QSC-Presentation_Q3_2013_2013_11_11_neu

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QSC-Presentation_Q3_2013_2013_11_11_neu

  1. 1. QSC AG Company Presentation Results Q3 2013 Cologne, November 11, 2013
  2. 2. AGENDA 1. Highlights Q3 2013 2. Financial Results Q3 2013 / Outlook 3. Questions & Answers 2
  3. 3. SOLID DEVELOPMENT IN Q3 2013 • • • QSC is well on track toward reaching its goals for 2013 Direct Sales continues to be the growth driver Indirect Sales and Wholesale constrained by • • • Negative regulatory impact in 2013 (€ 7-8 million less revenues per quarter) Declining demand for conventional TC products QSC is investing in future growth • • • 3 Talent: +298 additional ICT experts since the start of 2012 Customers: Higher upfront CAPEX + additional storage capacities Products: Presentation of the QSC-Box
  4. 4. DIRECT SALES GENERATES A HIGH LEVEL OF DAY-TO-DAY-ORDERS • • • 4 Day-to-day orders from existing and new customers on a higher level than on 2012 average TCV in 2012 positively impacted by three larger outsourcing orders QSC does not expect large orders in 2013
  5. 5. HIGH LEVEL OF DAY-DAY-ORDERS FUELS REVENUE GROWTH IN DIRECT SALES • • Direct Sales is able to increase its revenues quarter by quarter Two-fold development in Indirect Sales • • • 5 Positive impact of new ICT products Decline in TC revenues Wholesale is suffering from adverse market conditions in TC business
  6. 6. ADVERSE MARKET CONDITIONS IN TC BUSINESS – TIGHTENED REGULATION • As of December 1, 2012, the German regulator lowered interconnection fees. This involves three major changes: • • • • Lower mobile fees: minus 45 – 47% Lower fixed-line fees: minus 20 – 40% A new structure of fixed-line termination fees for altnets Effects on QSC: • • 6 € 7-8 million less revenues per quarter in 2013 (~55% Resellers / ~45% Indirect Sales) Some € 1 million less profit per quarter in 2013
  7. 7. ADVERSE MARKET CONDITIONS IN TC BUSINESS – LESS DEMAND FOR CALL BY CALL AND PRESELECT 7
  8. 8. QSC IS INVESTING IN FUTURE GROWTH: MORE TALENT 8
  9. 9. QSC IS INVESTING IN FUTURE GROWTH: LONG-TERM CUSTOMER RELATIONSHIPS • Changing your Outsourcing provider is like an “open-heart surgery” => many customers stay for ten years or more • Upfront-CAPEX are needed to build a long-term customer-relationship • • • • Modernization of customer’s hard and software Realization of interfaces between QSC and the customer In Q3 2013, has to bear an extraordinary high level of investments as • • 9 Customization of QSC’s own data centers Several large projects went to regular operations Modernization of storage capacity of data centers was due earlier than originally planned
  10. 10. QSC IS INVESTING IN FUTURE GROWTH: INNOVATIONS SUCH AS THE QSC-BOX QSC-Box works as a gateway to the Cloud Wireless sensors, e.g. in households Cologne Munich Nuremberg Customer-specific devices 10
  11. 11. QSC IS INVESTING IN INNOVATIONS • As of September 30, 2013, nearly 50 employees were focusing on developing new ICT and cloud products for existing and new markets • QSC is contributing to several highly promising initiatives • • •  11 EEBUS – home automation (presentation at IFA 2013) O(SC)2ar – smart car (DHL is testing pilot cars) Virtual power plant – working on the first pilot (FINESCE) All of these developments have the chance to disrupt existing markets and to open up tremendous growth opportunities to QSC
  12. 12. AGENDA 1. Highlights Q3 2013 2. Financial Results Q3 2013 / Outlook 3. Questions & Answers 12
  13. 13. Q3 2013 WENT AS EXPECTED Q3 2012 Q3 2013 120.5 113.8 -5.6% 79.6 75.9 -4.6% +40.9 In € million +37.9 -7.3% 20.5 18.5 -9.8% +20.4 +19.4 -4.9% • Revenues • Cost of Revenues (1) • Gross profit • Other operating expenses • EBITDA profit • Depreciation 13.0 13.8 +6.2% • EBIT profit +7.4 +5.5 -25.7% • Financial results -1.0 -0.9 +10.0% • Income taxes +0.9 +0.1 nm • Net profit +7.3 +4.7 -35.6% (1) 13 (1) Excluding depreciation and non-cash share-based remuneration
  14. 14. QSC IS ON A GOOD WAY TO REACHING ITS GOALS FOR 2013 Q1-Q3 2012 In € million Q1-Q3 2013 • Revenues 353.2 340.3 -3.7% • Cost of Revenues (1) 236.8 226.9 -4.2% • Gross profit +116.4 +113.4 -2.6% • Other operating expenses 60.4 56.0 -7.3% • EBITDA profit +56.0 +57.4 +2.5% • Depreciation 39.6 39.0 -1.5% • EBIT profit +16.4 +18.4 +12.2% • Financial results -2.9 -2.9 - • Income taxes -1.0 -0.5 nm • Net profit +12.4 +15.0 +21.0% (1) 14 (1) Excluding depreciation and non-cash share-based remuneration
  15. 15. RISING NUMBER OF EMPLOYEES LEADS TO HIGHER PERSONNEL EXPENSES 15
