Moderate decline in revenues in the first half year (-5 percent) - recent increase in order bookings; forecast for 08/09 still in focus

ISRA VISION AG: 1st Half Year of 2008/2009

Darmstadt, (PresseBox) - .
- Revenue falls by 5 percent in the first half of the year to 28.4 million Euros
- Operating cash flow rises by 6.6 million Euros to 7.5 million Euros
- EBT margin 13 percent; EBITDA margin at 24 percent of total output
- Gross margin stable at 58 percent
- Healthy order bookings in May 2009

ISRA VISION AG (ISIN: DE0005488100), one of the world's top five suppliers of industrial image processing (Machine Vision) and the global market leader in surface-inspection systems, was able to noticeable outperform the industry as a whole. While revenues declined precipitously in many sectors of the German plant construction, mechanical engineering and software industries during the 1st half of 2009, ISRA's revenues dropped off only slightly in the 1st six months of financial year 2008/2009 (October 1 to September 30). Specifically, the ISRA Group's net sales amounted to 28.4 million Euros, a decline of only 5 percent. Despite significant economic drag factors, the gross margin (total output minus production costs) remained stable. A number of measures were taken to keep costs down, such as capacity adjustments, personnel costs and production optimizations. These resulted in extraordinary charges in the 1st half of the year. EBT amounted to 4.2 million Euros (PY: 5.3 million Euros). The EBT margin temporarily narrowed to 13 percent. This is still within the expected profitability range, however, since Management expects profits to improve again in the second half of the year thanks to lower interest expense and efficiency enhancements already made. ISRA's pershare result for the 1st six months amounted to 0.67 Euros/share (PY: 0.83 Euros/share). During the same period, cash flow from operating activities rose by 6.6 million Euros to 7.5 million Euros. The equity capital ratio also improved, from 51 percent at the end of the prior financial year to 56 percent. Given its current cash assets and available lines of credit adding up to double-digit millions of Euros, ISRA is solidly financed.

In future, the strongest growth for this BU is expected to come from Asia and South America. In addition, ISRA plans to secure new local markets, mainly in Asia and Eastern Europe. A new branch operation has already been established in India. The Glass business unit's order backlog suggests that its business continues to improve. Management also expects a sustained growth impetus from the solar industry. A recently concluded frame agreement with a leading manufacturer in photovoltaic production lines is sure to be a source of growth. The Specialty Paper BU, meanwhile, is experiencing a steady increase in demand. In the Print BU, ISRA is seeing good results from the newly instituted sales-management system. The General Industries BU, by contrast, is seeing a marked improvement in order situation.

The volume of orders received showed signs of renewed vigor in May 2009, with a value totaling in the high single-digit millions of Euros. This is expected to show up in the third quarter of the current financial year. Recent trade fairs in Asia tend to confirm this trend. The company is presently tendering bids worth several hundred millions of Euros. Given an order backlog of more than 31 million Euros (PY: 35 million Euros), and assuming the clear uptrend proves sustainable, Managements expects revenues of roughly 60 million Euros for financial year 2008/2009 as a whole. In the process, external expansion will remain a key component of the overall growth strategy. A number of relevant projects are currently in development.

Following the successful integration of the Group's various acquisitions in recent years, efforts to improve profitability are now focused on the optimization of production. In this context, ISRA has implemented a number of personnel adjustments and location optimizations that resulted in extraordinary charges during the 1st half of the year. These measures are sure to have a favorable impact on future profitability, however. Decreased interest expense will also help improve the current financial result over the previous year. Provided the apparent recovery continues, the company intends to stick to its original profitability target for the ISRA Group: an EBT margin stabilized at or close to 15 percent (PY: 15 percent) over the short term, and increasing from there over the medium term.

In the coming years, ISRA intends to continue its strategy of long-term, profitable growth. In the wake of the current crisis, key investment projects have been postponed in practically all industries. If past experience is any guide, however, most of these projects will be revived in the next few years.

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