Quarterly Report • Apr 11, 2008
Quarterly Report
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| Key figures development (in T€) | |||||
|---|---|---|---|---|---|
| 16.000 14.000 12.000 10.000 8.000 6.000 4.000 2.000 |
|||||
| 0 | Q3 2006/2007 Revenues |
Q3 2007/2008 EBIT Profit |
| Q1-3 2007/2008 Q1-3 2006/2007 | Change in % |
||
|---|---|---|---|
| Accounting standards IFRS/€ thousand |
Accounting standards IFRS/€ thousand |
||
| Revenues | 14,889 | 14,036 | +6.1% |
| of which outside Germany (in %) | 58.0 | 70.9 | - |
| Capital expenditure | 468 | 2,866 | - |
| R&D expenses | 1,153 | 1,068 | +8.0% |
| EBITDA | 2,219 | 2,035 | +9.0% |
| EBIT | 1,829 | 1,655 | +10.5% |
| EBIT margin (in %) | 12.3 | 11.8 | +4.2% |
| Profit before tax | 1,727 | 1,608 | +7.4% |
| Consolidated profit | 1,181 | 973 | +21.4% |
| Profit attributable to shareholders of CeoTronics AG |
1,162 | 968 | +20.0% |
| Gross cash flow | 1,571 | 1,353 | +16.1% |
| Cash and cash equivalents | 1,480 | 1,202 | +23.1% |
| Total assets | 17,077 | 17,194 | -0.7% |
| Equity | 12,286 | 11,615 | +5.8% |
| Equity ratio (in %) | 71.9 | 67.6 | +6.4% |
| Employees (as of Feb. 29, 2008) | 148 | 147 | - |
| Earnings per share (in €) | 0.18 | 0.15 | +20.0% |
| Gross cash flow per share (in €) | 0.24 | 0.21 | +14.3% |
| Key Group Figures 2 | |
|---|---|
| Letter from the Board of Management 4 | |
| Group Management Report • Our Market 5 • Business Developments 6 • Results of Operations 6 • Investments and Depreciation 7 • Net Assets and Financial Position 8 • Workforce Development 8 • CeoTronics' Shares 8 • Report on Risks and Opportunities up to May 31, 2008 9 • Report on Expected Developments 10 |
|
| Consolidated Financial Statements as of February 29, 2008 • Balance Sheet (IFRS) 11 • Income Statement (IFRS) 12 • Cash Flow Statement (IFRS) 13 • Statement of Changes in Equity (IFRS) 14 • Notes to the Consolidated Half-Yearly Financial Report 14 • Segment Reporting 15 • Executive Bodies 17 |
|
| ISO Surveillance Audit — Zero Deviations Again 18 | |
| Current Financial Calendar 18 |
Ladies and Gentlemen, Dear Shareholders,
CeoTronics recorded 9-month consolidated revenues of €14,889 thousand as of February 29, 2008, an increase of 6.1% year-on-year. This figure for the first nine months of the current fiscal year 2007/2008 set a new record in the Company's 23-year history.
Third-quarter revenues declined 8.2% year-on-year due to preparatory production work on the second batch of the "CT-DECT JetCom Systems" order placed by the German Armed Forces. This second large batch is due to be delivered and invoiced in May 2008.
The high order backlog increased significantly, rising 177.9% year-on-year as of February 29, 2008. The order backlog is also at a record level.
Market players' patience regarding the forthcoming switch to digital radio on the part of the security authorities and organizations in Germany has been tested for years. According to the latest market information, the first major invitations to tender can be expected in summer 2008.
CeoTronics will again present a number of interesting product innovations for security authorities and organizations, especially in the area of digital radio, at the GPEC exhibition in Munich from June 3 to 5, 2008, thus demonstrating its leadership in the areas of its performance and innovation.
The probably weakening economy will not have a negative impact on the Ceotronics Group's results for fiscal year 2007/2008. At most, the threat of a recession in the U.S.A. combined with the continued unfavorable U.S. dollar exchange rate could impact business development at CeoTronics U.S.A.
