Corporate | 14 November 2016 07:30

QSC accelerates Cloud growth and performs as planned in Q3 2016

DGAP-News: QSC AG / Key word(s): Quarterly / Interim Statement

2016-11-14 / 07:30
The issuer is solely responsible for the content of this announcement.

QSC accelerates Cloud growth and performs as planned in Q3 2016

– Cloud revenues rise 143% to EUR 5.6 million
– Growth in IoT project business and with Pure Enterprise Cloud
– Overall business performance consistent with planning: revenues of EUR 95.9 million and
EBITDA of EUR 9.3 million
– Free cash flow forecast raised

Cologne, 14 November 2016. The operating business at QSC AG performed as planned in the third quarter of the current financial year, with increased revenues in those business fields in which the Company – as digitiser to the German SME sector – expects to see sustainable growth. That is particularly true for QSC’s Cloud segment, where revenues for the third quarter of 2016 rose by 143% to EUR 5.6 million. Migration of the first Outsourcing customers to the Pure Enterprise Cloud – QSC’s new full-range, cloud-based offering – has already begun. As in the second quarter of 2016, the Company also generated further revenue growth in its Internet-of-Things (IoT) business. Furthermore, in the past quarter QSC also increased revenues in its Consulting segment (+7%) and its All-IP telecommunications business with corporate customers (+4%). Consistent with expectations, however, revenues in the conventional telecommunications business with resellers with (-10%) and the Outsourcing segment (-17%) fell short of the previous year’s figures. Overall, revenues came to EUR 95.9 million, as against EUR 100.0 million in the previous year.

Third consecutive quarter with positive operating earnings

By the end of 2016, QSC will largely have implemented its two-year cost-cutting programme. Today, cumulative savings are already ahead of the figure of EUR 20 million targeted for this year. One core component of this programme involved downsizing the workforce to around 1,350 employees by the end of 2016. As of 30 September 2016, the Company had 1,371 employees. As previously announced, the organisational restructuring process still underway required one-off expenses in the past quarter. As a result, EBITDA came to EUR 9.3 million, compared with EUR 12.0 million in the previous year. Due to a substantially lower volume of depreciation and amortisation, EBIT rose to EUR 1.0 million. QSC thus posted positive operating earnings (EBIT) for the third quarter in succession.

QSC expects full-year free cash flow of more than EUR 7 million in 2016

Despite major investments in its Pure Enterprise Cloud, QSC generated a positive free cash flow of EUR 2.3 million in the third quarter of 2016. In view of this, the Company now expects its free cash flow for the financial year as a whole to exceed the previous year’s figure of EUR 7.1 million. Previously, the Company had merely expected to generate a positive free cash flow. QSC continues to expect revenues of between EUR 380 million and EUR 390 million and EBITDA in a range of EUR 34 million to EUR 38 million. As announced, further one-off expenses will be incurred, among other things, in connection with the completion of the cost-cutting programme in the fourth quarter of 2016. Furthermore, as was already the case in the third quarter of 2016, QSC plans to invest substantial sums in expanding its Pure Enterprise Cloud.

Jürgen Hermann, QSC’s CEO, comments: “QSC is on track and is growing in those business fields where its future lies. The cloud business in particular is gaining momentum and revenues are rising from quarter to quarter. With the Pure Enterprise Cloud and our IoT portfolio, we have the right solutions to support medium-sized business customers in digitising their businesses.”

EUR million	Q3 2016	Q3 2015	Change
Revenues	95.9	100.0	-4.1%
Cloud revenues	5.6	2.3	+143.4%
Consulting revenues	10.3	9.6	+7.3%
Outsourcing revenues	27.6	33.1	-16.6%
Telecommunications revenues	52.4	55.0	-4.7%
– of which with resellers	29.5	32.9	-10.3%
– of which with corporate customers	22.9	22.1	+3.6%
EBITDA	9.3	12.0	-22.5%
EBIT	1.0	-0.6	n/a
Consolidated net income	-0.1	-1.7	+94.1%
Free cash flow	2.3	5.3	-56.6%
Capital expenditure	7.2	7.2	–
Employees at 30 September	1,371	1,507	-9.0%

Notes:
The complete Quarterly Statement can be downloaded at www.qsc.de/en/investor-relations . This Corporate news contains forward-looking statements that are based on current expectations and forecasts on the part of the management of QSC AG with regard to future events. Due to risks or erroneous assumptions, actual results may deviate materially from these forward-looking statements.

Contact for enquiries:
QSC AG
Arne Thull
Head of Investor Relations
T +49 221 669-8724
F +49 221 669-8009
invest@qsc.de
www.qsc.de

2016-11-14 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Language:	English
Company:	QSC AG
	Mathias-Brüggen-Straße 55
	50829 Köln
	Germany
Phone:	+49-221-6698-724
Fax:	+49-221-6698-009
E-mail:	invest@qsc.de
Internet:	www.qsc.de
ISIN:	DE0005137004
WKN:	513700
Listed:	Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange

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