Kontron AG reports solid Q2 results and confirms 2014 guidance

• Revenues from continuing operations of EUR 116.1 million
• Gross margin of 25.9 percent
• Operating profit (EBIT) from continuing operations before restructuring costs of EUR 3.7 million

Eching near Munich, 30 July 2014 – Kontron AG, a globally leading provider of Embedded Computer Technology (ECT), delivered a solid performance in the second quarter of 2014, particularly in order entry and revenues.

Order entry for continuing operations increased by 5.8 percent to EUR 120.4 million (Q2 2013: EUR 113.8 million). Kontron generated revenues from continuing operations of EUR 116.1 million, after EUR 116.2 million in the same quarter last year. Taking into account one-off effects resulting from the switch to a royalty model for two customers in North America as well as currency effects, revenues increased by 9.7 percent. The book-to-bill ratio exceeded 1.0 for the third consecutive quarter. The gross margin amounted to 25.9 percent (Q2 2013: 26.7 percent).

“Our development in the first half of the year is promising and meets our expectations for the financial year 2014. We are on track – not only regarding our financial performance, but also in terms of our internal homework“, says Rolf Schwirz, CEO of Kontron AG. “Now, our focus will turn back primarily to our core business again: providing high-performance ECT products and services to our customers worldwide. We have already started to improve our access to the major growth regions in the ECT market in order to secure future revenues.”

Earnings before interest and taxes (EBIT) for continuing operations and before restructuring costs decreased slightly to EUR 3.7 million, after EUR 4.3 million in the same quarter of the previous year. Earnings in this quarter were affected by restructuring costs of EUR 1.7 million. Thus, the reported EBIT for continuing operations increased to EUR 2.0 million (Q2 2013: EUR 0.2 million).

“Our equity ratio of 57 percent underscores Kontron’s solid financial footing“, says Michael Boy, CFO of Kontron AG. “On 26 May 2014, we signed an amended contract for our credit facility. As such, all ‘New Kontron’ measures and our plans for further growth are soundly financed.”

Cash flow from continuing operations in the second quarter amounted to EUR -7.5 million, after EUR -2.0 million in the same period of the previous year. This decrease is mainly due to the increase in trade payables compared to the prior-year period.

“New Kontron” measures: site concentration proceeds smoothly and as planned

Kontron’s move to Augsburg and Deggendorf is proceeding smoothly and as planned. Engineering teams and production from Roding are now installed in Augsburg. Moreover, all new production facilities have already received full certification. Construction of the new building in Augsburg is also progressing well. All other relocation measures are scheduled to be completed by the end of November 2014.

In addition, Kontron plans to establish a dedicated medical competence centre at its new Technology Campus in Augsburg. As a globally leading supplier, the company provides embedded computer platforms for manufacturers of diagnostic equipment and patient care solutions. Kontron aims to strengthen its market position and meet global demand with safe and innovative solutions. The centre will be operational before the end of 2014.

Key figures for the second quarter 2014
(continuing operations)

For further information:
Alexandra Habekost
Kontron AG
Tel: +49 (0) 8165 77 281
Email: Alexandra.Habekost@kontron.com

Harald Kinzler
HERING SCHUPPENER Consulting
Tel:      +49 69 9218 7465
Email:  hkinzler@heringschuppener.com