Quarterly results telegate AG: earnings numbers significantly improved
• Group sales rise by approximately 7 percent• Transformation of the business model continues successfully:
Business area Media already generates approximately 14 percent of group sales
• EBITDA before one-time effects increased by around 9 percent
Munich, May 7, 2009 – The telegate group started well in the fiscal year 2009 irrespective of the recessionary economic environment. Group sales of the multichannel-provider of local search increased from € 39.7 m by approximately 7 percent to € 42.3 m due to the significant growth of the business sector Media, in particular. Earnings before interest, taxes, depreciation and amortization (EBITDA) before one-time effects amounted to € 9.9 m and thus around 9 percent above previous year’s earnings in the amount of € 9.1 m. telegate’s management board adheres to the objective of an EBITDA before one-time effects of € 32 to € 37 m in its forecast for the fiscal year 2009.
The young business sector Media attained sales in the amount of € 5.8 m which is more than the fivefold amount of € 1.1 m of the previous year. Both the first consolidation of the contribution to sales of telegate MEDIA AG (formerly klickTel AG) and the significant organic growth of the advertising sales business made a contribution to this development. The decline of sales from € 38.6 m to € 36.6 m in the classic directory assistance business which combines the telephone directory assistance services and the klickTel software products was within the expectations.
Profitability: accelerated cost management shows positive effects
EBITDA of the telegate group including one-time effects amounted to € 9.8 m after the first
3 months of the fiscal year 2009. This represents a significant increase in profits of approximately 14 percent compared to previous year’s earnings in the amount of € 8.6 m. This earnings number includes several special items: one-time expenses for the integration of telegate MEDIA AG in the earnings of the first quarter 2009 as well as one-time expenses for the acquisition of telegate MEDIA AG in the previous year’s quarter. EBITDA adjusted by these effects amount to € 9.9 m, this is around 9 percent higher compared to the previous year – telegate AG generated an EBITDA before one-time effects in the amount of € 9.1 m in the first quarter 2008.
First-quarter net income of the telegate group clearly increased from € 5.8 m in the previous year to now € 6.6 m. Earnings per share rose correspondingly from € 0.27 per share to € 0.31 per share. The development with regard to all earnings numbers is primarily based on an accelerated cost management, lower advertising expenses and the successful expansion of value added services in the classic directory assistance business.
Financial position: equity ratio of 56.1 percent
The telegate group which is free from debt further improved its balance sheet quality in the first quarter 2009. Equity ratio amounts to 56.1 percent as of March 31, 2009. This ratio amounted to 52.7 percent as of the closing date of the fiscal year 2009. Liquid assets increased again from
€ 53.5 m to € 54.9 m irrespective of high payments of taxes and the cash used for the acquisition of the remaining shares of telegate MEDIA AG’s minority shareholders.
Segments: growth of profits in spite of a difficult overall economic environment
telegate AG further continues to move forward with regard to the transformation process from a classic provider of telephone directory assistance to a specialist for local search and digital marketing of small and medium-sized businesses in the core market Germany/Austria. The share in sales of the advertising sales business of the segment sales already amounts to 17.7 percent. This share amounted to 14.9 percent by the end of the fiscal year 2008. The Media business continues to grow dynamically in spite of the difficult overall economic conditions. Sales of Media business increased from € 1.1 m in the previous year to € 5.5 due to both the organic growth and the contribution to sales of telegate MEDIA AG (formerly klickTel AG) which was consolidated for the first time. The sales volume of the directory assistance business in the amount of € 25.4 m was slightly above previous year’s level of 24.9 m. The expansion of the Comfort-Services and the sales of the software business of telegate MEDIA AG which were consolidated for the first time primarily contributed to this development. Segment sales overall significantly rose by 19 percent from
€ 25.9 m in the previous year to now € 30.9 m due to the contribution to sales of the advertising marketing business, in particular. The positive sales trend is also reflected in the segment-EBITDA before one-time effects. It improved from € 8.7 m in the comparative period to a current € 9.0 m.
The segment France generated quarterly sales in the amount of € 3.1 m after € 4.0 m in the previous year in a still very competitive and considerably declining market environment. In this connection, the new business sector Media already generated approximately 8.3 percent of total sales. The segment again generated a positive contribution to telegate group’s earnings due to lower advertising expenses and cost optimizations: EBITDA amounted to € 0.1 m in the first quarter 2009 after € -0.2 m in the previous year.
The difficult overall economic conditions had noticeable effects on the business development of the segment Italy/Spain in the first quarter 2009. The decreasing call volume resulted in a decline of sales in both countries in the amount of € 9.8 m in the previous year to now € 8.3 m. This trend was counteracted by cost optimization measures – capacity adjustments and expansion of offshoring, in particular. For this reason, the EBITDA in the amount of € 0.8 m was higher compared to the comparative quarter of the previous year (€ 0.6 m).
Outlook
telegate’s management board still proceeds on the assumption of a slightly declining profit dynamic with regard to the entire fiscal year 2009, irrespective of the positive first quarter’s profit performance. Overall, the company expects still an EBITDA before one-time effects within a range of € 32 m to € 37 m compared to € 40.2 m in the financial year 2008. The decline of sales to be expected in the classic directory assistance business with a high margin is the main reason which presumably cannot be compensated yet by the strong growth of the Media business with a lower margin in the current fiscal year.
In addition, the projection of the management is based on the still difficult overall economic environment in all European markets. The company continues to remain cautious even though the recession has not affected the financial figures of telegate AG yet. Accordingly, telegate AG continues to focus on an optimization of cost structures in order to ensure the investment scope for the growth of the Media business.
Press contact:
Joerg Kiveris
telegate AG
Head of Public Relations Department
Fraunhofer Str. 12a
82152 Planegg-Martinsried near Munich
GERMANY
Phone: +49 (89) 8954-1188
Fax: +49 (89) 8954-1189
E-mail: presse@telegate.com
