DGAP-News: ecotel communication ag: ecotel presents Q1 figures: Continued growth in B2B segment

• B2B transactions increase in Q1 2018 to EUR 11.9 million (previous year EUR11.6 million)
• Further growth in key account projects
• Gross profit increases by EUR 0.3 million to EUR 7.6 million
• EBITDA remains constant at EUR 1.8 million
• Free Cash Flow increases to EUR 0.4 million (previous year: EUR -0.7 million)

Düsseldorf, 15 May 2018
The year 2018 started off successfully for ecotel. For example, the important core segment »ecotel Business Customers« increased its revenue by EUR 0.3 million in comparison with the previous year to EUR 11.9 million, continuing the profitable growth course of the past four years. This development confirms that ecotel is well positioned with the new product portfolio for business customers, and has successfully started implementation of the technological transformation from ISDN to All-IP based voice services.

The »easybell« and »nacamar« segments likewise increased their revenue from EUR 0.1 million to EUR 4.0 million and EUR 0.5 million, respectively.  The change in strategy and the transformations implemented in these segments in recent years are evident in this positive development. The low-margin »ecotel Wholesale« segment achieved revenue of EUR 3.2 million (previous year: EUR 11.0 million). This decrease of EUR 7.8 million in comparison with the first quarter 2017 caused a decrease in consolidated revenue of EUR 7.3 million to EUR 19.6 million.

Consolidated gross profit on the other hand increased to EUR 7.6 million (previous year: EUR 7.3 million). While gross profit in the »ecotel Wholesale«, »easybell« and »nacamar« segments improved by a total of EUR 0.1 million, gross profit in the core segment »ecotel Business Customers« increased to EUR 5.8 million (previous year: EUR 5.6 million). The gross profit margin in this segment increased slightly to 48.7 % (previous year: 48.3 %). These results are the first positive effects from the growing share of the new high-margin IP voice products from in-house developments.

Consolidated EBITDA remained unchanged at EUR 1.8 million (previous year: EUR 1.8 million). The reinforcement of human resources made necessary in 2017 resulted in an increase in personnel expenses of EUR 0.2 million in comparison to the first quarter 2017. Other operating expenses and income increased by a total of EUR 0.1 million. The expected increase in depreciations totalling EUR 1.3 million (previous year: EUR 1.1 million) results in EBIT of EUR 0.5 million (previous year: EUR 0.7 million). After deduction of taxes on income and earnings as well as shares of other shareholders, ecotel achieved a consolidated surplus of EUR 0.1 million (previous year: EUR 0.3 million) in the first three months of 2018, which corresponds to earnings per share of EUR 0.04 (previous year: EUR 0.07).

With a nearly unchanged balance sheet total of EUR 41.6 million and equity of EUR 22.3 million, ecotel is well equipped to continue its sustainable growth strategy - with an equity ratio of 53.7 % (previous year: 48.8 %), net financial assets of EUR 0.6 million (previous year: EUR 2.7 million) and free cash flow of EUR 0.4 million (previous year: EUR -0.7 million).

ecotel will continue to make target-oriented and success-related investments in high-performance customer equipment, which will temporarily burden the free cash flow. With the new product portfolio ecotel now has everything needed by business customers to complete the successful and efficient development from ISDN to All-IP and eventually to a Gigabit society. The individual customer solutions will be implemented with DSL and optical fibre transmission technology of different upstream suppliers (multi-carrier strategy), combined with voice services from in-house developments, and managed by ecotel.

Meanwhile, more than 20 % of ecotel voice minutes are IP based, the majority transmitted via the company's own local exchange network. This share continues to increase. On the other hand, the share of voice minutes with ISDN preliminary products from Telekom - meanwhile below 25 % - continues to decrease as planned. The higher value creation from »in-house production« simultaneously increases ecotel's competitiveness, which has also made it possible to convince major customers to switch to IP-based voice services. For example, ecotel recently acquired a major contract for networking of regional branch offices with the head office via an MPLS VPN, including IP-based voice services. Additionally, the realization of already acquired major customer projects is proceeding as scheduled.

The Management Board is convinced that ecotel remains on the right path and reconfirms the forecast for 2018. According tothis the Management Board is predicting consolidated revenue ranging between EUR 90 and 120 million and EBITDA in the realm of EUR 7.0 to 8.0 million with a slightly increased gross profit margin, resulting in enhanced gross profits in the core segment Business Solutions.

About ecotel communication ag:
The ecotel Group (hereinafter »ecotel«) is a group of companies operating throughout Germany since 1998 that specialises in the marketing of information and telecommunications solutions for different target groups. The parent company is ecotel communication ag with headquarters in Düsseldorf (hereinafter »ecotel ag«).

Currently ecotel provides more than 50,000 customers nationwide with about 10,000 data connections and more than 80,000 voice connections.

The company's core segment is represented by »ecotel Business Solutions«. In this segment ecotel offers business customers nationwide an integrated product portfolio consisting of voice and data services (IT/telecom solutions). The focus is on enterprises with more than 50 employees.

The »ecotel Wholesale« segment comprises the services for other telecommunications companies, including network interconnections with more than 100 international carriers.

The »easybell« segment includes all transactions of the easybell group, which consists of four companies. The easybell segment markets broadband Internet access and VoIP telephony for private customers, as well as SIP trunking services for smaller enterprises.

In the »nacamar« segment nacamar GmbH offers streaming services for media enterprises on the basis of its own Content Delivery Network (CDN). With AddRadio, nacamar is the market leader in Germany.

The corporate group, with its main office in Düsseldorf, 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