Corporate | 28 February 2005 07:35

QSC posts strong and profitable growth – Preliminary results for 2004

Corporate-news announcement sent by DGAP. The sender is solely responsible for the contents of this announcement. —————————————————————————— QSC posts strong and profitable growth – Preliminary results for 2004 – Revenues up by 26 percent to EUR 145.9 million – Gross profit nearly quadruples to EUR 32.0 million – Positive EUR 0.9 million EBITDA; EUR 29.4 million improvement – QSC forecasts revenues of at least EUR 175 million for 2005 Cologne, February 28, 2005. According to preliminary results, Cologne-based QSC AG grew its revenues by 26 percent to EUR 145.9 million for the past fiscal year, as opposed to EUR 115.6 million in 2003. A 32-percent rise in revenues to EUR 40.0 million in the fourth quarter of 2004, alone, as opposed to EUR 30.3 million for the fourth quarter of 2003, underscores the dynamics of the company’s development. QSC posted its strong revenue growth in 2004 with overall expenses that remained virtually constant. As a result, gross profit nearly quadrupled to EUR 32.0 million according to preliminary results, as opposed to EUR 8.4 million in 2003. For the first time, QSC recorded a positive annual EBITDA, amounting to EUR 0.9 million; the year before, an operating loss before depreciation of EUR -28.5 million had been incurred. The preliminary net loss declined by 64 percent to EUR -21.6 million, as opposed to EUR -60.6 million in 2003. The company has been earning a positive free cash flow and a positive operating cash flow since the second quarter of 2004. Overall, the operating cash flow improved to EUR -4.8 million in the past fiscal year after EUR -28.0 million in 2003. In particular, annual prepayments to Deutsche Telekom for the full 2004 year resulted in a cash burn in the first quarter of 2004. These annual payments will again have a non-recurring effect on the cash flow in the first quarter of 2005, although to a significantly lesser degree. As of December 31, 2004, QSC accounted for liquid assets of EUR 40.3 million. QSC plans to sustain its strong and profitable growth in the current fiscal year. As in the year before, the company is forecasting revenue growth of at least 20 percent, to more than EUR 175 million. In addition, the company expects a positive EBITDA of between EUR 4 to 8 million for 2005, along with an operating cash flow of at least EUR 10 million. Given the strong growth opportunities that exist, in particular in the business customer and project business segment, QSC will be specifically expanding its sales team, its portfolio of products and services and its own network during the current fiscal year, thus creating the foundation for profitable growth beyond 2005. Preliminary results in EUR millions 2004 2003 Q4 2004 Q4 2003 Net revenues 145.9 115.6 40.0 30.3 Network expenses* 113.9 107.2 30.8 26.9 Gross profit +32.0 +8.4 +9.2 +3.4 Other operating expenses* 31.1 36.9 9.0 9.2 EBITDA +0.9 -28.5 +0.2 -5.8 Net loss -21.6 -60.6 -5.1 -14.3 * Exclusive of depreciation and non-cash compensation The full annual report will be available on March 23, 2005, at http://www.qsc.de/en/investor_relations/index.html Queries to: QSC AG Arne Thull Investor Relations Fon: +49(0)221-6698-112 Fax: +49(0)221-6698-109 Email: invest@qsc.de Notes: This corporate news contains forward-looking statements pursuant to the US “Private Securities Litigation Act” of 1995. These forward-looking statements are based on current expectations and forecasts of future events by the management of QSC AG. Due to risks or mistaken assumptions, actual results may deviate substantially from those made in such forward-looking statements. The assumptions that may involve material deviations due to unforeseeable developments include, but are not limited to, the demand for our products and services, the competitive situation, the development, dissemination and technical performance of DSL technology and its prices, the development and dissemination of alternative broadband technologies and their respective prices, changes in respect of telecommunications regulation, legislation and adjudication, prices and timely availability of essential third-party services and products, the timely development of additional marketable value-added services, the ability to maintain and enlarge upon marketing and distribution agreements and to conclude new marketing and distribution agreements, the ability to obtain additional financing in the event that management’s planning targets are not attained, the punctual and full payment of outstanding debts by sales partners and resellers of QSC AG, and the availability of sufficient skilled personnel. end of message, (c)DGAP 28.02.2005 —————————————————————————— WKN: 513700; ISIN: DE0005137004; Index: TecDAX Listed: Geregelter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin- Bremen, Düsseldorf, Hannover, München und Stuttgart 280735 Feb 05