NFON AG reaches important milestone of half a million seats in the third quarter of 2020 F

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• Number of extensions installed at customer sites doubles to more than 500,000 seats since the beginning of 2018

• Working from home continues to drive digitalization of business communication

• Recurring revenues grow significantly by around 25% year-on-year based on preliminary figures

• At 88%, the share of recurring revenues in total revenues remains extremely high

• Positive EBITDA underscores the high earnings potential of the business model

• Presentation of the figures at the Frankfurt Equity Forum 2020 on November 16, 2020, 11:00 a.m. – 11:30 a.m.

Munich, November 17, 2020 - NFON AG (together with its subsidiaries "NFON" or "the Company"), the only pan-European cloud PBX provider (telephone system from the cloud), continued to significantly increase its recurring revenues by 24.7% to EUR 43.7 million in the first nine months of 2020 (9M 2019: EUR 35.0 million) based on preliminary figures. Total revenues increased by 19.2% to EUR 49.4 million (9M 2019: EUR 41.5 million). Thus, the share of recurring revenues in total revenues has increased further and, at 88.4%, now by far exceeds the forecast of between 80% and 85% expected for 2020. At 508,265, the number of seats installed at customers' premises was 17.7% higher than on the previous year's reporting date (September 30, 2019: 431,935). The number of seats has thus more than doubled since the beginning of 2018.

"We have massively expanded our business activities since the IPO and are very proud to have reached an impressive milestone of more than 500,000 seats. Our dynamic growth both this year and in recent years shows that we are hitting the nerve of the times with our business model. These half a million seats also form a very solid basis for further growth in the future. After all, each seat represents an extension for which monthly charges and call minutes are incurred and thus generates recurring revenues," commented #hansszymanski, CEO and CFO of NFON AG.

The average revenue per user (ARPU) stabilized at EUR 9.77 over the course of the year in the 2020 reporting period and at the same time exceeded the previous year's figure of EUR 9.71. This development was mainly driven by the increasing volume of work done at home and the resulting higher call volume. The increased ARPU and the very high share of recurring revenues as well as the resulting improved gross profit had a correspondingly positive impact on the development of earnings. At the same time, expenses for travel and marketing activities, for example, were lower in the reporting period than in the previous year. As a result, earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to EUR 1.8 million in the first nine months of 2020 (9M 2019: EUR -5.6 million). Adjusted EBITDA even improved by around EUR 7 million to EUR 2.5 million (9M 2019: EUR -4.2 million). This extraordinary increase in earnings demonstrates the high earnings potential of NFON's business model. However, in view of the highly fragmented and dynamically developing market in Europe, NFON's strategic focus is currently clearly on growth. The success of this strategy so far is demonstrated by the more than 250,000 seats that NFON has acquired in less than three years. 

"We were able to impressively demonstrate the advantages of our business model in the first nine months of this year: A stable, predictable basis due to a high share of recurring revenues coupled with high growth momentum. We enable business communication on the road, at home or from the office. With NFON, our customers can act completely flexible. The growth rate of 25% in recurring revenues proves that we meet the needs of our customers. We are convinced that the many positive experiences with communication solutions from the cloud will prove to be a sustainable market driver and that this momentum will outweigh the temporary reluctance of customers in some markets to invest in the long term from our current perspective," Szymanski concludes. 

Against the backdrop that the seat growth planned for 2020 could not be fully realized due to the COVID- 19 pandemic, particularly in the Italian, French, Spanish and UK markets, the company expects a slightly lower growth rate of 17% to 19% for the seat base for 2020 as a whole compared to the 20% to 24% originally projected. With regard to recurring revenues, the Management Board remains optimistic for 2020 and continues to expect a growth rate of between 22% and 26%. The high pace of growth in recent years will thus be maintained. The share of recurring revenues in total revenues will probably even exceed the previously expected range (80% to 85%) and rise to between 85% and 90%.

The Management Board of NFON AG will present the company's preliminary 9-month figures at the German Equity Forum on Monday, November 16, 2020, 11:00 a.m. – 11:30 a.