Our results as of February 29, 2008 and our very high order backlog strengthen our belief that consolidated revenues of approximately €21.0 million, EBIT of approximately €2.6 million, and profit of approximately €1.7 million are possible in fiscal year 2007/2008.
Rödermark, April 11, 2008
Thomas H. Günther Chairman of the Board of Management
CeoTronics specializes in high-end communications under difficult conditions, and develops, produces, and sells audio, video, and data communications solutions. Above all, our top-of-the-line products ensure clear and precise interaction: in noisy or hazardous areas, while wearing protective helmets or protective clothing, in explosion hazard areas, in undercover operations, and in hands-free communication.
In addition to traditional headsets and other communications systems for connecting to analog and digital radio systems, the broad range of products for extremely diverse applications meets the toughest demands and focuses in particular on end-to-end system solutions. For example, mobile or fixed digital radio networks that can be set up in seconds and used on the move.
In line with this, our customer base includes well-known companies in industry, the service sector and sports, airlines, airports, and ground handling service companies as well as firefighters, civil defense, and rescue services.
A particular strength of CeoTronics AG is the development and supply of custom communications solutions for the German State and Federal Police, customs authorities, and the army, navy, and air force. A wide range of systems is available in this field. Fully and partially covert communication systems as well as miniature radio cameras for the wireless transfer of video images during undercover investigations and for preserving evidence.
Economic growth in Europe in the first nine months of 2007/2008 was largely stable and satisfactory. However, the most important countries still have a long way to go in increasing their budgets, which have been reduced over the course of many years, i.e., adjusting them to the necessary investments and workforce requirements. Many industrial companies are again investing in new technologies that accelerate work processes, in increasing workplace safety through improved communication, and in new jobs. This development offers CeoTronics further potential for growth, provided it continues.
The threat posed by international terrorism around the globe has not waned. Accordingly, government security and law enforcement agencies must upgrade their equipment in order to maintain the highest degree of security for citizens, as well as for freedom and democracy.
Government security and law enforcement agencies in a number of priority European markets already began switching from analog to digital radio several years ago. As a result, CeoTronics' subsidiaries in Spain, France, and Switzerland recorded sustained annual revenue increases, in part even more than doubling their revenues.
Preparations are being made for the switch in a few other priority European markets. CeoTronics expects large investments in Germany on the part of security authorities and organizations (BOS — Behörden und Organisationen mit Sicherheitsaufgaben), the Armed Forces, firefighters, and industry. Those responsible for Germany's switch to digital radio at the federal and state levels are projecting 500,000 BOS digital radio users and plan to invest a total of over €4.5 billion.
Additionally, CeoTronics expects to see its revenues grow through the switch to digital radio in industry and by firefighters.
CeoTronics has already produced and sold over 35,000 systems for connection to the new digital TETRA/TETRAPOL radios. Our experience in adapting communications accessories to digital radios is a major competitive advantage.
Once again, CeoTronics can report positive figures for the first nine months of the fiscal year 2007/2008 (reporting date: February 29, 2008). Consolidated revenues rose by 6.1% year-on-year from €14,036 thousand to €14,889 thousand, a new record.
The improvement in revenues is due in particular to revenue growth at CeoTronics Germany of 37.4%, from €5,307 thousand to €7,290 thousand. This was mainly driven by the delivery and invoicing of the first batch of the major order from the German Armed Forces.
Expressed in euros, revenues also increased — in some cases substantially — at CeoTronics Switzerland (+73.5%), CeoTronics France (+16.3%), CeoTronics Poland (+84.9%), and CeoTronics U.S.A. (+7.1%). As expected, CeoTronics Spain (-40.7%) was unable to match the previous year's very high level of revenues, but continues to make the largest contribution to revenues after CeoTronics Germany.
On account of these developments, the share of revenues generated outside Germany fell to 58.0% in the first nine months of fiscal year 2007/2008 (previous year: 70.9%). The proportion accounted for by Germany increased correspondingly to 42.0% (previous year: 29.1%).
