DGAP-News

Drillisch AG: With significant growth in the first nine months of 2016 and confirms forecast - Seite 2

customer acquisition (e.g. commissions for dealers and cooperation
partners, the reduction of package and connection fees and the granting of
MNP bonuses and other customer benefits) have a direct effect on gross
profit. As a consequence of the continuing shift from general brand
advertising to such direct expenditures, the gross profit in Q3 2016 fell
slightly in total in comparison with Q2 2016 by EUR0.3 million (0.5%) to
EUR68.6 million (Q2 2016: EUR68.9 million). The gross profit solely from
the MVNO subscriber base (average number of MVNO subscribers multiplied by
AGPPU), on the other hand, rose significantly.

Quarterly EBITDA grows dynamically for the third time in succession:
The EBITDA (earnings before interest, taxes and depreciation) came to a
total of EUR82.7 million in the first nine months of 2016. The value of the
previous year of EUR88.2 million was positively influenced by a
contributory payment to advertising expenditures by Telefónica related to
the acquisition of yourfone Retail AG and other factors, restricting the
comparability of the two years.

The EBITDA in Q3 2016 rose by EUR4.4 million (16.4%) over Q2 to EUR31.6
million, continuing the positive trend of the fiscal year (Q2 2016: EUR27.1
million, Q1 2016: EUR24.0 million; Q4 2015: EUR17.4 million).

Development of cash flow from current business activities:
Based on this steadily positive development in our core business, we
realised operating cash flow of EUR58.0 million in the first nine months of
fiscal year 2016 (9M 2015: EUR65.6 million). There were substantial
fluctuations during the year because of effects related to closing dates
and period shifts, as we explained in the half-year report. In Q3 2016, for
instance, the cash outflows for the network costs within the framework of
the MBA MVNO model significantly exceeded the actual expenditures for the
period so that the operating cash flow of the last three months dipped
slightly into the red at EUR-3.6 million; in the previous quarter, the
effect was exactly the reverse, leading to an extraordinary operating cash
flow of EUR+71.8 million for Q2 2016. Additional details and explanatory
comments can be found on page 23 of this 9-month report.

Outlook:
We expect a further increase in the MVNO customer base for 2016 and 2017
that will lead to the parallel continuation of the positive corporate
development. We confirm our EBITDA forecast for the year 2016 as a whole,
an increase in EBITDA to between EUR115 million and EUR120 million (2015: