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Revenues soar at QSC / Preliminary numbers for Q1/2003

  • Revenues up 188 percent
  • EBITDA advances 38 percent
  • Cash burn down for the eighth time in a row
  • Forecast for 2003 confirmed

Cologne, May 12, 2003. According to preliminary results, Cologne-based QSC AG grew its revenues by 188 percent to EUR 27.6 million for the first quarter of 2003, as opposed to EUR 9.6 million for the comparable period in 2002. In addition to further growth in the customer and project business, the revenue leap was essentially attributable to the first time consolidation of voice carrier Ventelo, which was acquired in December of 2002.

The preliminary EBITDA loss for the first quarter of 2003 amounted to EUR -10.1 million, as opposed to EUR -16.3 for the first quarter of 2002. This sharp improvement by 38 percent was mainly due to rising revenues with high-margin business and project customers, as well as attractive margins in the voice service business.

For the eighth time in a row, the company succeeded in significantly reducing its quarterly net cash outflow: According to preliminary results, cash burn for the first quarter of 2003 totaled EUR -10.9 million, as opposed to EUR -15.0 million for the fourth quarter of 2002 (including a net cash outflow of EUR 2.2 million stemming from the acquisition of Ventelo in December 2002). QSC anticipates that its average cash burn in 2003 will decline by at least two million euros per quarter. As at March 31, 2003, cash and cash equivalents totaled EUR 76.7 million. QSC is forecasting net cash and cash equivalents of around EUR 50 million at year-end 2003.

The positive development of the business during the first quarter confirms QSC´s revenue and EBITDA forecasts for 2003. The company plans revenues of EUR 105 to 115 million for the current fiscal year, along with a negative EBITDA of between EUR -25 and -30 million. QSC plans to reach the EBITDA breakeven point in the fourth quarter of 2003 and the cash flow breakeven point during the course of 2004.

Queries to:

Arne Thull
Investor Relations
Fon: +49(0)221-6698-112
Fax: +49(0)221-6698-009

Notes :
This ad hoc announcement contains forward-looking statements pursuant to the US "Private Securities Litigation Act" of 1995). 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. The assumptions that may involve material deviations due to unforeseeable developments include, but are not limited to, the demand for our products and services, the competitive situation, the development, dissemination and technical performance of DSL technology and its prices, the development and dissemination of alternative broadband technologies and their respective prices, changes in respect of telecommunications regulation, legislation and adjudication, prices and timely availability of essential third-party services and products, the timely development of additional marketable value-added services, the ability to maintain and enlarge upon marketing and distribution agreements and to conclude new marketing and distribution agreements, the ability to obtain additional financing in the event that management´s planning targets are not attained, the punctual and full payment of outstanding debts by sales partners and resellers of QSC AG, and the availability of sufficient skilled personnel.