As of February 29, 2008, the order backlog was up 177.9% as against the prioryear period. This growth was driven in particular by CeoTronics Germany (+365.2%), CeoTronics Spain (+104.9%), and CeoTronics Poland (+709.2%) in addition to CeoTronics U.S.A. (+400.0%). The other companies recorded declines in their order backlog.
Following a renewed analysis of the location factors and a renewed calculation of the production cost advantage at the Lodz location, the Board of Management decided at the end of 2007 to discontinue production in Poland in favor of the company's German sites, and particularly Lutherstadt Eisleben. No employees had to be made redundant due to high employee turnover in Poland.
During the period under review, the EBITDA and EBIT figures reported in the first nine months of fiscal year 2006/2007 were increased by a further 9.0% and 10.5% respectively, reaching new record levels in each case. EBITDA for the period under review amounted to €2,219 thousand (previous year: €2,035 thousand), while EBIT was €1,829 thousand (previous year: €1,655 thousand).
Consolidated profit before tax in the first nine months of fiscal year 2007/2008 was €1,727 thousand, up 7.4% year-on-year (previous year: €1,608 thousand). The return on sales based on profit before tax rose to 11.6% (previous year: 11.5%).
Consolidated profit after tax was €1,181 thousand, up 21.4% year-on-year (previous year: €973 thousand). The tax rate fell from 39.5% to 31.6%, primarily due to the corporate tax reform in Germany. The return on sales based on profit after tax amounted to 7.9% (previous year: 6.9%).
The share of consolidated profit attributable to shareholders of the parent amounted to €1,162 thousand for the first nine months of fiscal year 2007/2008 (previous year: €968 thousand).
Earnings per share (after tax) were €0.18, up from €0.15 in the previous year. The share split at a ratio of 1:3 that took place on January 31, 2008 has already been accounted for in this calculation.
The cost of sales as a proportion of revenues increased to 50.2% (previous year: 49.5%) due to an increase in the cost of purchased components, especially for the major order for the German Armed Forces.
Operating expenses (excluding cost of materials) as a percentage of revenues were 16.2%, up slightly on the previous year (15.7%).
Selling and marketing expenses as a percentage of revenues amounted to 20.6% in the first nine months of fiscal year 2007/2008 (previous year: 21.9%). Absolute costs fell by 0.2% year-on-year.
In the first nine months of fiscal year 2007/2008, general and administrative costs decreased by 4.2% year-on-year, due among other things to decreased employee expenses. This represents 7.8% of revenues (previous year: 8.6%).
In research and development, additional costs for external testing laboratories, additional employees, and extensive development activities led to an increase in expenses of €85 thousand over the previous year, from €1,068 thousand to €1,153 thousand. At 7.7%, the ratio of research and development expenses to revenues remained virtually unchanged as against the previous year (7.6%).
CeoTronics U.S.A.'s business performance and results improved year-on-year. In the first 9 months of fiscal year 2007/2008, its operating loss before currency translation adjustments and interest amounted to USD 73 thousand (previous year operating loss of USD 125 thousand).
CeoTronics has prepared itself for the challenges of the future in good time by investing in employee capacity, markets, technologies, developments, and production technologies and processes.
Investments in the first nine months of fiscal year 2007/2008 totaled €468 thousand. Excluding the one-time acquisition of real estate in the prior year, investments increased by €192 thousand or 69.6%.
Gross cash flow for the period under review improved by €218 thousand, from €1,353 thousand to €1,571 thousand, breaking the previous record set in the same period of 2006/2007.
The Group's cash and cash equivalents increased by €278 thousand as against the prior-year period to €1,480 thousand.
Equity as of February 29, 2008 increased to €12,286 thousand (previous year: €11,615 thousand), while the equity ratio amounted to 71.9% (previous year: 67.6%).
The number of staff (including trainees) increased from 147 (previous year) to 148 as of February 29, 2008. The Group reallocated staff in favor of the German locations in Rödermark and Lutherstadt Eisleben (currently 133 staff compared with 129 staff at the prior-year reporting date). This reflects our clear commitment to Germany.
Additional job vacancies have been advertised in Germany but had not been filled at the print date.
