GTS Central Europe 2009 financial results

March 3rd, 2010 - GTS Central Europe (GTS CE) today announces its results for the full year ending 31 December 2009, reporting the highest EBITDA and cashflow since the Group was founded over 16 years ago. The company continues revenue growth in high margin data and data center products.

Highlights:

• Revenue of €384.5m, 12% decline from previous year
• EBITDA of €86.0m, 11% growth over previous year
• EBITDA margin of 22%, compared to 18% for previous year
• Cashflow (EBITDA less capex) of €39.6m, 40% growth over previous year

GTS CE continues to exhibit strong financial and operating performance in the face of a challenging economic environment. Since the company became cashflow positive in 2005, EBITDA and cashflow have grown at a compound annual growth rate of 17% and 50%, respectively. Increased profitability reflects a product mix shift towards the higher margin data and managed service product lines and a continued emphasis on cost control and efficiency improvements. While total revenue declined due to the divestment of non-core business lines, declining legacy voice products, and weaker local currencies compared to 2008, GTS CE continued profitable growth in our core data and managed service products.

Adam Sawicki, Chief Executive Officer, commenting on the results, said:

“I am very pleased with the results achieved in 2009. We completed our operational restructuring, establishing seven customer-focused business units. The newly created International Services and Wholesale Voice regional business units can take advantage of our unique operating scale and network to better serve the data and voice requirements of our regional carrier customers, while the five domestic business units focus on our in-country corporate customers. The new business unit structure, combined with the establishment of a regional procurement function and international network management center, has resulted in improved service to customers and increased efficiency, visibility and accountability across the company.”

Gerry Grace, Chief Financial Officer, commented:

“Year 2009 was very successful for us as we achieved significant contract wins despite the weak macro-environment. This included the largest contract in the company’s history with an associated revenue of €8.5m. With an improving macro-environment and streamlined business model, the company is well positioned for profitable growth in the future.”

About GTS Central Europe:
GTS Central Europe (GTS CE) is a multi-layered infrastructure-based provider of integrated telecommunications solutions for those countries of central and eastern Europe lying between Frankfurt and Istanbul. Using its own regional fibre network, GTS CE provides fixed voice, data, IP, MPLS and broadband services primarily targeting business customers, as well as services for other telecom carriers, mobile operators and content providers. GTS CE’s primary countries of operation are the Czech Republic, Poland, Hungary, Slovakia and Romania, with network extensions and local partnerships involving neighboring Ukraine, the Baltic States, Bulgaria, Russia, Croatia, Slovenia, Serbia, Moldova and Turkey. Global telecommunication magazine Capacity chose GTS CE group as the best wholesale carrier in the central and eastern Europe region for the years 2005, 2007 and 2009. GTS CE has more than 1300 employees, with a revenue of EUR 436m and EUR 77m EBITDA in 2008. For further information, please visit www.gtsce.com.

One Network - One Region – One Offer
GTS Central Europe has an unrivalled footprint within central and eastern Europe (CEE) and offers its customers and partners equally unrivalled reach and accessibility within the CEE region, achieved through an extensive international portfolio. Further, with one brand serving an entire region, you benefit from simplicity, cost-savings and efficiency that is not always achievable if you use multiple suppliers for your solution. If you see CEE as one region, you should use just one network. GTS CE: Your one-stop solution.

More information: Agnieszka Chrzanowska, phone: +48 22 488 8082, mobile phone: +48 695 911 072, e-mail: agnieszka.chrzanowska@gtsce.com