Kapsch TrafficCom AG

Earnings Release • Nov 29, 2007

Report on fi rst half-year of fi scal year 2007/08.

Highlights

Operational performance	Operating results	Operational outlook
First-time order in New Zealand worth about EUR 10.7m	Adjusted EBIT in FY08-Q2 up 37 % compared to FY07-Q2	Successful prequalifi cation for nationwide truck tolling system in Hungary
Orders in South Africa and Chile	SEC segment revenues in FY08-Q2 up 75 % compared to FY07-Q2	Start of prequalifi cation for nationwide truck tolling system in Slovakia
First half sales of nearly 1.0 million on-board units (OBUs) almost match total for whole of previous fi scal year	Net debt of EUR 12.5m as of 31 March 2007 transformed into net assets of EUR 27.1m as of 30 September 2007	Extension of nationwide truck tolling system in Czech Republic under negotiation

Kapsch Traffi cCom Key Figures 1)

Operating Figures (cumulative)		FY08-Q2	FY07-Q2	+/- %	FY07
Revenues	in million EUR	68.8	72.6	-5 %	198.6
EBITDA 2)	in million EUR	9.6	7.6	26 %	30.8
EBIT	in million EUR	6.7	5.6	21 %	26.9
EBIT adjusted2)	in million EUR	7.6	5.6	37 %	26.9
Profi t before tax	in million EUR	8.6	5.8	48 %	27.0
Profi t after tax	in million EUR	6.3	4.3	47 %	20.3
Earnings per share 3)	in EUR	0.47	0.44	7 %	2.04
Earnings per share 3), adjusted 2)	in EUR	0.54	0.44	24 %	2.04
Free Cashfl ow 4)	in million EUR	-21.3	-4.1	>100 %	-4.3
Capital Expenditure 5)	in million EUR	-2.0	-1.2	61 %	-2.3

Financial Ratios		30 September 2007	31 March 2007	+/- %
Total Equity 6)	in million EUR	109.1	45.6	>100 %
Net assets (+) /-debt (-) 7)	in million EUR	27.1	-12.5	<-100 %
Capital Employed	in million EUR	140.4	78.2	79 %
Total Assets	in million EUR	286.0	227.2	26 %
Employees as of 30 September 2007		781	774	1 %

Key Capital Market Data 8)		FY08-Q2		Information on the Share/Financial Calendar
Offer price per share on 25 June 2007	in EUR	32.0		Stock exchange/ISIN Vienna, Prime Market/AT000KAPSCH9
Number of shares as of 30 Sep 2007	in million	12.2	Trading Symbol	KTCG, (Reuters) KTCG.VI (Bloomberg) KTCG AV
Free fl oat as of 30 Sep 2007	in %	30.3	27 February 2008	Interim Financial Report FY08-Q3 (IAS34)
Closing price as of 30 Sep 2007	in EUR	38.5	18 June 2008	Preliminary Results FY08
Market Capitalization as of 30 Sep 2007	in million EUR	469.6	10 July 2008	Annual General Meeting

1) only continuing operations

2) adjusted by non-recurring items (see item 11 under notes in condensed consolidated interim fi nancial information as of 30 September 2007)

3) earnings per share in FY08-Q2 related to 12.2 million shares, in FY07-Q2 related to 10.0 million shares

4) operating cashfl ow minus capital expenditure from operations (excl. acquisitions and securities) 5) capital expenditure from operations (excl. acquisitions and securities)

6) incl. minority interests

7) excl. long-therm securities (see item 6 under notes in condensed consolidated interim fi nancial information as of 30 September 2007)

8) for additional capital market data see page 6

RSP – Road Solutions Projects

SEC – Services, System Extensions, Components Sales OTH – Others

CEE – Central & Eastern Europe (incl. Austria) Americas – USA, Canada, Latin America

Letter from the Chief Executive Offi cer.

Georg Kapsch, Chief Executive Offi cer Erwin Toplak, Chief Operating Offi cer

Dear shareholders,

I am delighted to report that Kapsch Traffi cCom recorded adjusted EBIT of EUR 7.6 million for the fi rst half of the current fi scal year, up 37 % compared to the same period of the previous fi scal year. Profi t before tax was up even more, by 48 % to EUR 8.6 million.