CeoTronics' shares performed as follows in comparison to the indices in the period since June 1, 2007 (indexed):
The share split resolved at the General Meeting on November 2, 2007 was implemented on January 31, 2008 following its entry in the commercial register. Each no-par value share with a notional interest of €3.00 has been replaced by 3 no-par value shares with a notional interest of €1.00 each. This has increased the number of CeoTronics shares from 2,199,998 to 6,599,994.
CeoTronics shares performed well, bucking the generally negative trend on the international stock markets. CeoTronics AG's share price increased 35.1% in the period under review (June 1, 2007 to February 29, 2008), while the Technology All Share (-19.0%) and TecDAX (-15.2%) indices fell significantly.
The positive development of the Company's shares reflects in the CeoTronics Group's successful business development. Nonetheless, the shares have upside potential of about 33% until they reach the fair market price calculated by German Business Concepts GmbH.
The threat of a U.S. recession combined with the ongoing unfavorable U.S. dollar exchange rate could adversely affect business developments at CeoTronics U.S.A. If CeoTronics U.S.A. is unable to meet our revenue and earnings forecasts, a decrease in the goodwill reported on CeoTronics U.S.A.'s balance sheet and a write-down by CeoTronics AG (Germany) of the value of its investment in CeoTronics U.S.A. and/or of its receivables from CeoTronics U.S.A. cannot be ruled out.
Competitors, radio dealers, and importers could step up their efforts to penetrate CeoTronics' markets — especially Germany — using cheap goods from Asia in order to win tenders during the switch to digital radio. CeoTronics will not leave the premium segment and will attempt to keep price acceptance and appreciation for its products and systems at a high level by offering value. The Company will also make greater use of its more cost-effective production location in Lutherstadt Eisleben (Saxony-Anhalt, Germany).
CT video systems will play an even more important role in fighting crime and terrorism in future. The CeoTronics Group's long-term revenue growth will be boosted by authorities investing in monitoring areas at risk — especially those temporarily at risk — and in securing video evidence, as well as by CT-Video GmbH's new product innovations.
The development and marketing of new products ensure CeoTronics' market leadership and open up new markets — not only outside of the defined geographical priority markets in Europe and North America.
| Key figures 2006/2007 and 2007/2008 (planned), in T€ |
||||
|---|---|---|---|---|
| 25.000 | ||||
| 20.000 | ||||
| 15.000 | ||||
| 10.000 | ||||
| 5.000 | ||||
| 0 | ||||
| planned 2006/2007 2007/2008 |
||||
| Revenues EBIT Profit |
In addition to the high order backlog as of February 29, 2008, CeoTronics is pleased with the orders from Germany and abroad it has received up to the print date, and with the projects currently being negotiated or prepared for fiscal year 2007/2008.
In fiscal year 2007/2008, CeoTronics is aiming to:
CeoTronics will continue to profit from the switch to digital radio in Germany and Europe in the coming fiscal years, as well as from greater investment in domestic and foreign security.
