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SmartID catching up strongly – great interest of market in Cards & TECURITY® creates positive mood


Roding, October 31, 2006 - The Muehlbauer technology group, international and independent consultant and manufacturer of innovative security solutions for the TECURITY® market, continued its push ahead during the reporting period. While the order book increased by 23.4% to EUR 21.2 million (17.2) over the previous year, due to the strong demand for the unique range of solutions from the Cards & TECURITY® area, located within the company’s core business area SmartID, the overall order book grew by 20.6% to EUR 36.9 million (30.6). On a nine-month comparison of the SmartID area, the company - at EUR 65.2 million (70.2) - lags only 7.2% behind the order income of the previous year, which benefited from the strong demand for Smart Label technologies. With regarded to the consolidated order income of EUR 125.1 million (115.8) it is in fact 8.1% ahead in the nine-month comparison.

Thus, the company once again succeeded in compensating for temporary volatility through market diversification. Due to temporary delays in governments projects, sales have so far not benefited from this positive development and, at EUR 37.1 million (41.6), lagged the previous year’s value by 10.7%. As a result of the different product mixes in the periods under comparison, at EUR 8.6 million (11.2), earnings before interest and taxes (EBIT) were 23.8% below the comparative value of the previous year, which still corresponds to a high EBIT rate of 23.0% (27.0). In contrast, earnings before taxes (EBT) were spurred by the extremely positive rate of net interest income (EUR 1.6 million, PY: 0.8) and reached a level of EUR 10.2 million (12.0) during the reporting period. This corresponds with an extremely positive pretax profit margin of 27.4% (28.8). After deduction of taxes, a further EUR 6.8 million (7.9) can be transferred to retained earnings; this corresponds to earnings per share of EUR 0.47 (0.54). On a nine-month comparison, Muehlbauer increased sales by 5.9% to EUR 114.8 million (108.4). In the same period, EBIT rose 7.7% to EUR 24.9 million (23.1), while earnings per share increased by a total of 15.3% to EUR 1.28 (1.11).

As a result of scheduled investments, free cashflow in the reporting period amounted to EUR -4.0 million (-5.6). In the nine-month comparison free cashflow was virtually balanced at EUR -0.5 million (+9.3). Net working capital rose from EUR 31.2 million to EUR 41.8 million, due in particular to the further diversification of products. At the end of the reporting period the Group’s net cash amounted to EUR 41.9 million (43.0). The equity ratio was 78.4%, compared with 75.2% in the previous year.

In addition to the positive development of Muehlbauer’s core business area SmartID, the areas Traceability as well as Precision Parts and Systems managed to post significantly more orders than in the same period of the previous year. While Traceability’s order income rose 46.5% to EUR 3.8 million (2.6), order income in Precision Parts and Systems shot up 57.6% to EUR 4.5 million (2.8). As a consequence, the weakness in the semiconductor industry recorded during the reporting period and the resultant decline of order income in Semiconductor Related Products to EUR 7.4 million (8.0) was more than compensated for. The order backlog still stands at a high level: on 30 September 2006 it stood at EUR 89.1 million and is thus 25.4% higher year-on-year (71.1).

The market’s mood for technology solutions from the Cards & TECURITY® area is good. Due to the market’s great interest in implementing security-oriented identification systems and innovative card applications, the company expect a further boost to the business over the next months. Here the expectation is based on the excellent market position, the range of solutions that is unique in the world, and the high number of reference projects that recommend Muehlbauer as a reliable partner for governments and authorities of other states. The positive trend in Smart Labels experienced in the first two quarters of the financial year has continued in the reporting period. While the market was, in the past, controlled by only a few major players from certain countries, a shift towards a broader customer base in other countries can be noted. With the comprehensive range of solutions, based in the SmartID area and consisting of innovative products, user-oriented software solutions and a distinct proximity to the customers, the Muehlbauer technology group consider itself in an excellent position to benefit strongly from the market potential relevant to it.

Muehlbauer is a global and independent consultant and manufacturer of technologically innovative security solutions in a market segment the company refers to as the TECURITY® market. With more than 1,600 employees at 26 locations on five continents, Muehlbauer is the leading provider of production systems for the Smart Card industry.
Muehlbauer system solutions are suitable for the manufacture of any card type. They are used in the production of ID cards, ePassports, eVisa, contact and contactless cards, dual interface cards and multimedia cards. The products are, above that, suitable for the manufacture of Smart Labels for the security, supply chain, textile and retail industries.


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