Balda AG

EANS-News: Balda AG on the move (with document)

First half-year 2010: Earnings up in the second quarter / operational result still in the red / differing development in the segments / forecast 2010 affirmed

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6-month report

Subtitle: First half-year 2010: Earnings up in the second quarter / operational result still in the red / differing development in the segments / forecast 2010 affirmed

Bad Oeynhausen (euro adhoc) - Balda AG on the move

First half-year 2010: Earnings up in the second quarter / operational result still in the red / differing development in the segments / forecast 2010 affirmed

Bad Oeynhausen, 5. August 2010 - "As a whole, we are quite satisfied with the development of the company and the net result", summarised CFO Rainer Mohr regarding the first half-year results for 2010 from Balda AG (on 5 August) to an audience of analysts and the press. Indeed, at 63.3 million euros, the sales revenue of the company was only slightly under the previous year´s level of 66.2 million euros. Nonetheless, in the second quarter of the year from April to June, Balda saw an increase in sales by 44.0 percent, up to 37.4 million euros (same period previous year: 25.9 million euros). "We are on the right track, we just need to accelerate somewhat in order to achieve our goals", commented Mohr. By the end of the year Mohr aims to have improved the negative operating result in the company in the first half year of 2.1 million euros (previous year: + 2.5 million euros) to the previous year´s level of some 2.5 million euros. In the second quarter Balda has already shown a positive EBIT of plus 0.2 million euros (first quarter 2010: minus 2.3 million euros).

MobileCom reorganising and restructuring According to Mohr, the Balda Group continued to be `in a phase of reorganisation and restructuring´ in the second quarter of 2010".  The targeted and actively continuing reorganisation of the company involved, in particular, the business sectors MobileCom and Electronic Products. In future the MobileCom division will concentrate production at the new site in Beijing (production commencement August 2010). The first projects have already moved from  the production site Suzhou to the capital of China. In the context of this restructuring, MobileCom had cut back 1283 employees in Suzhou. "Of course one could say that the business sector had a spanner in the works in the last few weeks. Additionally, cost pressure had continued to increase. In relation to delayed contract demands, these factors placed a burden on both turnover and results ", said Mohr. The half year sales of the sector came to 35.3 million euros in comparison with 41.7 million euros the previous year. During that same business period, the EBIT was minus 3.3 million euros compared with plus 5.2 the year before. The Board of Directors is confident that the MobileCom business division will "significantly improve its performance in the second half year". "Costs will prove more favourable at the new facility in Beijing thanks to more efficient utilisation of personnel and positive exploitation of synergies such as new processes and state-of-the-art technologies. Uncertain factors continue to be seen in customer demands, that is to say order volume", explained Mohr.

Electronic Products on the move With the introduction of innovative products for communication and entertainment, in the first six months of 2010, the Electronic Products business sector grew according to plan by 74 percent to 14.9 million euros (previous year 8.5 million euros). "New items in this sector, including a tablet PC and a multimedia player for, among others, a German mobile telephone and internet provider, are gaining a foothold in the market. We can be justifiably proud of this", says Mohr. However, increasing material consumption, including electronic components and generally expensive production start-ups, influenced the result in a negative way. At the close of the half- year, the operating result was still minus at 2.5 million euros. Notwithstanding this, as early as in the second quarter the loss dropped to 0.8 million euros compared with 1.7 million euros in the first quarter year. "Here, again, the trend looks very promising", says Mohr.

Medical with growth injection 2011 According to Mohr, the Medical business sector also developed according to plan. With sales returns of 13.1 million euros (previous year: 16.0 million euros), the sector fell back slightly in the first half year. Nonetheless the second quarter year exceeded revenues of the first quarter by some 0.7 million euros. Despite the considerable scope of weak-margined advance payments for projects for the year 2011 the operating result (EBIT) of 1.1 million euros, (previous year 2.3 million euros), remained clearly on the plus side. In the second quarter the operating result grew by 0.7 million euros. `We are quite content with the course of the first half year in the medical sector´, confirmed Mohr.

According to Mohr, the three business sectors of the Balda Group invested a great deal of effort for the future during the first half year. "We managed various opportunities and risks successfully", said Mohr. Balda will reap the benefits already in 2010 and above all starting 2011. Despite the development in the MobileCom business sector, that can be better determined in the course of the third quarter, Balda is keeping up with the forecast of sales growth of 10 to 15 percent with the company´s operating result remaining unchanged in comparison with the financial year of 2010.

* * * Company Profile Balda AG The Balda Group develops and produces complete plastic assemblies, electronic products and products for the medical industry. The customers of Balda are leaders in business from the mobile, entertainment and electronic communications as well as pharmaceutical and medical technology markets.

The group has an international position with product sites in China, Malaysia and Germany. A subsidiary in the United States serves North American customers in product design and development. As part of a shareholding in a leading manufacturer of touch screens in China, Balda participates in the dynamic touch screen displays market. * * * This corporate news announcement includes "forward-looking statements" which are based on the current expectations of the management of Balda. They are subject to risks and uncertainty because they relate to events and depend on circumstances that will occur in the future, such as, for example, developments in the mobile communications industry, changes in technology and the ability to timely and successfully develop new products and various other factors. Balda does not undertake any obligation to update publicly or revise forward-looking statements except to the extent legally required.

This corporate news announcement is not an offer of securities for sale or a solicitation of an offer to purchase securities in the United States or elsewhere. The shares in Balda AG (the "Shares") may not be offered or sold in the United States or to or for the account or benefit of U.S. persons (as such term is defined in Regulation S under the U.S. Securities Act of 1933, as amended (the "Securities Act") unless registered under the Securities Act or pursuant to an exemption from such registration. The Shares have not been and will not be registered under the Securities Act.

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Clas Röhl
Tel.: +49 (0) 5734 922-2728

Branche: Semiconductors & active components
ISIN:      DE0005215107
WKN:        521510
Index:    CDAX, Prime All Share
Börsen:  Frankfurt / regulated dealing/prime standard
              Berlin / free trade
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              Stuttgart / free trade
              Düsseldorf / free trade
              München / free trade

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