Balda AG / Key word(s): Half Year Results/Half Year Results
Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted
by DGAP – a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
Balda on track for future growth
– Earnings target for the first half year of 2007 largely achieved
despite difficult operating conditions
– Asia grows above average and profitable, Europe negatively affected by
continuing weakness of Infocom
– Surprising switch of touchscreen specification for major order shortly
before start of mass production
– Potential of the respective order unchanged, but revenue and earnings
partly delayed into 2008
– Balda Medical is ahead of buget and wins first global order with Balda
Bad Oeynhausen, 2 August 2007 – Balda despite difficult operating
conditions largely achieved its targets in the first half year 2007. From
January to June the globally operating high-tech company recorded revenues
amounting to 129.4 million euros (first half year 2006: 164.4 million
euros) and a pre-tax loss (EBT) of 6.7 million euros (pre-tax profit (EBT)
in the first half year 2006: 11.8 million euros). While business in Europe
developed only weakly, Asia gained substantially.
The cause of the Group’s fall in revenues of 21.3 percent is thus mainly to
be found in the development of the European Infocom division. Despite
re-orienting sales activities at the beginning of this year in Europe,
Infocom could not compensate for the loss of the BenQ business and the
transfer of production to Asia by a key customer.
In Asia, however, Balda has significantly over-compensated for the loss of
BenQ. As expected, revenues in the region continued to advance and grew by
37.7 per cent to 80.3 million euros (corresponding period of 2006: 58.3
For the full year Balda expects from today’s perspective that the Group’s
revenues and earnings will remain below previous expectations. For a major
order the touchscreen specification has been switched on short notice
immediately before the start of production. This resulted in delays, and
the Touch division’s revenues and earnings planned for 2007 are expected to
partially materialise in 2008 only.
Balda has to deviate from projections for 2007 on account of the
short-notice switch in specifications. But the revenue and earnings
anticipated from this major order remain unchanged. This means however, the
Touch business will make an even stronger contribution to growth in 2008
than hitherto expected.
Switch of specification for major touchscreen order
Due to a switch in the product specifications immediately prior to the
start of the mass production extensive changes were required in the
assembly line and the respective preparations for production had to be
largely re-started. The Touch division mastered this extremely short-notice
challenge outstandingly well, but a delay in the process was unavoidable.
A consequence of this adjustment is that now different components have to
be procured. In the event of delivery bottlenecks or quality fluctuations
in these new components during the course of the year, further delays may
arise. The possibility also cannot be excluded that, as a result of this
adjustment, optimal utilization of production lines will not be achieved
until later than planned.
Revenues and earnings
In the first half year 2007 the revenues of Balda Group fell by 21.3 per
cent to 129.4 million euros (corresponding period of last year 164.4
million euros). In the 2nd quarter of 2007 Balda Group achieved revenues of
66.3 million euros (2nd quarter 2006: 83.1 million euros). This is a
reduction of 16.9 million euros or 20.2 per cent.
As expected the Asian business has continued to expand and has grown by
37.7 per cent to 80.3 million euros. With a revenue share of 62 per cent
(January to June 2006: 35.4 per cent) Asia has replaced Europe as the
The decline in revenues in the first six months of 2007 mainly reflects the
weaker than expected European
Infocom business. Revenues in the region fell by 56.4 per cent to 43.3
million euros (corresponding period of last year: 99.5 million euros).
Europe contributed 33.4 per cent of revenues (in the first half year of
2006: 60.5 per cent), followed by America with 5.1 per cent (January to
June 2006: 4.4 per cent).
In the first half year 2007 there was a consolidated pre-tax loss (EBT) of
6.7 million euros. In the corresponding period of last year a pre-tax
profit (EBT) of 11.8 million euros was made. As a result the earnings
target was almost achieved in the first half year 2007.
In the 2nd quarter of 2007 Balda made a consolidated pre-tax loss (EBT) of
1.9 million euros (pre-tax profit in 2nd quarter 2006: 5.2 million euros).
In addition to the continuing weakness of the European Infocom business,
the switch in product specifications for a major Touch division order also
contributed to this.
Investments and cash flow
In the first six months of 2007 Balda Group invested in tangible and
intangible assets 34.6 million euros (first half year 2006: 11.0 million
euros). From April to June 2007 Balda spent 18.9 million euros for
investments throughout the Group (2nd quarter 2006: 7.4 million euros –
The largest share of investments went into TPK at Xiamen as well as the
purchase of a property at Chennai, India.
Operating cash flow in the first half year was minus 11.0 million euros
(corresponding period of last year: plus 18.9 million euros). In this
period the still negative operating result, high interest payments and the
increase in working capital in the Asian Region led to an outflow of funds.
In the 2nd quarter of 2007 Balda recorded a positive operating cash flow of
5.9 million euros (2nd quarter 2006: 12.2 million euros).
As of 30 June 2007 Balda employed a total of 8,258 staff throughout the
Group (31 December 2006: 7,876 staff). In terms of the continued operations
this represents a gain of 4.9 per cent compared to the end of the financial
year 2006. This increase is mainly associated with the development of the
touchscreen production at Xiamen.
