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Embedded | July 28, 2011

Kontron raises revenue forecast

Kontron continued the past months' dynamic business trend in the 2Q, achieving revenue of EUR 145.2 million. This represents around 25% growth compared with the prior-year period (EUR 116.1 million).

Total revenue stood at EUR 275.3 million in the first half of 2011 as a consequence, compared with EUR 213.8 million in the first half of 2010. This represents an increase of about 29 percent. The strongest growth rates were achieved in North America (44 percent), although Kontron also benefited from strong demand in emerging markets (23 percent) and Europe (20 percent). In terms of vertical markets, the application areas of industrial automation, energy, medical technology, but as well infotainment developed well. "It is already clear that the central key technologies of the future such as smart services for the most varied types of application areas, and smart grids in the energy area, will prove to be strong growth-drivers," confirmed Kontron CEO Ulrich Gehrmann. For instance, the company has just signed a long-term technology agreement with the largest operator of energy supply networks in Russia. This will entail the joint development of new hardware and software solutions to boost the reliability and efficiency of Russian electricity supplies. Kontron is anticipating high order volumes in this context. Order book position and design wins remain at high level At EUR 424 million, Kontron AG's order book position remained at a very high level (previous year: EUR 398 million). There was also gratifying trend in design wins, which reported a volume of EUR 149 million in the first half-year, compared with EUR 141 million in the prior-year period, and in terms of number amounted to 234, compared with 218. EUR 12.9 million of net income Kontron AG also achieved significant earnings growth. Operating profit (EBIT) grew from around EUR 7.4 million in the first three months of 2011 to around EUR 11.4 million in the second quarter. EBIT stood at a total of EUR 18.7 million in the first half-year as a consequence. Net income for the first six months totalled EUR 12.9 million. The year-on-year comparison is meaningful to only a limited extent due to the risk provision at the Malaysia company in the second quarter of the previous year. EBIT in the prior-year period amounted to EUR 10.7 million before this write-off. Despite these growth rates, gross profit was unable to fully keep up with the rapid rate of revenue growth. For instance, the second-quarter gross margin amounted to 28 percent, compared with 30 percent in the first quarter, and an average of 29 percent in the 2010 financial year. The reasons for this are the residual effects arising from the allocation of materials, and the major impact from the start-up of new large-scale projects, which entail even lower gross margins during this phase. With a positive cash flow of EUR 3.7 million in Q2/11 the cash position reduced from EUR 43,7 million at the end of the first quarter to EUR 33,3 million after paying the dividend for the 2010 financial year.
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