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Business | November 08, 2011

Smartrac with revenue growth for first nine months of 2011

Dr. Christian Fischer, CEO: “We have continued our positive business development in the 3Q/2011 and achieved decided improvements on the 2Q of the year. Due to the current high-water situation in Thailand we will, however, not be able to keep capitalizing on the initiated measures aimed at the further improvement of processes and structures in the short term."

The currently experienced moderate demand in the worldwide RFID industry continued unabated during the third quarter of 2011. In the light of the slower market development, the company returned to a steadier pace of operations and was able to focus its attention on strategic projects. In addition to targeted investments, the company continued working on the setup and optimization of structures and processes within the Group. A restructuring program initiated at Smartrac's core production facilities in Thailand at the beginning of the third quarter achieved first encouraging successes in August and September 2011. Expansion of volume production in Smartrac's tickets and labels business in Malaysia developed very well and resulted in pleasing output numbers and promising customer acceptance. Group Revenue: Smartrac maintained its positive business development in the third quarter of 2011 and achieved anticipated improvements on the second quarter of the year. In total, the company generated revenue of EUR 44.9 million in the three-month period from July to September 2011. From January to September 2011, Smartrac increased revenue by 6 percent and generated Group Revenue of EUR 138.8 million for the first nine months 2011, compared with revenue of EUR 130.9 million a year ago. Growth mainly resulted from the successful ramp-up of volume production for new e-ID projects, the favorable development of the tickets and labels business, as well as from constant growth in the Business Unit Industry & Logistics. Security Segment Revenue (Business Units Cards and eID) amounted to EUR 100.4 million in the first nine months of 2011, representing an increase of 2 percent compared with revenue of EUR 98.2 million in the same period of 2010. The Security Segment accounted for 72 percent of total Group revenue from January to September 2011, compared with 75 percent a year ago. Industry Segment Revenue (Business Units Industry & Logistics and Tickets & Labels) accounted for EUR 37.4 million in the first nine months of 2011, representing an increase of 17 percent compared with revenue of EUR 31.9 million in the same period of 2010. Industry Segment revenue for January to September 2011 represented 27 percent of the Group’s total revenue, compared with 24 percent a year ago. Business Outlook: Smartrac continued its positive business development in the first nine months of 2011. The initiated strategic projects, including the restructuring program in Thailand, have achieved first encouraging successes. Due to the current flooding in Thailand, however, the company will not be able to benefit from the improvements nor will the company be able to continue with the measures which have already been initiated to improve processes and structures in the short term. Currently, the water level in the industrial park and in the ground floors of the company’s production facilities is falling slowly but steadily. At present, the full extent of damage can, however, not be foreseen and will only be assessable once the facilities are waterless. Although the current situation at the core production facilities in Thailand is severe, the company will spare no effort to support customers in this challenging situation as well as possible. “We are currently facing a challenging situation. But our company and our team are strong enough to meet this challenge. We expect to be able to restart production in Thailand in the course of January 2012. Based on current planning, we assume that from a Group perspective full production capacity of our global manufacturing network will be re-established in the course of January 2012 as well,” said Dr. Christian Fischer.
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