Rödermark, April 11, 2008
CeoTronics AG
Thomas H. Günther Chairman of the Board of Management
Berthold Hemer Deputy Chairman of the Board of Management
Günther Thoma Chief Operating Officer
| Assets | Quarterly report | Annual report |
|---|---|---|
| (closing date of the current | (closing date of last annual | |
| quarter) | report) | |
| February 29, 2008 | May 31, 2007 | |
| € thousand | € thousand | |
| Current assets | ||
| Cash and cash equivalents | 1,480 | 783 |
| Trade receivables | 2,721 | 4,886 |
| Inventories | 4,462 | 3,861 |
| Other current assets | 692 | 241 |
| Total current assets | 9,355 | |
| Noncurrent assets | ||
| Property, plant, and equipment | 5,743 | 5,740 |
| Intangible assets | 270 | 194 |
| Goodwill | 1,214 | 1,308 |
| Deferred tax assets | 495 | 520 |
| Total noncurrent assets | 7,722 | 7,762 |
| Total assets | 17,077 | 17,533 |
| Equity and Liabilities | Quarterly report | Annual report |
|---|---|---|
| (closing date of the current | (closing date of last annual | |
| quarter) | report) | |
| February 29, 2008 | May 31, 2007 | |
| € thousand | € thousand | |
| Current liabilities | ||
| Current financial liabilities | 175 | 291 |
| Trade payables | 569 | 814 |
| Advance payments received | 143 | 208 |
| Provisions | 883 | 1,058 |
| Current tax payables | 454 | 816 |
| Other current liabilities | 388 | 336 |
| Total current liabilities | 2,612 | 3,523 |
| Noncurrent liabilities | ||
| Noncurrent financial liabilities | 2,179 | 2,305 |
| Total noncurrent liabilities | 2,179 | 2,305 |
| Equity | ||
| Subscribed capital | 6,600 | 6,600 |
| Capital reserves | 4,471 | 4,471 |
| Retained earnings | 16 | 16 |
| Cumulative other recognized income and expense | 25 | -36 |
| Net retained profit | 1,111 | 609 |
| Equity attributable to shareholders of CeoTronics AG | 12,223 | 11,660 |
| Minority interest | 63 | 45 |
| Total equity | 12,286 | 11,705 |
| Total equity and liabilities | 17,077 | 17,533 |
| Income Statement | Quarterly report | Quarterly report | Year-to-date | Year-to-date |
|---|---|---|---|---|
| (current quarter) | (comparative quarter | (current fiscal year) | (comparative period | |
| of previous year) | of previous year) | |||
| December 1, 2007 - | June 1, 2007 - | |||
| February 29, 2008 | December 1, 2006 - | February | June 1, 2006 - | |
| February 28, 2007 | 29, 2008 | February 28, 2007 | ||
| € thousand | € thousand | € thousand | € thousand | |
| Revenues | 4,321 | 4,705 | 14,889 | 14,036 |
| Cost of sales | -2,164 | -2,318 | -7,472 | -6,948 |
| Gross profit | 2,157 | 2,387 | 7,417 | 7,088 |
| Selling and marketing expenses | -958 | -1,107 | -3,065 | -3,071 |
| General and administrative expenses | -392 | -380 | -1,162 | -1,213 |
| Research and development expenses Other operating income and expenses |
-409 -95 |
-419 -82 |
-1,153 -208 |
-1,068 -67 |
| Impairment of goodwill | 0 | 0 | 0 | -14 |
| Operating profit (EBIT) | 303 | 399 | 1,829 | 1,655 |
| Interest income/expense | -39 | -32 | -102 | -47 |
| Profit before tax | 264 | 367 | 1,727 | 1,608 |
| Income tax expense | -57 | -110 | -546 | -635 |
| Consolidated profit | 207 | 257 | 1,181 | 973 |
| Consolidated profit attributable to: | ||||
| Minority interest | 23 | 1 | 19 | 5 |
| Shareholders of CeoTronics AG | 184 | 256 | 1,162 | 968 |
| Earnings per share (basic) in € | 0.03 | 0.04 | 0.18 | 0.15 |
| Earnings per share (diluted) in € | 0.03 | 0.04 | 0.18 | 0.15 |
| Weighted average shares outstanding (basic) | 6,599,994 | 2,199,998 | 6,599,994 | 2,199,998 |
| Weighted average shares outstanding (diluted) | 6,599,994 | 2,199,998 | 6,599,994 | 2,199,998 |
| Cash Flow Statement | Year-to-date | Year-to-date |
|---|---|---|
| (current fiscal year) | (comparative period of previous | |
| year) | ||
| June 1, 2007 - February 29, 2008 | June 1, 2006 - February 28, 2007 | |
| € thousand | € thousand | |
| Cash flow from operating activities | ||
| Profit before tax | 1,727 | 1,608 |
| Income tax expense | -546 | -635 |
| Consolidated profit | 1,181 | 973 |