  16. 16. HIGHER DEPRECIATION IN Q3 2013 DUE TO ONE-OFF EFFECT FROM THE INFO AG MERGER 16
  17. 17. LOWER REVENUES AND HIGHER DEPRECIATION INFLUENCED PROFITABILITY IN Q3 2013 17
  18. 18. EBITDA BENEFITS FROM POSITIVE DEFERRED COST EFFECT • • • 18 Cost reduction of € 5.2 million per quarter since Q1 2011 due to the premature termination of the Plusnet contract (originally to run through Dec 31, 2013) in late 2010 QSC used deferred costs to return the payment from TELE2 over the remaining contract period This positive effect will stop after Q4 2013, and will be compensated, to some extent, by a network deal (€ 2.5 – 3 million per quarter)
  19. 19. 9-MONTH COMPARISON SHOWS ROBUST PROFITABILITY DEVELOPMENT 19
  20. 20. TEMPORARILY HIGHER CAPEX IN Q3 2013 20
  21. 21. HIGH OPERATING CASH FLOW HELPS QSC TO EARN AN ATTRACTIVE FREE CASH FLOW IN Q3 2013 21
  22. 22. THE DETERMINING FACTORS OF FCF AT A GLANCE 22
  23. 23. QSC CONFIRMS GUIDANCE FOR FINANCIAL YEAR 2013 QSC anticipates: • (9M: € 340.3 million) • An EBITDA margin of at least 17% (9M: 16.9%) • 23 Revenues of at least € 450 million Free cash flow of at least € 24 million (9M: € 18.1 million)
  24. 24. AGENDA 1. Highlights Q3 2013 2. Financial Results Q3 2013 / Outlook 3. Questions & Answers 24
  25. 25. SHAREHOLDER STRUCTURE AFTER THE TWO FOUNDERS HAVE BOUGHT ADDITIONAL SHARES 25
  26. 26. FINANCIAL CALENDAR November 12, 2013 November 14, 2013 5th German Company Day, LBBW, London December 12, 2013 26 German Equity Forum, Deutsche Börse, Frankfurt Analyst Roundtable, Cologne
  27. 27. CONTACT QSC AG Arne Thull Head of Investor Relations Mathias-Brüggen-Strasse 55 50829 Cologne Phone Fax E-mail Web 27 +49-221-669-8724 +49-221-669-8009 invest@qsc.de www.qsc.de twitter.com/QSCIRde twitter.com/QSCIRen blog.qsc.de xing.com/companies/QSCAG slideshare.net/QSCAG paulrobertloyd.com/2009/06/social_media_icons
  28. 28. SAFE HARBOR STATEMENT   28 This presentation includes forward-looking statements as such term is defined in the U.S. Private Securities Litigation Act of 1995. These forward-looking statements are based on management’s current expectations and projections of future events and are subject to risks and uncertainties. Many factors could cause actual results to vary materially from future results expressed or implied by such forward-looking statements, including, but not limited to, changes in the competitive environment, changes in the rate of development and expansion of the technical capabilities of DSL technology, changes in prices of DSL technology and market share of our competitors, changes in the rate of development and expansion of alternative broadband technologies and changes in prices of such alternative broadband technologies, changes in government regulation, legal precedents or court decisions relating, among other things, to line sharing, rent for colocation and unbundled local loops, the pricing and timely availability of leased lines, and other matters that might have an effect on our business, the timely development of value-added services, our ability to maintain and expand current marketing and distribution agreements and enter into new marketing and distribution agreements, our ability to receive additional financing if management planning targets are not met, the timely and complete payment of outstanding receivables from our distribution partners and resellers of QSC services and products, as well as the availability of sufficiently qualified employees. A complete list of the risks, uncertainties and other factors facing us can be found in our public reports and filings with the U.S. Securities and Exchange Commission.
  29. 29. DISCLAIMER • • No representation or warranty (express or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein and, accordingly, none of the Company or any of its parent or subsidiary undertakings or any of such person’s officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document • 29 This document has been produced by QSC AG (the “Company”) and is furnished to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any other person The information contained in this document does not constitute or form a part of, and should not be construed as, an offer of securities for sale or invitation to subscribe for or purchase any securities and neither this document nor any information contained herein shall form the basis of, or be relied on in connection with, any offer of securities for sale or commitment whatsoever

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