QSC updates full-year 2019 forecast to account for Plusnet sale
23 May 2019. QSC AG today updated its forecast for the 2019 financial year as a whole to account for the agreement reached on 6 May 2019 concerning the sale of its telecommunications subsidiary Plusnet. Based on the transaction-related effects currently foreseeable, and in particular the deconsolidation of Plusnet involved in the sale, QSC expects to generate revenues of more than € 255 million, EBITDA of more than € 145 million and a free cash flow of more than € 130 million in the 2019 financial year. Prior to the Plusnet sale, the Company had expected to generate revenues of more than € 350 million, EBITDA of more than € 65 million and a positive free cash flow in a low single-digit million euro range. The new forecast is based on the assumption that the transaction will be executed as of 31 July 2019, subject to approval by the antitrust authorities and fulfilment of further closing conditions.
The new EBITDA forecast includes a deconsolidation gain, including transaction and migration costs associated with the Plusnet sale, that is estimated at € 110 million. The deconsolidation gain itself mainly comprises accounting gains resulting from the difference between the agreed purchase price and the carrying amount. The free cash flow forecast includes the purchase price less liquidity thereby sold and also accounts for transaction and migration costs, including taxes, and future growth financing. QSC will use the liquidity received from the Plusnet sale to implement its growth strategy more rapidly, to make potential acquisitions aimed at supplementing its technology portfolio in a targeted manner and to fully repay its debt.
The new revenue forecast is also based on the assumption that Plusnet is deconsolidated as of 31 July 2019. Apart from the Plusnet revenues originally planned and now set to be discontinued from 1 August 2019, the updated revenue forecast is consistent with the previous forecast.
This ad-hoc announcement 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. Explanations of key financial figures used can be found in the Annual Report 2018 of QSC AG (accessible at https://www.qsc.de/en/investor-relations/ir-publications/).