QSC performs in line with expectations and steps up Cloud growth at start of 2019
- Cloud revenues surge by 49% to € 10.6 million in first quarter of 2019
- Total revenues of € 87.4 million as against € 94.1 million in previous year
- EBITDA increases to € 15.9 million due to first-time application of IFRS 16
Cologne, 13 May 2019. QSC AG has begun the 2019 financial year in line with expectations, with significantly higher Cloud and Consulting revenues offset by lower TC and Outsourcing revenues in the first quarter of 2019. Growth in the Cloud segment, with its core areas of Cloud Services and Internet of Things (IoT), accelerated yet further. Revenues here surged by 49% to € 10.6 million in the first quarter of 2019. Overall, QSC generated revenues of € 87.4 million, compared with € 94.1 million in the previous year’s quarter.
QSC’s earnings and financial performance was also largely consistent with expectations in the first quarter of 2019. EBITDA amounted to € 15.9 million, compared with € 9.2 million in the previous year, while the free cash flow stood at € -4.7 million, as against € -0.8 million in the first quarter of 2018. First-time application of the IFRS 16 lease standard significantly increased the volume of EBITDA reported. The new standard requires lessees to recognise operating leases in their balance sheets and, as with any other capital expenditure, subject these to depreciation. As a result, depreciation and amortisation rose to € 14.6 million in the first quarter of 2019, up from € 6.8 million in the previous year’s period. This figure includes € 8.5 million for the depreciation of lease-related right-of-use assets pursuant to IFRS 16. Due to IFRS 16 and the associated recognition of lease-related interest expenses, financial expenses rose in arithmetic terms to € -1.9 million, compared with € -1.1 million in the first quarter of 2018. Net of taxes on income, this resulted in consolidated net income of € -0.3 million, compared with € 0.9 million in the previous year’s quarter. Excluding IFRS 16 items, QSC would once again have generated positive consolidated net income.
QSC’s business performance in the first quarter of 2019 conformed to expectations and is consistent with the 2019 full-year forecast published at the end of February. According to this, the Company expects to generate revenues of more than € 350 million, EBITDA of more than € 65 million and free cash flow in at least a low single-digit million euro amount. This forecast naturally does not yet account for the agreement reached on 6 May 2019 regarding the sale of all the shares in the TC subsidiary Plusnet. The closing of this transaction is expected to take place in the third quarter of 2019. As already communicated at the end of February 2019 and in the 2018 Annual Report, QSC will update its existing forecast to account for the sale now agreed. The new forecast will be published as soon as the transaction-related effects can be assessed with reasonable certainty.
|€ million||Q1 2019||Q1 2018|
|Depreciation and amortisation||14.6||6.8|
|Consolidated net income||-0.3||0.9|
|Free cash flow||-4.7||-0.8|
|Employees as of 31 March||1,278||1,342|
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.