QSC accelerates Cloud growth and performs as planned in Q3 2016
- Cloud revenues rise 143% to € 5.6 million
- Growth in IoT project business and with Pure Enterprise Cloud
- Overall business performance consistent with planning: revenues of € 95.9 million and EBITDA of € 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 € 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 € 95.9 million, as against € 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 € 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 € 9.3 million, compared with € 12.0 million in the previous year. Due to a substantially lower volume of depreciation and amortisation, EBIT rose to € 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 € 7 million in 2016
Despite major investments in its Pure Enterprise Cloud, QSC generated a positive free cash flow of € 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 € 7.1 million. Previously, the Company had merely expected to generate a positive free cash flow. QSC continues to expect revenues of between € 380 million and € 390 million and EBITDA in a range of € 34 million to € 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.”
|€ million||Q3 2016||Q3 2015||Change|
|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 %|
|Consolidated net income||-0.1||-1.7||+94.1 %|
|Free cash flow||2.3||5.3||-56.6 %|
|Employees at 30 September||1,371||1,507||-9.0 %|
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.