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SMT & Inspection | August 11, 2007

SUSS: Significantly higher order entry in Q2

The SUSS MicroTec Group has noticed a significant upturn in new business. After the first quarter's order entry fell below expectations, new orders booked between April and June 2007 totaled EUR 37.5 million.
That was EUR 0.6 million more than in the second quarter of 2006 when investment in semiconductor equipment was extremely high. Sales at EUR 37.0 million failed to reach the previous year's level (EUR 43.1 million). H1 2007 sales at EUR 76.4 million were 7 percent down on the previous year when sales totaled EUR 82.1 million.

The earnings trend continues to reflect pressure on margins due to industry-specific cyclical weakness in the first quarter. Earnings before interest and taxes (EBIT) fell in the second quarter to EUR 2.2 million (Q2/06: EUR 7.8 million) and the EBIT margin was down on the year to 6.0 after 18.0 percent. First-half EBIT was EUR 6.1 million after EUR 12.6 million in H1/06. The first-half EBIT margin was 8 percent after 15.3 percent accordingly. Second-quarter earnings after taxes (EAT) were EUR 2.0 million (Q2/06: EUR 6.3 million) as no material tax or interest factors took effect. First-half EAT was down 44.7 percent to EUR 5.5 million from EUR 10.0 million.

Reasons for the decline in earnings were, along with the above-mentioned pressure on margins, higher administrative and sales costs (up 10.6 percent on a half-yearly basis). The EUR 1.2 million (10.1 percent) increase in sales costs in particular was due to a deliberate strategic personnel buildup.

The second-quarter gross profit margin was 47 percent (Q2/06: 48.5 percent). In the first quarter of 2007, it was only 42 percent. The first-half margin was 44.5 percent (H1/06: 46.8 percent). As in the first quarter, pressure on margins was primarily due to important customers having in part built up surplus capacities last year and now requiring less new investment in machinery. That enabled customers in some cases to achieve price discounts. The product mix of tools sold in Q2 had no significant effect on the margin.

The net cash position (the balance of cash and cash equivalents and financial liabilities) rose in the half year comparison to EUR 11.7 million from EUR 8.4 million but was down EUR 3.4 million on December 31, 2006, due primarily to a decline in cash and cash equivalents. The decline was primarily a result of the fact that in spite of positive EAT only a balanced cash flow from operating activities was achieved (previous year: EUR 4.8 million). Lower customer prepayments are the main reason. The trend was apparent in the first quarter and has continued.
Free cash flow at the end of the first half of 2007 amounted to minus EUR 4.1 million (June 30, 2006: EUR 1.2 million).

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