The performance of the SEC (Services, System Extensions, Components Sales) segment was particularly strong, with a 75 % jump in revenues to EUR 50.4 million. This was primarily attributable to recurring revenues from the technical and commercial operation of the nationwide truck tolling system in the Czech Republic and a high volume of components sales. First half sales of nearly 1.0 million on-board units (OBUs) are almost at the same level as those for the whole of the previous fi scal year.

With respect to the consolidated balance sheet, I would like to point out that net debt of EUR 12.5 million as of 31 March 2007 has been transformed into net assets of EUR 27.1 million as of 30 September 2007, due in part to our successful initial public offering. Total equity during the same period increased by 139 %, reaching EUR 109.1 million as of 30 September 2007 (31 March 2007: EUR 45.6 million) with an equity ratio of 38 %.

Adjusted EBIT in FY08-Q2 up 37 % compared to FY07-Q2

SEC segment revenues in FY08-Q2 up 75 % compared to FY07-Q2

First half sales of nearly 1.0m onboard units (OBUs) almost match total for whole of previous fi scal year

Net debt of EUR 12.5m as of 31 March 2007 transformed into net assets of EUR 27.1m as of 30 September 2007

A very pleasant addition was made to our list of reference customers: New Zealand is the latest country to decide for its fi rst fully electronic tolling system worth about EUR 10.7 million. Kapsch Traffi cCom New Zealand Ltd. – a subsidiary of Kapsch Traffi cCom AB, Sweden – has been contracted to implement a multi-lane free-fl ow system. New Zealand now joins its neighbour Australia – a leading country in the introduction of fully electronic road tolling systems – as a user of road traffi c telematics solutions from Kapsch Traffi cCom.

Our subsidiary Kapsch Traffi cCom Südafrika (Pty) Ltd. has already won its fi rst contract just a few months after its formation in March: Tolcon Lehumo (Pty) Ltd. placed an order with the South African company for the development, construction and turnkey implementation of a road tolling system worth more than EUR 1.0 million. Kapsch Traffi cCom South Africa will be responsible for the maintenance upon completion. Massive demand for road traffi c telematics solutions in South Africa is not just driven by the 2010 FIFA World Cup. We have identifi ed considerable potential in the country, which we aim to make the most of. To this end, we strengthened our presence in the country in October 2007 – after the end of the period covered by this interim report – with a joint venture with South African company Traffi c Management Technologies (TMT). TMT is a leading supplier of intelligent traffi c management systems. Its systems are customized to local needs, and are the perfect complement to Kapsch Traffi cCom's portfolio of products and solutions. The joint venture, in which each partner holds an 50 % interest, will operate as ETC (Pty) Ltd. (Electronic Tolling Coordination and Operations).

Kapsch Traffi cCom was successful in Chile for the fi fth time, winning a contract from Sociedad Concesionaria Túnel San Cristóbal S.A. (a Hochtief and Dragados joint venture) for the development, construction and turnkey implementation of a fully electronic road tolling system worth about EUR 1.4 million. Once it has been implemented, Kapsch Traffi cCom will continue to be responsible for the maintenance of the system.

There is more good news from closer to home, too. We prequalifi ed to tender for a nationwide truck tolling system in Hungary. The prequalifi cation for a nationwide truck tolling system in Slovakia has also begun.

For the Czech Republic, the tolling stations on those "fi rst class roads" were defi ned which will go into operation on 1 January 2008.

Assuming that economies worldwide continue to perform satisfactorily, and given the growing interest around the world in tolling systems and road traffi c telematics, we take a thoroughly optimistic view of our future prospects.

With all best wishes

Georg Kapsch

First-time order in New Zealand worth about EUR 10.7m

Order in South Africa

Order in Chile

Successful prequalifi cation for nationwide truck tolling system in Hungary; Start of prequalifi cation for nationwide truck tolling system in Slovakia

Expansion of nationwide truck tolling system in the Czech Republic in negotiation

Looking forward with optimism

Disclaimer

Certain statements contained in this report constitute "forward-looking statements." These statements, which contain the words "believe", "intend", "expect" and words of similar meaning, refl ect management's beliefs and expectations and are subject to risks and uncertainties that may cause actual results to differ materially. As a result, readers are cautioned not to place undue reliance on such forward-looking statements. The company disclaims any obligation to publicly announce the result of any revisions to the forward-looking statements made herein, except where it would be required to do so under applicable law.

