Kontron AG reports third quarter 2012 figures and launches “Shape” optimization program

  • International debt crisis and weak economy impact business development in the entire ECT market
  • Revenues of EUR 131 million generated in third quarter 2012
  • One-off effects of EUR -12.3 million hit EBIT figure
  • Company aiming to achieve full year total revenues of EUR 540 - 555 million – continuous earnings pressure expected
  • Increasing incoming orders (EUR 141 million) and rising backlog (EUR 371 million) raise expectations of strong Q4; very good development in design wins (EUR 92 million)

Eching near Munich, October 25, 2012 – Kontron AG, the globally leading manufacturer of embedded computer technology (ECT), was, like many other internationally active technology companies, particularly in the ECT market, unable to escape the effects of the international debt crisis and the savings policies of public clients: The company posted stable revenues of EUR 131 million, while earnings came in at
EUR -13.3 million. The latter contains one-off effects totaling EUR 12.3 million, largely relating to reorganization and restructuring projects. The earnings improvements stemming from the 2012 restructuring and personnel reductions are set to be over EUR 10 million in 2013. Revenues for the first nine months of the current financial year totaled EUR 401 million (previous year period: EUR 423.5 million), while earnings (EBIT) were posted at EUR -5.3 million for the first three quarters (previous year period: EUR 29.7 million). At EUR 38.4 million, Kontron AG achieved a very strong operating cash flow for the first three quarters of 2012. In the third quarter, the company achieved an operating cash flow of EUR 3.1 million despite the one-off effects from restructuring. Incoming orders grew in the third quarter 2012 to EUR 141 million (Q2/2012: EUR 126.8 million) and the backlog rose to EUR 371 million (Q2/2012: EUR 362.8 million), both of which point towards a strong fourth quarter. The volume of the design wins – an indicator for mid term growth – posted at very good EUR 92 million (previous year quarter: EUR 83 million).
On the back of this, Kontron is anticipating total annual revenues between EUR 540 million and EUR 555 million. In this actual challenging environment Kontron expects continuous earnings pressure.

Kontron adapts to changing market environment with “SHAPE” optimization program

The “Shape” program is designed to both focus the business model and optimize the organization and processes. As part of the strategic alignment, existing product lines are being streamlined and one aim is to invest a disproportionately high amount into innovation in strategic business fields.
In an effort to make better use of synergies, Kontron’s vertical markets are to be pooled into four globally responsible business units: Industry, Communication, Military/Aero/Rail and Multimarket. “We will continue to serve all of our important markets such as industrial automation, medical technology, communications, transport, government (security), energy and infotainment, all of which Kontron has tapped over the last decade. This means that development capacities are pooled according to technological aspects and market conditions, increasing the global efficiency further. Developed technologies should be used for the widest possible range of applications and customer requirements should be satisfied more quickly and fully,” says Ulrich Gehrmann, Chairman of the Management Board of Kontron AG. In addition to the four business units, in “Kontron Ventures”, a division for larger innovation projects is to be established. The aim is to move into profitable market segments at the earliest possible stage. Initial successes here include establishing new visualization product lines in the fields of multi touch and widescreen technology as well as the latest CPU technologies on ARM-based platforms. Another important strategic point is establishing a consistent alignment to growth markets such as China. This requires development capacities in the Asian region to be strengthened and specific product lines for the local markets to be set up. The first steps in this direction have already been made by Kontron with the launch of the first Rackmount PC developed completely in China and especially for the Asian market.

Increasing efficiency through restructuring

The first restructuring measures for cost and efficiency optimization have already begun and are being systematically continued as part of SHAPE. “With the sale of the Malaysian production site for standard components at the start of 2012 as well as the sale of the aircraft component assembler AP Parpo in Mexico, we have already achieved important milestones in the concentration on our core business,” says Ulrich Gehrmann. In addition, the company plans to dissolve one site in North America and Europe respectively and in doing so make the most of synergies created by concentrating activities in larger sites. Moreover, a holding in the Czech Republic is also to be sold. The restructuring measures will be completed within the first half of 2013.

About Kontron
Kontron is among the world’s leading producers of embedded computer technology (ECT). With a high proportion of over 40% development engineers, Kontron is a leader in the development of global standards for the embedded computer industry. Kontron works closely with its customer base in local markets and offers application-ready platforms which allow customers to focus on their core competencies. The reliable innovative solutions from Kontron contribute to a more rapid market launch and a reduction in system costs on the part of the customer.
You can get more information about Kontron online at www.kontron.com.

Investor Relations:
Gaby Moldan
Kontron AG
Oskar-von-Miller-Str. 1
85386 Eching
Tel: 08165/77212, Fax 08165/77222
Email: Gaby.Moldan@kontron.com

Für weitere Informationen:
Dr. Udo Nimsdorf
Engel & Zimmermann AG
Agentur für Wirtschaftskommunikation
Schloss Fußberg, Am Schlosspark 15,
82131 Gauting
Tel: 089-89 35 633, Fax: 089-89 39 84 29
Email: info@engel-zimmermann.de

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