EUROTECH: BoD APPROVES CONSOLIDATED HALF-YEAR RESULTS AT 30 JUNE
2012
Amaro (Italy), 29 August 2012 - - - - - - - - Consolidated
revenues: from EUR 41.16 million to EUR 42.18 million Consolidated
gross profit: from EUR 21.19 million to EUR 20.73 million
Consolidated EBITDA: from EUR -598 thousand to EUR -425 thousand
Consolidated EBIT: from EUR -4.33 million to EUR -4.20 million
Consolidated pre-tax profit (loss): from EUR -5.37 million to EUR
-4.75 million Group net profit (loss): from EUR -5.41 million to
EUR -4.45 million Net debt: EUR 15.66 million Group shareholders'
equity: EUR 132.06 million
Today the Board of Directors of Eurotech S.p.A. reviewed and
approved the results for the first half of 2012. Group revenues
registered a slight increase of 2.5% in the first six months of the
year, totaling EUR 42.18 million, compared with EUR 41.16 million
in the first half of 2011. The first half was affected by the trend
in new orders, which were slightly lower than forecast,
particularly at the end of 2011, but benefited from the forex
effect of the dollar and the yen against the euro. However, because
the first half traditionally makes up a different proportion of
total annual revenues, and in view of existing opportunities in the
pipeline, we expect a positive result at the end of the year and an
improvement on the second half compared to 2011. We will continue
to keep a close eye on the global situation, where the US and
particularly Japan are showing positive signs albeit gradually
and where future developments in Europe are hard to predict, due to
economic and financial uncertainty in some countries, including
Italy. One of the Group's strengths is still its international
presence, which allows it to benefit from any signs of recovery in
the various economies world-wide and to seize opportunities as they
arise. The gross profit margin came in at 49.1%, slightly less than
in the first half of 2011 and at the end of 2011. This reflects a
wholly temporary situation resulting from the specific mix of
products sold in the second quarter. Management is aiming for a
gross profit margin at year-end that tops 50% and is in line with
previous periods. Operating costs as a percentage of revenues,
inclusive of adjustments, decreased from 55.6% in the first half of
2011 (EUR 22.9 million) to 53.0% in the first half of 2012 (EUR
22.4 million). This performance had a positive impact on Group
EBITDA. The result does not fully reflect the efforts made to cut
fixed costs, due to the negative forex trend. When looking at
amounts in local currencies, substantial year-on-year savings can
be seen, due to the measures taken during 2011 and in the early
months of 2012, all of which were designed to increase structural
efficiency and thereby lower the
EUROTECH SpA Via F. Solari, 3/A 33020 Amaro (UD) - ITALY Tel. +39
0433 485411 Fax. +39 0433 485499 ir@eurotech.com
www.eurotech.com
activation threshold for operating leverage. Curbing fixed costs
and streamlining existing resources remain a priority for
management, in order to move towards the profit targets set for the
current year. Due to the traditional distribution of turnover over
the quarters, the ratio of fixed costs to turnover was higher in
the first half than the forecast level for year-end, assessed over
the 12 months. EBITDA improved in the first half of the year,
coming in at EUR -0.4 million in 2012, compared with EUR -0.6
million in 2011. EBIT registered an improvement in the half-year,
reaching EUR -4.20 million, compared with EUR -4.33 million in the
first half of 2011. EBIT as a percentage of revenues was affected
by turnover levels, coming in at -10.0% compared with -10.5% in the
first half of 2011. This result reflects the EBITDA performance, as
well as depreciation recognised in the income statement for the
reporting period, which was due to both operating assets that
became subject to amortization in this period and the effects of
purchase price allocation (PPA) relating the acquisitions of
Eurotech Inc. (formerly Applied Data Systems Inc.), Dynatem Inc.
and the Advanet Group. The effect on EBIT of the higher values
attributed at the time of the PPA was EUR 1.88 million the first
half of 2012, compared with EUR 1.62 million in the same period of
2011. The pre-tax result was negative for EUR 4.75 million in the
first half of 2012 (compared with a loss of EUR 5.37 million in the
first six months of 2011); this performance was affected by the
factors described above, as well as positive forex effects due to
currency trends. The effect of PPA on the pre-tax result was EUR
1.88 million in the first half of 2012 (EUR 1.62 million in the
first half of 2011). The Group posted a net loss of EUR 4.45
million in the first half of 2012, compared with a net loss of EUR
5.41 million in the first half of 2011, reflecting the trend in the
pre-tax result and the current tax burden. The Group had net debt
of EUR 15.66 million at 30 June 2012, an improvement on the EUR
18.34 million posted at 31 March 2012. Operating cash flows were
slightly positive in the first half of 2012, a marked improvement
on the negative cash flows of EUR 2.04 million registered in the
first half of 2011. Working capital decreased, from EUR 30.14
million at 31 December 2011 to EUR 27.95 million at 30 June 2012.
