3U TELECOM releases nine months figures

Marburg, November 10th, 2004 (3.30 pm) – In the first nine months of 2004 the 3U TELECOM group has recorded sales of EUR 69.38 million. The segment fixed-line telephony (3U and OneTel) generated sales of EUR 50.44 million (2003: EUR 44.94 million), whereas LambdaNet Communications AG (segment broadband/IP), a fully consolidated subsidiary since April 1st 2004, had sales of EUR 18.94 million. In comparison to the previous quarter sales rose by EUR 1.34 million or 8.4% to EUR 17.21 million in the fixed-line segment. In contrast, quarterly sales of LambdaNet fell slightly by 2.5% to EUR 9.35 million.

As extraordinary amortization was realized during Q2 2004, the net loss of the group amounts to minus EUR 17.50 million after the first nine months ended of fiscal year 2004. In the third quarter 2004 the fixed-line segment recorded a net loss of minus EUR 1.10 million (Q2 2004: minus EUR 8.20 million), whereas LambdaNet was able to reduce its net loss during Q3 2004 to minus EUR 3.46 million in comparison to minus EUR 3.65 million in the previous quarter. The group´s net loss therefore translates into an EPS (basic) of minus EUR 0.38 per share.

The fixed-line segment shows an accumulated operating profit before depreciation and amortization (EBITDA) of EUR 0.42 million (2003: EUR 5.30 million). The reduction of the operating margin is mainly a result of an increasingly competitive environment in the course of 2004 as well as an increase in operating expenses. Considering the EBITDA generated in the broadband/IP segment of EUR 1.83 million (previous quarter: EUR 1.64 million), the 3U group generated an operating profit (EBITDA) of EUR 3.89 million after the first nine months 2004.

The complete nine months report will be available for download on the company´s website (www.3u.net) as of November 15th 2004.

Contact:

3U TELECOM AG
Ulrich Wiehle
Tel.: + 49 (0)6421-999 1200
Fax: + 49 (0)6421-999 1111
E-Mail: ir@3u.net

Through the acquisition of LambdaNet and OneTel, 3U TELECOM AG does not anticipate a further flow of funds / Voluntary lock-up period of three years on the part of the acting board members

Contrary to information that would imply otherwise, 3U TELECOM AG (Prime Standard, ISIN DE0005167902) does not anticipate any further flow of funds in relation to their acquisitions of LambdaNet Communications Deutschland AG and OneTel Telecommunication GmbH. 3U TELECOM AG thus posses an unaltered financial position. Among other things, this is displayed by the financial state of short-term holdings, which were over €31 million as of the end of Q2 2004.

The acquisition of LambdaNet is an important contribution to the strategic direction of the 3U Corporation. In the future, LambdaNet will act as a technology platform for the entire 3U group. This integration makes it possible for the 3U Corporation to augment its current portfolio of telecommunication services (Call by Call & cps), especially in the area of IP services.

Furthermore, the acting directors Michael Schmidt and Roland Thieme have voluntarily pledged not to sell any of their held stock for a timeframe of three years (Lock-Up Period).

Contact:

3U TELECOM AG
Michael Diegelmann
Tel.: + 49 (0)6421 999-1200
Fax: + 49 (0)6421 999-1111
E-Mail: ir@3u.net

Security I.D. Number: 516790; ISIN: DE0005167902; Index: NEMAX 50

Listed: Geregelter Markt in Frankfurt (Prime Standard); Unofficial Market in Berlin-Bremen, Düsseldorf, Hamburg, Hannover and Stuttgart

3U TELECOM AG forms a substantial partnership with Neckermann

Today 3U TELECOM AG (Prime Standard, ISIN DE0005167902) announces a substantial sales partnership with the mail-order-company Neckermann, a subsidiary of the Karstadt-Quelle Corporation. Beginning for the first time in July of 2004, Neckermann will offer its customers its own fixed-line scheme (Neckermann-phone-powered by 3U). This scheme is a special carrier pre-selection offer for Neckermann customers, allowing them to make calls up to 50% cheaper than the T-Net Standard Scheme from Deutsche Telecom AG (scheme date 15/05/2004). 3U TELECOM AG will undertake all order processing. Both companies will thus obtain an excellent gateway for reaching new end customers, who will be able to make all of their calls (local, national & international) using the network of 3U TELECOM AG.

This exclusive offer, which is sent out with the Neckermann catalogue, will be accessible to about 7 million households. Michael Schmidt, on 3U’s Management board, said, “Additionally, we will make the customers aware of this offer through direct marketing, so by year’s end an anticipated 10,000 plus customers will have taken advantage of this offer, and an additional source of income will be created for both companies.”

