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Funkwerk acquires Euro Telematik AG


- Automotive Communication segment extended by telematics and navigation systems
- Additional sales potential and positive earnings contribution from acquisition as early as in 2006
- First joint development of Fleetbox basic for intelligent vehicle fleet management already on the market
- Funkwerk on the way to becoming one of the key European manufacturers of communication equipment for automobile industry

Kölleda/Ulm, 20 February 2006. Funkwerk AG (ISIN: DE 0005753149) is set to extend its Automotive Communication segment by a further range to include telematics and navigation systems. Settled by the decision to take over Euro Telematik AG with immediate effect, the specialist in professional communication systems 16 February signed the purchase contract, after agreement on a purchase price in the low single-figure millions. On signing of the contract, Funkwerk Chairman Dr. Hans Grundner said, “Our objective here is clear: we intend to become one of the key European manufacturers of communication equipment for vehicles in the next few years. Our customers are interested in integrated systems with telematics and navigation applications, thus the know-how and product range of Euro Telematik form an ideal complement to our technology platform. Strategically, this move will secure further growth for our Automotive Communication segment in the medium term.“

With the acquisition of Euro Telematik, Funkwerk will in future be able to provide a complete hardware and software package with appropriate telematics, fleet management and navigation applications across different industries. At the same time, Funkwerk will gain access for its current product range to new, interesting customer groups, including vehicle fleet operators and companies in the aviation and aerospace sectors.

The takeover is expected to open up additional sales potential for Funkwerk of around 7 million Euro as early as in the current year and result in a positive earnings contribution. Dr. Grundner: “If the synergy effects in development and distribution are achieved as quickly as anticipated, the impact on sales and earnings could be even more encouraging.“

Euro Telematik operates own web portal for fleet management

Founded in 1998, Euro Telematik AG is a leading manufacturer of mobile system solutions for the monitoring and control of vehicles on land and in the air. Based in Ulm, the company develops, produces and sells hardware and software for the quickly growing market for intelligent fleet management systems, specifically focusing on transport logistics, service fleets, and special fleets. As a unique selling point, the systems provided by Euro Telematik AG allow deep integration into the upstream ERP systems of the fleet operators, thus enabling real-time incorporation of business processes in the vehicle into the stationary IT domain. This, in turn, leads to an effective increase in efficiency in vehicle assignment and deployment for the fleet operator. In addition to the client/server solutions installed directly at the cus-tomer, the Ulm-based company also offers Internet-based fleet management via its own web portal.

Furthermore, the company, which originated from the former Daimler-Benz Aerospace, develops navigation and communication systems in aviation. Thus, for example, the mission management computer for the Airbus aeroplanes of the German and Canadian air force, which are to be converted into flying tanker planes, was supplied by Euro Telematik AG. Commissioned by the European space agency, ESA, the company is also involved in various technology developments for the future European satellite navigation system GALILEO.

“Over the past few years, we have grown quite substantially by our own efforts. Our integration into the Funkwerk group, however, will bring with it new potentials in development as much as in marketing and sales. In future, we will be able to offer our customers integrated complete solutions featuring cutting-edge technology. Our consolidated know-how will enable us to provide numerous other innovations,“ stresses Dr. Heinz-Leo Dudek, Managing Director at Euro Telematik AG.

Increasing demand for integrated systems for communication and fleet management

Substantial market opportunities and sales potential for Funkwerk and Euro Telematik are anticipated to arise in the short term from an integrated system solution for communication and fleet management. “In times in which the increase in oil price has been but one factor in leading to significantly higher costs for companies operating their own fleet, such a solution would effectively help save money. This would be a crucial advantage in competition,“ explains Lutz Pfister, head of the Automotive Communication segment of Funkwerk. Consequently, experts anticipate the demand for intelligent fleet management solutions to see a sharp rise by 2007, to in excess of 10 billion Euro worldwide. The market will be driven by commercial vehicle manufacturers, many of which are already customers of Funkwerk and Euro Telematik.

An initial result of the cooperation of Euro Telematik and Funkwerk has already been launched onto the market: the “Fleetbox basic,” an economically priced, retrofittable system for fleet control. Along with mobile communication with the driver, it also helps optimise scheduling and dispatch as well as the routes and the driving and break times by parallel positioning of the vehicle. At the same time, it allows journeys to be documented, which can subsequently be used for evaluation and optimisation purposes.

Further growth with multifunctional platform

The next project of Funkwerk and Euro Telematik hoped to elicit a strongly positive response from the market has already been agreed: a multifunctional platform (MFP) that will link the vehicle with the com-munication devices of the vehicle user, allowing equipment such as smartphones, PDAs, notebooks, iPods and suchlike to be wirelessly integrated into the infrastructure of the vehicle. Depending on the requirement, this further development of the KomBox, a Funkwerk product already available on the mar-ket, can be used with appropriate software adjustments for different applications, including as an on-board computer for telematics applications, a hands-free unit, an on-board navigation device for data exchange, or a storage medium for music and video. “Vehicle users want to be able to use the consumer products available to them in their vehicles, which previously was not possible for lack of missing inter-faces. We can solve this problem. This is why we see excellent market opportunities for the MFP and intend to use them to ensure our further growth. Initial potential solutions and specimens of these MFP will be presented at the Funkwerk Dabendorf stand at this year’s CeBIT,“ announced Lutz Pfister.

The Automotive Communication segment of Funkwerk develops, produces and sells communication solutions for vehicles both as an OEM supplier for the automobile industry and for the retrofitting market. The company has enjoyed many years of business relations with premium vehicle manufacturers such as Audi, BMW, and Daimler-Chrysler. Over the past few years, Funkwerk has also managed to gain a foot-hold in the OEM sector dealing with commercial vehicle manufacturers including Daimler-Chrysler, DAF, MAN, and IVECO. The Automotive Communication segment of Funkwerk with its leading brand, Funkwerk Dabendorf, has seen a highly successful development over the past five years, more than tripling its sales from 15 to over 50 mill. Euro and reporting a consistently strong earnings margin.

Further information on Funkwerk AG:

Based in Kölleda near Erfurt, Funkwerk AG develops, produces and markets professional communication systems used in vehicles, transport companies, businesses, and institutions. With its three business segments, Traffic & Control Communication (communication, management, and information systems for transport and logistics companies), Automotive Communication (communication equipment for vehicles), and Enterprise Networking (personal security, messaging systems, and innovative access solutions), Funkwerk occupies a strategically excellent place in future markets. In 2004, the high technology company employed over 1,100 staff and generated sales of around 250 mill. Euro.
Funkwerk will present its segments Automotive Communication (Hall 11, Stand B37) and Enterprise Communication (Hall 13, Stand D72) at this year’s CeBIT from 9 to 15 March 2006.


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