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DGAP-Adhoc: Drillisch AG posts substantial increase in profit and growth in subscriber base in the first half of 2014

August 13, 2014

Drillisch AG / Key word(s): Half Year Results/Miscellaneous 13.08.2014 20:30 Dissemination of an Ad hoc announcement according to 15 WpHG, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Drillisch AG posts substantial increase in profit and growth in subscriber base in the first half of 2014. - Stable Service revenues +0.4% to EUR139.6 million (H1 2013: EUR139.0 million) - Gross profit +21.2% to EUR68.0 million (H1 2013: EUR56.1 million) - EBITDA +24.2% to EUR42.4 million (H1 2013: EUR34.1 million) - MVNO subscribers +13.9% to 1.815 million (H1 2013: 1.593 million) - Thereof budget subscribers +55.7% to 1.023 million (H1 2013: 657,000) - Average gross profit per MVNO user (AGPPU) +7.5% to EUR6.43 (H1 2013: EUR5.98) - MBA MVNO contract opens up additional growth opportunities Maintal, 13 August 2014 - Drillisch AG (ISIN DE 0005545503) has once more significantly increased the major performance indicators and thus further improved the earning power of the company in a difficult and challenging market environment. Parallel to its operating business, and after intensive negotiations, Drillisch concluded an MBA MVNO (Mobile Bitstream Access) agreement with TelefÓnica Germany GmbH & Co. OHG ("TelefÓnica") on 25 June 2014 through its wholly-owned group member MS Mobile Services GmbH ("MS Mobile"). In this agreement, TelefÓnica undertakes to grant MS Mobile, as the only competitor on the German wireless services market, access to up to 30 % of the network capacity that is available after the merger in the controlled wireless network of TelefÓnica and E-Plus, for all present and future technologies. The basic term of the agreement is 5 years and can be extended by means of two call options by MS Mobile by 5 more years each, that is, to a total of 15 years. In return, MS Mobile has undertaken to take over at least 20 % of the present and future network capacity for new customers for the basic term of 5 years, using a "glide path" (that is, the obligation to take over this network capacity will reach 20 % towards the end of the basic term). In addition, there is a certain minimum capacity which has been defined for existing customers. Furthermore, MS Mobile will initially take over 50 shop locations from TelefÓnica at attractive terms and conditions, with the option of taking over up to a further 550 locations. This further expands its distribution capacity, even outside major cities. The technical launch, that is the startup as an MBA MVNO, will take place at the earliest on 1 January 2015 and at the latest on 1 July 2015. With these agreements, the Drillisch Group is in an outstanding position to improve its market position as well as its business volume significantly in the years to come, and to have permanent access to all products and technologies that are or will be available in the largest German wireless network. In terms of the flexibility, freedom and design of its products, Drillisch is thus on an equal footing with the three remaining German network operators. This is reported in detail in the report for the first half of 2014, on Pages 4 and 5. All of the above-mentioned agreements are currently still subject to approval by the European Commission. Summary Report on 1st Half-Year 2014 Subscriber growth - positive dynamics continue: The increase in the number of MVNO subscribers continued unabated in the first six months of fiscal 2014. Year on year, the subscriber base increased by a total of 13.9% or 222,000 to 1.815 million. In the significantly more profitable budget sector, the number of subscribers rose by 55.7% or 366,000 to 1.023 million (H1 2013: 657,000), while the number of volume subscribers dropped slightly by 144,000 to 792,000 (H1 2013: 936,000. Significant improvement in profit from stable Service Revenues: Service revenues rose slightly by 0.4% to EUR139.6 million (H1 2013: EUR139.0 million). This means that Drillisch AG performed better than the market. Service revenues in the 2nd quarter rose by 0.6% to EUR69.5 million (Q2 2013: EUR69.1 million). Sharp rise in gross profit: Gross profit improved by EUR11.9 million or 21.2% to EUR68.0 million in the first half of 2014 (H1 2013: EUR56.1 million). The gross profit margin increased by 9.8 percentage points to 48.0% (H1 2013: 38.2%). EBITDA reaches new high at the upper end of the target corridor: With growth of 24.2% to EUR42.4 million (H1 2013: EUR34.1 million) EBITDA reached a new record figure. The EBITDA margin improved by 6.7 percentage points