EANS-News: Balda AG on the move (with document)

05.08.2010
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Corporate news transmitted by euro adhoc. The issuer/originator is solely
responsible for the content of this announcement.
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Subtitle: First half-year 2010: Earnings up in the second quarter / operational
result
still in the red / differing development in the segments / forecast 2010
affirmed

Bad Oeynhausen (euro adhoc) – Balda AG on the move

First half-year 2010: Earnings up in the second quarter / operational result
still in the red / differing development in the segments / forecast 2010
affirmed

Bad Oeynhausen, 5. August 2010 – ‘As a whole, we are quite satisfied with the
development of the company and the net result’, summarised CFO Rainer Mohr
regarding the first half-year results for 2010 from Balda AG (on 5 August) to
an audience of analysts and the press. Indeed, at 63.3 million euros, the sales
revenue of the company was only slightly under the previous year´s level of
66.2 million euros. Nonetheless, in the second quarter of the year from April
to June, Balda saw an increase in sales by 44.0 percent, up to 37.4 million
euros (same period previous year: 25.9 million euros). ‘We are on the right
track, we just need to accelerate somewhat in order to achieve our goals’,
commented Mohr. By the end of the year Mohr aims to have improved the negative
operating result in the company in the first half year of 2.1 million euros
(previous year: + 2.5 million euros) to the previous year´s level of some 2.5
million euros. In the second quarter Balda has already shown a positive EBIT of
plus 0.2 million euros (first quarter 2010: minus 2.3 million euros).

MobileCom reorganising and restructuring
According to Mohr, the Balda Group continued to be `in a phase of
reorganisation and restructuring´ in the second quarter of 2010′. The targeted
and actively continuing reorganisation of the company involved, in particular,
the business sectors MobileCom and Electronic Products. In future the MobileCom
division will concentrate production at the new site in Beijing (production
commencement August 2010). The first projects have already moved from the
production site Suzhou to the capital of China. In the context of this
restructuring, MobileCom had cut back 1283 employees in Suzhou. ‘Of course one
could say that the business sector had a spanner in the works in the last few
weeks. Additionally, cost pressure had continued to increase. In relation to
delayed contract demands, these factors placed a burden on both turnover and
results ‘, said Mohr. The half year sales of the sector came to 35.3 million
euros in comparison with 41.7 million euros the previous year. During that same
business period, the EBIT was minus 3.3 million euros compared with plus 5.2
the year before. The Board of Directors is confident that the MobileCom
business division will ‘significantly improve its performance in the second
half year’. ‘Costs will prove more favourable at the new facility in Beijing
thanks to more efficient utilisation of personnel and positive exploitation of
synergies such as new processes and state-of-the-art technologies. Uncertain
factors continue to be seen in customer demands, that is to say order volume’,
explained Mohr.

Electronic Products on the move
With the introduction of innovative products for communication and
entertainment, in the first six months of 2010, the Electronic Products
business sector grew according to plan by 74 percent to 14.9 million euros
(previous year 8.5 million euros). ‘New items in this sector, including a
tablet PC and a multimedia player for, among others, a German mobile telephone
and internet provider, are gaining a foothold in the market. We can be
justifiably proud of this’, says Mohr. However, increasing material
consumption, including electronic components and generally expensive production
start-ups, influenced the result in a negative way. At the close of the half-
year, the operating result was still minus at 2.5 million euros.
Notwithstanding this, as early as in the second quarter the loss dropped to 0.8
million euros compared with 1.7 million euros in the first quarter year. ‘Here,
again, the trend looks very promising’, says Mohr.

Medical with growth injection 2011
According to Mohr, the Medical business sector also developed according to
plan. With sales returns of 13.1 million euros (previous year: 16.0 million
euros), the sector fell back slightly in the first half year. Nonetheless the
second quarter year exceeded revenues of the first quarter by some 0.7 million
euros. Despite the considerable scope of weak-margined advance payments for
projects for the year 2011 the operating result (EBIT) of 1.1 million euros,
(previous year 2.3 million euros), remained clearly on the plus side. In the
second quarter the operating result grew by 0.7 million euros. `We are quite
content with the course of the first half year in the medical sector´,
confirmed Mohr.

According to Mohr, the three business sectors of the Balda Group invested a
great deal of effort for the future during the first half year. ‘We managed
various opportunities and risks successfully’, said Mohr. Balda will reap the
benefits already in 2010 and above all starting 2011. Despite the development
in the MobileCom business sector, that can be better determined in the course
of the third quarter, Balda is keeping up with the forecast of sales growth of
10 to 15 percent with the company´s operating result remaining unchanged in
comparison with the financial year of 2010.

* * *
Company Profile Balda AG
The Balda Group develops and produces complete plastic assemblies, electronic
products and products for the medical industry. The customers of Balda are
leaders in business from the mobile, entertainment and electronic
communications as well as pharmaceutical and medical technology markets.

The group has an international position with product sites in China, Malaysia
and Germany. A subsidiary in the United States serves North American customers
in product design and development. As part of a shareholding in a leading
manufacturer of touch screens in China, Balda participates in the dynamic touch
screen displays market.
* * *
This corporate news 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 corporate news 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.

Further inquiry note:
Clas Röhl
Tel.: +49 (0) 5734 922-2728
croehl@balda.de

Attachments with Announcement:
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resources.euroadhoc.com/us/ZWLHGwcS

issuer: Balda AG
Bergkirchener Str. 228
D-32549 Bad Oeynhausen
phone: +49 (0) 5734 9 22-0
FAX: +49 (0) 5734 922-2747
mail: info@balda.de
WWW: www.balda.de
sector: Semiconductors & active components
ISIN: DE0005215107
indexes: CDAX, Prime All Share
stockmarkets: regulated dealing/prime standard: Frankfurt, free trade: Berlin,
Hamburg, Stuttgart, Düsseldorf, München
language: English