DGAP-News: ecotel communication ag

• Consolidated revenue increases by EUR 3.1 million to EUR 62.3 million
• B2B transactions grow from EUR 0.6 million to EUR 23.2 million
• Consolidated revenue improves by EUR 0.3 million to EUR 14.5 million
• Forecast for 2017 is confirmed
• Order acquisitions continue to rise

Düsseldorf, 10 August 2017
Despite increasing investments in continued future growth, developments at ecotel in the first half year 2017 went as planned. Consolidated revenue increased by a total of EUR 3.1 million to EUR 62.3 million. The analysis of the high-margin core segment Business Customers (B2B) shows that revenue in the first half year increased by EUR 0.6 million to EUR 23.2 million; in comparison with the second quarter of the previous year, revenue increased by EUR 0.5 million to EUR 11.7 million.

Order acquisitions in the Business Customers segment also increased again in comparison with the previous year. In the first half year 2017, more orders were generated for All-IP products than in the entire previous year. Developments in the marketing of broadband Ethernet and optical fibre access were likewise very positive. ecotel continues to push the transformation from conventional ISDN to All-IP products. The conversion of existing ISDN customers to the new All-IP solutions will also secure revenue as a result of new contract terms, while simultaneously increasing the gross profit margin.

The low-margin Wholesale Solutions segment grew in the first half year by EUR 2.5 million to EUR 30.6 million. Revenue in the New Business Segment remained constant at EUR 8.5 million. This segment is likewise undergoing transformations. The conventional call-by-call transactions of the easybell Group are being replaced by the new NGN voice products for private customers and increasingly also for business customers. In the area of new media solutions, which is also part of the New Business segment, nacamar was able to successfully implement the strategic realignment introduced in 2016 and now contributes to the group revenue with a positive EBITDA.

Total consolidated revenue increased in the first half year by EUR 0.3 million to EUR 14.5 million. The majority of this gross profit was due to revenue from the Business Customers segment totalling EUR 11.1 million (1st half year 2016: EUR 10.9 million). The gross profit margin in the B2B segment remained unchanged at 48 %, but is expected to rise continuously starting in 2018.

EBITDA in the first half year 2017 totalled EUR 3.4 million (1st half year 2016: EUR 3.5 million). In order to process the increasing order volume to the satisfaction of customers and partners, measures were initiated in 2016 to hire additional personnel in the operative areas as well. As a result of these measures, personnel expenses increased in the first half year 2017 to EUR 6.8 million (1st half year 2016: EUR 6.3 million).

Consolidated profit, at EUR 0.4 million, remained slightly below the previous year's figure, resulting in earnings per share of EUR 0.10 (1st half year 2016: EUR 0.13).

The expected investments in high-performance customised hardware components and advance investments for major projects result in a negative free cash flow of EUR 0.8 million for the first half year. As a result, net financial assets decreased as expected to EUR 2.1 million (1st half year 2016: EUR 3.0 million).

The group is taking advantage of the current opportunities for the future by investing in growth, even if this results in a temporary strain on revenue. Nevertheless, the Management Board can reaffirm its forecast for the year 2017 and continues to expect consolidated revenue of EUR 95 to 115 million and EBITDA of EUR 7.0 to 8.0 million. The Management Board is planning revenue in a corridor between EUR 45 and 48 million for the core segment Business Customers. For the Wholesale Solutions segment, which in our experience is subject to large fluctuations, revenue is currently expected at the upper end of the forecast corridor of EUR 35 to 50 million. The Management Board is planning revenue of EUR 15 to 17 million for the New Business segment.

The quarterly statement and a presentation of key figures (»time series«) are available for download on the company's website at www.ecotel.de.

About ecotel communication ag:

The ecotel Group (hereinafter »ecotel«) is a telecommunications company operating throughout Germany since 1998 that specialises in meeting the information and telecommunication (IT/telecom) requirements of customers. The parent company is ecotel communication ag. The shares are traded in the Prime Standard segment of the Frankfurt Stock Exchange. ecotel markets products and services in the following segments: »Business Solutions (B2B)«, »Wholesale Solutions«, »Private Customer Solutions (B2C)« and »new media solutions«.

ecotel's core segment is represented by »Business Solutions (B2B)«. Here ecotel offers 18,000 small and medium-sized enterprises, as well as large-scale customers throughout Germany, an integrated product portfolio of voice and data services (IT/telecom solutions) from a single source.

In »Wholesale Solutions« ecotel integrates the services offered to other telecommunications companies. In addition, ecotel is active in cross-network trading of telephone minutes (Wholesale) for national and international carriers; for this purpose, ecotel maintains network interconnections with approximately 100 international carriers.

The »Private Customer Solutions (B2C)« of ecotel include the services of the easybell Group. The Berlin-based subsidiary markets high-quality yet low-priced Internet and telephone services. For this purpose easybell provides rate-adaptable ADSL2+ and VDSL services nationwide. easybell is also one of the market leaders in the provision of classic call-by-call and Internet-by-call access.

With more than 20 years of expertise, nacamar GmbH is among the pioneers of the German Internet. As a product provider nacamar supplies digital service components for digital transformation applications. The company's core products are in the areas of Radio-CDN, analysis and data services, as well as video and connected TV components, which are marketed since 2017 together with the new product developments AddRadio and AddVideo.

The corporate group, with its main office in Düsseldorf, currently has about 270 employees, including subsidiaries and holdings.

Note:
This publication is not an offer for the sale nor an invitation for the purchase or subscription of securities. This publication is not a securities brochure. This publication and the information contained therein are not intended for direct or indirect dissemination to or within the United States of America, Canada, Australia or Japan.

PR office:
Business and Financial Media
Annette Drescher (Assistant to the Managing Director)
Phone: 0211-55 007-740
Fax: 0211-55 007 5 740
E-mail: presse@ecotel.de

Business media
Bernadette Loosen-Flanz (PR)
Phone: 0211-55 007-316
Fax: 0211-55 007 5 316
E-mail: presse@ecotel.de

For further information please visit us on the web at www.ecotel.de