QSC confirms full-year forecast after good start to 2020

  • Revenues rise to € 34.1 million in first quarter of 2020 – third consecutive quarter of revenue growth
  • Strong new orders of € 33.7 million in first three months of 2020
  • Despite coronavirus pandemic, QSC still plans for revenue growth of at least 13% to more than € 143 million in 2020

Cologne, 11 May 2020. QSC AG increased its revenues to € 34.1 million in the first quarter of 2020, up from € 33.1 million in the fourth quarter of 2019. Since selling its telecommunications business in mid-2019, the Company has maintained its consistent course of organic growth from quarter to quarter. This is being driven by QSC’s concentration on digitalisation in the German SME segment, with a focus on Cloud, SAP and IoT applications.

Revenues mostly recurring and immune to crisis

Comments Jürgen Hermann, CEO of QSC: “Our ‘2020plus’ growth strategy is proving its worth in the current exceptional circumstances as well.” Since mid-March 2020, the coronavirus pandemic has largely paralysed public life and economic activity around the world. QSC is in a comparatively comfortable situation. Explains Hermann: “Our business model is stable and robust: The predominant share of our revenues are recurring and immune to the crisis. Not only that, digitalisation is currently surging in nearly all areas of life and sectors. QSC will therefore grow from quarter to quarter.” He also pointed to the strong new order figure of € 33.7 million in the first quarter of 2020, which was around 30% up on the previous quarter.

Given its strong order situation, in the first quarter of 2020 QSC continued to invest in its future growth, pressed ahead with developing new digital services and recruited additional Cloud, SAP and IoT specialists. As planned, the EBITDA of € -1.1 million approached break-even in the first quarter of 2020. In the third quarter of 2019, this key figure still amounted to € -2.2 million. At € -4.1 million, the free cash flow for the past quarter was also within the budgeted framework. At the end of March 2020, the Company had no debts and net liquidity of € 61.9 million. It therefore sees itself as being solidly financed, also with a view to its future development.

Growing interest in digital workplaces

For the current financial year, QSC still expects its revenues to rise by at least 13% to more than € 143 million. The Company assumes that economy activity will normalise again from the third quarter. Until then, new business volumes may not reach expected levels in all areas, while the Consulting business may be held back by contact restrictions. On the other hand, since March 2020 there has been a noticeable rise in the interest shown in digital workplace solutions. In its current phase of growth and investment, the Company therefore still plans to report EBITDA of up to € -5 million and a free cash flow of up to € -16 million. QSC will generate sustainably positive EBITDA once again from the fourth quarter of 2020 and a sustainably positive free cash flow from the fourth quarter of 2021.

Jürgen Hermann, who just recently increased his own shareholding by 50% to 1 million QSC shares, is confident: “QSC will continue to press ahead with its new alignment by implementing numerous individual measures. Our implementation expertise along the whole of the digital value chain – from sensor technology to SAP through to Cloud – and our power of innovation with a clear sector focus are key value drivers. We will be strengthening these and consistently developing them further.” Given these success factors and the progress already made in the operating business, both Commerzbank and Bankhaus Lampe recommend QSC’s shares as a “clear buy” with target prices of € 2.00 and € 1.80 respectively.

Key figures for first quarter of 2020*

€ million Q1 2020
Revenues 34.1
- Cloud & IoT 23.3
- SAP 10.8
EBIT -5.3
Consolidated net income -5.5
Free cash flow -4.1
Capital expenditure 0.8
Net liquidity as of 31 March 61.9
Equity ratio as of 31 March 71%
Employees as of 31 March 860


* This Corporate News focuses on the first quarter of 2020. Comparison with the previous year’s figures would not facilitate understanding of the results, as the TC business successfully sold in mid-2019 still accounted for significantly more than half of revenues and expenses. This Corporate News therefore does not provide comparative figures for the previous year.
This Corporate News contains forward-looking statements that are based on current expectations and forecasts on the part of the management of QSC AG with regard to future events. Due to risks or erroneous assumptions, actual events may deviate materially from these forward-looking statements.

About QSC AG:

QSC AG is digitalising the German SME sector and enabling its customers to enhance their business processes and business models with the utmost flexibility and efficiency. QSC has longstanding technological and application expertise in the fields of Cloud and Colocation, SAP and the Internet of Things. Its extensive service portfolio provides exactly what SME players need as they move into the digital age: from standardised pay-as-you-use services through to individualised full-range solutions for the retail, manufacturing and energy sectors. All services offer end-to-end quality and high security. QSC bases its relationships with customers on an entrepreneurial approach, a service-driven mindset and a desire to forge mutually beneficial partnerships.
QSC AG is based in Cologne and has around 900 employees at locations throughout Germany.

Arne Thull
Head of Investor Relations
T +49 221 669 8724
F +49 221 669 8009

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Arne Thull
Arne Thull
Head of Investor Relations / Mergers & Acquisitions
T +49 221 669-8724