QSC firms up net income and posts further Cloud revenue growth
- Consolidated net income rises to € 1.1 million in first half of 2017
- Cloud revenues up 80% to € 11.5 million
- EBITDA margin rises to 11% with business performing largely in line with expectations
- Free cash flow improves to € 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 € 22.1 million to € 175.9 million. At € 20.2 million, EBITDA was virtually at the previous year’s level, but EBIT rose by € 1.8 million to € 4.4 million and consolidated net income grew to € 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 € 6.4 million in the first half of 2017, and that although QSC’s capital expenditure of € 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 € 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 € 16.6 million to € 45.2 million in the first half of 2017. As planned, revenues in the Outsourcing segment decreased by € 10.7 million to € 53.0 million.
QSC expects free cash flow of more than € 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 € 355 million and € 365 million, the Company plans to generate EBITDA of € 36 million to € 40 million and free cash flow slightly ahead of the previous year’s figure of € 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.”
|€ million||Q2 2017||Q2 2016||H1 2017||H1 2016|
|- of which with resellers||21.9||29.8||45.2||61.8|
|- of which with corporate customers||22.6||23.3||45.5||45.7|
|Consolidated net income||0.5||0.2||1.1||0.0|
|Free cash flow||2.8||6.3||6.4||5.5|
|Number of employees at 30 June||1,371||1,396||-||-|
The complete Half-Year Report can be downloaded at 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.