Excellent start to 2004 financial year

telegate forecasts a net profit of minimum EUR 20 million in 2004

Munich, 29 April 2004 – telegate AG started excellently into the 2004 financial year. The first quarter closed with a significant net profit of EUR 3.2 million (Q1 2003: EUR –0.3 million). Revenues increased by 52 percent year-on-year and totalled EUR 40.3 million (Q1 2003: EUR 26.5 million). One outstanding aspect was the positive growth trend in telegate’s International segment: Revenues quadrupled to EUR 10.8 million against the same period last year (Q1 2003: EUR 2.7 million). Earnings before interest, taxes, depreciation and amortization (EBITDA) increased to EUR 6.9 million (Q1 2003: EUR 2.9 million). Operating earnings (EBIT) totalled EUR 5.1 million (Q1 2003: EUR 0.8 million).

In the first quarter, positive free cash flow of EUR 9.9 million allowed the Company to repay fully all its financial liabilities. As of 31 March 2004, telegate has cash and cash equivalents of around EUR 15 million.

As a result of these positive first-quarter results, and given current business developments, telegate is now giving firmer details on its earnings forecasts for the current year: the Company is anticipating a rise in EBITDA of at least 20 percent, which corresponds to minimum EBITDA of EUR 25 million compared to EUR 20.7 million in 2003. In addition, telegate AG net profit for the year will benefit from an extraordinary, non-cash book profit of EUR 7.8 million (effective in Q2 2004), resulting of the after taxes should then reach EUR 20 million (2003: EUR 7.5 million). deconsolidation of US business. For the 2004 financial year, telegate anticipates that the net profit