Hoeft & Wessel Records Significant Surge in Consolidated Profit for 2010

    HANNOVER, Germany, March 29, 2011 /PRNewswire-FirstCall/ --
    - High Operating Cash Flow
    - Rising Dividend
    - Earnings Per Share Doubled

The Hoeft & Wessel Group recorded a significant increase in its operating income in fiscal year 2010. Consolidated earnings adjusted for temporary currency effects of the IT, hardware and software specialist for ticketing, parking and mobile solutions more than doubled to EUR 4.3 million (2009: EUR 1.9 million). The increase was due, among other factors, to a non-recurring tax effect which contributed EUR 1.3 million to consolidated earnings for the year 2010. With a growth rate of 2 per cent, the sales revenues of EUR 95.6 million were in line with expectations (2009: EUR 94.1 million).

The operating result (EBIT) adjusted for temporary currency effects was up by 23 per cent, to EUR 3.8 million, year-on-year (2009: EUR 3.1 million). Earnings per share doubled, to EUR 0.50 (previous year: EUR 0.22).

The substantially higher operational strength of this technology enterprise is also reflected in its growing profitability. Accordingly, it was possible for the contribution margin to be raised from 41.7 to 44.3 per cent.

In 2010, the Hoeft & Wessel Group supplied ticket vending machines and systems to public transport companies in Berlin, Geneva, Hamburg and the Swiss National Railways SBB, the Finnish State Railways and German Rail, amongst others. Recipients of parking terminal deliveries included the Isle of Wight, various London boroughs, and Australia. Mobile devices for data recording where delivered amongst others to leading German retail chains such as Rewe and Edeka.

"The positive result for the 2010 fiscal year allows a reliable payout to shareholders of a dividend increased by 25 per cent. Over the next few years, we plan to record organic growth. The opening up of new international markets will generate an additional impetus for growth," explains Hansjoachim Oehmen, CEO of the Hoeft & Wessel Group.

Given the overall positive economic fundamentals, the Hoeft & Wessel Group expects that its solid performance will continue in 2011. The Company anticipates an increase in sales revenues and the operating result (EBIT) for 2011. Should the economic recovery remain stable, Hoeft & Wessel also expects a further increase in sales revenues and earnings for 2012.

In the Auto ID market segment, which covers mobile devices for identifying and data recording, a further normalisation is expected for the current financial year after the worldwide market slump. It is therefore anticipated that the Skeye business division will provide the increased impetus for sales anticipated for 2011 and subsequent years, especially as a result of the expansion in the international partner business. The market environment in the public transport and parking segments indicates that sales revenues for the Almex and Metric divisions in the current financial year will match the high level recorded a year earlier.

With rising sales from quarter to quarter, last year was yet another typical reflection of business trends for Hoeft & Wessel. The fourth quarter, with EUR 35.5 million in sales revenues, met the Company's ambitious expectations. Another contributory factor to the positive business development in the fourth quarter was the better ability of the shipment of electronic components. By approaching producers directly and adopting other targeted measures, Hoeft & Wessel managed to ensure procurement on a timely basis for the production. The new representative office in Taiwan played a major role in this respect.

In the year 2010, the Hoeft & Wessel Group was able to boost its net liquidity substantially. The operational cash flow developed positively in 2010 and, at EUR 7.8 million, saw a substantial increase (2009: EUR 5.9 million). The funds generated were used to repay net financial liabilities and, for the first time in the Company's history, a dividend was paid out to the shareholders. For the financial year 2010, the Management Board will also propose a dividend payout to the Annual General Meeting, which will increase by 25 per cent, to EUR 0.10, year-on-year.

The order intake continued to develop at a high level as the year progressed. A total volume of new orders amounting to EUR 83.0 million was recorded in the books. Compared with the previous year, this represents an increase by just over 3 per cent (2009: EUR 80.3 million).

The very good sales performance in the fourth quarter of 2010 led to a corresponding decline in the order portfolio of the Hoeft & Wessel Group by 17 per cent, to EUR 61.9 million (31 December 2009: EUR 74.4 million).

For 2011 and subsequent years, the Hoeft & Wessel Group plans to extend ist business activities. This will be achieved through organic growth and the opening up of additional international markets by expanding the distribution network and acquiring additional partners. The company is well positioned for this endeavour with a range of new products capable of running on open system platforms. They include solar-powered ticket vending machines and parking terminals, on-board computers and robust mobile devices.

    Key Financials of Hoeft & Wessel Group

    in EUR thousands            2010    2009    2008    2007     2006
    -----------------------------------------------------------------
    Sales revenues            95,567  94,098  98,072  99,704   73,959
    Operating result before
    depreciation and amorti-
    sation (adj. EBITDA (1))   8,914   7,569   9,591  11,294    3,685
    Operating result
    (adj. EBIT (1))            3,787   3,076  (3,545)  6,249   (1,102)
    in % of sales revenues       4.0     3.3       -     6.3        -
    Earnings before taxes
    (adj. EBT (1))             2,870   2,081  (5,023)  4,727   (1,930)
    in % of sales revenues       3.0     2.2       -     4.7        -
    Group earnings (adj. (1))  4,256   1,854  (6,751)  4,401   (2,491)
    Earnings per share
    (adj. in EUR (1))           0.50    0.22   (0.79)   0.51    (0.29)
    Dividend (in Cent (2))        10       8       -       -        -
    EBITDA                     8,045   7,569   9,591  11,294    3,685
    EBIT                       2,918   3,076  (3,545)  6,249   (1,102)
    EBT                        2,001   2,081  (5,023)  4,727   (1,930)
    Group earnings             3,387   1,854  (6,751)  4,401   (2,491)
    Contribution margin
    (in per cent (3))           44.3    41.7    42.0    44.3     48.8
    Cash flow from
    operating activities       7,826   5,933   1,456  12,180    4,703
    Average number of employees  500     503     502     513      528
    -------------------------------------------

    (1) Adjusted for temporary currency effects
    (2) 2010: Proposal to the AGM
    (3) Turnover +/- inventory changes - cost of materials in relation to
        turnover


    Investor Relations website:
    http://www.hoeft-wessel.com/en/ir/ir.htm

    Press kit with photos:
    http://www.presseportal.de/pm/12945/hoeft_wessel_ag/

The Company

The Hoeft & Wessel Group is the leading IT and engineering technology Group for ticketing, parking and mobile solutions in Germany and Great Britain. Established in 1978 by the two entrepreneurs who gave the company its name and listed on the stock market since 1998, the enterprise has developed into a group of companies with sales revenues of nearly EUR 100 million and a workforce of 500 employees. Its main locations are Hannover, Germany, and Swindon, UK, to the 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. According to the EU Industrial R&D Investment Scoreboard, Hoeft & Wessel ranks amongst the top companies in Europe.

In Europe, the Almex division is a leading provider of ticketing and telematics systems for public transport and check-in solutions for the airline industry. More recently, Almex has been making mobile GSM-Rail communications systems available for shunting and construction operations.

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]

    Company: Hoft & Wessel AG
    Rotenburger Str. 20
    D-30659 Hannover

    Phone: +49-511-6102-0
    Fax:   +49-511-6102-411
    mail: [email protected]

    http://www.hoeft-wessel.com

    Stockmarkets: regulated dealing/prime standard: Frankfurt, free trade:
    Berlin, Hamburg, Stuttgart, Duesseldorf, Hannover, Muenchen

SOURCE Hoeft & Wessel AG