3U’s cooperation with Neckermann is similar to the recently published agreement with the mail-order-company Quelle. In its pursuit of developing its potential yield, the agreement with Quelle is a new milestone for 3U TELECOM AG, and demonstrates the consistent pursuit of 3U’s business strategy.

Contact:

3U TELECOM AG
Michael Diegelmann
Tel.: + 49 (0)6421 999-1200
Fax: + 49 (0)6421 999-1111
E-Mail: ir@3u.net

Security I.D. Number: 516790; ISIN: DE0005167902; Index: NEMAX 50

Listed: Geregelter Markt in Frankfurt (Prime Standard); Unofficial Market in Berlin-Bremen, Düsseldorf, Hamburg, Hannover and Stuttgart

The CEO of 3U TELECOM AG leaves the company

The supervisory board and the chairman of the board of 3U TELECOM AG (Prime Standard, ISIN DE0005167902) hereby announce that the management contract of Mr Graul has expired on 20/07/2004, according to schedule. Mr Graul wishes to attend to other tasks outside of the corporation. However, after his retirement from the company, he will be available as an advisor.

The two remaining board members, Michael Schmidt and Roland Thieme, will be augmented by two new board members in the areas of finance and sales and marketing.

Contact:

3U TELECOM AG
Michael Diegelmann
Tel.: + 49 (0)6421 999-1200
Fax: + 49 (0)6421 999-1111
E-Mail: ir@3u.net
Security I.D. Number: 516790; ISIN: DE0005167902; Index: NEMAX 50

Listed: Geregelter Markt in Frankfurt (Prime Standard); Unofficial Market in Berlin-Bremen, Düsseldorf, Hamburg, Hannover and Stuttgart

Q1 2004 Operating Profit

Turnover in Q1 2004 amounted to €17.36 million (€13.78 million). EBITDA increased by €0.53 million (€2.36 million), an increase of 29% over Q4 2003.

With an EBITDA of -€0.67 million (€1.84 million), there was an improvement of €0.49 million over Q4 2003. At -€1.09 million (€1.34 million), the operating profit was marginally worse than that of Q4 2003.

As previously announced, Q1, which falls short of the original strategic forecast, can be compensated for during the course of the fiscal year. 2004’s goal for the fixed line business still stands with an expected revenue of €100 million and stock profits of €1.

These goals will be achieved by:

 

    • initiation of the product push in June
    • growth via cooperation with Quelle
    • entry into internet telecommunications
    • completion of OneTel integration

 

The management’s proposals on all pertinent agenda items was passed with over 99% of the shareholders’ vote in the shareholders’ meeting of 13/05/2004. The board of directors will implement these resolutions as quickly as possible, so that the issuing of the new shares of stock (split 4:1) can take place shortly.

For queries:

3U TELECOM AG
Axel Becker
Tel.: +49 (0)6421 999-0
Fax: +49 (0)6421 999-1111
E-Mail: ir@3u.net

After a weak start this year, 3U anticipates growth via its cooperation with Quelle

3U has closed a deal with Quelle, Europe’s largest mail-order firm. Starting in the middle of this year, Quelle will offer its customers their own fixed line scheme (powered by 3U), a special carrier pre-selection offer intended for Quelle customers. 3U will handle the execution of this plan.

Due to this project, 3U anticipates a broad volume of sales and increase of income starting in the second half of this year, following its weak start.

3U was unable to reach its customary profit margin in Q1. Restructuring due to the integration of OneTel has once again severely hindered profits. Additionally, due to technical difficulties experienced by system technology suppliers, the implementation of new products was delayed. Also the adjustment of customer portfolios from OneTel has contributed to Q1’s resulting business volume being lower than had been expected. The results from Q1, which will be released in detail on 17/05/2004, will however fall short of expectations.

The promising cooperation with Quelle should provide for clear growth, and is capable of compensating for temporal adjustments made during the transformation and its planned provisions. By the end of Q2, 3U will be in a position to initiate an increase of organic growth with the implementation of further products and services. By then 3U should have once again reached its former market strength.

For queries:

3U TELECOM AG
Axel Becker
Tel.: +49 (0)6421 999-0
Fax: +49 (0)6421 999-1111
E-Mail: ir@3u.net

3U TELECOM AG takes over LambdaNet

3U is taking over the Internet infrastructure provider LambdaNet Communications Deutschland AG (LambdaNet) by a majority of 90%. For 3U this is an introduction into the ISP business. Internet telecommunications and value-added services currently define the trend in today’s telecom market. By acquiring LambdaNet, 3U is immediately able to position itself in an excellent growth market, and in so doing will have one of the most modern IP networks at its disposal.