The Kapsch Traffi cCom Share.

The Kapsch Traffi cCom AG share continued its initial upward trend, reaching an intraday high of EUR 43.75, compared with the offer price per share of EUR 32.00 on 25 June 2007. As of 30 September 2007, the share price was EUR 38.49, up 2.91 %, compared to the closing price as of 30 June (EUR 36.51). The share price signifi cantly outperformed the ATX Prime, which declined by approximately 10.7 % during the same period. Since the initial public offering, the price of the share has climbed 20.3 %, as of 30 September 2007, while the ATX Prime was down about 10 %.

Based on a closing price of EUR 38.49 per share as of 30 September 2007 and the number of outstanding shares in circulation unchanged at 12.2 million, Kapsch Traffi cCom's market capitalization as of the end of the fi scal half year was EUR 469.6m. The ownership structure remained unchanged during the period under review: 30.3 % of the shares were in free fl oat, whereas the remaining 69.7 % continued to be held by KAPSCH-Group Beteiligungs GmbH. Schroder Investment Management Limited informed us, that as of 15 August 2007 it held 5.12 % of the Kapsch Traffi cCom AG voting rights.

Share price development in FY08-Q2 and since IPO (Kapsch Traffi cCom AG vs. ATX Prime)

1) Offer price on 25 June 2007 and closing value for ATX Prime on 25 June 2007, each indexed to 100 2) Closing price as of 30 June 2007 and closing value for ATX Prime as of 30 June 2007, each indexed to 100

Capital Market Data in FY08-Q2 and since IPO
Offer price per share on 25 June 2007	in EUR	32.00	Highest closing price 4 July 2007	in EUR	42.00
Closing price as at 30 June 2007	in EUR	36.51	Lowest closing price 17 August 2007	in EUR	35.50
Closing price as at 30 September 2007	in EUR	38.49	Intraday high 4 July 2007	in EUR	43.75
Performance in FY08-Q2	in %	2.91	Intraday low 17 August 2007	in EUR	33.00
Performance since IPO	in %	20.30	Average daily trading volume 1)	in shares	47,783
Performance of ATX Prime in FY08-Q2	in %	-10.7
Performance of ATX Prime since
Kapsch Traffi cCom IPO	in %	-10	1) Double counting

Condensed consolidated interim fi nancial information 30 Sep 2007 (unaudited).

Kapsch Traffi cCom AG – Consolidated income statement

All amounts in TEUR

	Note	FY08-Q2	FY07-Q2	FY08-Q2 cum.	FY07-Q2 cum.
Continuing Operations
REVENUES	(4)	34,956	45,312	68,799	72,636
Other operating income		208	-59	694	-56
Changes in fi nished and unfi nished goods and work
in progress		5,582	999	10,932	937
Cost of material and other production services		-20,305	-29,133	-38,160	-39,438
Staff costs		-10,298	-8,569	-21,478	-17,769
Amortisation of intangible assets and depreciation of
property, plant and equipment		-1,021	-1,079	-1,946	-2,045
Other operating expenses		-6,338	-4,876	-12,111	-8,685
Operating result	(4,11)	2,784	2,595	6,730	5,580
Finance income		2,112	350	4,156	801
Finance costs		386	270	2,253	576
Financial result		1,727	81	1,903	225
Result from associates		101	0	-31	0
Profi t before tax		4,611	2,675	8,602	5,805
Income taxes	(12)	-1,207	-629	-2,308	-1,530
Profi t after tax for the period from continuing operations		3,405	2,047	6,294	4,274
Discontinued Operations
Result from discontinued operations	(15)	0	127	0	-304
Profi t for the period		3,405	2,173	6,294	3,971
Attributable to:		2,929	2,204	5,680	4,063
Equity holders of the Company		475	-31	614	-93
Minority interest		3,405	2,173	6,294	3,971
Earnings per share for profi t from continuing
operations attributable to the equity holders of the
company (expressed in euro per share)	(13)	0.24	0.21	0.47	0.44

Earnings per share in FY08-Q2 related to 12,2 million shares; in FY07-Q2 related to 10,0 million shares. The notes on the following pages form an integral part of this condensed consolidated interim fi nancial information.

