EQS-News: ecotel communication ag: ecotel presents 9M figures: Focus on »cloud & fiber« strategy after sale of easybell shares

• easybell to be reported as discontinued operation (held for sale)
• Group revenue increases by 47 % to 69.8 million (prev. year: 47.4 million)
• EBITDA grows to 21.9 million or, without one-off effect, to 7.0 million
• EPS increases substantially to 4.36 or, without one-off effect, to 1.24 (prev. year: 0.91)
• Free cash flow almost tripled to 22.1 million (prev. year: 7.7 million)
• Net financial assets of 18.9 million as of 9/30/2022
• Revenue of about 56 million expected in Q4/2022 from sale of easybell shares

Düsseldorf, November 8, 2022

On October 25, 2022, ecotel communication ag (ecotel) concluded a contract for the sale of its 50.9% holding in easybell GmbH.

After deduction of transaction fees, the revenue for the shares held by ecotel is expected to total between 55.5 and 56.5 million, which will become due after closing of the transaction.

This additional financial freedom will now allow ecotel to achieve profitable growth, while placing the main emphasis on the two key growth drivers in the German telecommunications market of the coming years: cloud telephony (»cloud«) and broadband services (»fiber«) for business customers.

As of September 30, 2022, the requirements of IFRS 5 Non-current assets held for sale and discontinued operations for the operative segment easybell (»discontinued operation«) were fulfilled. The statement of comprehensive income for the first nine months of financial year 2022 and the comparison periods of previous years therefore was based on a different accounting policy in accordance with IFRS regulations. The reported consolidated EBITDA now comprises the following segments: »ecotel Business Solutions«, »ecotel Wholesale« and »nacamar« (»continued operations«). The »easybell« segment will continue to be included in the consolidated profit and earnings per share until conclusion of the transaction in the fourth quarter.

Trend of business:

Consolidated revenue from continued operations increased by 22.4 million to 69.8 million in the first nine months of 2022. The surplus revenue results primarily from growth in the »ecotel Wholesale« segment. Consolidated gross profit grew by 0.7 million to 23.2 million in the reporting period.

Consolidated EBITDA from continued operations increased by 15.1 million to 21.9 million in the first nine months of 2022. This figure includes the one-off effect from the transfer of usage rights for Internet resources totaling 14.9 million. Adjusted to allow for the one-off effect, EBITDA increased by 0.2 million to 7.0 million.

The result from continued operations and earnings of the easybell Group (discontinued operation) is consolidated profit totaling 15.3 million (prev. year: 3.2 million) and earnings per share of 4.36 (prev. year: 0.91). Without taking into account the one-off effect 14.9 million before taxes or 11 million after taxes earnings per share increased to 1.24 (prev. year: 0.91) in the first nine months of financial year 2022.

As of September 30, 2022, the Group has repaid all financial loans from credit institutes. The Group is therefore one hundred percent equity financed. With free cash flow of 22.1 million (prev. year: 7.7 million), the Group reports net financial assets of 18.9 million as of September 30, 2022. This figure takes into account distributions of 3.8 million and dividends paid in July 2022 totaling 7.9 million.

With the exception of a substantial rise in energy costs, developments within the Group went largely according to plan in the third quarter 2022. With revenue of 24.5 million (prev. year: 18.1 million), EBITDA totals 2.3 million (prev. year: 2.6 million).

Details of the individual segments:

»ecotel Business Solutions«

The high-margin segment »ecotel Business Solutions« earned revenue in the first nine months of this year totaling 34.1 million (prev. year: 34.5 million). Gross profit again increased, to 21.5 million (prev. year: 20.5 million). Sustainable effects have been achieved through the altered product mix, automation and improved purchasing terms. Adjusted by the one-off effect, EBITDA increased by 0.5 million to 6.4 million in the first nine months.

In the third quarter 2022, the segment achieved revenue totaling 11.4 million (prev. year: 11.5 million). However, high electricity costs reduced gross profit by 0.4 million to 7.0 million compared to the previous years period. As a result, EBITDA for the third quarter totaled 2.1 million (prev. year: 2.3 million). Electricity costs are expected to decrease again in the fourth quarter 2022.

»ecotel Wholesale«:

The »ecotel Wholesale« segment reported strong growth in revenue both in the third quarter (+ 6.8 million) and in the first nine months of the year 2022 (+ 23.8 million). This positive development was the result of higher revenue from cross-network trading of telephone minutes as well as a significant rise in revenue from the marketing of data connections for national and international carriers. Meanwhile, this traditionally low-margin business sector has also achieved an increase in gross profit: to 1.0 million (prev. year: 0.8 million) in the first nine months of the year 2022, and to 0.4 million (prev. year: 0.3 million) in the third quarter. The segment contributed 0.5 million (prev. year: 0.4 million) to the group EBITDA in the first nine months of financial year 2022.

»nacamar«:

The »nacamar« segment developed according to plan both in the third quarter and in the first nine months of 2022. Revenue in the third quarter 2022 totaled 0.3 million (prev. year: 0.6 million), gross profit 0.3 million (prev. year: 0.4 million), and EBITDA 0.1 million (prev. year: 0.2 million).

Forecast:

The continuing conflict in Ukraine and the related incidents as well as the global economic effects of this conflict, as well as the restrictions of global supply chains still resulting from the COVID-19 pandemic, have had only minor consequences for ecotel so far. As a result of product demand, our customers solvency and the performance of our upstream suppliers, there have been no significant restrictions in our business operations. However, energy costs have risen substantially at times, especially for operation of the data center infrastructure.

Taking into account the aforementioned change in the accounting policy due to the pending sale of the easybell Group, as well as all known and foreseeable developments in the segments, the company has prepared the following forecast: The Management Board now expects revenue for financial year 2022 in the »ecotel Business Solutions« segment in a corridor from 45 to 47 million (previously 47 to 50 million), in the »Wholesale« segment in a corridor from 43 to 48 million (previously 20 to 25 million), and in the »nacamar« segment of about 1 million (previously 0.5 to 1.5 million).

Consolidated EBITDA, adjusted by the one-off effect, in the future will comprise the »ecotel Business Solutions«, »ecotel Wholesale «and »nacamar« segments, and will be in a corridor of 8.5 to 10.5 million, in line with the previous forecast.

Altogether, the Management Board therefore expects reported consolidated EBITDA in a corridor of 68 to 75 million for financial year 2022.

About ecotel communication ag:

The ecotel Group (hereinafter »ecotel«) has been operating nationwide since 1998 and is established as one of Germanys leading providers of high-quality business solutions. With the focus on cloud & fiber in 2022, ecotel supplies the two most important growth areas of the German telecommunications market. The parent company is ecotel communication ag with headquarters in Düsseldorf. Including its subsidiary, ecotel has a total of about 225 employees. Currently, ecotel provides full cloud and broadband services to more than 20,000 customers throughout Germany.

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.

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ecotel communication ag

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