2004-11-09: technotrans reports significant rise in revenue and earnings
2004-11-09: technotrans reports significant rise in revenue and earnings

after 9 months at upper end of financial targets range with revenue up 10 percent and net earnings up 129 percent / earnings per share after third quarter at 0.72 € (9M prior year 0.31 €)
technotrans , leading systems supplier of equipment for the printing industry and the manufacture of micro technology, on the back of a very successful first half succeeded in posting a further improvement in revenue and earnings in the third quarter. Revenue at the nine-month mark totalled € 84.9 million, exactly 10 percent up on the prior-year figure (€ 77.2 million). Compared with the third quarter of the previous year (€ 27 million), growth actually reached 11.3 percent, with revenue rising to € 30.1 million. The driving force behind this growth was once again the Print segment which, compared with the corresponding prior-year period, expanded by 17 percent during the first nine months of the year.
The earnings situation, too, has without exception progressed positively. Gross earnings after nine months improved by 12.9 percent to € 29.5 million (previous year: € 26.2 million). The operating profit was up 59.7 percent to € 8.1 million (previous year € 5.1 million), despite the cost factors of this year's Drupa and a slight rise in development expenditure. The operating margin reached 11.3 percent in the third quarter - impressive proof of the sustained, earnings-driven growth strategy. The net profit after nine months is in excess of € 4.7 million (+ 129 percent, previous year € 2.1 million), equivalent to earnings per share of € 0.72 (previous year € 0.31). In all, these figures are at the upper end of the target range for the current financial year.

639 people were employed by the group on September 30, 2004 (previous year: 588, + 8.3 percent). Personnel were recruited in the first instance to the production area, where loan workers were in some cases offered permanent employment, and also with a view to building up expertise for the new cleaning systems product area.

Outlook
"The outstanding progress of the Print segment should continue until the end of the current financial year, with the result that we are likely to end the year with revenue on a par with 2002. That being the case, we will have succeeded in making good the significant reversal of 2003 in the very next year," Heinz Harling, Chairman of the Executive Board, summarises the current situation. "technotrans has thus regained its traditional course of growth, and as matters stand we expect this trend to hold up in the next financial year, too," adds CFO Wolfgang Breme. " Thanks to our adjusted cost structures, this growth will be reflected particularly in improved earnings. Nine months into the 2004 financial year, we are confident that the original earnings target of € 5.5 to 6 million will be achieved by the end of the year, with the actual figure towards the upper end of this range. Following a very strong third quarter, we moreover expect to be almost spot on with our revenue target of € 115 million." 2004 then would be technotrans' most profitable financial year since its IPO.

"It is fundamentally possible to state that the underlying conditions are currently very much in our favour," Ralph Teunissen, Sales Director, explains. "The surge in orders precipitated by this year's Drupa is likely to last for a few more months, the new products have got off to a successful start and are offering the prospect of above-average growth, and the venture into the new product area of cleaning systems should start bringing in revenue in the second half of 2005." Details of the next year's targets will be published along with the figures for the 2004 financial year.

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

The Print segment made better progress than planned during the first nine months of 2004. Revenue increased by 17 percent to € 59.1 million (previous year € 50.5 million), with growth actually touching 18.6 percent in the third quarter. In addition to a marked recovery in demand for core business (dampening solution preparation and ink roller temperature control), the new products which were exhibited for the first time at the Drupa attracted considerable interest.

This positive development in revenue again had a disproportionately very high impact on earnings. The result for the segment improved from € 1.6 million in the previous year to € 4.7 million nine months into the current financial year, representing a rise of 183 percent, and is attributable in the first instance to economies of scale and improved capacity utilisation. The rate of return for the segment was further improved, reaching 7.9 percent at the nine-month mark in spite of expenditure for this year's Drupa.

At the nine-month mark, revenue for the Micro Technologies segment amounted to just under € 6 million and therefore fell short of expectations by some € 1.5 million. The number of projects handled is roughly unchanged from the previous year, but the average contract value of each project was lower. This area is moreover suffering from the adverse effect on exports of the weak US dollar. As matters stand, it is most likely that it will not be possible to make up for this shortfall in revenue compared with the original plans by the end of the year (revenue target for 2004: appr. € 10 million), as projects are already being delayed until the next financial year at the request of customers. The downturn in the sales market for optical storage media cannot currently be compensated for by the growth market for microstructure technology. This development in the 2004 financial year has no impact on the company's overall goal, as the Print segment has performed far better than expected.

As in the second quarter of 2004, the Micro Technologies segment nearly moved into profit from the current level of revenue. After nine months, this segment posted an overall loss of 661,000 euros. As one of management's top priorities, technotrans is are currently working on measures to improve profitability in this area, with the aim of ideally avoiding having to post a year-end loss.

The Services segment enjoyed a 10 percent rise in revenue on the third quarter of the previous year (€ 6.4 million) to over € 7 million. The growth trend after the first nine months of 2004 continued at an overall rate of 4 percent.

After contributing € 3.7 million towards total earnings in the previous year, the Services segment has again accounted for € 3.8 million or almost half the total figure. The rate of return after three quarters has reached a very healthy 18.9 percent.

Key Data 01-09/2004

Dates
The Annual Report 2004 will be published on March 08, 2005.

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.