WEB.DE AG

euro adhoc: WEB.DE AG
Quarterly or Semiannual Financial Statements / WEB.DE grows strongly and increases portal-EBIT to EUR 2.9m and EBIT-margin to 15% in H1/2004 (E)

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WEB.DE AG once again reports on a very positive business development in the first half of fiscal 2004 (H1/2004): In second quarter of fiscal 2004 (Q2/2004) revenues rose to more than EUR 10 million a quarter and totalled EUR 20.0 million in H1/2004 (EUR +4.8 million or +32% y-o-y). Gross profit reached EUR 7.9 million in Q2/2004, so that WEB.DE AG recorded a gross profit of EUR 15.0 million (EUR +3.6 million or +31% y-o-y) in H1/2004 at a margin of 75%.

Growth driver with a significant increase in revenues on a quarterly and semi-annual basis again were the fee-based Digital Services: totalling EUR 6.3 million in Q2/2004 WEB.DE generated EUR 12.1 million in revenues with fee-based Digital Services in H1/2004 (EUR +5.3 million or +78% y-o-y). Revenues again were boosted by the WEB.DE Club, whose membership increased by +50,000 in Q2/2004 and now counts 275,000 paying subscribers (EUR 52 p.a.). On a y-o-y basis the number of Club members even rose by +175,000 subscribers or +175%.

WEB.DE Group focusses on two business segments - the WEB.DE Portal and Web Telecommunications:

The WEB.DE Portal increased its segment earnings before interest and taxes (EBIT) in Q2/2004 significantly to EUR 1.6 million (EUR +0.3 million q-o-q) and hence generated a considerable segment EBIT margin of 15% (Q1/2004: 14%). Earnings before interest, taxes, depreciation and amortization (EBITDA) of the WEB.DE Portal likewise recorded a rise by EUR +0.5 million q-o-q to EUR 3.4 million. This secured the WEB.DE Portal an EBITDA margin of 32% (Q1/2004: 31%).

Profits from WEB.DE´s portal business were, as announced, re-invested into the future-oriented Web Telecommunications segment. With revenues of EUR 0.2 million and R&D investments of EUR 2.3 million in Q2/2004, the Web Telecommunications segment generated earnings before interest, taxes, depreciation and amortization (EBITDA) of EUR -2.3 million (Q1/2004: EUR -1.9 million) and a segment-EBIT of EUR -2.4 million (Q1/2004: EUR -2.1 million).

As budgeted, the WEB.DE Group in H1/2004 invested EUR 9.0 million or 45% of total revenues in research and development (H1/2003: 42%). Despite these high investments in next-generation products and technologies, WEB.DE AG generates positive consolidated results on the basis of the EBITDA and net result because of the high-margin digital business model.  

The company generated a consolidated net profit on a quarterly and semi-annual basis (Q2/2004: EUR 0.2 million; H1/2004: EUR 0.3 million) as well as positive earnings before interest, taxes, depreciation and amortization (EBITDA) of EUR 1.1 in Q2/2004 and EUR 2.1 million in H1/2004, respectively. WEB.DE AG has hence been profitable for the seventh quarter in a row.

The operating cash flow of the WEB.DE Group amounted to EUR +3.1 million in Q2/2004 and subsequently also in H1/2004 (EUR 5.9 million) clearly above the comparative quarters (Q2/2003: EUR +1.8 million; H1/2003: EUR +3,4 million). The liquid funds increased on the reporting date to EUR 102.0 million or EUR 2.67 per share.  

Backed by a further spread of the Internet, the Executive Board anticipates a positive development of the profitably growing portal business and a positive development in the field of Web Telecommunications. In Web Telecommunications, the Executive Board expects the distribution of Com.Win to be launched internationally in 2004 and will further step up product development.

Appendix:

Key indicators in EUR million.

~
                                  H1/04        H1/03        Q2/04      Q2/03
Total Revenues              20,0         15,2         10,6         7,9
thereof Portal            19,6         n.a.         10,4         n.a.
thereof Web Telecoms    0,4         n.a.          0,2         n.a.
Gross profit                 15,0         11,4          7,9         6,0
Marketing+Advertising (6,3)        (5,5)         (3,2)      (2,8)
R&D                              (9,0)        (6,3)         (4,8)      (3,3)
thereof Portal          (4,7)         n.a.         (2,5)        n.a.
thereof Web Telecoms (4,3)         n.a.         (2,3)        n.a.
EBIT                            (1,6)        (1,4)         (0,8)      (0,6)
thereof Portal            2,9          n.a.          1,6         n.a.
thereof Web Telecoms (4,5)         n.a.         (2,4)        n.a.
Net income                    0,3          0,5            0,2         0,3
EBITDA                          2,1          2,0            1,1         1,0
thereof Portal            6,3          n.a.          3,4         n.a.
thereof Web Telecoms (4,2)         n.a.         (2,3)        n.a.
Operating cash flow      5,9          3,4            3,1         1,8
Liquid funds              102,0          99,3         102,0      99,3
~

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

WEB.DE AG, Investor Relations, Richard Berg      
tel. +49 (0)721.94329.2700, E-Mail rb@webde-ag.de    

end of announcement            euro adhoc 22.07.2004
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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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