K2 Internet S.A. – Analytical Report.

Due to the IPO of the shares of K2 Internet S.A., on March 27, 2008, Penetrator Brokerage House published an analytical report on the Company’s performance. The company was evaluated at PLN 73.7 million based on DCF method and at PLN 73.3 million based on the comparative method. The average of the evaluations is PLN 73.48 million, which translates into PLN 36.56 per one share.
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The analysts report that K2 Internet S.A. EV/EBITDA ratio (determined based on the Company’s projected EBITDA for 2008) amounting to 14.4 at the share price of PLN 36.56 allows for 21% discount versus the planned EV/EBITDA of the companies in the comparative basis.

The report presents major assumptions concerning CAPEX in the years 2008-2009. The Company will carry out a PLN 15.2 million investment plan presented in detail in the Prospectus.

”The main strengths of our strategy are its versatility and compatibility with the tendencies observed on the dynamically developing interactive marketing sector. The strategy’s versatility is manifested by planning investments in market segments with most promising development prospects. I believe that appropriately selected strategy will enable K2 to grow fast and strengthen its position on the market. This in turn should translate into the growth of the operating revenue.” Janusz Żebrowski, the President of the Management Board of K2 Internet S.A says.

According to the analysts, realization of the assumptions concerning business development and operating costs will enable: a gradual increase of planned sales revenues from PLN 25.5 million in 2007 (PLN 15.3 million in 2006) to PLN 127.3 million in 2015, a gradual growth of projected EBIT from PLN 2.2 million in 2007 (PLN 1.5 million in 2006) to PLN 15.2 million in 2015, a gradual improvement of projected EBITDA from PLN 3.0 million in 2007 (PLN 2.1 million in 2006) to PLN 19.8 million in 2015, a gradual growth of projected net financial result from PLN 1.8 million in 2007 (PLN 1.1 million in 2006) to PLN 12.2 million in 2015.

The analysts stress numerous competitive advantages of K2 Internet S.A., the most important being: a proven business model, based on many years of experience and solutions proven in practice, a multidisciplinary team of specialists, complementary e-marketing and technology services, a portfolio of prospect clients and high market potential.