Cicor with 8.9% increase in net sales in H1/08

Net profit also improved on the year-back figure, rising by 20.7 % to €3.3 million. Despite a rather subdued outlook for the second half of the year, the Board of Directors and Group Management still believe that the group will record higher net sales and improved profitability for 2008 as a whole. During the period under review Cicor Technologies Group increased its net sales by 8.9% to €67 million (first-half 2007: €61 million), with 2.7% of this sales growth coming from the acquisition of ESG Group (consolidated from May 2008). The group's operating earnings before interest and taxes (EBIT) went up 27.3% to €4.7 million (€3.7 million). The EBIT margin rose to 6.9% (5.9%) as a result. In the first half of 2008, Cicor Technologies achieved a profit of €3.3 million, an increase of 20.7% on the same period last year (€2.7 million). The influence of currency movements on the consolidated result was only small at around €61,000. The PCB and EMS Divisions tend to be exposed to EUR and USD movements on the sales side, but during the period under review these were almost offset by the EMS Division's purchasing flows in the same currencies. Thanks to stronger cash flow and the optimization of current assets, net debt was reduced to €27 million as at 30 June 2008 (31 December 2007: €30 million); this was despite the fact that the ESG acquisition was paid for entirely from own funds. With an equity ratio of 58.4% on 30 June 2008, Cicor Group has sufficient financial resources to fund new acquisitions from its own resources. Performance of the individual divisions During the period under review the PCB Division held its sales steady at €17 million (previous year €17.7 million), but improved operating earnings (EBIT) to €2.2 million (€2.1 million). The EBIT margin increased to 12.6% (12.0%). The PCB Division posted solid results for the first half of the year, but did not meet management expectations. After extremely strong sales in the first quarter the second quarter was much weaker, mainly because of the smaller contribution made by Photochemie AG, which had to cope with a collapse in orders from the semiconductor industry. Countermeasures were initiated immediately, including cost reductions and intensified sales activities in other client segments. Cicorel SA, with its two production facilities in Boudry and Moudon, performed well again, with net sales and operating earnings both improving on the year-back figures. The ME Division increased its net sales to €10 million (previous year, consolidated from 1 May 2007: €4.5 million) and posted operating profit of €1.1 million (€495,000). The EBIT margin rose to 11.3% (10.3%). RHe Microsystems GmbH and Reinhardt Microtech GmbH in Ulm performed particularly well; both increased their sales and profitability by the expected amount. Reinhardt Microtech AG in Wangs suffered from price pressure in its US sales market and also had to overcome technical challenges in the industrialization of a major printer manufacturing project, which significantly affected the division's profitability. Orders received by the companies of the ME Division were at a record level at the mid-point of the year, which should lead to a further improvement in margins and on-target sales growth. In the first half of 2008, the EMS Division achieved sales of €39 million (previous year €39.8 million). Operating profit (EBIT) went up to €1.8 million from the previous year's €1.5 million, and the EBIT margin increased to 4.5% (3.9%). After a good start to the financial year, signs of an economic downturn put the brakes on the Division's growth. The successful integration of ESG Group triggered fresh sales impulses, and it appears that the high expectations we had of our Asian operations have been fulfilled. Systel SA in the Ticino improved its operational key figures in many areas. A new direct sales system soon helped Systronics SRL in Romania to post its first successes. Once it moves into its new building in spring 2009 it will be ideally positioned to carry out its marketing and commercial activities. Management expects demand from our clients in Switzerland to weaken slightly in the second half of 2008, but it sees good potential in Romania and Asia.