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QSC planning higher dividend following successful 2012

Cologne, March 4, 2013. In fiscal 2012, the QSC Group made great strides as it traveled the road toward becoming a full-fledged ICT provider, and was able to conclude a portion of the preparations required for this earlier than had originally been planned. With revenues of € 481.5 million, an EBITDA margin of 16 percent and a free cash flow of € 23.6 million, the company attained its targets, according to preliminary calculations. Given QSC's sustained strong financial position and profitability, the Management Board will propose to the Annual Shareholders Meeting that the dividend be raised by 1 cent to € 0.09 per share. This is the dividend that QSC also views as the minimum for the coming years.

Highest level of new orders in the company's history

With Direct Sales posting new orders valued at € 193.1 million during the past fiscal year, the QSC Group recorded the highest order backlog in its history. The majority of these new orders consist of multiple-year contracts for major Outsourcing projects - a visible manifestation of the company's successful transformation into a full-fledged ICT provider. The development of revenues in the business units demonstrates the dynamic of this transformation process: Revenues in Direct Sales, which together with Indirect Sales covers ICT business, rose by 24 percent in 2012 to € 187.9 million; Indirect Sales gained 3 percent to € 125.1 million. On the other hand, revenues with resellers, who cover TC business, decreased by 18 percent in 2012 to € 168.5 million. Overall, the QSC Group grew its revenues by 1 percent during the past fiscal year to € 481.5 million, according to preliminary calculations.

A comparison of EBITDA margins, too, underscores the importance of the transformation process. In 2012, the QSC Group earned an EBITDA margin of 14 percent in Direct Sales, in spite of considerable investments in future growth and the recruitment of some 150 additional people; and Indirect Sales, which had already been more industrialized, earned an EBITDA margin of 27 percent. The EBITDA margin with resellers, on the other hand, stood at 11 percent - and the trend is downward. Overall, QSC earned an EBITDA margin of 16 percent in 2012; as a result of investments in future growth, as well, the company's EBITDA for 2012 amounted to € 77.9 million, according to preliminary calculations, in contrast to € 79.9 million the year before. Earnings before taxes totaled € 20.7 million, as opposed to € 23.4 million in fiscal 2011. Given the company's sustained profitability, the Management Board will propose to the Annual Shareholders Meeting on May 29, 2013, that the dividend be increased by 1 cent to € 0.09 per share.

Outlook for 2013: Stronger financial position and greater profitability

The current fiscal year will be characterized by a two-track development of operative business at the QSC Group: Significantly rising ICT revenues will again be offset by further declines in TC revenues. Moreover, various rulings by the German Federal Network Agency that were made in the autumn of 2012 will result in an additional year-on-year shortfall of some € 30 million in TC business. In November, the German Federal Network Agency had lowered mobile termination fees by 45 to 47 percent and fixed-network termination fees by 20 to 40 percent, while also modifying the fee structure.

Given this backdrop, QSC is planning on overall revenues of at least € 450 million for fiscal 2013. In spite of declining revenues, QSC anticipates higher profitability and a stronger financial position: The EBITDA margin in 2013 is likely to rise to at least 17 percent, with an increase of at least € 24 million planned for free cash flow. "Our strategy is working," states QSC Chief Financial Officer Jürgen Hermann, who will succeed Dr. Bernd Schlobohm as Chief Executive Officer on May 30, 2013. "Step by step, QSC is withdrawing from TC business and participating in the growth of the ICT market. In fiscal 2013, we will be bringing further in-house Cloud product developments to market, winning additional Outsourcing projects and thus strengthening our position in the ICT market. In doing so, we are creating a good foundation for achieving our Vision 2016!" The QSC Group has its sights set on revenues of between € 800 million and € 1 billion for fiscal 2016, along with an EBITDA margin of 25 percent and a free cash flow of between € 120 and € 150 million.

In € million 2012 2011
Revenues 481.5 478.1
EBITDA 77.9 79.9
EBIT 24.6 26.2
EBT 20.7 23.4
Free cash flow 23.6 41.0
Net liquidity* 35.2 24.1
Capital expenses 37.0 35.6
Workforce* 1,485 1,334

* As of December 31

Notes:
The 2012 Annual Report will be available for download at www.qsc.de/en/qsc-ag/investor-relations.html from March 28, 2013. This corporate news contains forward-looking statements. These forward-looking statements are based on current expectations and forecasts of future events by the management of QSC AG. Due to risks or mistaken assumptions, actual results may deviate substantially from those made in such forward-looking statements.

Queries to:
QSC AG
Arne Thull
Head of Investor Relations
Phone: +49 221 6698-724
E-mail: invest@qsc.de


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