Electronics Production | March 17, 2009
Smartrac reports another good year
Despite the challenging economic environment, Smartrac reports another good year with further increase in sales and operating cash flow as well as an attractive profitability level.
Reviewing 2008, Smartrac was affected by the deep financial and economic crisis. Despite that, the company advanced its business both strategically and operationally. Key topics of the 2008 development: Compensating a significant decline in the U.S. ePassport business In the second half of the year, the global economic developments and the U.S. recession led to a significant reduction in demand for passports as people trimmed down travel activities and companies cut business travel. Including the effects of a decline due to large inventory in the value chain in the second quarter, Smartrac delivered over 40 percent less inlays to its customers for the U.S. passport in 2008. Due to newly acquired projects Smartrac was able to compensate the reduction in U.S. ePassport volume for a portion, strongly supported by 54 percent growth in the product line ePayment and an 8o percent growth in the product lines allocated to Smartrac´s standard segment. Expansion of manufacturing capacity to record level In 2008, Smartrac strengthened its position as leading provider of RFID transponders with the largest production capacity worldwide. In the course of one year, Smartrac increased the capacity of the four factories in Ayutthaya, Thailand, from 15 million units to 24 million units per month by year end 2008. In addition, Smartrac completed the construction and security certification of its U.S. factory and integrated it into the global manufacturing network. Smartrac now maintains dedicated high security manufacturing facilities in Asia, Europe and America. Strategic acquisition of Sokymat Automotive GmbH In September 2008, Smartrac acquired Sokymat Automotive GmbH. The company considers this investment as being substantial for the further development of the Smartrac Group. Both companies have a very similar position in the global RFID value chain. The acquisition broadens the product portfolio and it represents an important step towards a more balanced product portfolio. Smartrac has implemented a new platform to accelerate the combined business activities in industrial, logistics and animal ID applications. The activities of Sokymat Automotive provide access to the market of RFID components for the automotive industry, where Sokymat Automotive GmbH holds a strong market position. Despite the current challenging environment, Smartrac´s Management strongly believes that RFID technology in the automotive industry in general will provide additional growth opportunities in the future. Smartrac sales in 2008 was EUR 112.3 million, representing an increase of 16 percent on the EUR 96.6 million generated in 2007. Operating cash flow 2008: EUR 19.3 million, representing an increase of 15 percent on EUR 16.7 million provided in 2007. Outlook 2009: Confidence to grow the business organically.