11/19/2007

QSC submits report on the third quarter of 2007

Cologne, November 19, 2007. QSC AG today submitted its report on the third quarter of 2007. There were no material changes to the preliminary results announced on October 25, 2007.

In the third quarter of 2007, QSC grew its revenues by 22 percent to € 83.2 million, as opposed to € 68.4 million for the corresponding quarter the year before. The company generated its strongest growth in the Wholesale/Reseller segment, where revenues rose by 74 percent to € 31.8 million. Overall, QSC increased the share of its total revenues accounted for by its three strategic segments of Large Accounts, Business Customers and Wholesale/Resellers to 87 percent, as opposed to 82 percent for the third quarter of 2006.

Totaling € 7.4 million, EBITDA was 42 percent higher than the company's EBITDA of € 5.2 million for the third quarter of 2006; at € -4.7 million, however, the consolidated net loss was up from € -2.0 million the year before. This stemmed primarily from the strong rise in depreciation expense attributable to the expansion of the network; in the third quarter of 2007, depreciation expense totaled € 12.7 million, as opposed to € 7.2 million for the same quarter the year before.

QSC expanded its network according to schedule in the third quarter of 2007, and can now already directly access some 1,600 central offices. Consequently, capital expenditures rose to € 34.5 million, as opposed to € 7.4 million for the corresponding quarter the year before. This line item additionally includes unplanned capital expenditures for measurement solutions in wholesale business, as well as an earlier upgrade of the existing network to SHDSL technology, as it is more efficient to perform this upgrade concurrently to the network expansion.

Given the weaker operational development in the third quarter of 2007, QSC had already adjusted its guidance for the current fiscal year in connection with the announcement of its preliminary results on October 25, 2007: The company now anticipates revenues of about € 325 million, an EBITDA of around € 35 million, as well as a marginally positive net income after taxes.

Queries to:
QSC AG
Arne Thull
Investor Relations
Fon: +49(0)221-6698-724
Fax: +49(0)221-6698-009
E-mail: invest@qsc.de

Notes:
The complete 9-months report is available under http://www.qsc.de/en/investor-relations.html. 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. 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.