DGAP-News: Drillisch AG

DGAP-News: Drillisch AG: With significant growth in the first nine months of 2016 and confirms forecast

DGAP-News: Drillisch AG / Key word(s): 9-month figures/Forecast Drillisch AG: With significant growth in the first nine months of 2016 and confirms forecast

09.11.2016 / 20:03 The issuer is solely responsible for the content of this announcement.

---------------------------------------------------------------------------

Drillisch AG with significant growth in the first nine months of 2016 and confirms forecast

Highlights of 9M 2016 - Service revenue rises over previous year by EUR91.0 million to EUR404.4 million (+29.0%; 9M 2015: EUR313.4 million)

- Gross profit rises by EUR26.3 million to EUR205.7 million (+14.7%; 9M 2015: EUR179.4 million)

- Steady increase in EBITDA to EUR31.6 million in Q3 (Q2: EUR27.1 million; Q1 2016 EUR24.0 million)

- MVNO subscriber numbers rise within 12 months by 689,000 (28.1%) to 3.138 million subscribers

Maintal, 9 November 2016. Drillisch AG (ISIN DE 0005545503) has once more significantly increased the number of MVNO subscribers, service revenue and gross profit over the same period of the previous year and further improved the earning power of the company in what is overall a difficult and challenging market environment. The major indicators of our core business continued to improve dynamically during the year.

Strong development in service revenue: In the first nine months of fiscal year 2016, revenues increased in total by EUR67.0 million (14.7%) to EUR522.1 million (9M 2015: EUR455.1 million). The service revenues above all rose significantly - by EUR91.0 million (29.0%) to EUR404.4 million (9M 2015: EUR313.4 million). Service revenue in Q3 alone rose by EUR6.0 million (4.4%) over Q2 to EUR142.9 million (Q2 2016: EUR136.9 million; Q1 2016: EUR124.6 million).

Strong subscriber development: The driver of this overall good development of the MVNO subscriber base, which increased by 689,000 subscribers (28.1%) to 3.138 million subscribers (9M 2015: 2.449 million), was once again the highly dynamic growth in the budget subscriber segment. The number of subscribers in this segment rose by 830,000 (46.9%) to 2.600 million subscribers (9M 2015: 1.770 million subscribers). The number of volume subscribers continued to fall as expected to 538,000 (9M 2015: 679,000 subscribers),

Substantial increase in gross profit: Gross profit rose by EUR26.3 million (14.7%) and at EUR205.7 million significantly exceeded the level of the previous year (9M 2015: EUR179.4 million). The gross profit margin per 30 September 2016 came to 39.4% (previous year: also 39.4%).

In contrast to advertising expenditures, direct expenditures related to new customer acquisition (e.g. commissions for dealers and cooperation partners, the reduction of package and connection fees and the granting of MNP bonuses and other customer benefits) have a direct effect on gross profit. As a consequence of the continuing shift from general brand advertising to such direct expenditures, the gross profit in Q3 2016 fell slightly in total in comparison with Q2 2016 by EUR0.3 million (0.5%) to EUR68.6 million (Q2 2016: EUR68.9 million). The gross profit solely from the MVNO subscriber base (average number of MVNO subscribers multiplied by AGPPU), on the other hand, rose significantly.

Quarterly EBITDA grows dynamically for the third time in succession: The EBITDA (earnings before interest, taxes and depreciation) came to a total of EUR82.7 million in the first nine months of 2016. The value of the previous year of EUR88.2 million was positively influenced by a contributory payment to advertising expenditures by Telefónica related to the acquisition of yourfone Retail AG and other factors, restricting the comparability of the two years.

The EBITDA in Q3 2016 rose by EUR4.4 million (16.4%) over Q2 to EUR31.6 million, continuing the positive trend of the fiscal year (Q2 2016: EUR27.1 million, Q1 2016: EUR24.0 million; Q4 2015: EUR17.4 million).

Development of cash flow from current business activities: Based on this steadily positive development in our core business, we realised operating cash flow of EUR58.0 million in the first nine months of fiscal year 2016 (9M 2015: EUR65.6 million). There were substantial fluctuations during the year because of effects related to closing dates and period shifts, as we explained in the half-year report. In Q3 2016, for instance, the cash outflows for the network costs within the framework of the MBA MVNO model significantly exceeded the actual expenditures for the period so that the operating cash flow of the last three months dipped slightly into the red at EUR-3.6 million; in the previous quarter, the effect was exactly the reverse, leading to an extraordinary operating cash flow of EUR+71.8 million for Q2 2016. Additional details and explanatory comments can be found on page 23 of this 9-month report.

Outlook: We expect a further increase in the MVNO customer base for 2016 and 2017 that will lead to the parallel continuation of the positive corporate development. We confirm our EBITDA forecast for the year 2016 as a whole, an increase in EBITDA to between EUR115 million and EUR120 million (2015: EUR105.6 million).

We expect a further increase in the EBITDA by about 40% to between EUR160 million and EUR170 million for fiscal year 2017.

Provisional performance indicators of Drillisch Group for the first nine months of 2016

In EURm 30/09/2016 30/09/2015 Change Revenues 522.1 455.1 +14.7% Service revenue 404.4 313.4 +29.0% Gross profit 205.7 179.4 +14.7% Gross profit margin in % 39.4% 39.4% EBITDA 82.7 88.2 (6.2%) EBITDA margin in % 15.8% 19.4% Cash 71.1 117.5 (39.5%) CF from current business activities 58.0 65.6 (11.6%)

Subscribers (millions) 3.214 2.547 +26.2% Thereof MVNO subscribers 3.138 2.449 +28.1% Thereof budget subscribers 2.600 1.770 +46.9% Thereof volume subscribers 0.538 0.679 (20.8%)

Gross Profit per User (AGPPU) AGPPU budget subscribers 8.85 9.20 (3.8%) AGPPU volume subscribers 3.06 3.15 (2.9%) AGPPU subscribers (total) 7.65 7.36 +3.9%



Provisional performance indicators of Drillisch Group for Q3 2016

In EURm Q3-2016 Q2-2016 Change Revenues 180.9 167.8 +7.8% Service revenue 142.9 136.9 +4.4% Gross profit 68.6 68.9 (0.5%) Gross profit margin in % 37.9% 41.1% EBITDA 31.6 27.1 +16.4% EBITDA margin in % 17.5% 16.2%

Gross Profit per User (AGPPU) AGPPU budget subscribers 8.75 9.11 (4.0%) AGPPU volume subscribers 3.26 3.07 +6.2% AGPPU subscribers (total) 7.75 7.85 (1.3%)



You can view the complete 9-month report by clicking on the following link from 10 November http://www.drillisch.de/investor-relations/reports

Maintal, 9 November 2016

Drillisch AG The Management Board



Contact: Oliver Keil Head of Investor Relations Mail: ir@drillisch.de

---------------------------------------------------------------------------

09.11.2016 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de

---------------------------------------------------------------------------

Language: English Company: Drillisch AG Wilhelm-Röntgen-Straße 1-5 63477 Maintal Germany Phone: +49 (0)6181 412 218 Fax: +49 (0)6181 412 183 E-mail: ir@drillisch.de Internet: www.drillisch.de ISIN: DE0005545503 WKN: 554550 Indices: TecDax Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Munich, Stuttgart, Tradegate Exchange End of News DGAP News Service ---------------------------------------------------------------------------

518931 09.11.2016