DGAP-News: QSC AG

QSC firms up net income and posts further Cloud revenue growth

- Consolidated net income rises to EUR 1.1 million in first half of 2017
- Cloud revenues up 80% to EUR 11.5 million
- EBITDA margin rises to 11% with business performing largely in line with expectations
- Free cash flow improves to EUR 6.4 million in first six months of 2017
- QSC confirms forecast: greater financial and earnings strength despite lower revenues
 

Cologne, 7 August 2017. As expected, QSC boosted its earnings and financial strength in the first half of 2017, while revenues fell year-on-year by EUR 22.1 million to EUR 175.9 million. At EUR 20.2 million, EBITDA was virtually at the previous year's level, but EBIT rose by EUR 1.8 million to EUR 4.4 million and consolidated net income grew to EUR 1.1 million. As a result, the EBITDA margin improved year-on-year by 1 percentage point to 11% and the EBIT margin doubled to 2%. This was driven by improved cost structures and the rising share of revenues generated in forward-looking business fields, above all in the Cloud business. The free cash flow grew by 16% to EUR 6.4 million in the first half of 2017, and that although QSC's capital expenditure of EUR 9.8 million was significantly higher (+42%) than in the previous year.

In the current financial year, QSC is focusing above all on expanding Cloud, its newest segment, with its two main activities of the Pure Enterprise Cloud (PEC) and the Internet of Things (IoT). In the first six months of 2017, revenues here already surged by 80% to EUR 11.5 million. Revenues in the two other forward-looking business fields, Consulting and TC for corporate customers, remained at around the previous year's level in the first half of 2017. The TC business with resellers posted an unexpectedly weak performance. Due to market and regulatory factors, revenues here fell by EUR 16.6 million to EUR 45.2 million in the first half of 2017. As planned, revenues in the Outsourcing segment decreased by EUR 10.7 million to EUR 53.0 million.

QSC expects free cash flow of more than EUR 8.4 million in 2017

Given its business performance in the first half of 2017, which was largely consistent with expectations, QSC can confirm its full-year forecast: Based on revenues of between EUR 355 million and EUR 365 million, the Company plans to generate EBITDA of EUR 36 million to EUR 40 million and free cash flow slightly ahead of the previous year's figure of EUR 8.4 million. The sales department expects Cloud to generate the highest revenue growth in the second half of the year as well. Having stabilised their position in the first half of 2017, Consulting and the TC business with corporate customers are also expected to report revenue growth once again. Not only that, the TC business with resellers is expected to make up for part of the loss of revenues in the first half of 2017.

Comments QSC's CEO Jürgen Hermann: "QSC is rapidly turning into a genuine digitiser for the SME sector. What's more, our strategy of building on cloud technology as the basis for digitisation is paying off. That is reflected in our half-year figures and above all in the growth in our Cloud business."
 

Notes:
The complete Half-Year Report can be downloaded at https://www.qsc.de/en/investor-relations. This Corporate News includes forward-looking statements. These are based on current expectations and forecasts as to future events made by the management of QSC AG. Due to risks or erroneous assumptions, actual results may deviate substantially 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