- Q2 sales of some 70 mill. Euro up by 20 per cent on previous year - EBIT increases to 1.5 mill. Euro (2006: 1.1 mill. Euro) - Level of orders 155.1 mill. Euro at the end of June (2006: 96.2 mill. Euro) - Growth dynamics expected to improve in latter half Kölleda, 14 August 2007. The Funkwerk AG (ISIN: DE0005753149) increased sales in the second quarter of fiscal 2007 by a good 20 per cent on the previous year, from 57.8 mill. Euro to 69.7 mill. Euro. The net earnings (EBIT) rose to 1.5 mill. Euro in the second quarter (2006: 1.1 mill. Euro). "The synergy effects from the acquisition of the former Vossloh Information Technologies, the potentials of new products and the increase in incoming orders will lead to a gradual increase in both sales and earnings in the latter half of the year. Consequently, the Executive Board is confident that we will be able to reach the targets set for 2007, even if a number of potential risks could not yet be completely eliminated", explained Funkwerk Chairman Dr. Hans Grundner on presentation of the interim report. For the first six months of 2007, the revenues of the Thuringian technology group totalled around 127 mill. Euro and were up by 14 per cent on 2006 (111 mill. Euro). This increase is due predominantly to the acquisition of Funkwerk Information Technologies (formerly Vossloh Information Technologies). In the main, the Traffic & Control Communication and Automotive Communication segments developed according to plan. In Enterprise Communication, on the other hand, various delays in product placements resulted in failure to achieve the planned targets for the first six months. Dr. Grundner: "Due to the different customer target group orientation of each segment, however, this could be partly compensated. In fact, this is one of the strengths of the Funkwerk business model." At 1.7 mill. Euro, the net earnings (EBIT) in the first six months were above the prior-year level (1.4 mill. Euro), regardless of the fact that the integration and consolidation measures required for the acquisitions burdened the result. The consolidated surplus rose on the previous year to 1.2 mill. Euro (2006: 0.7 mill. Euro), so that the earnings per share stood at 0.15 Euro (2006: 0.09 Euro). Above-average earnings increase in latter half Similar to last year, when Funkwerk posted record sales and earnings as late as in the final quarter, fiscal year 2007 of Funkwerk is once again defined by a strong asymmetry in terms of sales and earnings distribution. "Since many orders, customer projects and product placements will not come to fruition until the third and, predominantly, the fourth quarter, while start-up expenses are booked in the first six months, the Executive Board does not consider the earnings figure as at the end of June representative for the whole year. The earnings trend in the latter half of the year is expected to rise significantly and progressively", said Dr. Grundner. The most profitable sector of Funkwerk in the first six months proved to be the business with communication, information and management systems for transport companies, the industry and logistics (Traffic & Control Communication segment). Dr. Grundner: "We increasingly experience the positive effects of the restructuring measures initiated last year here". Thus, the net earnings (EBIT) in the second quarter continued to rise to 1.4 mill. Euro (2006: -1.7 mill. Euro), despite the fact that the integration of FIT incurred additional expenditure. From April to the end of June 2007, TCC generated revenues of 34.6 mill. Euro (2006: 22.2 mill. Euro). 56 per cent of this increase was due predominantly to FIT, which was consolidated for the first time on 8 February 2007. Over the first half of the year, sales in this segment thus rose to 58.2 mill. Euro (2006: 42.6 mill. Euro). Automotive Communication grows with new products - Enterprise Communication below plan Funkwerk business with communication equipment for vehicles (Automotive Communication segment) reported a decline in net earnings from 2.5 mill. Euro in 2006 to 0.6 mill. Euro. "In addition to competition-related pricing pressures, this primarily reflects the drops in sales in the after-sales business as well as increased efforts in marketing and in the opening of new sales channels. The launch of new products, however, is expected to result in significant earnings effects in the latter half of the year", explained Dr. Grundner. Due to the new product sectors - telematics and transponders for aircrafts - the Automotive Communication segment once again saw business in the second quarter slightly increase on the previous year. Sales in this quarter totalled 14.3 mill. Euro, up from 13.5 mill. Euro in 2006. Over the first six months, revenues thus rose by 10 per cent to 28.7 mill. Euro (2006: 26.1 mill. Euro). In the second quarter, the Enterprise Communication segment, which specialises in network solutions, communication and messaging systems for companies and institutions remained below target. On the whole, sales here totalled 20.8 mill. Euro and thus lagged behind the prior-year benchmark (22.2 mill. Euro). In the first six months of 2007, the segment generated a mere 40 mill. Euro (2006: 42.4 mill. Euro). "This drop in sales is due exclusively to the network components sector. Here, the strategic requirement of creating a uniform technological platform caused delays in the rollout of new products", explained Dr. Grundner. As a result, the operative earnings of this segment in the first six months remained negative at -0.3 mill. Euro (2006: 0.6 mill. Euro). "The launch of new products and the concentration of our sales activities is expected to result in a significant increase in sales and a turnaround of our earnings trend in the further course of the year." High level of orders on hand - further growth in sight for 2008/2009 The Executive Board of Funkwerk generally remains confident that the synergy effects from the acquisitions realised in the first six months, the potentials of new products, and the increase in incoming orders (end of June 2007: 174 mill. Euro, 2006: 126 mill. Euro) will have a positive knock-on effect on Funkwerk's group figures in the latter half of the year. Based on the existing orders (orders on hand as at the end of June: 155.2 mill. Euro, 2006: 96.2 mill. Euro) and current business initiations, Funkwerk anticipates sales in the latter half to grow to over 170 mill. Euro, the lion share of which will be attributable to the last quarter. Funkwerk AG has confirmed its annual projections of 300 mill. Euro in sales and net earnings (EBIT) of about 15 mill. Euro for 2007. "On the whole, 2007 is a year of transition and strategic reorientation for Funkwerk. If the technological innovations, rationalisations and investments already initiated affect the market as planned, Funkwerk will once again be able to grow organically and return to its usual earnings power in 2008 and 2009", said Dr. Grundner in summary of the group's prospects. The full interim report of Funkwerk AG is available for downloading at www.funkwerk.com. For further information contact Funkwerk AG Im Funkwerk 5 99625 Kölleda/Thuringia Germany Jörg Reichenbach Investor Relations Telephone: 0 36 35/458-346 Fax: 0 36 35/6 00 -507 [email protected] rw konzept GmbH Emil-Riedel-Straße 18 80538 Munich Germany Sebastian Brunner Tel: 0 89/13 95 96 -33 Fax: 0 89/13 95 96 -34 Mobile: 01 75/5 60 46 73 [email protected] --- End of Message --- Funkwerk AG Im Funkwerk 5 Kölleda Germany WKN: 575314; ISIN: DE0005753149; Index: HDAX, MIDCAP, CDAX, Prime All Share, TECH All Share; Listed: Geregelter Markt in Frankfurter Wertpapierbörse, Prime Standard in Frankfurter Wertpapierbörse, Freiverkehr in Börse Berlin Bremen, Freiverkehr in Bayerische Börse München, Freiverkehr in Börse Düsseldorf, Freiverkehr in Börse Stuttgart, Freiverkehr in Hanseatische Wertpapierbörse zu Hamburg, Freiverkehr in Niedersächsische Börse zu Hannover;