ecotel communication ag / Quarter Results



Corporate-announcement transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement.

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Business trend dynamically upward
Rapid growth in the “Reseller” segment
Sales and earnings targets for 2006: double those of 2005
Duesseldorf, May 15, 2006 – The trend for ecotel communication ag sales to rise was borne out in Q1 2006 (i.e., even excluding the support that came from the influx of funds from the successful IPO) and has in fact continued dynamically. In this context, the traditional “Business Customers” segment saw gratifying expansion in the gross profit margin, while the new “Reseller” segment recorded a significant rise in demand and sales growth.
In the period January 1 – March 31, 2006 ecotel booked sales for the two segments of EUR 12.04 million, a figure 56% up on the same period the year before. Sales climbed a further 18% plus on those for Q4 2005, indicating that the growth trend persists. The growth was fostered by the new “Reseller” segment, which contributed EUR 4.33 million or 35% of total output. This is all the more remarkable given that ecotel first started posting noteworthy sales in this segment in August 2005.
In the traditional core business “Business Customers” ecotel offers small and mid-sized companies an all-in package of telecom solutions – ranging from simple access via voice, data and value-added services through to complex networking of a firm’s hubs. As at March 31, 2006, the client base already included more than 27,000 business customers.
ecotel has possessed its own connection technology since August 2005. In this way, if required the company can draw on capacities from various suppliers independent of any network, which has the advantage that ecotel is not reliant on a connection or subscriber network of its own. With the technological shift into Internet telephony (VoIP/Voice over Internet Protocol) investment by market players in establishing their own networks are becoming increasingly superfluous. The highest value added will in future be made with individual client solutions that are based on intelligent IP services and thus simpler and cheaper to create; precisely here, ecotel has identified a trailblazing growth market and has positioned itself accordingly at an early date.

ecotel has invested in central technology specifically to advance these new IP solutions; for the same reason, the company has expanded the team to over 100 employees. Thus, other phone companies, ISPs, resellers and also non-industry distributors are availing themselves of ecotel products and know-how.

The key competitive edge delivered by ecotel’s business model is the enormous potential synergies achieved by bundling retail and wholesale business. Thus, in Q1 2006 ecotel already profited from back integration of its value-added chain and significantly raised the gross profit margin for its “Business Customer” segment from 33.4% in Q4 2005 to 39.3%.
With the investments made before the IPO, depreciation rose in Q1 2006 compared with the same period the year before from EUR 41,400 to EUR 145,900; the personnel expense climbed by 20.1% to EUR 1,074,600. EBIT for the first quarter of the last business year came to EUR 874,000 Euro, fell to EUR 221,100 in Q4 2005 in the wake of the afore-mentioned investments and in Q1 2006 was back up again at EUR 595,700; this goes to show that the investments made are already starting to pay off.


Outlook:
ecotel communication ag anticipates that Q2 2006 will see an ongoing positive performance by all operating activities. Current financial planning shows that the present business year offers very good opportunities for the company to appreciably top the average sales growth for the last five years of 48% (CAGR). Indeed, funds from the IPO will be used to foster our profitable growth potential and press ahead with the company’s expansion, thus further strengthening its market position. In the past, ecotel already grew profitably on its own, but additional investments in the company’s own systems and connection technology as well as targeted acquisitions should now enable us to make even broader use of market opportunities.

Given these overall conditions, the company’s is targeting total sales for business 2006 of about EUR 70 million. EBIT, so the forecast, will jump from EUR 2.2 million in 2005 to at least EUR 4.4 million in business 2006.

Important note:
In order to guarantee as great a measure of transparency as possible, ecotel communication ag is for the first time publishing its business results for the period Jan. 1 – march 31, 2006 in German and English. The Company thus aspires to meet the standards it has set and give shareholders a wide-ranging overview of its assets, earnings and financial position at as early a point in time as possible. Since no quarterly balance sheet was prepared in 2005, for the balance sheet and cash flow (unlike the income statement) for the purposes of comparison we present the figures for 2005 as a whole.

An interim report on Q1/2006 can be downloaded via the Internet from www.ecotel.de.



About ecotel: 

ecotel is a network-independent telecoms provider founded in 1998, immediately after liberalization of the telco market. In what has to date been its core division, “Solutions for Business Clients“, the company provides voice, data and value-added services to small and medium-sized enterprises in particular, as well as direct access for voice and data traffic from a single source. Nationwide, more than 25,000 corporate clients now make use of ecotel’s standardized and customized telecom solutions.

ecotel has brought its products and services for telecoms corporation and non-branch promoters as well as Wholesale services together in its rapidly growing second division of “Re-Seller Solutions”. Systems developed in-house and modern switching technology constitutes the interface between the two divisions and thus enables bundling of services and telecommunication solutions on the basis of new technological standards at favorable rates, e.g., IP services incl. VoIP (Internet telephony).
ecotel communication ag is headquartered in Düsseldorf. In early 2006, a second hub was opened in Munich. At present, the company has a payroll of some 100 staff. In 2005, the telecoms provider placed no. 8 in the Deloitte “Technology Fast 50” competition. In other words, it is among the Top 10 fastest-growing technology companies in Germany. ecotel is listed on FWB, the Frankfurt Stock Exchange, since end of March 2006.













For further details for the press, please contact:
ecotel communication ag

Business and financial media
Annette Drescher (Assistentin des Vorstandes)
Tel.: +49-211-55 007-740
Fax: +49-211-55 007 5 740
Email: presse@ecotel.de


Trade press
Stefanie Toloszycki
Tel.: +49-211-55 007-310
Fax: +49-211-55 007 310
Email: presse@ecotel.de

Further information can be obtained in the Internet from www.ecotel.de.

DGAP 15.05.2006 

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Language:     English
Issuer:       ecotel communication ag
              Prinzenallee 9-11
              40549 Düsseldorf Deutschland
Phone:        +49 (0)211 55 00 7300
Fax:          +49 (0)211 55 00 75300
email:        achim.theis@ecotel.de
WWW:          www.ecotel.de
ISIN:         DE0005854343
WKN:          585434
indices:      
 
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