This improvement was due, in particular, to careful control of the
duration of receivables and payables and efficient management of
inventories, which reduced the value of inventories substantially
at the end of the half-year.
Note that, as required by Consob (Italian securities & exchange
commission), the Consolidated Half-year Financial Report at 30 June
2012 is available to anyone who requests it from the Company's
registered headquarters and from the headquarters of Borsa Italiana
S.p.A. The Report is also available on Eurotech's website, at
www.eurotech.com Pursuant to article154-bis, paragraph 2, of the
Italian Consolidated Finance Act, the Financial Reporting Manager
of Eurotech SpA, Sandro Barazza, hereby declares that the financial
disclosure contained in this press release corresponds to the
Company's documentary evidence, corporate books and accounting
records.
THE EUROTECH GROUP Eurotech (ETH.MI) is a global company based in
Italy and with offices and subsidiaries in Europe, North America
and Asia. The Eurotech group develops and markets miniaturised
computers for special use (NanoPCs) and computers featuring high
computing capacity (HPCs High Performance Computers). With these
two product categories, Eurotech aims to become a leader in the
implementation of pervasive computing, which, leveraging on Cloud
IT infrastructure, is capable of enabling an entire range of
value-added services and functions in the transport, defence,
industrial and medical sectors.
Company contacts: Investor relations Andrea Barbaro Tel: +39 0433
485411 e-mail: andrea.barbaro@eurotech.com
Corporate Press Office Cristiana della Zonca Tel. +39 0433 485411
e-mail: cristiana.dellazonca@eurotech.com
International Press Office Citysavvy Jana Sanchez Tel. +44 207395
1000 jana@citysavvy.com
ANNEXES FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
CONSOLIDATED INCOME STATEMENT ( '000) Sales revenue Cost of
material Gr os s profit Services costs Lease & hire costs
Payroll costs Other provisions and costs Other revenues EBITDA
Depreciation & Amortization EBIT Share of associates' profit at
equity Finance expense Finance income Pr of it before tax Income
tax Ne t profit before m inor it y interest M inor it y interest Gr
oup net profit (loss) Bas e earnings per share Dilut e d earnings
per share 1H 2012 (b) % 1H 2011 (a) 41,164 ( 19,973) 21,191 (
7,973) ( 1,185) ( 12,847) ( 900) 1,116 ( 598) ( 3,734) %
ch an g e (b-a) am o u n t 1,012 1,475 ( 463) ( 602) ( 39) ( 6,347)
( 219) 83 173 43 130 ( 107) ( 1,531) ( 1,152) 616 ( 345) 961 0 961
%
2.5%
42,176 100.0% (21,448) -50.9% 20,728 4 9 . 1% (7,371) (1,146)
(6,500) (681) 1,199 ( 425) (3,777)
-1 .5% 7 -2.7% -1 .4% 5 -16% . 2.8%
1 0.0% 0
-48.5% 5 1. 5 % -1 .4% 9 -2.9% -312% . -2.2% 2.7%
7.4% - 2 .2 % -7.6% 3.3% 49.4% 24.3% 7.4%
- 1. 0 % -9.0%
- 1. 5 % -9.1 %
- 2 8 .9 % -12% . 3 .0 %
( 4,202) - 10 . 0 % (32) (2,067) 1,548
-0.1 % -4.9% 3.7%
( 4,332) - 10 . 5 % ( 139) ( 3,598) 2,700
-0.3% -8.7% 6.6%
-77.0% -42.6% -42.7% 11. 5 % n.s . 17 . 8 % n/ a 17 . 8 %
( 4,753) - 11. 3 % 305 0.7% ( 4,448) - 10 . 5 % 0
0 .0 %
( 5,369) - 13 . 0 % ( 40) -0.1 % ( 5,409) 0 ( 5,409) ( 0.154) (
0.154)
- 13 . 1% 0 .0 % - 13 . 1%
( 4,448) - 10 . 5 % ( 0.127) ( 0.127)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
('000) at June 30, 2012 at December 31, 2011
ASSETS Intangible assets Pr oper ty , Plant and equipment Inv es
tments in non-consolidated subsidiaries Inv es tments in affiliate
companies Inv es tments in other companies Def er r ed tax assets
Other non current financial assets Other non-current assets T ot al
non-current assets Inv entor ies Contr ac ts in progress Tr ade
receivables Inc ome tax receivables Other current assets Rec eiv
ables from affiliates companies Short term borrow ing allow ed to
affiliates companies and other Group companies Other current