| Depreciation, amortization, and impairment losses | 390 | 380 |
| Gross cash flow | 1,571 | 1,353 |
| Changes in assets and liabilities | ||
| Change in trade receivables | 2,165 | -1,239 |
| Change in inventories | -601 | -117 |
| Change in other assets | -451 | -429 |
| Change in trade payables | -245 | -97 |
| Change in advance payments received | -65 | -146 |
| Change in other provisions | -175 | 414 |
| Change in tax payables | -362 | 421 |
| Change in other current liabilities | 52 | 132 |
| Change in deferred tax assets | 25 | 98 |
| Total changes in assets and liabilities | 343 | -963 |
| Net cash provided by operating activities | 1,914 | 390 |
| Cash flow from investing activities | ||
| Payments to acquire intangible assets | -132 | -42 |
| Payments to acquire property, plant, and equipment | -336 | -2,826 |
| Change in foreign currency differences | 93 | 27 |
| Disposal of noncurrent assets (net carrying amounts) | 0 | 51 |
| Net cash used in investing activities | -375 | -2,790 |
| Cash flow from financing activities | ||
| Change in current financial liabilities | -116 | 0 |
| Change in noncurrent financial liabilities | -126 | 1,927 |
| Dividend payment to minority interest | 0 | -12 |
| Dividend payment to shareholders of CeoTronics AG | -660 | -660 |
| Net cash used in financing activities | -902 | 1,255 |
| Change in cash and cash equivalents | 637 | -1,145 |
| Effect of exchange rate changes on cash and cash equivalents | 60 | -29 |
| Cash and cash equivalents at beginning of period | 783 | 2,376 |
| Cash and cash equivalents at end of period | 1,480 | 1,202 |
| Equity attributable to shareholders of CeoTronics AG | ||||||||
|---|---|---|---|---|---|---|---|---|
| Subscribed capital |
Capital reserves |
Retained earnings |
Net retained profit/net accumulated losses |
Cumulative other recognized income and expense |
Total | Minority interest |
Total equity | |
| € thousand | € thousand | € thousand | € thousand | € thousand | € thousand | € thousand | ||
| Current year | ||||||||
| Balance at May 31, 2007 | 6,600 | 4,471 | 16 | 609 | -36 | 11,660 | 45 | 11,705 |
| Consolidated profit | 1,162 | 1,162 | 19 | 1,181 | ||||
| Dividend distribution | -660 | -660 | -660 | |||||
| Currency translation adjustments | 61 | 61 | -1 | 60 | ||||
| Change in minority interest | 0 | 0 | ||||||
| Balance at February 29, 2008 | 6,600 | 4,471 | 16 | 1,111 | 25 | 12,223 | 63 | 12,286 |
| Previous year's figures for comparison |
||||||||
| Balance at May 31, 2006 | 6,600 | 4,471 | 16 | 226 | -13 | 11,300 | 43 | 11,343 |
| Consolidated profit | 968 | 968 | 5 | 973 | ||||
| Dividend distribution | -660 | -660 | -12 | -672 | ||||
| Currency translation adjustments | -29 | -29 | -29 | |||||
| Change in minority interest | -13 | -13 | 13 | 0 | ||||
| Balance at February 28, 2007 | 6,600 | 4,471 | 16 | 521 | -42 | 11,566 | 49 | 11,615 |
The equity ratio of the CeoTronics Group was 71.9% as of February 29, 2008 (previous year: 67.6%).
There were no material changes to equity compared with the last annual financial statements.
The unaudited consolidated quarterly financial report of CeoTronics AG as of February 29, 2008 was prepared in accordance with the International Financial Reporting Standards (IFRSs). This interim report complies with IAS 34 Interim Financial Reporting.
The quarterly financial report was prepared using the accounting, measurement, and consolidation principles applied in the preparation of the consolidated annual financial statements as of May 31, 2007. Further details can be found in the Annual Report for fiscal year 2006/2007.
There were no changes in the consolidated Group structure in the first nine months of fiscal year 2007/2008.
The following companies are included in the consolidated financial statements:
CeoTronics AG (Rotkreuz, Switzerland), CeoTronics S.A.R.L. (Brie Comte Robert, France), CeoTronics Ltd. (Aberdeen, United Kingdom), CeoTronics Inc. (Virginia Beach, U.S.A.) , CeoTronics S.L (Madrid, Spain), CT-Video GmbH (Lutherstadt Eisleben, Germany), CeoTronics Sp. z o.o. (Lodz, Poland).
