Ecotel communication : Annual financial report 2021 (04/29/2022)

300

205 >100,000 >21,000

partnersemployeesvoice lines

data lines

Company profile

Company profile

The ecotel Group (referred to hereinafter as "ecotel") has been operating throughout Germany since 1998 and specialises in marketing information and telecommunication solutions in various segments. Its parent company is ecotel communication ag, headquartered in Düsseldorf (referred to hereinafter as "ecotel ag").

Including its subsidiaries and equity interests, ecotel has around 300 employees.

ecotel currently supports more than 50,000 customers across Germany, provides 55,000 data lines and in excess of 440,000 voice channels.

The "ecotel Business Customers" segment represents ecotel's core area. Here, ecotel offers business customers throughout Germany an integrated product portfolio of voice and data services (ICT solutions). The focus is on companies with more than 50 employees.

The ecotel Wholesale segment comprises cross-network trading in telephone minutes (Wholesale Voice) and marketing data lines (Wholesale Data) for national and international carriers.

The easybell segment comprises all business of the easybell Group, consisting of four companies. Here easybell markets telephone systems for business customers which can be understood and are simple to integrate and All-IP telephony with or without carrier lines.

In the nacamar segment, nacamar GmbH offers streaming services for media companies on the basis of its own content delivery network (CDN). nacamar is the market leader in Germany with its AddRadio product.

Contents

01	Company profile	54	Consolidated financial statements
02	Foreword by the Management Board	56	Consolidated statement of financial position
04	Management Board and Supervisory Board	58	Consolidated statement of comprehensive income
08	Report of the Supervisory Board	59	Consolidated statement of cash flows
12	Investor relations	60	Consolidated statement of changes in equity
62	Notes to the consolidated financial statements
18	Group management report	ecotel communication ag Accounting principles
20	Basic information on the Group	102	Independent Auditor's Report
26	Economic report
41	Events after the end of the reporting period	110	Notes
41	Forecast and report on opportunities and risks	110	Index
52	Takeover-related disclosures	111	Financial calendar
53	Declaration on corporate governance and	112	Legal notice
corporate governance report

Foreword by the Management Board

Dear shareholders,

We concluded financial year 2021 with a record result. At the same time, we posted a considerable year-on-year improvement for all Group operating key figures and performance indicators.

EBITDA surged by 55% to € 18.1 million (previous year: € 11.7 million). Furthermore, economies of scale are becoming increasingly evident in the ecotel Busi-ness Customers segment. As a result, it was possible to almost double EBITDA to € 8.6 million (previous year: € 4.4 million). The strongly growing easybell segment also continue the positive trend of the previ- ous year, moving up EBITDA by € 2.6 million to € 8.5 million. EBITDA in the ecotel Wholesale and nacamar segments, developed as planned, each generating € 0.5 million.

Consolidated sales at € 95.9 million (previous year: € 98.3 million) were again systematically maintained below the € 100 million threshold stipulated in sec- tion 35 (5a) of the German Telecommunications Act (TKG), which protects the Group to a significant extent from potential negative retroactive regulatory decisions with regard to fees for market-dominating telecommunications providers. Sales in the high- margin segments ecotel Business Customers (+4% to € 46.3 million) and easybell (+16% to € 25.0 mil-lion) were further expanded. In the ecotel Wholesale and nacamar segments, sales developed in line with planning.

We improved gross profit by € 8.0 million (+21% to € 45.7 million), with particular contributions being made as a result of positive developments in the ecotel Business Customers segment at € 28.5 million (previous year: € 23.9 million) and the easybell seg-ment at € 14.6 million (previous year: € 11.2 million).

Taking account of the expected lower depreciation and amortisation, net finance costs, taxes and minor- ities, consolidated net profit of € 4.8 million was generated (previous year: € 1.0 million), equivalent to earnings per share (EPS) of € 1.36 (€ 0.28).

The considerable upturn in operating results also brought with it an improvement in the net assets and financial position. With free cash flow of € 10.5 million (previous year: € 4.4 million) or approximately € 3 per share, net financial assets rose to € 9.6 million (previ-ous year: € 2.3 million).

This pleasing trend is also confirmation that the stra-tegic realignment and the investments made in growth over recent years are bearing fruit. The trust placed by shareholders in the ecotel share should now be rewarded. For this reason, together with the ecotel Supervisory Board, we resolved to propose to the Annual General Meeting, not only the basis dividend of € 0.70/share (> 50% of EPS), but also a specific dividend of € 1.55/share and thus a total dividend of € 2.25 per eligible share.

In view of the last year's business performance and the strategic alignment of the segments described above combined with the opportunities and risks described in the Group Management Report, we have the following outlook for 2022:

Overall, we anticipate a further increase in gross profit and further growth in Group EBITDA within the € 20 million to € 22 million range and a further increase of consolidated net income in financial year 2022.

Factoring in current knowledge on risks and opportu-nities, for the ecotel Group, we are anticipating annual sales growth of roughly 5%, combined with higher gross profit and higher EBITDA, also after financial year 2022 and also once again beyond the € 100 mil-lion threshold of the German Telecommunications Act which has been utilised since 2018. Furthermore, we anticipate, also after financial year 2022, that we will maintain the key figures and targets of the sustained financial strategy presented in the Group Manage- ment Report.

Without our highly motivated employees we would not have been able to make such a success for what was for all of us an outstanding financial year 2021. In the second year of the COVID-19 pandemic and the related restrictions, we again all worked together for success at ecotel. For this reason, at this point, we would like to thank not only you, dear shareholders, but also our many colleagues for their excellent work. However, our particular thanks also goes to the confi-dence placed in us by our loyal business partners and customers.

We are looking into the future with great confidence and are looking forward to the challenges and oppor- tunities that the fast-moving telecommunications market holds for us.

Peter Zils Co-Chairman of the Management Board

Markus Hendrich Co-Chairman of the Management Board

Achim Theis Management Board member