Lycos Europe N.V.

euro adhoc: Lycos Europe N.V.
Financial Figures/Balance Sheet
LYCOS Europe with 32 percent revenue growth and 48 percent net loss reduction in the first nine months 2005: Positive outlook to reach breakeven in 2006

@@start.t1@@--------------------------------------------------------------------------------   Disclosure announcement transmitted by euro adhoc.   The issuer is responsible for the content of this announcement. --------------------------------------------------------------------------------@@end@@

25.10.2005

• Total revenues improve by 32 percent and amount to EUR 93.2 million / EBITDA of EUR (12.3) million diminished by 57 percent / net loss almost cut in half with 48 percent improvement to EUR (18.5) million / gross margin jumps from 42 percent in 2004 to 52 percent in 2005 • Third quarter 2005 exceeds expectations with a revenue increase of 39 percent to EUR 31.7 million, a net loss improvement by 77 percent to EUR (2.0) million and an EBITDA result of EUR (0.5) million (93 percent improvement)

Haarlem / Netherlands, October 25, 2005 - LYCOS Europe, one of Europe's leading internet portals, today announced its results for the first nine months and the third quarter of 2005. An increase of 32 percent to EUR 93.2 mln in total revenues in the first nine months (vs. EUR 70.5 mln in the reference period 2004) mirror the ongoing successful efforts to widen LYCOS Europe’s customer base. The EBITDA of EUR (12.3) mln diminished by 57 percent (vs. EUR (28.7) mln in reference period 2004) and by this represents the best level in the first nine months since going public in the year 2000. The ongoing increase in revenues along with subsequent cost optimization measures are the drivers for this development, which is also mirrored in the improvement of net loss by 48 percent to EUR (18.5) mln (vs. EUR (35.4) mln in the reference period 2004). Excluding restructuring charges, which origin in a cost optimization program started at the end of 2004, the EBITDA result would have been EUR (6.9) million in the first nine months of 2005 compared to EUR (28.0) mln in the first nine months of 2004, which is an improvement of 75 percent. LYCOS Europe again was able to raise the gross margin by 24 percent to 52 percent (vs. 42 percent in the first nine months 2004). The cost optimization measures have been deployed by 75 percent per August 2005 already and will lead to an annual cost reduction of around EUR 30 mln with a full impact in 2006.

In the third quarter of 2005, total revenues amounted to EUR 31.7 mln, showing an increase of 39 percent compared to the same period last year. EBITDA improved by 93 percent to EUR (0.5) mln, mainly as an effect of the ongoing cost optimization program and subsequent revenue growth. For the same reason, net loss improved by 77 percent from EUR (9.0) mln in 2004 to EUR (2.0) mln in 2005. Third quarter's gross margin increased to 52 percent in 2005 compared with 43 percent in 2004.

LYCOS Europe’s business model is based on three equally strong and growing revenue streams that showed a beneficial development altogether. Paid services & shopping, interconnect and advertising contributed to total revenues in the first nine months of 2005 with 35 percent (EUR 32.2 mln, +48 percent vs. EUR 21.8 mln in 2004), 33 percent (EUR 30.6 mln, +71 percent vs. EUR 17.9 mln in 2004) and 31 percent (EUR 29.4 mln, same level as in the first nine months of 2004), respectively. A gratifying development in the third quarter 2005 was achieved in the advertising sector with an increase of 18 percent to EUR 10.2 mln after having faced a decline in the first quarter 2005 and brought back on track in the second quarter of 2005. This relates, besides the positive reach development, to the successful reorganization of the internal set-up which has been distinguished by streamlining and internationalization of sales units since the beginning of 2005. Positive developments in the webhosting and domain business as well as growing shopping revenues reasoned the growth in paid services and shopping. The revenue boost in the interconnect business is driven by the integration and consolidation of the former Tiscali Sweden access customer base which had already been acquired in 2004 by Spray Networks, a wholly owned LYCOS Europe subsidiary.

Even though total revenues increased by 32 percent or by EUR 22.7 mln, respectively, cost of revenues only slightly increased by EUR 3.7 mln to EUR 44.8 mln in the first nine months 2005. Therefore the gross margin improved by 24 percent especially as a result of continuous cost optimization efforts.

LYCOS Europe succeeded in strengthening the reach of its pan-European portal network and gained around 5 mln new unique users compared to last year (year-on-year), so that about 20 percent (23.4 mln) of all European Internet users visit the LYCOS pages on a regular basis.

LYCOS Europe's cash, cash equivalents and deposits amounted to EUR 108.0 mln on September 30, 2005, compared to EUR 123.7 mln on September 30, 2004. The reduction in the third quarter of 2005 was EUR 3.0 mln.

- ends -

"The Internet business continues to be a sustainable growing industry especially in the markets of paid services, e-commerce and advertising. The LYCOS Europe results mirror these developments, reveal the prospering set-up of the company and are a clear indicator that we are on the right track to reach breakeven in the next year", comments Christoph Mohn (40), CEO of LYCOS Europe N.V..

Christoph Mohn: "Besides a strong organic growth in paid services & shopping the turnaround of our advertising business becomes evident in the third quarter. Driven by a successful reorganization of our sales units and a continuous reach growth we now manage a prospering advertising business with a two-digit increase compared with last year’s quarter. Moreover, the international set-up of our European portal network gives us the opportunity to participate from the trend of increased branding budgets with an international approach."

@@start.t2@@In million Euro                    9mon ended 09/30/05 9mon ended 09/30/04 Change
Total revenues                      93.2                         70.5                         32%
Gross profit                         48.5                         29.4                         65%
Gross margin                         52%                          42%                          24%
Operating loss (EBIT)          (20.2)                      (39.0)                      48%
Net loss                                (18.5)                      (35.4)                      48%
Net loss per share in Euro  (0.06)                      (0.11)                      48%
EBITDA                                  (12.3)                      (28.7)                      57%
Cash, cash equiv., deposits 108.0                        123.7                        (13)%@@end@@

~ In million Euro                  3mon ended 09/30/05 3mon ended 09/30/04
Change Total revenues                    31.7                         22.8
39% Gross profit                        16.4                         9.8
68% Gross margin                        52%                          43%
21% Operating loss (EBIT)         (2.9)                        (10.5)
72% Net loss                              (2.0)                        (9.0)
77% Net loss per share in Euro (0.01)                      (0.03)
77% EBITDA                                 (0.5)                        (7.2)
93%

@@start.t3@@end of announcement                                                 euro adhoc 25.10.2005 08:34:50
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ots Originaltext: Lycos Europe N.V.
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:
Kay Oberbeck
Director PR & IR Europe and Germany
Tel.: +49 (0)5241 8071055
E-Mail: kay.oberbeck@lycos-europe.com

Branche: Software
ISIN:      NL0000233195
WKN:        932728
Index:    Prime Standard, Prime All Share, Technologie All Share
Börsen:  Frankfurter Wertpapierbörse / regulated dealing
              Berliner Wertpapierbörse / free trade
              Hamburger Wertpapierbörse / free trade
              Baden-Württembergische Wertpapierbörse / free trade
              Börse Düsseldorf / free trade
              Niedersächsische Börse zu Hannover / free trade
              Bayerische Börse / free trade
              Bremer Wertpapierbörse (BWB) / free trade



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