The subsidiary AACOM-CeoTronics Sp. z o.o. (Lodz, Poland) was renamed CeoTronics Sp. z o.o. as of June 1, 2007.
Subsidiaries in which the parent directly or indirectly holds the majority of shares and hence of the voting power are consolidated in accordance with the principles of acquisition accounting under IFRSs.
We account for the 25% minority interest in CeoTronics Sp.z o.o. by deducting the minority interest and the resulting effects on profit or loss within equity in the balance sheet, in the income statement, the cash flow statement, and the statement of changes in equity.
All options on virtual shares outstanding at the end of fiscal year 2006/2007 were exercised on June 4, 2007. The exercise price was €11.84. €9.72 was paid as a cash settlement per option for the fourth stock option plan, and €8.08 per option for the fifth stock option plan. A total of €107 thousand was paid out to entitled employees. Provisions for outstanding options amounted to €64 thousand at the end of fiscal year 2006/2007.
€0.30 per share was distributed in the first half of the current fiscal year in accordance with the resolution by the General Meeting on November 2, 2007.
The Company assesses the performance of the subsidiaries on the basis of their pre-tax profit. The accounting and reporting principles used for regional reporting comply with the group accounting principles. The subsidiaries in the individual countries are legally independent and have their own management teams.
The Company's product groups are comparable in terms of both the production process used and the marketing methods. Internal and external reporting primarily follows geographic criteria.
The information below is presented by region.
Revenues for the first nine months of 2007/2008 and 2006/2007 are attributable as follows:
Country of origin (primary segment):
| Q1-3 2007/2008 | Q1-3 2006/2007 | |
|---|---|---|
| Revenues | € thousand | € thousand |
| Germany | 8,582 | 6,750 |
| Rest of Europe | 6,022 | 7,020 |
| Rest of world | 285 | 266 |
| Third-party revenues | 14,889 | 14,036 |
By customer country (secondary segment):
| Q1-3 2007/2008 | Q1-3 2006/2007 | |
|---|---|---|
| Revenues | € thousand | € thousand |
| Germany | 6,250 | 4,082 |
| Rest of Europe | 8,318 | 9,557 |
| Rest of world | 321 | 397 |
| Third-party revenues | 14,889 | 14,036 |
The profit or loss for the first nine months of 2007/2008 and 2006/2007 is attributable as follows to the subsidiaries in the various regions (primary segment):
| Q1-3 2007/2008 | Q1-3 2006/2007 | |
|---|---|---|
| Profit/loss | € thousand | € thousand |
| Germany | 766 | 513 |
| Rest of Europe | 659 | 697 |
| Rest of world | -244 | -237 |
| Consolidated profit | 1,181 | 973 |
Segment assets are attributable as follows to the subsidiaries in the various regions (primary segment) as of February 29, 2008 and February 28, 2007:
| February 29, 2008 | February 28, 2007 | |
|---|---|---|
| Segment assets | € thousand | € thousand |
| Germany | 11,543 | 10,579 |
| Rest of Europe | 3,973 | 5,022 |
| Rest of world | 1,561 | 1,593 |
| Total segment assets | 17,077 | 17,194 |
Segment liabilities are attributable as follows to the subsidiaries in the various regions (primary segment) as of February 29, 2008 and February 28, 2007:
| February 29, 2008 | February 28, 2007 | |
|---|---|---|
| Segment liabilities | € thousand | € thousand |
| Germany | 4,067 | 4,633 |
| Rest of Europe | 682 | 908 |
| Rest of world | 43 | 38 |
| Total segment liabilities | 4,792 | 5,579 |
Noncurrent assets are attributable as follows to the subsidiaries in the various regions (primary segment) as of February 29, 2008 and February 28, 2007:
| February 29, 2008 | February 28, 2007 | |
|---|---|---|
| Noncurrent assets | € thousand | € thousand |
| Germany | 5,905 | 5,746 |
| Rest of Europe | 564 | 588 |
| Rest of world | 758 | 882 |
| Total noncurrent assets | 7,227 | 7,216 |
Investments in the first nine months of 2007/2008 and 2006/2007 are attributable as follows to the subsidiaries in the various regions (primary segment):
| Q1-3 2007/2008 | Q1-3 2006/2007 | |
|---|---|---|
| Investments | € thousand | € thousand |
| Germany | 445 | 2,761 |
| Rest of Europe | 23 | 105 |
| Rest of world | 0 | 0 |
| Total investments | 468 | 2,866 |
Depreciation, amortization, and impairment losses are attributable as follows to the subsidiaries in the various regions (primary segment) in the first nine months of 2007/2008 and 2006/2007:
| Q1-3 2007/2008 | Q1-3 2006/2007 | |
|---|---|---|
| Depreciation, amortization, and impairment losses | € thousand | € thousand |
| Germany | 358 | 327 |
| Rest of Europe | 28 | 38 |
| Rest of world | 4 | 15 |
| Total depreciation, amortization, and impairment losses | 390 | 380 |
There were no changes in the Company's executive bodies in the first nine months of 2007/2008.
