Corporate | 8 March 2012 08:00


Fiscal year 2011 of telegate AG: annual profit guidance achieved – dividend proposal of EUR 0.35 per share


telegate AG / Key word(s): Final Results/Dividend

08.03.2012 / 08:00

– Business sector Media with a revenues increase of approx. 19 percent compared to the previous year – business sector now contributes approx. one third to group revenues
– Group EBITDA before non-recurring items of EUR 14.7 m approx. one third below
the previous year, however, within the forecasted margin of EUR 13 m to EUR 18 m
– Dividend proposal of EUR 0.35 per individual share certificate by the Management Board
and Supervisory Board
– Profit guidance for 2012: EBITDA before non-recurring items of EUR 10 m to EUR 12 m.

Planegg-Martinsried near Munich, March 08, 2012 – telegate AG's business development 2011 was still affected by the transformation of the business model from a telephone DA service provider to an information and Internet service specialist. This transformation process resulted in contrary trends in the two business sectors.

The business sector Media, which generates revenues with local online advertising, achieved revenues in the amount of EUR 35.1 m. This corresponds to an increase of approx. 19 percent compared to the previous year. Thus, the advertising sales business now contributes approx. one third to group revenues. This share, which is an indicator for the progress regarding the company transformation, amounted to 24 percent at the end of the fiscal year 2010. The business development of the classic DA business showed a contrary trend, as expected, due to the unchanged market trend of the users towards digital information channels. Revenues of the business sector DA solutions declined from EUR 93.7 m in 2010 to EUR 74.9 m now. The declining volume trend of the DA business was partly compensated by higher revenues per call as well as cost optimizations.

Overall, the effects on revenues of the two business sectors resulted in group revenues in the amount of EUR 110.0 m compared to EUR 123.1 m in the previous year. At segment level, EUR 101.3 m and approx. 92 percent respectively of group revenues were attributable to Germany/Austria and EUR 8.7 m and approx. 8 percent of group revenues to the segment Spain.

Profit situation: net annual results decline only moderately

telegate AG has optimized its cost items by a variety of measures, in order to limit the effects of the company transformation on the profit. Thus, savings on the fixed cost of production and administrative expenses, in particular, contributed to a partly compensation of the significant decline in revenues. The cost optimizations also helped that the company realized its main profit target: the most important ratio for the development of the operating business, the group earnings before interest, taxes, depreciation and amortization (EBITDA) before non-recurring items, decreased due to the decline in earnings in the DA business with stronger revenues and a stronger margin from EUR 22.3 m to EUR 14.7 m. However, this result was still within the margin of EUR 13 m to EUR 18 m, forecasted at the beginning of the year. Both the segment Germany/Austria and the segment Spain made positive contributions to earnings.

Negative non-recurring items amounted to EUR 3.6 m in the reporting period compared to EUR 1.1 m in the previous year and particularly include expenses for capacity adjustments in the DA business in Germany and Spain. The business sector Media reduced its contribution to losses at full cost from EUR -17.2 m to EUR -14.6 m in the previous annual year. However, the company expected significantly more progress here.

Annual results after taxes from continuing operations decreased from EUR 4.4 m and EUR 0.21 per share respectively to EUR 3.4 m and EUR 0.18 per share respectively. The decline in profits was considerably lower than at the operative profit level. The reason for this was the extraordinary impairment of the customer base of the business sector Media in the amount of EUR 8.6 m in the previous year.

According to the profit trend the company's Management Board and Supervisory Board propose to this year's annual general meeting to distribute a reduced dividend to the shareholders of EUR 0.35 per individual share certificate. With respect to the current share price level, this corresponds to a dividend yield above-average of approx. 6 percent.

Net worth and financial position of telegate AG, free from debt, is still very solid. The company is capitalized to a high extent with an equity ratio amounts to 54 percent (previous year: 53 percent) and liquid assets in the amount of EUR 39.0 m (previous year: EUR 48.8 m). Thus the company can comfortably refinance on its own account any demand for funds and the transformation of the business model at any time.

Outlook: profit guidance 2012 slightly lower than in the previous year,
focus is still on improved customer loyalty and efficiency in the Media business

The operative focus of telegate AG in the current fiscal year 2012 will be on the topics 'realignment of the brand strategy' as well as 'increase of customer satisfaction and thus customer loyalty' in the Media business. The company aims to increase the contribution margin in the Media business on a sustainable basis thanks to a greater focus on existing customer support and reduction of the churn rate. Together with an additional reduction of structural costs in the entire company, profitability of the young business sector shall be improved significantly.

However, improved profitability of the advertising sales business will presumably be not sufficient yet to compensate the revenues reductions in the highly-profitable classic DA business. Correspondingly, the company delivers a profit guidance for the full fiscal year 2012 – based on EBITDA before non-recurring items – of EUR 10 m to EUR 12 m. Furthermore, the company expects to generate a positive free cash flow in both 2012 and subsequent years.


Business figures telegate AG (fiscal year)
2011
2010
+/- in percent

Group revenues
110.0
123.1
-10.6

Revenues business sector DA solutions
74.9
93.7
-20.0

Revenues business sector Media
35.1
29.5
+19.2

EBITDA before non-recurring items
(operating earnings)

14.7

22.3

-34.0

Net income after taxes from continuing operations
3.4
4.4
-21.6

Free cash flow before M&A
-1.4
13.1
—

Liquid assets (as of December 31)
39.0
48.8
-19.9

Number of employees
(headcount as of December 31)

1,507

1,951

-22.8

All figures stated in m of EUR; group figures refer to continuing operations



Note:
telegate AG's annual report for the annual year 2011 will be available for download by March 08, 2012 at www.telegate.com > Investor Relations. Furthermore, a video interview in English of approx. 4 minutes with Elio Schiavo, CEO of telegate AG, is also available here.



Contact:
Jörg Kiveris
telegate AG
Head of Public Relations Department
Germany
Fraunhofer Str. 12a
82152 Planegg-Martinsried
Tel.: +49-89/ 8954-1188
Fax: +49-89/ 8954-1189
E-Mail: presse@telegate.com



End of Corporate News

08.03.2012 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
Germany
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
End of News DGAP News-Service
159770  08.03.2012