In the Asian Infocom business Balda is currently preparing for the start of
mass production for new customers. Here for the first time large volumes of
components will be manufactured, which combine Balda’s plastic technology
with metal applications from the Balda AVY joint venture established in the
last year. Management’s attention is clearly focused on the future
development of the Infocom division in Europe.
Within the last 12 months the Touch division has been listed as a
development partner by all relevant mobile phone manufacturers. Touchscreen
solutions are currently being produced for 15 customers from various
industries. In the course of the coming months the breadth and volume of
production is expected to increase further.
Due to further increasing demand for touchscreen solutions, from today’s
perspective the capacity of the Touch division will be increased in the
Balda Medical is ahead of budget and will probably significantly exceed its
revenue target of 25.0 million euros in 2007.
Previously Group revenues of 600 to 650 million euros and a pre-tax profit
(EBT) of 50 to 55 million euros were expected for 2007. In the past Balda
however has repeatedly pointed out that the current year will be driven
very significantly by the development of the second half.
The delay of several weeks caused by the switch in the touchscreen
specification has resulted in increased uncertainty with respect to
revenues and earnings for the second half year.
The European Infocom business is expected to stay weak for the remaining
five months of 2007. However negotiations are currently underway for new
volume orders. Revenues and earnings in this segment will depend on the
still open results of the negotiations.
Against this background and from today’s perspective it is to be assumed
that the previous forecasts for 2007 will not be achieved, and that for the
Touch business revenues and earnings may be partially shifted into the year
Key ratios of the continued operations
Q2 2007 Q2 2006 Change Half year Half year Change
Revenues 66.3 Mio 83.1 Mio – 20.3 129.4 Mio 164.4 Mio – 21.3
EUR EUR % EUR EUR %
EBT – 1.9 5.2 Mio -136.5 – 6.7 Mio 11.8 Mio – 157.2
Mio EUR EUR % EUR EUR %
Group result – 1.4 4.2 Mio – 133.3] – 3.3 Mio 8.4 Mio EUR – 139.0
Mio EUR EUR % EUR %
Depreciation 4.2 Mio 3.5 Mio 19.3 % 8.6 Mio EUR 7.1 Mio EUR 21.8 %
(fixed assets) EUR EUR
Investment (fixed 18.9 Mio 7.4 Mio 155.4 % 34.6 Mio 11.0 Mio 214.5
assets) EUR EUR EUR EUR %
Cash flow 5.9 Mio 12.2 Mio – 51.3 – 11.0 Mio 18.9 Mio –
EUR EUR % EUR EUR 158.2%
Employees (as 8,258 6,845 20.6 % 8,258 6,845 20.6 %
of 30 Juni)
Capital stock (in 47.387 40.279 17.6 % 47.387.0 40.279.0 17.6 %
shares) .088 .025 88 25
Key ratios of the discontinued operations
Q2 2007 Q2 2006 Chan Half year Half year Cha
ge 2007 2006 nge
Revenues 0.0 Mio 10.4 Mio -100,0 3.3 Mio EUR 21.8 Mio 87.0
EUR EUR % EUR %
EBT -0.2 Mio -2.3 Mio 1,050 -2.1 Mio -2.5 Mio 18.4
EUR EUR % EUR EUR %
Result discontinued – 0.2 – 2.3 1,05 – 2.1 Mio – 2.5 Mio 18.4
operations Mio EUR Mio EUR 0% EUR EUR %
Information and Explaination of the Issuer to this News:
This ad hoc announcement includes ‘forward-looking statements’ which are
based on the current expectations of the management of Balda. They are
subject to risks and uncertainty because they relate to events and depend
on circumstances that will occur in the future, such as, for example,
developments in the mobile communications industry, changes in technology
and the ability to timely and successfully develop new products and various
other factors. Balda does not undertake any obligation to update publicly
or revise forward-looking statements except to the extent legally required.
This ad hoc announcement is not an offer of securities for sale or a
solicitation of an offer to purchase securities in the United States or
elsewhere. The shares in Balda AG (the ‘Shares’) may not be offered or sold
in the United States or to or for the account or benefit of U.S. persons
(as such term is defined in Regulation S under the U.S. Securities Act of
1933, as amended (the ‘Securities Act’)) unless registered under the
Securities Act or pursuant to an exemption from such registration. The
Shares have not been and will not be registered under the Securities Act
If you have any questions please contact us: Balda AG, Clas Röhl and
Kathrin Wiederrich, Phone: +49 (0)5734 922 – 2728 / 2751, Fax: +49 (0)5734
922 – 2691, Email: firstname.lastname@example.org, email@example.com, Inter-net:
On Thursday, 2 August 2007, a conference call in German is taking place for
journalists at 9:30 am. Those interested in participating may dial in
approx. 10 minutes before the start of the conference under the telephone
number +49 69 5007 1316.
At 11.00 am on the same day a conference call is being held in English for
investors and analysts. Those interested in participating may dial in
approx. 10 minutes before the start of the conference under the telephone
number +49 69 2222 2244.
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Company: Balda AG
Bergkirchener Str. 228
32549 Bad Oeynhausen
Phone: +49 (0) 57 34 / 9 22-0
Fax: +49 (0) 57 34 / 9 22-2604
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Düsseldorf, Hamburg, Hannover, München, Stuttgart
End of Announcement DGAP News-Service