08/10/2015

QSC posts positive turnaround in earnings in Q2 2015

• At € 10.6 million, EBITDA up € 1.5 million on Q1 2015
• Free cash flow positive again at € 1.5 million
• Cost-cutting programme progressing better than expected
• 2015 forecast again reiterated

Cologne, 10 August 2015. QSC successfully turned around its earnings performance in the second quarter of 2015, with growth in all key earnings figures compared with the first quarter of 2015. This was substantially due to the cost-cutting programme initiated at the end of February 2015, whose measures are taking effect earlier than expected. The savings achieved as of 30 June 2015 thus already total more than € 4 million. Around 60 percent of this sum results from the staff cuts already initiated. As of 30 June 2015, employment termination agreements had already been reached with 180 employees. Overall, QSC plans to downsize its workforce by around 350 employees by the end of 2016.

QSC generated revenues of € 100.9 million in the second quarter of 2015, compared with € 109.4 million in the previous year’s period. This reduction, which was consistent with expectations, results from the ongoing reorganisation of the Outsourcing business and from a decline in Telecommunications revenues due to market and regulatory factors. By contrast, revenues increased significantly in the Consulting and Cloud business units. Thanks to orders received from new customers and extensions to existing contracts, new orders rose to € 55.6 million in the past quarter, up from € 23.6 million in the second quarter of 2014.

All key earnings figures up on first quarter of 2015

Gross profit improved for the second consecutive quarter, reaching € 27.2 million in the second quarter of 2015. Compared with the first quarter of 2015, EBITDA rose by € 1.5 million to € 10.6 million, EBIT by € 0.8 million to € -2.2 million and consolidated net income by € 0.7 million to € -2.7 million. In view of this turnaround in its earnings, QSC can reiterate its full-year forecast for 2015. Accordingly, the company expects to post revenues of more than € 400 million, EBITDA of more than € 40 million and a positive free cash flow. The cost-cutting programme will generate savings of more than € 10 million in the current year already. From 2017 onwards, the company has budgeted a sustainable reduction in its costs by at least € 25 million a year.

€ million	Q2 2015	Q1 2015	Q4 2014	Q3 2014	Q2 2014
Revenues	100.9	104.7	106.4	106.6	109.4
Gross profit	27.2	27.1	20.3	26.1	27.8
EBITDA	10.6	9.1	2.3	8.8	10.5
EBIT	-2.2	-3.0	-29.2	-3.9	-2.0
Consolidated net income	-2.7	-3.4	-24.1	-6.2	-3.9
Free cash flow	1.5	-4.4	-38.2	3.7	5.0
Capital expenditure	3.9	3.5	10.8	6.3	8.2
Number of employees	1,585	1,666	1,697	1,709	1,712

Notes:
The 6-month report can be downloaded at www.qsc.de/en/qsc-ag/investor-relations.html. 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 results may deviate materially from these forward-looking statements.

Contact for enquiries:
QSC AG
Arne Thull
Head of Investor Relations
Tel: +49 221 669-8724
Fax: +49 221 669-8009
E-mail: invest@qsc.de