Thus 3U has set a course for the future, and has created a second area of growth as well as an additional source of income.

LambdaNet is a leading provider of network transmission solutions to telecommunication corporations, Internet service providers and large customers. LambdaNet operates a European-wide optical transmissions network, which through the combined implementation of the most modern technology, such as DWDM (Dense Wave Division Multiplexing) and SDH (Synchronous Digital Hierarchy), has a transmission capacity of several terabits per second.

The acquisition was made possible, because an investors group had previously led the company through their insolvency. It was agreed that the purchase price would remain undisclosed, which is in keeping with usual market conditions.

The founder of LambdaNet, Dr. Dieter Finke, was appointed as CEO. The position of Director of Sales was assigned to Stefan Krüger, who had already held this position for LambdaNet.

In 2003 LambdaNet had a revenue of €54.2 million and an EBITDA of €16.7 million (according to US-GAAP).

For queries:

3U TELECOM AG
Axel Becker
Tel.: +49 (0)6421 999-0
Fax: +49 (0)6421 999-1111
E-Mail: boerse@uuu.de

Operating Profits for 2003: Revenue increased by 50% during the second half of fiscal year 2003

Revenue increased by 50% during the second half of fiscal year 2003. There was a onetime charge against operating profits due to a reserve for bad debt in OneTel’s accounts receivable.

Results point back to a successful year in 2003. The business achieved sustained profits. At the same time, expansion was further advanced via the opening of two new subsidiary companies in Belgium and Luxembourg. Through the acquisition of OneTel, the German company has been bolstered, and the framework has been put in place for further expansion in 2004.

The business achieved a revenue of €64.68 million in 2003, just 2% less than in 2002. In the second half of the year the business was able to improve its revenue, due to the acquisition of OneTel, by about 50% over the first two quarters. In so doing, the wholesale business was able to make up for a temporary softening of its margin strength.

The company’s operating profits in its operational business saw a clear improvement. Through the acquisition of OneTel, the annual profit in 2003 was however negatively influenced due to a reserve for bad debt in the amount of €1.78 million on OneTel’s accounts receivable. As a result, 2003’s net income of €1.73 million didn’t improve by 50% as internally planned. Consequently, it nearly obtained the value of the pervious year’s net income of €1.78 million.

Positive growth expected in 2004!

For fiscal year 2004, the board of directors forecast a business volume of €100 million, and stock earnings of €1 per share. Through consolidation with OneTel, revenue will be increased by more than €80 million during this fiscal year. Internal growth is expected to account for approximately 25% of this. This internal increase of revenue should result in organic growth through a restart of the wholesale business and execution of the currently planned measurements.

The forecasted earnings of €10 million are based on 3U’s cost structure, how it was obtained before the 2003’s acquisition of OneTel, and how it will be reached after the integration of OneTel is completed. Expected earnings are at about 10% of the total revenue.

By 31/12/2003 the company had at its disposal liquid and near-liquid assets totalling €55.5 million (circa €6 per stock share). Furthermore, this includes a hidden reserve of almost €4 million in security assets.

It is the board of directors’ aim to use this capital for further acquisitions, which will have a positive impact on profitability. 2003’s annual report is accessible online.

For queries:

3U TELECOM AG
Mr. Axel Becker
Tel.: +49 (0)6421 999 – 0
Fax: +49 (0)6421 999 – 1111
E-Mail: ir@3u.net

3U continues its international expansion with an entrance into the British market

3U TELECOM continues its international expansion with an entrance into the British market. In the course of its international expansion strategy, 3U has broadened its business operations to include Great Britain, and announces the addition of its subsidiary, 3U TELECOM Ltd, which is based in London.

3U is now actively operating in 9 European countries and in the USA. With this step, 3U has further solidified its position as an international provider of voice communications. Through cooperation in local markets with other telecom providers, 3U will continue the build-up of its successful business model, and has established itself as a premier provider of low rate telecommunications and per second billing. With its entry into Great Britain, 3U has expanded its platform for growth through acquisition in 9 countries, and has improved the framework for its call-termination business.

For queries:

3U TELECOM AG
Axel Becker
Tel.: +49 (0)6421 999-0
Fax: +49 (0)6421 999-1111
E-Mail: boerse@uuu.de
Internet: http://www.uuu.de