31)
47.4
60.5
– 21.7

Number of employees (headcount by March 31)
1,847
2,801
– 34.1


All figures in EUR m. Group figures refer to continued operations.
Number of employees 2010 including the Italian subsidiary

Note

The interim report of telegate AG on the first quarter of the annual year 2011 is available for download from: 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



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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
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover, München, Stuttgart
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123017  05.05.2011