2004-08-10: technotrans back on Growth Track in Financial Year 2004
2nd quarter 2004:increase of revenue by 15.5% / operating profit up 70.2% / net profit plus 240% / Cash flow at mid-year € 7.8 million

technotrans , leading systems supplier of equipment for the printing industry and the manufacture of micro technology, is able to look back on a highly satisfactory second quarter to 2004. Revenue growth continued to gain momentum. The factor behind the increase of 15.5 percent compared with the previous year to revenue of € 28.1 million (previous year: € 24.3 million) was the Print segment, which was up by almost € 3.5 million or 21.5 percent on the prior-year quarter alone. With consolidated revenue reaching € 54.8 million mid-way through 2004 (previous year € 50.1 million), the growth rate was 9.3 percent.

The rise in revenue was reflected by a substantial improvement in earnings. Gross earnings at the six-month mark were up 15.4 percent to € 18.8 million (previous year € 16.2 million). In particular as a result of the DRUPA, which takes place only once every four years, distribution costs rose sharply in the first half (+ € 892,000 compared with previous year). In spite of this burden, the operating profit at the year's mid-point was up by 62.6 percent to € 4.7 million (previous year € 2.9 million). The rate of return for the segments at last returned to the excellent level of 9.4 percent (previous year 6.4 percent) in the second quarter. The net profit half way through the year is just under € 2.8 million (+ 180 percent), equivalent to earnings per share of € 0.42 (previous year € 991,000 or € 0.15 per share).

At the year's midway point, cash flow had risen to € 7.8 million (previous year: € 5.2 million), representing growth of 50 percent. The free cash flow likewise touched a record level of more than € 7.0 million (previous year € 3.9 million).

The rise in revenue since mid-2003 once again resulted in the recruitment of additional personnel. Whereas the group numbered only 577 employees on June 30, 2003, by June 30, 2004 the total had already risen to 606. This rise was due primarily to the extension of production capacity, particularly at the German sites.

Outlook
Whereas the expectations being voiced before the DRUPA by the major German players were decidedly subdued, the outcome of the exhibition was ultimately far better than expected, with foreign investment proving a driving force. technotrans will benefit disproportionately from this buoyancy.

"In our forecasts for the 2004 financial year, we have based our assumptions on the belief that the second half of the year will almost inevitably be better than the first half, not least thanks to the DRUPA," says Heinz Harling, chairman of the Board of Management of technotrans AG. "In order to achieve our revenue target of € 115 million, we would need to post revenue of € 60 million in the second half. As matters stand, we have no reason for doubting our ability to achieve this target. Based on the first-half earnings, we are equally confident about achieving our goal of a net profit of € 5.5 to 6 million."

Management is also very confident about the medium-term progress of the company. Sales Director Ralph Teunissen: "The new products exhibited at the DRUPA met with a resoundingly positive market reception and we know that we are taking the company in the right direction strategically speaking, with our aim of "more technotrans per printing press". The new product area of cleaning systems will moreover provide us with access to a market that can contribute significantly to the company's growth over the next few years. In operating terms, we are not expecting to generate revenue until the second half of 2005, but from a strategic viewpoint this move is already very significant for technotrans at a time when it is poised to become the largest systems supplier for liquid technology systems."

The segments
technotrans is active in three areas of business: Print, Micro Technologies and Services.

Business progressed better than expected in the Print segment, which once again posted revenue of € 19.3 million in the second quarter in spite of the interruption of the DRUPA. This represents an increase of 21.5 percent on the prior-year quarter. With a total of € 38.6 million after the first six months, the overall increase on the previous year (33.2 million) is now 16.2 percent. Due to our customers' lead times, there is no evidence as yet in this figure of this year's DRUPA; experience has shown that this will only transpire within two or three quarters' time.

The positive development in revenue has had a disproportionately very high impact on earnings. The 16.2 percent rise in revenue compares with an improvement in the result for the segment from € 955,000 in the previous year to € 2.7 million in the first half of 2004, equivalent to almost a three-fold increase. Following a lengthy lean period, the Print segment has now once again generated well over half of consolidated earnings. The rate of return for the segment in the first six months was highly satisfactory, at 7.0 percent.

Six months into the year, revenue for the Micro Technologies segment of € 3.3 million was down on the previous year (€ 4.2 million, -20 percent), as expected it was possible to compensate in part for the weak first quarter. The volume of revenue from microstructure technology is still insufficient to compensate for stagnating sales in the traditional area of business (production plant for optical storage media) or to return to former rates of growth.

With revenue reaching € 2.6 million in the second quarter, the result was almost back in the black. However, this area of business again posted a loss of € 576,000 at the year's mid-way point (previous year: loss of € 424,000). The usual increase in volume in the second half of the year should prompt a corresponding improvement in earnings.

The Services segment again posted slight revenue growth at the half-way mark, to over € 12.8 million (2003: € 12.7 million). This is all the more remarkable for the fact that particularly the services provided for the DRUPA exhibition could not be invoiced in full.

The operating profit of € 2.3 million was almost on a par with the previous year. As expected, the rate of return in the second quarter fell as a result of the DRUPA, leaving an overall rate of return for the segment of 17.8 percent at the end of the first six months.

Key Data 01-06/2004

Dates
The Interim Report 3/2004 will be published on November 09, 2004.

technotrans AG - WKN 744 900

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These press releases contain forward-looking statements which are based on assumptions and estimations by the management board of technotrans AG. Even though the management board is of the opinion, that those assumptions and estimations are realistic the future development and the projected results may deviate substantially from the forward-looking statements. Those deviations can be due to several factors including but not limited to changes in the macro-economic situation, in the exchange rates, in the interest rates and in the graphic arts industry. technotrans AG gives no warranty and does not assume the liability for any damages in case the future development and the projected results do not correspond with the forward looking statements.