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

| Source: EQS Group AG
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

  - 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:

  - 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:

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

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            EUR8.88     EUR9.54     (6.9%)
AGPPU (4) volume subscribers            EUR3.50     EUR3.77     (7.2%)
AGPPU (4) subscribers (total)           EUR6.43     EUR5.98     +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         EUR8.86  EUR9.72  (8.8%)       EUR8.91
AGPPU (4) volume subscribers         EUR3.50  EUR3.77  (7.2%)       EUR3.50
AGPPU (4) subscribers (total)        EUR6.49  EUR6.16  +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

Oliver Keil
Head of Investor Relations
Mail: ir@drillisch.de

13.08.2014 The DGAP Distribution Services include Regulatory Announcements,
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Language:     English
Company:      Drillisch AG
              Wilhelm-Röntgen-Straße 1-5
              63477 Maintal
Phone:        +49 (0)6181 412 218
Fax:          +49 (0)6181 412 183
E-mail:       ir@drillisch.de
Internet:     www.drillisch.de
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