08/29/2007

QSC submits report on second quarter of 2007: Revenues and profitability up significantly

Cologne, August 29, 2007. QSC AG today published its report on the second quarter of 2007. There were no material changes to the preliminary results announced on August 15, 2007.

In the second quarter of 2007, QSC grew its revenues by 41 percent to € 79.6 million, as opposed to € 56.6 million for the corresponding quarter the year before. The company generated its strongest growth in the Wholesale/Reseller segment, first and foremost in wholesale business: Revenues in this segment advanced by 162 percent to € 27.8 million, as opposed to € 10.6 million for the second quarter of 2006. Overall, QSC is now already generating 84 percent of its total revenues in its three strategic segments of Wholesale/Resellers, Large Accounts and Business Customers; the year before, these segments had accounted for 77 percent of total revenues.

The company's better revenue quality led to significant improvements in profitability again in the second quarter of 2007. Gross profit rose by 49 percent to € 29.1 million, as opposed to € 19.5 million for the comparable quarter the year before, while EBITDA surged by 166 percent to € 10.9 million, as opposed to € 4.1 million in the second quarter of 2006. Consolidated net income stood at € 0.5 million, as opposed to a consolidated net loss of € -3.1 million for the comparable period the year before.

QSC will be sustaining this high-margin growth during the second half of 2007. As already noted in announcing its preliminary results, QSC is therefore reiterating its full year revenue forecast of more than € 350 million, its EBITDA target range of € 50 to € 60 million and is further specifying its net income after taxes forecast to approximately € 15 million. In addition to significant rises in revenues and profitability in the segments of Large Accounts and Business Customers, QSC particularly expects to see strong growth in its wholesale business. All three segments are benefiting from the ongoing network expansion to nearly 2,000 central offices by the first quarter of 2008. The effects of this network expansion, coupled with the marketing successes of the company's wholesale partners, are becoming clearer to see from quarter to quarter, prompting QSC to anticipate especially high growth during the fourth quarter within the second half of 2007. QSC's Chief Executive Officer Dr. Bernd Schlobohm: "With the network expansion, we are laying the foundation for sustained strong and profitable growth beyond the year 2007."

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 6-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.