Mühlbauer increased sales and earnings significantly

High order income in core business Cards & TECURITY®

Roding, (PresseBox) - Based on a large order for the complete transfer of technology and expertise for the production of electronic ID documents and the call of placed orders for the provision of technology and software solutions for Cards & TECURITY® applications, the Mühlbauer technology group, quoted on the Prime Standard, is able in Q2 2008, to continue the positive development of the previous quarter with a strong increase in orders and sales and to make a significant contribution to consolidated net earnings.

In Q2 group sales climbed 44.8%, to EUR 44.4 million (30.7), due to growth in all business areas. Mühlbauer recorded the greatest increase in sales, namely 58.5%, in its restructured core business area Cards & TECURITY®. This area focuses exclusively on the transfer of technologies and expertise for the production of all types of card and ePassport applications. As a result, earnings before interest and taxes (EBIT) almost doubled year-on-year, at EUR 7.5 million (3.9), while the EBIT margin rose from 12.6% to 17.0%. Earnings before taxes (EBT) climbed to EUR 7.4 million (5.2), but - in contrast to the same period of the previous year - was unable to benefit from the positive financial result (minus EUR 0.1 million; PY: EUR 1.3 million), due to the unfavorable capital market environment. After deducting tax expenses, net income for the period totaled EUR 5.7 million - after EUR 3.4 million year-on-year. Earnings per share for the same period rose from EUR 0.21 to EUR 0.39. In 1HY 2008, sales rose to EUR 87.6 million (65.1) and EBIT climbed EUR 6.8 million to EUR 14.6 million. For the same period earnings per share more than doubled from EUR 0.37 to EUR 0.78.

As a result of the extension of business, working capital climbed EUR 6.6 million to EUR 52.7 million, while free cashflow rose significantly year-on-year, particularly due to the increase in earnings and the as yet restrained investments, to EUR 7.0 million (+1.2). The equity ratio dropped from 81.2% to 77.9%, due to the payment of dividends of EUR 1.00 per no par share including the statutory distribution of profits to the personally liable shareholder.

Demand for technology solutions and products by Mühlbauer continued unabated in Q2. With new orders worth EUR 54.2 million (42.2) the order book reports year-on-year growth of 28.4%. Based on the order volume of EUR 12.6 million from a large order of a European country for the complete transfer of technology and expertise for the production of electronic ID documents placed in the reporting period, and additional orders of production solutions for innovative card applications, the core business area Cards & TECURITY® achieved an order income of EUR 33.7 million (20.4) - an increase of 65.2% over the comparison period of the previous year. In Semiconductor Related Products order income totaled EUR 10.8 million (12.9). While the semiconductor-related area thus lagged behind the order income for the same period of the previous year by 16.3% due to the weak semiconductor environment, Precision Parts & Systems declined only slightly year-on-year, at EUR 5.0 million (5.2). The business area Traceability, which again benefited from the sustained demand for systems for the marking of electronic components, continued its growth. In this area, order income rose by 27.0% from EUR 3.7 million to EUR 4.7 million. With regard to cumulated order income for the first half of 2008, Mühlbauer recorded a year-on-year increase of 34.9%, thus reporting a new half-yearly record high of EUR 102.4 million. The order backlog to the end of the first half of 2008 amounted to EUR 83.4 million (86.6), thus lagging the year-on-year value slightly by 3.7%.

The Mühlbauer technology group is expecting to continue the good development of sales and earnings in the current year, while this will primarily be driven by the demand for system solutions from the Cards & TECURITY® area. Several countries and public authorities will require technology systems to realize their ID projects due to the transformation and implementation process of innovative security-oriented ID systems. The increasing demand for EMV bank cards and GSM/SIM cards is also relevant. It should continue to exert a positive influence on the need for Smart Card production systems. Moreover, the business area Semiconductor Related Products is expected to undergo an intensification of demand. While short-term delays are possible in the product line Smart Label, due to fluctuations in supply and demand, the increasing use of RFID labels in supply chain management and ticketing should medium- to long-term result in the growth anticipated by many experts. As a result of the increasing market maturity of its new high-performance machine solutions, Mühlbauer is also ideally positioned in promising niches of the semiconductor industry to benefit strongly from a future development of demand. The positive development of business in the Traceability and Precision Parts & Systems areas should continue in the second half of 2008, subject to the fact, however, that the market environment remains favorable.

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