QSC continues to grow from quarter to quarter and confirms forecast
- Revenues rise to € 34.5 million in second quarter of 2020 – fourth consecutive quarter of growth
- New orders of € 36.0 million set new record
- Despite severe recession, QSC still plans to increase its 2020 revenues by at least 13% to more than € 143 million
Cologne, 10 August 2020. Revenues at QSC AG rose from € 34.1 million in the first quarter to € 34.5 million in the second quarter of 2020, marking a continuation of the growth seen each quarter since the sale of the telecommunications business in mid-2019. QSC’s CEO, Jürgen Hermann, comments: “Our revenues continue to grow even in the worst recession in our country’s history. Our crisis-proof business model has proven its worth even in this exceptional situation of historic proportions.”
Segment revenues show substantial growth
This is underlined by the strong new order figure which, at € 36.0 million in the second quarter of 2020, was higher than at any time since QSC sold its telecommunications business as of 30 June 2019. The exceptional lockdown situation boosted demand for digital workplace solutions. Not only that, SME companies have been pressing ahead with migrating their IT to the cloud. This trend particularly benefited the Cloud & IoT segment, where revenues grew by 3% on the previous quarter to reach € 24.0 million. Compared with the second quarter of 2019, revenues rose by 13%. Year-on-year, revenues in the SAP segment even surged by 18% to € 10.5 million.
Given rising revenues and new orders, in the second quarter of 2020 QSC continued investing in its future growth. Regardless of this investment, EBITDA moved even closer to break-even, reaching € -0.8 million in the second quarter of 2020 (Q1 2020: € -1.1 million). Free cash flow improved to € -3.5 million, as against € -4.1 million in the previous quarter. At the end of June 2020, QSC was debt-free and had net liquidity of € 54.7 million. It is therefore solidly financed for its current phase of growth and investment.
Sustainably positive EBITDA from the fourth quarter of 2020
Following the pleasing course of business in the first half of 2020, QSC can confirm its full-year forecast for 2020. Despite the severe recession, the Company still expects to increase its revenues by at least 13% to more than € 143 million. This is based on the assumption that economic activity normalises from the third quarter onwards. The strong new order figure of € 69.7 million for the first half of 2020 gives QSC reason to have confidence in its outlook, as does the fact that more than 75% of its revenues are of a recurring, platform-based nature. During the growth and investment phase, the Company still expects to generate EBITDA of up to € -5 million and free cash flow of up to € -16 million in the current financial year. From the fourth quarter of 2020, QSC will generate sustainably positive EBITDA once again, followed by sustainably positive free cash flow from the fourth quarter of 2021.
Comments Jürgen Hermann: “We are benefiting in the current exceptional situation as well from our clear sector focus, our great power of innovation and our implementation expertise along the whole of the digital value chain.” This portfolio of services ranges from sensor technology and IoT to SAP through to Cloud. QSC is boosting this portfolio with targeted acquisitions. In July 2020, the Company acquired the fast-growing software engineering specialist Incloud and has thus extended its software and development competence, particularly in the important field of smart products and enterprise apps.
Adds Jürgen Hermann: “In the quarters ahead, we will continue consistently implementing our ‘2020plus’ growth strategy.” One upcoming major milestone is the change in QSC’s name to “q.beyond” at the end of September. “The new name stands for the new company and its new positioning with innovative products and technologies in attractive forward-looking markets, in short for our entry into a new era of growth.”
Key figures for the first two quarters of 2020*
|€ million||Q2 2020||Q1 2020|
|- Cloud & IoT||24.0||23.3|
|Consolidated net income||-5.1||-5.5|
|Free cash flow||-3.5||-4.1|
|Net liquidity as of 30 June/31 March||54.7||61.9|
|Equity ratio as of 30 June/31 March||73%||71%|
|Employees as of 30 June/31 March||867||860|
* This Corporate News focuses on the first two quarters of 2020. Comparison with the previous year’s figures for the overall Company would not enhance understanding of the results, as the TC business successfully sold in mid-2019 traditionally accounted for significantly more than half of revenues and expenses.
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 events may deviate materially from these forward-looking statements.
About QSC AG:
QSC AG is digitalising the German SME sector and enabling its customers to enhance their business processes and business models with the utmost flexibility and efficiency. QSC has longstanding technological and application expertise in the fields of Cloud and Colocation, SAP and the Internet of Things. Its extensive service portfolio provides exactly what SME players need as they move into the digital age: from standardised pay-as-you-use services through to individualised full-range solutions for the retail, manufacturing and energy sectors. All services offer end-to-end quality and high security. QSC bases its relationships with customers on an entrepreneurial approach, a service-driven mindset and a desire to forge mutually beneficial partnerships. QSC AG is based in Cologne and has around 900 employees at locations throughout Germany.
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