QSC doubles free cash flow and quadruples consolidated net income in 2010
Preliminary numbers for 2010
Successful transformation process: IP-based revenues rise by 11%
Greater profitability: Consolidated net income rises to € 24.2 million
Stronger financial position: Free cash flow rises to € 27.7 million
Forecast for 2011
Free cash flow of € 35 to € 45 million planned
First distribution of a dividend planned for the current fiscal year
Cologne, February 28, 2011. The development of business at Cologne-based QSC AG continued to be driven in 2010 by the company’s transformation process from a network operator to a provider of ICT services. As a result of its focus on higher-margin IP-based revenues, QSC was able to significantly improve its financial position and profitability, thus enabling it to fully achieve its expectations for the 2010 fiscal year as announced throughout the year.
Revenues rose to € 422.1 million in 2010 from € 420.5 million the year before. While revenues with the classical products of a network operator, such as Call by Call and ADSL2+, declined by € 26.1 million to € 133.2 million in 2010, revenues with IP-based products and services advanced by a total of € 27.7 million to € 288.9 million. This means that in 2010 QSC was already generating 68 percent of its revenues in these forward-looking lines of business. The advances the company has made in its transformation process are illustrated by the quarter-to-quarter development of business: The share of IP-based revenues rose from 65 percent in the first quarter of 2010 to 72 percent in the fourth quarter.
The transformation into an ICT service provider as well as sustained strict cost discipline enabled QSC to further increase its EBITDA to € 78.1 million in 2010 from € 76.9 million the year before; this raised the EBITDA margin to 19 percent.
As anticipated, declining depreciation expense played a major role in enabling QSC to more than double its operating profit – its EBIT – during the same period; this metric rose to € 20.9 million, compared to € 9.7 million the year before; the EBIT margin increased to 5 percent. Given its sustained and growing profitability, in 2010 the company recognized deferred taxes on losses carried forward, in accordance with IFRS, which had a positive effect of € 5.3 million on taxes. This increased net consolidated income after taxes to € 24.2 million, compared to € 5.5 million the year before; earnings per share rose to € 0.18, compared to € 0.04 in 2009.