euro adhoc: Lycos Europe N.V. / Annual Reports / LYCOS Europe N.V. increases 2005 revenues by 21 percent and breaks even in fourth quarter with EBITDA result

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Disclosure announcement transmitted by euro adhoc.
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22.02.2006

• Total revenues in 2005 grow by 21 percent to EUR 125.5 million and
are spread almost evenly among the three main revenue streams Paid
Services & Shopping, Internet Access and Advertising Business
• EBITDA in full year 2005 improves by 64 percent to EUR (12.3)
million, net loss decreases by 56 percent to EUR (20.2) million •
LYCOS Europe N.V. breaks even in Q4/2005 on EBITDA with EUR 0.0
million and improves net loss by 83 percent vs. Q4/2004 to EUR (1.7)
million

Haarlem / Netherlands, 22nd February 2006 - LYCOS Europe N.V., one of
the leading European portal providers and developer of web
applications, today announced its results for the financial year
2005. Mostly driven by an increase in total revenues by 21 percent to
EUR 125.5 mln (vs. EUR 103.8 mln last year) and a successful
implementation of several cost optimization measures LYCOS Europe
N.V. achieved to significantly improve its results targeting
profitability for the full year 2006. The 2005 net loss diminished by
56 percent to EUR (20.2) mln compared with last year’s EUR (45.5)
mln. The 2005 EBITDA result improved even more by 64 percent to EUR
(12.3) mln vs. EUR (34.2) mln in 2004.

The total revenues of LYCOS Europe were spread almost evenly among
the three main revenue streams Paid Services & Shopping, Internet
Access (Interconnect) and Advertising. The above average growing Paid
Services & Shopping contributed to total revenues with a share of 35
percent (EUR 43.8 mln, increase of 40.6 percent vs. 2004), followed
by the Interconnect division with a current share of 32 percent (EUR
40.3 mln, increase of 38.0 percent vs. 2004) and advertising revenues
also with a share of 32 percent (EUR 40.1 mln, decrease of 2.9
percent vs. 2004, but restated by one-term-events increased by 8.0
percent in 2005 vs. 2004). Revenues from Licensing and others
contributed 1.0 percent (EUR 1.3 mln) to total revenues. The revenue
development in 2005 shows that LYCOS Europe was able to successfully
develop revenue generators apart from the advertising market.

In the financial year 2005 costs of revenues of EUR 59.7 mln remained
on an almost constant level (2004: EUR 57.8 mln), while at the same
time the revenues rose by EUR 21.7 mln. The gross margin therefore
improved by 8 percentage points to 52 percent.

LYCOS Europe managed to achieve a balanced EBITDA result of EUR 0.0
mln in the fourth quarter 2005, compared with EUR (5.5) mln in
Q4/2004. At the same time, net loss improved by 83 percent to EUR
(1.7) mln compared with EUR (10.1) mln in the corresponding quarter
of 2004. This positive development was mostly driven by the
successful implementation of several cost optimization measures and
therefore a much enhanced cost base. The capital efficiency was
raised significantly, leading e.g. to an improvement in the ratio of
accounts receivables to total revenues by 39 percent (y-o-y). In
relation to the fourth quarter 2004, revenues amounted to EUR 32.2
mln and therewith slightly dipped by 3 percent (Q4/2004: EUR 33.3
mln). Due to pricing pressure especially in the Swedish broadband
access market coming along with a churn in narrowband customers,
LYCOS Europe’s Interconnect revenues diminished by 14 percent in the
fourth quarter 2005 (EUR 9.7 mln vs. EUR 11.2 mln in Q4/2004) whilst
revenues from Paid Services & Shopping grew by 23 percent to EUR 11.5
mln (vs. EUR 9.3 mln in last year’s reference period).

Cash, cash equivalents and other investments decreased by 14 percent
from EUR 121.7 mln on 31st December 2004 to EUR 105.1 mln on 31st
December 2005. The average monthly cash reduction in 2005 amounted to
EUR 1.4 mln, an improvement of 70 percent vs. 2004 (EUR 4.5 mln per
month). This positive development is attributed to increased revenues
and an enhanced cost base as well as improved capital efficiency.

- ends -

"With the financials 2005 at hand, LYCOS Europe has proven the
capability for a turnaround coming along with increasing revenues and
significantly improved results. Being right on track with our
financials and being well-positioned to breakeven in the full year
2006, we will now focus on increasing the pace to market new and
enhanced products. LYCOS Europe now has the right set-up, the means,
the strategy and the creativity to benefit from the ongoing growth of
the Internet business. We see high potentials especially in the field
of search, communication and community", comments Christoph Mohn, CEO
of LYCOS Europe N.V.

Mln.EUR (except share,margin) Full Year 05 Full Year 04 Change
Total revenues 125.5 103.8 21%
Pro forma gross profit 65.8 46.0 43%
Pro forma gross margin 52% 44% 18%
Loss from operations (22.7) (50.3) 55%
Net loss (20.2) (45.5) 56%
Net loss per share in Euro (0.06) (0.15) 56%
EBITDA (12.3) (34.2) 64%
Cash, cash equiv., other inv. 105.1 121.7 (14%)
Mln.EUR (except share,margin) 3months end. 12/31/05 3months end. 12/31/04 Change
Total revenues 32.2 33.3 (3%)
Pro forma gross profit 17.3 16.5 5%
Pro forma gross margin 54% 50% 8%
Loss from operations (2.5) (11.3) 78%
Net loss (1.7) (10.1) 83%
Net loss per share in Euro (0.01) (0.03) 83%
EBITDA 0.0 (5.5) 100%

end of announcement euro adhoc 22.02.2006 07:48:47
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ots Originaltext: Lycos Europe
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:
Kay Oberbeck, Director PR & IR
Tel.: +49 (0)5241 8071055
E-Mail: kay.oberbeck@lycos-europe.com

Branche: Software
ISIN: NL0000233195
WKN: 932728
Index: Prime All Share, Technologie All Share
Börsen: Frankfurter Wertpapierbörse / regulated dealing/prime
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