to 29.9% (H1 2013: 23.2%). Increase in income is reflected in consolidated profit: Compared with the consolidated profit for the first half of 2013, adjusted for the effects from the reduction of the stake in freenet, the consolidated profit for the reporting period rose by 22.4% or EUR4.7 million to EUR25.4 million (H1 2013: EUR20.7 million). Profit per share rose by EUR0.10 to EUR0.53 per share (H1 2013: EUR0.43 per share). Excellent development of cash flow from current business activities: Cash flow from current business activities grew sharply by EUR23.8 million or 182.1% to EUR36.9 million compared to last year (H1 2013: EUR13.1 million). On account of the dividend payment effected in May 2014 in the amount of EUR76.8 million, cash declined on balance by EUR42.3 million to EUR144.7 million (31.12.13: EUR187.0 million). In combination with attractive financing opportunities, Drillisch AG has adequate flexibility to expand or supplement its business activities as expedient. Outlook: EBITDA and dividend forecast confirmed: With the final results for the first six months and a positive outlook for the rest of the year, Drillisch can confirm its Guidance. Based on the current status, Management Board expects an EBITDA for the current fiscal year 2014 at the upper end of the forecast of EUR82 million to EUR85 million. A further EBITDA increase to between EUR95 million and EUR100 million is planned for 2015. We want to continue to share the success of the Company with the shareholders in the future as well and are still planning a dividend of at least EUR1.60 per share for fiscal years 2014 and 2015. Key Indicators of the Drillisch Group as per 30 June 2014 In EURm H1-2014 H1-2013 Change in % Revenue 141.8 147.0 (3.6%) Service revenue 139.6 139.0 +0.4% Gross profit 68.0 56.1 +21.2% Gross profit margin in % 48.0% 38.2% EBITDA 42.4 34.1 +24.2% EBITDA margin in % 29.9% 23.2% Consolidated profit (adjusted)* 25.4 20.7 +22.4% Profit per share in EUR (adjusted)* 0.53 0.43 +22.6% Consolidated results 25.4 139.3 (81.8%) Profit per share (in EUR) 0.53 2.90 (81.7%) Subscribers (thousands) (1) 1,977 1,823 +8.4% - thereof MVNO subscribers 1,815 1,593 13.9% - thereof budget subscribers (2) 1,023 657 +55.7% - thereof volume subscribers (3) 792 936 (15.4%) AGPPU (4) budget subscribers EUR8.88EUR9.54 (6.9%) AGPPU (4) volume subscribers EUR3.50EUR3.77 (7.2%) AGPPU (4) subscribers (total) EUR6.43EUR5.98 +7.5% - * adjusted for the effects from the reduction in the stake in freenet Key Indicators of Drillisch Group, comparison Q2 2014 vs. Q2 2013 In EURm Q2 2014 Q2 2013 Change in % Q1 2014 Revenue 70.4 72.3 (2.5%) 71.3 Service revenue 69.5 69.1 +0.6% 70.0 Gross profit 35.1 29.6 +18.8% 32.9 Gross profit margin in % 49.8% 40.9% 46.2% EBITDA 21.8 17.9 +21.8% 20.5 EBITDA margin in % 31.0% 24.8% 28.8% Consolidated profit (adjusted)* 13.2 11.0 +20.5% 12.2 Profit per share in EUR (adjusted)* 0.28 0.23 +20.6% 0.25 Consolidated results 13.2 17.6 (24.7%) 12.2 Profit per share (in EUR) 0.28 0.37 (24.6%) 0.25 Subscribers (thousands) (1) 1,977 1,823 +8.4% 1,935 - thereof MVNO subscribers 1,815 1,593 +13.9% 1,760 - thereof budget subscribers (2) 1,023 657 +55.7% 946 - thereof volume subscribers (3) 792 936 (15.4%) 814 AGPPU (4) budget subscribers EUR8.86EUR9.72 (8.8%) EUR8.91 AGPPU (4) volume subscribers EUR3.50EUR3.77 (7.2%) EUR3.50 AGPPU (4) subscribers (total) EUR6.49EUR6.16 +5.4% EUR6.39 - * adjusted for the effects from the reduction in the stake in freenet (1) Thereof 102,000 prepaid subscribers and 60,000 postpaid service provider subscribers (2) Rate plans with inclusive volume (voice, text messages, data) (3) Rate plans with billing based on usage ("Pay as you go") (4) AGPPU = average gross profit per user The complete, audited report for the first half of the year will be available from 14 August at the following link: Maintal, 13 August 2014 Drillisch AG The Management Board Contact: Oliver Keil Head of Investor Relations Mail: ir@drillisch.de13.08.2014 The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at and --------------------------------------------------------------------------- Language: English Company: Drillisch AG Wilhelm-RÖntgen-Straße 1-5 63477 Maintal Germany Phone: +49 (0)6181 412 218 Fax: +49 (0)6181 412 183 E-mail: Internet: ISIN: DE0005545503 WKN: 554550 Indices: TecDAX Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, DÜsseldorf, MÜnchen, Stuttgart End of Announcement DGAP News-Service ---------------------------------------------------------------------------

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Source: DGAP Ad Hoc Disclosures

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