financial assets Cas h & cash equivalents T ot al current
assets T ot al assets 126,273 5,645 51 304 266 1,420 186 844
134,989 21,715 1,453 22,353 537 2,499 0 0 100 10,852 59,509 194,498
125,922 5,897 0 278 270 1,439 226 843 134,875 23,734 2,356 26,724
938 2,569 1,163 178 0 13,596 71,258 206,133
L IABILIT IES AND EQUITY Shar e capital Shar e premium reserve
Other reserves Gr o up shareholders' equity Eq u it y attributable
to m in or it y interest T ot al shareholders' equity Medium-
/long- ter m borrow ing Employ ee benefit obligations Def er r ed
tax liabilities Other non-current liabilities T ot al non-current
liabilities Tr ade payables Shor t- ter m borrow ing Der iv ativ e
instruments Inc ome tax liabilities Other current liabilities Bus
ines s combination liabilities T ot al current liabilities T ot al
liabilities T ot al liabilities and equity 8,879 136,400 ( 13,221)
132,058 0 132,058 14,123 1,776 11,466 1,791 29,156 12,731 12,082
375 751 7,123 222 33,284 62,440 194,498 8,879 136,400 ( 10,236)
135,043 0 135,043 10,482 1,718 12,111 1,586 25,897 18,388 17,253
376 1,731 7,229 216 45,193 71,090 206,133
STATEMENT OF CHANGES IN EQUITY
Share capital ('000) Balance as at December 31, 2011 8,879
Legal reserve
Share premium reserve
Conversion reserve
Other reserves
Cash flow hedge reserve
Exchange rate differences reserve Treasury shares Profit (loss) for
period
Group shareholders' equity
Equity attributable to Minority interest
Total shareholders' equity
39
136,400
34,514
( 35,703)
( 376)
( 124)
( 1,340)
( 7,246)
135,043
-
135,043
2011 Result allocation Profit (loss) as at June 30, 2012
Comprehensive other profit (loss) - Hedge transactions - Foreign
balance sheets conversion difference - Exchange differences on
equity method - Exchange differences on equity investments in
foreign companies Comprehensive result
-
-
-
-
( 7,246) -
-
-
-
7,246 ( 4,448)
( 4,448)
-
( 4,448)
-
-
-
874 -
-
1
-
-
-
1 874 16
-
1 874 16
16
-
-
-
-
-
874
16
1
572 572
-
( 4,448)
572 ( 2,985)
-
572 ( 2,985)
Balance as at June 30, 2012
8,879
39
136,400
35,388
( 42,933)
( 375)
448
( 1,340)
( 4,448)
132,058
-
132,058
NET FINANCIAL POSITION
('000) Cas h & cash equivalents Cas h equivalent Shor t term
borrow ing allow ed to affiliates companies Other current financial
assets Der iv ativ e instruments Shor t- ter m borrow ing Bus ines
s aggregation liabilities Shor t - t e r m financial position Shor
t - t e r m net financial position Medium/long term borrow ing
allow ed to affiliates companies Other non current financial assets
Medium/long term borrow ing M e dium - /long- t e r m net financial
position ( NET FINANCIAL POSITION) NET DEBT A B=A C D E F G
H=C+D+E+F+G I=B+H J K L M =J+K+L N=I+M at June 30, 2012 at December
31, 2011 ( 13,596) ( 13,596) ( 178) 0 376 17,253 216 17,667 4,071 0
( 226) 10,482 10,256 14,327 at June 30, 2011
( 10,852) ( 10,852) 0 ( 100) 375 12,082 222 12,579 1,727 0 ( 186)
14,123 13,937 15,664
( 10,000) ( 10,000) 0 0 213 8,756 196 9,165 ( 835) ( 1,211) ( 226)
19,058 17,621 16,786
WORKING CAPITAL
at June 30, ('000) 2012 (b ) at December 31, 2011 (a) at June 30,
2011 C h an g es (b -a)
Inventories Contr ac ts in progress Tr ade receivables Rec eiv
ables from affiliates companies Inc ome tax receivables Other
current assets Cur r ent assets Tr ade payables Inc ome tax
liabilities Other current liabilities Cur r ent liabilities Ne t w
or k ing capital
21,715 1,453 22,353 0 537 2,499 48,557 ( 12,731) ( 751) ( 7,123) (
20,605) 27,952
23,734 2,356 26,724 1,163 938 2,569 57,484 ( 18,388) ( 1,731) (
7,229) ( 27,348) 30,136
25,171 689 22,248 0 1,965 2,805 52,878 ( 16,369) ( 252) ( 6,335) (
23,169) 29,709
( 2,019) ( 903) ( 4,371) ( 1,163) ( 401) ( 70) ( 8,927) 5,657 980
106 6,743 ( 2,184)
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