Hoeft & Wessel AG Records Very Good Level of Orders

    HANOVER, Germany, November 4, 2010 /PRNewswire/ --
    - Shortages of Electronic Components Lead to Deferments of Turnover to Q4

    - Profit deferment as a result of temporary currency effects
    - Strong fourth quarter and a slight increase in sales for 2010 are
      forecast
    - Cash flow at record level

The Hoeft & Wessel Group has recorded a very good order intake 2010. The incoming orders of the IT and engineering group for ticketing, parking and mobile solutions also continued their extremely positive trend during the third quarter of the current year. The first nine months had facilitated new ledger entries for orders with a total volume of EUR 66.3 million. This represents a year-on-year increase of 15 per cent (30 September 2009: EUR 57.5 million.)

During 2010, Hoeft & Wessel has been in a position to secure orders for e-ticketing systems in Spain and Germany, for automatic parking ticket machines on the Isle of Wight in the United Kingdom and for mobile terminals from Rewe, among other successful sales. During October 2010, this was supplemented by a large-scale order from the Swiss Federal Railways (SBB) for a new mobile communications solution based on GSM-R for shunting and construction operations. As a result, an interesting new field of business activity has opened up for this technology enterprise.

In line with the positive level of incoming orders, the order portfolio of the Hoeft & Wessel Group had increased to EUR 80.7 million as at 30 September 2010 (31 December 2009: EUR 74.4 million).

The bottlenecks pertaining to electronic components occurring worldwide subsequent to the economic crisis led to deferments in delivery and thus sales revenues from the third into the fourth quarter of 2010 at the Hoeft & Wessel Group. During the third quarter, sales decreased by 12 per cent, to EUR 20.9 million (Q3 2009: EUR 23.9 million). During the initial three quarters of the year, sales totalled EUR 60.1 million and were thus down 15 per cent year-on-year (30 September 2009: EUR 71.0 million).

Amongst other activities, the technology enterprise commenced with deliveries of ticketing systems to public transport companies in Hamburg, Rostock and Berlin. A completely new solar-operated automatic ticketing machine was developed for Geneva. The installation of 1,000 automatic parking ticket machines was successfully completed within the U.S. metropolis of Philadelphia. Mobile terminals were delivered to the Netto Marken-Discount, Rewe and Lekkerland enterprises.

A marked increase in sales is anticipated by the Hoeft & Wessel Group for the current fourth quarter, resulting in a forecast of a slight increase in turnover for the year 2010 as a whole.

It is the view of Hoeft & Wessel that the cyclical market for electronic components will normalise again. As a result of its representative office in Taiwan established in September 2010, the company is also in a position to utilise the strategic advantage of local presence in order further to optimise purchases and also to respond to market fluctuations even more rapidly in the future.

Temporary currency effects resulted in negative earnings before interest and taxes (EBIT) of -EUR 0.8 million as at 30 September 2010 (2009: EUR 2.3 million). However, the merely reporting date based currency effects to the amount of -EUR 1.0 million (preceding year: +EUR 0.1 million) will lead to reversed effects over the next several months upon completion of the hedging transactions concluded for incoming orders in foreign currencies. These effects and the forecast increase in sales during the fourth quarter are already leading to marked improvements in earnings during the current fourth quarter. However, total EBIT figures for 2010 as a whole will be lower year-on-year since a portion of these currency effects will have a positive impact on the operating result in 2011.

The Hoeft & Wessel Group has been able to boost its net liquidity considerably this year. The operating cash flow also continued its positive trend in the third quarter, permitting its significant increase to a record level of EUR 5.8 million as at 30 September 2010 (preceding year: -EUR 1.3 million). Loans were paid off using the generated funding, and a dividend was paid out to shareholders for the first time in the history of the company, something that is also to be proposed for the current financial year.

The Hoeft & Wessel Group forecasts a further increase in sales revenues and earnings for 2011 on the basis of the excellent level of orders.

"Our future prospects look very promising: the order situation is excellent, and the commenced internationalisation facilitates growth within new markets," says Hoeft & Wessel Group CEO Hansjoachim Oehmen in summarising the company's business trends.

    Key figures for the Hoeft & Wessel Group as at 30 September 2010

    in EUR thousands        30/09/10  30/09/09  30/09/08  30/09/07  30/09/06
    -------------------------------------------------------------------------

    Sales revenues            60,057    71,037    70,031    68,416    50,925
    Operating result before
    depreciation/amortisation
    (EBITDA)                   2,749     5,638     5,480     5,082       850
    Operating result (EBIT)     (799)    2,325     2,088     1,562    (2,748)
      in % of sales revenues       -       3.3       3.0       2.3         -
    Earnings before taxes
    (EBT)                     (1,454)    1,618     1,002       525    (3,287)
      in % of sales revenues       -       2.3       1.4       0.8         -
    Group earnings            (1,481)    1,120       863       409    (3,178)
    Earnings per share(in EUR) (0.17)     0.13      0.10      0.05     (0.38)

    Cash flow from current
    operating activities       5,756    (1,258)   (1,839)    2,693     1,087
    Cash flow from investment
    activities                (3,194)   (3,391)   (3,536)   (3,566)   (3,642)
    Net cash flow             (1,502)     (217)   (1,264)      106    (1,428)
    Average number of employees  499       502       507       503       506


    Nine-month report for 2010 and additional reports:
    http://www.hoeft-wessel.com/de/aktie/index.htm

    Press folder, including photographs:
    http://www.presseportal.de/pm/12945/hoeft_wessel_ag/

About the Company

The Hoeft & Wessel Group is the leading German IT and engineering technology group for ticketing, parking and mobile solutions. Established in 1978 by the two entrepreneurs of the same name, the Group today generates sales revenues of nearly EUR 100 million with a workforce of 500 employees. It has been listed on the stock market since 1998 (ISIN DE0006011000). Its headquarters are in Hanover, Germany, and Swindon, UK, west of London. The annual investment volume in the Research & Development division, which sets the pace in the Group's technological orientation and employs more than a third of the total workforce, amounts to approximately 10 per cent in terms of turnover.

In Europe, the Almex division is among the leading providers of ticketing and telematics systems for public transport and check-in solutions for the airline industry.

The British subsidiary Metric Parking is one of the largest global providers of car park ticket vending machines, parking space management systems as well as comprehensive services.

As one of Europe's largest manufacturers, the Skeye division provides a wide range of mobile terminals, e.g. for retail and logistics, as well as point-of-sale solutions. Skeye is the market leader in Germany's retail sector.

    Further inquiry note:

    Arnd Fritzemeier
    Tel.: +49-511-6102-300
    E-Mail: [email protected]

SOURCE Hoft & Wessel AG