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. 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. 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. 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
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. 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. 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
17. LOWER REVENUES AND HIGHER DEPRECIATION
INFLUENCED PROFITABILITY IN Q3 2013
17
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)
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)
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. 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. 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. 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
