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SMT & Inspection | November 09, 2007

SUSS business development in Q3 subdued

The SUSS MicroTec Group faced investment restraint by key customers in the third quarter of 2007.
Order entry fell to EUR 31.3 million (Q3/06: EUR 37.5 million) which was lower than forecast. Sales at EUR 22.3 million (Q3/06: EUR 31.3 million) were also below expectations due to delayed final acceptance of delivered machinery primarily in the Test Systems and Substrate Bonder divisions. Earnings before interest and taxes were EUR -4.9 million (Q3/06: EUR 1.7 million). One reason was the relatively low gross profit (EUR 9.2 million compared with EUR 14.0 million in Q3/06) as a result of the unsatisfactory sales level. Another was a foreign exchange related burden of EUR 1.2 million arising from an inter-company loan to the Group’s US subsidiary and a EUR 0.9 million revaluation on deferred tax positions. This additional one-off expense without effect on payments was necessitated by the terms of Germany’s 2008 Corporate Tax Reform Act.

Sales in the first nine months of 2007 amounted to EUR 98.7 million (2006: EUR 113.5 million), order entry to EUR 95.5 million (2006: EUR 115.0 million), order backlog as of September 30 to EUR 72.0 million (2006: EUR 82.8 million) and EBIT to EUR 1.3 million (2006: EUR 14.3 million). Nine-month earnings after taxes were down this year from EUR 11.3 million to EUR 0.2 million. Due to a negative free cash flow in the second and third quarters, the net cash position was down from EUR 14.1 million to EUR 8.3 million, while the nine-month gross profit margin was down from 46.2% in 2006 to 43.8% in 2007. The main reason was heavy ongoing pressure on prices exerted especially by Asian customers.

As reported on October 29, SUSS MicroTec now anticipates sales of approximately EUR 140 million for the full year and an operating result of between EUR 6 million and EUR 7 million. The guidance adjustment was made primarily in response to poorer than expected key figures for the third quarter and partly reduced expectations for the fourth quarter.

The fourth quarter, however, shows signs of a significant improvement in new business. The most important indicator is a strong October order entry of at least EUR 22 million. SUSS MicroTec assumes that at least EUR 40 million in new orders can be booked in the last three months of the year.

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