Test & Measurement | May 21, 2007
Rood technology turnover growth<br>first half 2007 over 15%
The board of management of Rood Testhouse International N.V. forecasts growth of turnover in the first half of 2007 to amount to over 15% compared to the same period in 2006.
The investments made in 2006 in testing equipment are now contributing positively to turnover growth. This turnover growth is achieved despite the stock reductions by its customers at the end of 2006 and in early 2007 and increasing competition from low-wage countries. As in 2006, the business units Qualification and Failure and Technological Analysis grew exponentially compared to the first quarter of 2006. While in 2006 start-up costs impacted the results of these business units, this year both will contributed positively to the operating result. Turnover of the business unit Test Engineering is also growing compared to the same period in 2006, despite a lack of test engineers. However, Rood Technology is now training more young engineers, and is increasingly successful in recruitment. Throughout 2007, strengthening this business unit will be a major focus area. The business unit Test & End-of-line Services has been affected most by the stock reductions mentioned above, and as a result is showing limited growth. Rood Technology has received an order for its test facility in Dresden from a multinational company. The operational activities have started and are expected to generate limited turnover in the first half of 2007. In the second half of 2007, Dresden's contribution may increase to approximately 5% of total semi-annual turnover, with further upward turnover potential. In terms of results, Dresden is expected to reach the break-even point at the end of the year. The activities in support of the supply chain from Asia (China) to Europe are developing positively. In this context Rood is working on collaborations to strengthen its position and to obtain orders. While the start-up phase takes time, this supply chain will constitute a major contribution to turnover in the future. As mentioned in the annual report, Rood is increasingly focusing on Fabless Design Houses. A major part of the 2007 turnover growth, referred to in the Business Units section in the annual report, will be effected in this customer base. This strategy will be continued in the next few years. In 2007 the internal organization will be optimized with a view to reducing costs. The start-up phase of new business, as stated above, generates additional costs, but Rood is endeavouring to minimize those costs as far as possible.