DGAP-News: Drillisch AG

Drillisch AG with successful first half of 2017

- MVNO subscribers +26.9% to 3.71 million (H1-2016: 2.92 million)

- Service revenue +17.7% to 307.8 million euros (H1-2016: 261.6 million euros)

- EBITDA (adjusted) +44.9% to 74.0 million euros (H1-2016: 51.1 million euros)

- Outlook 2017 confirmed: EBITDA increase to 160-170 million euros expected

Maintal, 9 August 2017 - Drillisch AG (ISIN DE 0005545503) continued its course for growth in the first half of 2017. The mobile services company, which is listed on the TecDax, has once more improved the number of customer contracts, service sales and operating results.

Subscribers:
In the first half of 2017, Drillisch again showed strong investment in new customer acquisition. The driver of this overall good development of the subscriber base, which increased by 768,000 subscribers (25.6%) to 3.771 million subscribers (HY1 2016: 3.003 million subscribers), was once again the growth in the budget subscriber segment. The number of subscribers in this segment rose by 905,000 (38.7%) to 3,243 million subscribers (HY1 2016: 2.338 million subscribers). The number of volume subscribers fell as expected to 464,000 (HY1 2016: 584,000 subscribers). The total number of MVNO subscribers grew by 785,000 (26.9%) to 3.707 million subscribers (HY1 2016: 2.922 million subscribers). The number of LTE subscribers rose by 1.110 million (85.5%) over the previous year to 2.409 million subscribers (H1 2016: 1,299,000). The average data consumption of these LTE subscribers rose in the second quarter by 51.1% to 1,073 MB a month in a year-on-year comparison (Q2 2016: 710 MB).

Service revenues:
With a higher number of customers in comparison to last year, Drillisch has improved its service revenue in the first six months of the financial year by a total of EUR46.2 million (+17.7 percent) to EUR307.8 million compared to the same period last year (HY1 2016: EUR261.6 million). This figure also includes the MVNO customers in the Vodafone network as well as the old service provider customers. With the significant increase in service sales we achieved a gross profit in the first half of 2017 which, at EUR145.8 million, exceeded the figure of the same period of the previous year by 6.3 percent, or EUR8.7 million (HY1 2016: EUR137.1 million). The gross profit margin rose by 6.6 percentage points to 46.8 per cent (HY1 2016: 40.2 percent) due to the omission of the low-margin distribution business.

Pure MBA gross service revenue (i.e. including customer benefits) rose by EUR83.5 million (+42.6%) to EUR279.6 million (HY1 2016: EUR196.0 million). Adjusted for customer benefits (= cost of sales), the MBA net service revenue rose by EUR60.9 million (+35.4%) to EUR233.3 million (HY1 2016: EUR172.3 million).

The decline in overall revenue by 8.8% to EUR311.3 million (HY1 2016: EUR341.3 million) is a consequence of the restructuring of our subsidiary Phone House. The revenues from the low-margin distribution business (the commission-based brokerage of network operator contracts, including the related hardware business), which has in the meantime been sold, were included in Other Revenues last year.

EBITDA:
Despite high investments in customer growth, the EBITDA * (earnings before interest, taxes, depreciation and amortisation), adjusted for the one-off expenses incurred for the acquisition of the 1&1 Telecommunication SE (1&1) rose by 44.9% or EUR22.9 million to EUR74.0 million in the first half of 2017 (HY1 2016: EUR51.1 million). We are expecting a further increase of this performance indicator, an important one for our business, in the coming quarters.

Consolidated profit:
The favourable development in operating business is reflected in the consolidated profit as well. In earnings before tax (EBT **) adjusted for non-recurring expenses, Drillisch AG generated EUR42.7 million in the first half of 2017, 72.0% more than in the same period last year (HY1 2016: EUR24.8 million). The consolidated profit after taxes *** improved by 68.6% to EUR29.0 million (HY1 2016: EUR17.2 million).

Outlook
The Management Board expects a further increase in the MVNO customer base for 2017 (on a stand-alone basis, before the complete takeover of 1&1) and the continuation of the positive corporate development. Our plans for fiscal year 2017 foresee an increase in the EBITDA to a figure between EUR160 million and EUR170 million (2016: EUR120.2 million).

Performance indicators pursuant to IFRS - comparison HY1 2017 v. HY1 2016

Performance indicators pursuant to IFRS - comparison Q2 2017 v. Q2 2016

* In Q II 2017 adjusted for professional expenses arising from the acquisition of 1&1 Telecommunication SE.

** In Q II 2017 adjusted for professional expenses arising from the acquisition of 1&1 Telecommunication SE as well as expenses arising from cash settlements paid to bond creditors in the context of conversions of convertible bonds.

*** In Q II 2017 adjusted for professional expenses arising from the acquisition of 1&1 Telecommunication SE as well as expenses arising from cash settlements paid to bond creditors in the context of conversions of convertible bonds and the tax effects arising from these adjustments.

The complete quarterly report will be made available on the Company's home page on 10 August 2017.
http://www.drillisch.de/investor-relations/berichte

Maintal, 9 August 2017

Drillisch AG
The Management Board

Disclaimer: This report contains statements regarding the future which are based on the current assumptions and projections of the Drillisch AG management. Various risks, uncertainties and other factors, both known and unknown, can cause actual developments, especially in the results, financial position, and the business of our Company, to deviate substantially from the projections about the future as they are shown here. The Company does not undertake any obligation to update such future-oriented statements and to adapt them to future events or developments.