Earnings forecast successfully met – Higher dividend planned
Munich, March 13, 2008 – The telegate Group closed fiscal year 2007 with record results in the company’s history. It proved possible to increase profitability significantly across all business segments. At the same time, there has been investment across the Group to expand the multichannel product portfolio, thus further strengthening the company’s competitive position. A dividend of €0.70 per share – that is five Eurocent more than in the previous year – will be proposed. “We are proud to have attained our ambitious targets,” is how Dr. Andreas Albath, Chairman of the Management Board of telegate AG, sums up the fiscal year. “2007 was a year of many challenges, especially with regard to the strategic realignment of the company. We have been able to drive things forward decisively, particularly on the advertising sales business front,” continues Albath.
Annual results 2007
The year 2007 saw telegate post an annual income after taxes of €33.6 million (fiscal year 2006: €6.0 million). Sales for the period under review were down slightly year on year to €173.3 million (fiscal year 2006: €178.9 million). Adjusted by outsourcing sales not affecting income from contracts with the French mobile telephone partners SFR and Bouygues Telecom, which were also shown during the previous year, sales for 2007 showed a modest rise of two percent. Increased sales were registered outside Germany. With a total of €60.5 million, Italy, Spain and France today contribute 35 percent of the telegate Group’s overall sales. (fiscal year 2006: €63.3 million; adjusted figure €53,7 million). Sales for the Segment Germany/Austria were, however, slightly down, at €112.8 million (fiscal year 2006: €115.6 million).
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the entire year of 2007 stand at €48.4 million (fiscal year 2006: €17.0 million), which means that the company has reached the earnings target range announced already during 2004 for the fiscal year 2007. As of December 31, 2007 the company holds liquid assets of €66.8 million (fiscal year 2006: €18.7 million) and has a equity ratio of just on 57 percent (December 31, 2006: 50 percent).
Dividend payment
The Management Board and Supervisory Board will be proposing a payment of a dividend of €0.70 per share at the Shareholders’ Meeting on June 11, 2008. This represents a total payout amounting to €14,9 million, and is thus more than nine percent higher than in the previous year. The dividend payment will be tax-free both for national and international shareholders.
Current business development
The market and competitive environments for directory assistance media are changing at a dramatic pace - with ‘Local Search’ the expression on everyone’s lips. What is meant here is a search for contact data and offerings of service providers from the user’s local area, representing the traditional core business of ‘Yellow Pages’ publishers and telephone directory assistance providers. This market is on the move throughout Europe. User behavior is shifting, influenced in particular by technological change: While traditional media are losing importance, the new access channels, Internet and mobile devices, are gaining ground. Last year’s strategic realignment of the telegate Group should be seen against this background: “With the consistent, pan-European expansion of our product portfolio into the new media channels, we have put ourselves in the ideal position to derive the optimum benefit from changed user behavior in the future,” says Dr. Andreas Albath of this development. “We are today the leading alternative ‘Local Search’ provider in Germany,” continues Albath.
The company’s new product strategy is proceeding hand in hand with the radical realignments of the business model. In future we will be financing our ‘Local Search’ offering through advertising as well,” says Dr. Andreas Albath. “Last year, the building-up of an effective advertising sales function thus had top priority.” In the wake of the acquisition of a majority holding in klickTel AG, the company was able to expand its sales force to a current figure of around 400, and thus cement its position as an alternative market leader in Germany. Today, telegate boasts one of the largest sales organizations in Germany, with the focus on small to midsize enterprises. In France and Spain, on the other hand, telegate is concentrating on a partnership model as a means of beefing up advertising sales. Here too, the multichannel product portfolio was massively expanded over the course of the last year. In the medium term, telegate Group is looking to generate around one quarter of its total sales from advertising sales.
Financial outlook
In the medium term, the transformation of the business model and the resultant growing contribution from advertising sales will assure telegate sustainable growth in sales and profitability. In light of further investment in the advertising sales business, the company is expecting the current fiscal year 2008 to show a one-off downturn in profits to a level of around 30 million Euros (EBITDA) – without taking account of the expected refund from the ongoing data cost actions against Deutsche Telekom. In the three subsequent years, earnings are set to grow steadily once again and will be seen back at 2007 structural profitability level, that means slightly above 40 million Euros. For this three-year period, telegate is also reckoning on a pre-tax contribution to earnings of a minimum of 100 million Euros accruing from the successful data cost actions against Deutsche Telekom.
Press contact:
Claudia Strixner
telegate AG
Head of Public Relations
Fraunhofer Str. 12a
82152 München-Martinsried
Tel.: 089/ 8954-1188
Fax: 089/ 8954-1189
e-mail: presse@telegate.com
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