WEB.DE AG

euro adhoc: WEB.DE AG
Quarterly or Semiannual Financial Statements / WEB.DE with 30% growth in revenues, a positive net result and positive EBITDA in Q1/2004 (E)

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WEB.DE AG reports a continuing positive business development in its review of the first quarter of fiscal 2004. In Q1/2004 year-on-year revenues increased by EUR +2.2 million or 30% to EUR 9.5 million. The company generated a gross profit of EUR 7.1 million and a gross margin of 75%. WEB.DE AG achieved positive earnings before interest, taxes, depreciation and amortization (EBITDA) in Q1/2004 of EUR +1.0 million as well as a positive net income of EUR 0.1 million for the period under review. WEB.DE AG has hence shown profitability for the sixth quarter in succession.  

Again, the growth driver in Q1/2004 proved to be the fee-based Digital Services, with an increase in revenues y-o-y of EUR +2.6 million or almost +80%. The WEB.DE Club was the particularly successful offering, with membership rising during the first quarter of 2004 by +45,000 to 225,000 paying members (EUR 52 p.a., net of VAT).

Q1/2004 saw WEB.DE AG reporting segment results (revenues, EBIT and EBITDA) for the first time for the WEB.DE Portal and the Web Telecommunications divisions.

In Q1/2004, the company's WEB.DE Portal division generated revenues of EUR 9.3 million, earnings before interest, taxes, amortization and depreciation (EBITDA) of EUR 2.9 million and a segment result (EBIT) of EUR 1.3 million. With R&D investments of EUR 2.2 million, the WEB.DE Portal has already reached an EBITDA margin of 31% and an EBIT margin of 14%.

The Web Telecommunications division continued its investment and development phase in Q1/2004. With revenues of EUR 0.2 million in Q1/2004 and R&D investments of EUR 2.0 million, Web Telecommunications generated earnings before interest, taxes, amortization and depreciation (EBITDA) of EUR -1.9 million and a segment result (EBIT) of EUR -2.1 million.

During Q1/2004 WEB.DE invested EUR 4.2 million or around 44% of its revenues in research and development as budgeted. Whilst continuing to strengthen next-generation products and technologies, WEB.DE still achieves positive consolidated results based on EBITDA and net earnings thanks to its high-margin digital business model.

Operating cash flow for the WEB.DE Group in Q1/2004 totaled EUR +2.9 million - a clearly positive result that significantly outperformed the previous year's quarter (Q1/2003: EUR +1.6 million). Despite higher investments in fixed assets and IT infrastructure (EUR 3.3 million in Q1/2004), WEB. DE’s cash and cash equivalents increased to EUR 102.3 million during the reporting period (Q1/2003: EUR 98.3 million).

The Executive Board of WEB.DE AG expects a 35 to 40 percent growth in revenues for the current fiscal year 2004 on the basis of a positive result. The further growth of the Internet leads the Executive Board to anticipate continuing positive development for the profitably growing portal business in the coming years. In Web Telecommunications, international-level distribution of Com.Win will be launched in 2004 and product development will be further advanced.

Appendix: Key indicators
~
(in EUR million)                                                                                    
                                                                 Q1/2004         Q1/2003
Revenues                                            9.5                  7.3
Revenues Portal                                 9.3                  n.a.
Revenues Web Telecommunications        0.2                  n.a.
Gross profit                                      7.1                  5.5
Marketing and Advertising                (3.1)                (2.7)
Research and Development                 (4.2)                (3.1)
R&D Portal                                        (2.2)                 n.a.
R&D Web Telecommunications              (2.0)                 n.a.
Income for the period under review    0.1                 0.2
Earnings per share (in EUR)              0.00                0.01
EBITDA                                                1.0                  1.0
EBITDA Portal                                    2.9                  n.a.
EBITDA Web Telecommunications         (1,9)                 n.a.
Operating cash flow                          2.9                  1.6
Cash and cash equivalents              102.3                 98.3
~
Contact:
WEB.DE AG, Investor Relations, Richard Berg
tel. +49 (0)721.94329.2700, email rb@webde-ag.de

The full quarterly report can be downloaded from the website of WEB.DE AG on http://webde-ag.de.

end of announcement            euro adhoc 22.04.2004
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Further inquiry note: Richard Berg Tel. +49(0)721 94329 2700 E-Mail: rb@webde-ag.de

Branche: Software
ISIN:      DE0005296503
WKN:        529650
Index:    HDAX, Nemax 50, Prime Standard, TecDAX
Börsen:  Frankfurter Wertpapierbörse / regulated dealing
              Niedersächsische Börse zu Hannover / free trade
              Berliner Wertpapierbörse / free trade
              Bayerische Börse / free trade
              Hamburger Wertpapierbörse / free trade
              Bremer Wertpapierbörse (BWB) / free trade
              Börse Düsseldorf / free trade
              Baden-Württembergische Wertpapierbörse / free trade



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