Drillisch Company Profile and Outlook
Drillisch AG is a listed stock corporation which offers telecommunication services. The Group has a total workforce of about 898 associates. In the first quarter 2017, we realised service revenues of €151.1 million (Q1 2016: €124.6m). The performance indicator service revenues is a key figure that substantially reflects the earnings from providing ongoing wireless services (voice and data transmission) and billing of the same based on existing customer relations.
Our customers, in particular our MVNO customers, are the drivers of our operating success; during the reporting period, their total numbers grew by 836,000 (30.8%) from 2.712 million subscribers to 3.548 million subscribers.
Beginning with standardised and unbundled advance services from the wireless network providers Telefónica O2 Germany GmbH & Co. OHG (“O2”) and Vodafone D2 GmbH (“Vodafone”), we develop flexible services on the basis of our own product ideas, giving us the opportunity to respond to changes in the market as well as to contribute actively to the definition of the wireless services market with our innovative rate plans.
The Drillisch Management Board expects the telecommunications and IT markets in Germany to remain important innovation drivers for the German economy. However, there will presumably not be any significant growth in revenues in the telecommunications industry because, although use is on the rise, price sensitivity will remain at the same level. Mobile data communications will remain the most important growth segment in telecommunications. Network quality and the availability of fast data connections continue to gain in importance for consumers. Moreover, the displacement of the landline network by mobile services will continue. Simplicity in making phone calls and “surfing” at low prices will remain the focus of interest for mobile services customers. The virtually full-area availability of mobile high-speed Internet, the continuing growth in popularity of powerful smartphones and of services such as cloud applications, streaming services for photos or music, “near-field” and “machine-to-machine communication” along with the spread of LTE give rise to the expectation that growth rates in the use of mobile data communications will continue to be high. The greatest turnover growth and growth potential are predicted for this segment of the mobile services market. Drillisch intends to make use of its customer-friendly portfolio to profit from this development.
In the segment Online, Drillisch is aiming to increase significantly its MVNO clientele and improve further its mix of rate plans in the coming fiscal year, thereby continuing the positive development of gross profit in its operating business and a substantial rise in turnover in the area of “service revenues”.
In the segment Offline, Drillisch is aiming to increase significantly its MVNO clientele, improve further its mix of rate plans and achieve a substantial rise in turnover in the area of “service revenues” as well. These steps, in conjunction with the ongoing expansion of offline sales, are the basis for the Management Board’s assumption of a positive development in gross profit and EBITDA in the coming fiscal year.
In view of these general conditions, the Management Board expects overall a significant increase in MVNO clientele and a related continuation of the positive development of gross profit in its operating business and a substantial rise in turnover in the area of “service revenues”. The Management Board expects an increase in adjusted EBITDA to €160 million to €170 million for 2017.