| CeoTronics shares | |||
|---|---|---|---|
| (ISIN DE0005407407/WKN 540740) | |||
| (quantity) | |||
| Board of Management | |||
| Chairman | Thomas H. Günther | 28,494 | |
| Chief Technology Officer | Berthold Hemer | 513,150 | |
| Chief Operating Officer | Günther Thoma | 18,066 | |
| Supervisory Board | |||
| Chairman | Hans-Dieter Günther | 1,113,600 | |
| Deputy Chairman | Horst Schöppner | 655,410 | |
| Member of Supervisory Board | Stephan Haack | 0 |
The total number of CeoTronics AG shares at the reporting date amounted to 6,599,994.
No significant related party transactions were conducted in the first nine months of 2007/2008.
Legal Notice:
This quarterly financial report contains forward-looking statements that reflect the current views of CeoTronics AG's Board of Management. These statements are based on the Company's current plans, estimates, projections, and expectations and are therefore subject to risks and uncertainties that could cause actual results to differ from expected results. The forward-looking statements are only valid at the time of publication of this quarterly report and cannot be guaranteed. CeoTronics AG assumes no obligation to the public to update or correct forward-looking statements. This does not affect the Company's obligation to fulfill its information and reporting duties.
CeoTronics passed the ISO audit conducted by TÜV Rheinland with zero deviations for the second time in a row. This audit also includes the ATEX and KBA certifications. ATEX certification affects CeoTronics as a manufacturer of products for use in explosion hazard areas, such as the pharmaceutical and petrochemical industries. Certification by the Kraftfahrtbundesamt (KBA — German Federal Motor Transport Authority) is necessary because many CeoTronics products are intended for use in or on vehicles. ISO 9001 is a globally recognized, established, and comparable standard that describes the requirements for quality management systems that a company must comply with. CeoTronics undergoes a comprehensive renewal audit every three years; a regular surveillance audit by TÜV-Rheinland is performed in the intervening years.
Participation in the 5th MKK (Munich Capital Market Conference) Wednesday, May 7, 2008
End of fiscal year 2007/2008 Saturday, May 31, 2008
Ad hoc disclosure on preliminary revenues/order backlog as of the end of fiscal year 2007/2008 Beginning of June 2008
Annual report 2007/2008 Friday, August 14, 2008
Annual earnings press conference 2008 Thursday, August 28, 2008
Ad hoc disclosure on preliminary revenues/order backlog as of the end of Q1 2008/2009 Beginning of September 2008
General Meeting 2007/2008 Friday, November 7, 2008
Analyst meeting 2008 Thursday, August 28, 2008
Report on Q1 2008/2009 Friday, October 10, 2008
CeoTronics AG 63322 Rödermark (Germany) Adam-Opel-Str. 6 Tel. +49 6074 8751-722 Fax +49 6074 8751-720 E-mail: [email protected]
www.ceotronics.com
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