• Contract for sale of the 50.9% holding in easybell GmbH
• Expected revenue of € 55.5 to 56.5 million (after deduction of transaction fees)
• Net financial assets expected to increase to more than € 70 million
• Accelerated growth due to focus on scalable cloud telephony and broadband services for business customers
• Planned expansion of market shares through organic and inorganic growth
• Evaluation of all options for enhancing shareholder value

Düsseldorf, October 25, 2022
ecotel communication ag, one of Germany’s leading provider of modern telecommunications solutions for business customers, announced today the sale of the company’s holding in easybell GmbH. The transaction is subject to the usual closing conditions and will be concluded before the end of this year.

As communicated at the start of the year, all business divisions have been strategically realigned. For easybell GmbH, which operates independently to the greatest possible extent, the focus was primarily on expansion in bordering European countries.

“Integration of easybell in the Dstny Group, whose complementary business model is already pan-European oriented, will substantially facilitate the entry in markets beyond Germany as the basis for easybell’s further growth,” says Markus Hendrich, CEO of ecotel.

Within the framework of the agreement, ecotel will provide upstream telecommunications services for easybell and Dstny in Germany, to secure additional revenue totaling about € 6 million per year.

Upon closing of the transaction, ecotel – after deduction of consulting and transaction fees – will receive additional funds on the order of € 55.5 to 56.5 million. In addition to the operating profit and the one-off effect from the sale of usage rights for Internet resources, consolidated EBITDA for financial year 2022 is expected to reach a corridor of € 68 to 75 million. The Group’s net financial assets will increase to more than € 70 million, having totaled € 23.9 million on June 30, 2022, and after distribution of dividends in the amount € 7.9 million in July.

This additional financial freedom will now allow ecotel to focus on growth of the Business Solutions and Wholesale segments, while placing the main emphasis on the two key growth drivers in the German telecommunications market of the coming years: cloud telephony (“cloud”) and broadband services (“fiber”) for business customers.

“Demand for reliable gigabit bandwidths in Germany has increased, as has the importance of flexible and scalable, cloud-based telephony solutions. Both of these business fields are expected to experience high market growth in the next five years, which makes this the ideal time for ecotel to secure market shares in these two fields,” Hendrich continues.

Due to the 50.9% shareholding structure, the decrease in consolidated EBITDA resulting from deconsolidation of the easybell Group will have only a proportionate effect on consolidated profit starting in 2023. In the coming years, this earnings effect can therefore be more than compensated by the planned growth.

In view of the strategic focus on cloud and data services for business customers, the company plans to step up organic growth and to evaluate potential options for additional inorganic growth.

Additional funds will be used to enhance the attractiveness of the ecotel share and strengthen shareholder value. To this end, the company will review all options, such as payment of special dividends again and/or initiation of a new share buy-back program. The Annual Report for financial year 2022, which will be published in March 2023, is expected to contain concrete suggestions in this regard.

The two shareholders, ecotel communication ag and consultist GmbH, consulted Noerr and CASE Corporate Finance.

About ecotel communication ag:
The ecotel Group (hereinafter »ecotel«) has been operating nationwide since 1998 and is established as one of Germany’s leading providers of high-quality business solutions. With the focus on “cloud & fiber” in 2022, ecotel supplies the two most important growth areas of the German telecommunications market. The parent company is ecotel communication ag with headquarters in Düsseldorf. Including its subsidiary, ecotel has a total of about 225 employees. Currently, ecotel provides full cloud and fiber services to more than 20,000 customers throughout Germany.

Note:
This publication is not an offer for the sale nor an invitation for the purchase or subscription of securities. This publication is not a securities brochure. This publication and the information contained therein are not intended for direct or indirect dissemination to or within the United States of America, Canada, Australia or Japan.

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