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QSC announces preliminary numbers for 2011 and plans to pay a dividend of € 0.08 per share

Cologne, March 5, 2012. In 2011, QSC AG accelerated its evolution into an ICT provider and raised key metrics. Given the Company's strong financial position and profitability, the Management Board will, as planned, propose to the Annual Shareholders Meeting to declare the first ever distribution of a dividend in the amount of € 0.08 per share. QSC views this amount as being the minimum for the coming years, as well, while striving to steadily increase the dividend.

The QSC Group increased revenues to € 478.1 million in fiscal 2011, compared to € 422.1 million the year before. The initial consolidation of the two new subsidiaries, IT Outsourcing and IT Consulting provider INFO AG (effective May 2, 2011) and Housing and Hosting specialist IP Partner (effective January 3, 2011) played a key role in this positive development. Moreover, QSC was able to win new SME customers and sell additional products and services to its existing customer base. As a result of these advances, in 2011 the Company was able to significantly increase the percentage of total revenues accounted for by IP-based revenues to 77 percent, compared to 68 percent the year before. QSC generated only 23 percent of total revenues in the conventional "old" lines of business of a TC provider, such as call by call and reselling DSL lines; revenues in "old" business declined by nearly € 25 million in fiscal 2011.

QSC invested in growth and recruited additional professionals in 2011

The rising percentage of ICT revenues and, in particular, the relatively personnel-intensive revenues here in Consulting and Outsourcing business altered the cost structure of the QSC Group, especially during the second half of fiscal 2011. Plus capital investments in the strong growth of ICT business, especially through the recruitment of further staff: At year-end 2011, the QSC Group, including the two new subsidiaries, employed a workforce of 1,303 people, compared to 608 the year before.

In spite of these factors, QSC was able to raise its EBITDA by 2 percent to € 79.9 million during the past fiscal year, with the EBITDA margin reaching 17 percent. EBIT improved by 25 percent to € 26.2 million during the past fiscal year. Consolidated net income rose by 16 percent to € 28.0 million. QSC financed both the acquisitions of IT providers INFO AG and IP Partner as well as needed capital expenditures predominantly from within. The unbroken financial strength of the QSC Group was underscored by a further rise in free cash flow to € 41.0 million.

Outlook for 2012: QSC anticipates revenues of € 480 - € 510 million

In fiscal 2012, QSC will largely conclude its transformation process from a TC provider into an ICT provider, and will be driving the integration of INFO AG and IP Partner. The merger of these two subsidiaries that was announced in January 2012, and the resulting acquisition of the remaining INFO AG shares, will facilitate Group-wide collaboration and serve as a key prerequisite for sustained profitable growth in 2013 and beyond. The uncertain economic situation in early 2012 makes it extremely difficult to properly assess the resulting dynamic. Regardless of the economy, though, QSC expects to see a further decline in conventional TC lines of business, such as call by call and ADSL2+, on the order of some € 25 million in 2012. On the other hand, the Company plans to grow faster than the market in such ICT lines of business as Outsourcing and Consulting.

Overall, the QSC Group anticipates revenues of between € 480 and € 510 million in fiscal 2012. Given that this will be the first full-year consolidation of these two subsidiaries, the Company is striving for an EBITDA margin of at least 16 percent. In addition, the Company expects to see a free cash flow of between € 22 and € 32 million. This guidance takes into account planned capital investments in growth, especially in Direct Sales, and for the first time does not include any payments from TELE2, the former co-owner of network operating company Plusnet.

QSC reiterates long-term goals for fiscal 2016

QSC Chief Executive Officer Dr. Bernd Schlobohm is convinced that 2012 will be "a year of preparation" for achieving the full strength and power of the QSC Group. Growing success with ICT and increasingly with Cloud services, as well, coupled with the declining importance of conventional TC business is likely to mean that the Company will achieve stronger revenue growth beginning in 2013, while steadily improving its profitability and financial strength. Schlobohm: "We know our long-term goals: In 2016, the QSC Group will be an organization with revenues of between € 800 million and € 1 billion, an EBITDA margin of 25 percent and a free cash flow of between € 120 and € 150 million. These are highly ambitious goals. However the advances we made last year, the further preparations in 2012 and the tangible get-up-and-go spirit that prevails throughout the entire QSC Group show that we are heading in the right direction."

In € million 2011 2010
Revenues 478.1 422.1
- IP-based 369.5 288.9
EBITDA 79.9 78.1
EBIT 26.2 20.9
Consolidated net income 28.0 24.2
Free cash flow 41.0 27.7
Net liquidity* -33.1 28.4
Liquid assets* 24.1 46.6
Capital expenditures 35.6 29.2
Workforce* 1,303 608

*As of December 31

Queries to:
Arne Thull
Head of Investor Relations
Phone: +49 221 6698-724

The Annual Report will be available for download at from March 30, 2012. 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.