ecotel communication ag: Growth in all segments – B2B business pick-ing up considerably

• Revenues: € 106.3 million (+14%)
• Gross profit: € 32.1 million (+6%)
• Operating EBITDA: € 9.0 million (+2%)
• Adjusted EPS: € 0.94 (previous year: € 1.39)
• Dividend proposal: 50% of adjusted EPS (€ 0.47 per share)
• Two major orders secured with TCV of > € 20 million
• Double-digit annual growth in B2B business forecast from 2024 to 2026

Düsseldorf, 14 March 2024
The 2023 financial year was overall very positive for ecotel, with the company achieving its forecasts and even exceeding them in some cases. The focus on the core segments that was announced in 2022 continued successfully with the contribution of the nacamar segment to the joint venture UPLINK Digital GmbH as of 4 April 2023.

All in all, revenues increased to € 106.3 million (+14%), the gross profit rose to € 32.1 million (+6%) and operating EBITDA increased to € 9.0 million (+2%).

Consolidated net profit amounted to € 7.4 million (previous year: € 67.5 million). This translates into adjusted EPS of € 0.94 per share (previous year: € 1.39 per share).

The dividend payment of € 66.1 million resolved by the Annual General Meeting in the 2023 financial year reduced net financial assets to € 3.7 million (previous year: € 66.9 million) and the equity ratio to around 50% (previous year: around 75%). The Group continues to be fully internally financed and has no external debt.

ecotel Business Customers:
The focus on »Cloud« and »Fiber« is having the desired effect. Having declined for several years due to transformation-related factors, revenues in the ecotel Business Customers segment increased to € 46.2 million in the 2023 financial year (previous year: € 45.6 million). The investments in the »Cloud« and »Fiber« growth markets that were planned and realised in 2023 resulted in considerable marketing success and initial sales growth in the second half of the year in particular, with both product segments seeing a year-on-year increase in the number of orders.

Segment operating EBITDA amounted to € 7.8 million (previous year: € 8.3 million). This downturn was due to the investments in the growth strategy that were announced at the start of 2023 and successfully implemented.

Operating EBITDA was calculated by adjusting reported EBITDA for extraordinary income from the transfer of rights-of-use assets for online resources in the amount of € 3.9 million (previous year: € 14.9 million), expenses for non-cash measurement effects of € 0.1 million and non-recurring expenses for reorganisation measures of € 0.4 million. Accordingly, reported EBITDA amounted to € 11.2 million (previous year: € 22.8 million).

In December 2023, ecotel won a tender to secure the biggest individual order in the company’s history ahead of more than ten high-profile competitors. Following successful negotiations in the second half of 2023, another high-volume major order was acquired in late January 2024. These two orders, which have a combined TCV (total contract value) in excess of € 20 million, will be successively implemented in 2024. The rising recurring sales from the orders will initially be offset by initial expenditure for investments in hardware and licences, transformation and service provision. Following the ramp-up in 2024, these two orders will be fully reflected in sales and earnings from 2025 and will generate double-digit sales growth in subsequent years as well in conjunction with the planned sales performance.

ecotel Wholesale:
Revenues in the ecotel Wholesale segment increased significantly by € 13.6 million to € 60.1 million in the 2023 financial year. This development was mainly due to two factors. Firstly, sales with the former easybell segment are no longer eliminated on an intragroup basis following its disposal in 2022, but instead are reported as sales in the ecotel Wholesale segment (effect: € +6.4 million). Furthermore, cross-network trading in telephone minutes (Wholesale) increased in the 2023 financial year (effect: € +6.1 million), while the marketing of data lines for national and international carriers was successfully expanded (effect: € +0.8 million).

As a result of this sales growth, the gross profit rose by € 0.7 million to € 1.9 million. Because operating expenses remained essentially unchanged year-on-year, the substantial upturn in gross profit was reflected directly in operating EBITDA, which increased by € 0.6 million to € 1.2 million.

In line with the long-term capital market strategy, the Management Board and Supervisory Board together intend to propose a dividend of at least 50% of adjusted EPS to the Annual General Meeting.

Forecast:
In light of the extremely good market opportunities and the successful positioning of the product range, the Management Board believes that annual sales growth in the Business Customers segment could amount to 10% or more following the successful implementation of the major projects and the further increase in incoming orders.

In detail, the Management Board’s expectations for 2024 and beyond are as follows:
 

(in € million)	2022*	2023	Forecast for 2024
Group revenues	92.1	106.3	108 – 112
thereof ecotel Business Customers	45.6	46.2	48 – 52
thereof ecotel Wholesale	46.5	60.1	50 – 60
Gross profit	30.3	32.1	33 – 35
thereof ecotel Business Customers	29.1	30.2	31 – 33
thereof ecotel Wholesale	1.2	1.9	2 – 3
Operating EBITDA	8.8	9.0	9 – 10
thereof ecotel Business Customers	8.3	7.8	8 – 9
thereof ecotel Wholesale	0.5	1.2	~ 1
Consolidated net profit	67.5	7.4	> 2
Adjusted earnings per share (in €)	1.39	0.94
Free cash flow	72.5	4.0
Net financial assets	66.9	3.7
Equity ratio (in %)	75%	50%

* Prior-year figures restated.

The Management Board is forecasting considerable increase in sales in the ecotel Business Customers segment in 2025 and 2026 because the investments in marketing and accompanying measures will continue to have a positive impact on incoming orders, while the aforementioned major projects are expected to be fully reflected in sales by this time. Accordingly, the Management Board considers annual growth in the ecotel Business Customers segment of around 10% to be achievable. Operating EBITDA has the potential to increase to up to € 15 million in 2025 and 2026 on the back of the effects described above.


About ecotel communication ag:
The ecotel Group (hereinafter referred to as “ecotel”) has been operating throughout Germany since 1998 and has established itself as one of the leading quality providers for business customers. With its focus on cloud and fibre, ecotel serves two of the most important growth areas of the German telecommunications market.
The Group’s parent company is ecotel communication ag, Düsseldorf. Including its subsidiary, ecotel has around 225 employees. ecotel currently provides a full-service range of cloud and broadband services to more than 15,000 customers throughout Germany.

Note:
This publication is not an offer to sell nor an invitation to submit an offer to buy or subscribe for securities. This publication is not a securities prospectus. This publication and the information contained within are not intended for direct or indirect distribution to or within the United States of America, Canada, Australia or Japan.


Investor Relations

ecotel communication ag
Investor Relations
+49 (0) 211-55 007 740
e-mail: investorrelations@ecotel.de

Further information can be found online at www.ecotel.de