DGAP-News: ecotel communication ag

• Q3 consolidated revenue increases by EUR 2.0 million to EUR 33.3 million
• Q3 B2B transactions grow from EUR 0.8 million to EUR 12.0 million
• Q3 Consolidated revenue improves by EUR 0.2 million to EUR 7.3 million
• Q3 EBITDA grows to EUR 1.8 million
• Successful implementation of additional key contracts
• All-IP transformation gaining momentum
• Clarification of forecast for 2017 financial year

Düsseldorf, 09 November 2017
With consolidated revenue of EUR 33.3 million in the third quarter 2017 (previous year: EUR 31.3 million) ecotel continues on its course of growth. The high-margin core segment Business Customers (B2B) improved by 7 % to EUR 12.0 million in the quarterly comparison. The decrease in revenue from traditional ISDN transactions was more than compensated by successfully implemented large-scale projects and by the positive order situation in the classic B2B segment (new customers and product changes). Revenue in the New Business segment totalling EUR 4.3 million likewise increased by 5 % in the quarterly comparison. This was due to increases both within the easybell Group and in the new media solutions division of nacamar GmbH. In the low-margin segment of Wholesale Solutions, which is difficult to plan, revenue totalled EUR 17.0 million (previous year: EUR 16.0 million).

The group's gross profit in the third quarter increased to EUR 7.3 million (previous year: EUR 7.1 million). The implementation of large-scale projects in the Business Customers segment and the related initial investments as well as one-time expenses for line migrations result in temporary impacts on the gross profit margin in this segment.

EBITDA increased in the third quarter 2017 to 1.8 million EUR (previous year: 1.6 million EUR). EBITDA is affected by both the one-time gross profit margin effects and by other temporary expenses. For example, ecotel had to pay a share of EUR 0.1 million for regulation of damages from manipulated contracts of a sales partner adversely affecting ecotel and other carriers; this amount is already accounted for in the reported figure of EUR 1.8 million. In addition, EBITDA in the core segment Business Customers was affected by expenses for targeted marketing of optical fibre access in commercial areas and for the improvement of customer service, as well as the development of operational areas for implementation of the high order volume, including the related system developments. Without these effects, EBITDA in the third quarter 2017 would have totalled EUR 2.0 million.

Consolidated EBIT in the third quarter remained unchanged at EUR 0.5 million in comparison with the previous year. In the first nine months of 2017 the group achieved EBIT of EUR 1.6 million (2016: EUR 1.9 million). The taxes on income and profit increased by a one-time figure of EUR 0.1 million due to taxes for previous years as the result of tax audits. Overall, in the first nine months ecotel earned consolidated profit totalling EUR 0.4 million (previous year: EUR 0.6 million), which resulted in earnings per share of EUR 0.10 (previous year: EUR 0.17).

Free cash flow in the third quarter totalled EUR 0.4 million (previous year: EUR 0.7 million). This decrease is the result of expected investments in high-performance customised hardware components, as well as advance investments for large-scale projects. Net financial assets as of 30 September 2017 totalled EUR 1.6 million (previous year: EUR 2.8 million). In the third quarter, based on a resolution of the Annual General Meeting, ecotel paid a cash dividend of EUR 0.23 per qualified share, which resulted in the total payment of EUR 0.8 million (previous year: EUR 0.8 million) to the shareholders.

The group continues to take advantage of the current opportunities for the future by investing in growth, even if this results in a temporary strain on revenue.

The revenue development, especially in the Wholesale Solutions segment, and the temporary impact on revenue result in an adjustment of the forecast for 2017. The Management Board now expects higher consolidated revenue of EUR 120 to 130 million. In this context, revenue in the Business Customers segment will be in a corridor between EUR 47.0 and EUR 47.5 million, and revenue in the New Business segment will be in a corridor between EUR 16.5 and EUR 17.5 million. The Management Board expects EBITDA of about EUR 7.0 million at year's end, which is at the lower end of the forecast corridor.

The current investments in future growth and in new systems will enable ecotel to continue pushing ahead with the ongoing transformation from ISDN to All-IP. Management expects that the resulting gross profit increase from about 50 to as high as 60 % in this unit will lead to significant increases in revenue in the coming years.

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 one of the pioneers of the German Internet. As a product provider, nacamar focuses on providing digital service components for digital transformation applications. The main products are in the realm of radio CDN, analysis and data services, as well as video and connected TV components, which are marketed since 2017 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