Kapsch TrafficCom AG – Consolidated balance sheet

All amounts in TEUR

ASSETS Note	30 Sep 2007	31 March 2007
Non-current assets
Property, plant and equipment (5)	6,411	6,148
Intangible assets (5)	8,613	9,269
Shares in associates	223	254
Other financial assets	3,585	3,619
Other non-current assets	61,584	81,694
Deferred tax assets	8,777	8,660
	89,193	109,644
Current assets
Inventories	33,392	19,900
Trade receivables and other assets	104,948	77,460
Other current fi nancial assets (6)	29,770	0
Cash and cash equivalents	28,651	20,183
	196,761	117,543
TOTAL ASSETS	285,954	227,187
EQUITY AND LIABILITIES
Equity
Share capital (7)	12,200	10,000
Capital Reserve	70,705	5,325
Currency translation differences	778	914
Unrealised gains/losses from securities	-345	-114
Consolidated profit/loss and other reserves	24,810	29,130
	108,147	45,256
Minority interests	977	340
Total Equity	109,124	45,595
Non-current liabilities
Non-current financial liabilities (8)	16,262	10,523
Liabilities from post-employment benefits to employees (9)	14,334	14,552
Non-current provisions (10)	1,634	1,684
Other non-current liabilities	28,806	26,886
Deferred tax liability	2,294	2,466
	63,330	56,111
Current liabilities
Trade and other current payables	40,342	40,524
Other liabilities and deferred income	39,041	42,249
Current tax payables	6,567	5,123
Current financial liabilities (8)	15,033	22,124
Current provisions (10)	12,517	15,462
	113,500	125,481
Total Liabilities	176,830	181,592
TOTAL EQUITY AND LIABILITIES	285,954	227,187

The notes on the following pages form an integral part of this condensed consolidated interim fi nancial information.

Kapsch TrafficCom AG – Consolidated statement of changes in equity all amount in TEUR

Attributable to equity holders of the Company
	Share capital	Capital reserve	Currency translation differences	Fair value valuation reserve	Consoli dated retained earnings & other reserves	Minority Interest	Total equity
Carrying amount at 1 April 2007	10,000	5,325	914	-114	29,130	340	45,595
Currency translation differences			-137			23	-114
Fair value gains/losses realised (net of tax)				-231			-231
Net income/expenses recognized directly in equity			-137	-231		23	-345
Increase in share capital due to IPO	2,200						2,200
Increase in capital reserve due to IPO less IPO costs		65,379					65,379
Dividend relating to 2006/07					-10,000		-10,000
Profi t for the year					5,680	614	6,294
Carrying amount at 30 Sep 2007	12,200	70,705	778	-345	24,810	977	109,124
Carrying amount at 1 April 2006	10,000	5,325	1,272	-57	21,722	789	39,051
Currency translation differences			-88			-4	-92
Fair value gains/losses realised
Fair value gains/losses realised (net of tax)				28			28
Net income/expenses recognized
directly in equity			-88	28		-4	-64
Acquisition of minority interest					-716	-280	-996
Dividend relating to 2005/06					-10,000	0	-10,000
Profi t for the year					4,063	-93	3,971
Carrying amount at 30 Sep 2007	10,000	5,325	1,184	-30	15,069	413	31,962

The notes on the following pages form an integral part of this condensed consolidated interim fi nancial information.

Kapsch TrafficCom AG – Consolidated cash flow statement

all amount in TEUR

Cash fl ow from operating activities	FY08-Q2	FY07-Q2	FY08-Q2 cum.	FY07-Q2 cum.
Operating result	2,784	2,595	6,730	5,580
Adjustments for non-cash items and other reconciliations
Depreciation and amortisation	1,021	1,079	1,946	2,045
Increase/decrease in obligations for post-employment benefi ts	-139	-60	-218	-24
Change in other non-current liabilities and provisions	-52	-17	-51	33
Increase/decrease in non-current trade receivables	20,620	0	20,110	0
Increase/decrease in non-current trade payables	2,189	20	1,920	104
Other (net)	45	78	47	-705
	26,468	3,695	30,483	7,032
Changes in net current assets
Increase/decrease in trade receivables and other assets	-34,621	-26,787	-27,488	-24,891
Increase/decrease in inventories	-8,173	-2,182	-13,492	-3,825
Increase/decrease in trade payables and other current payables	5,234	19,761	-3,389	19,580
Increase/decrease in current provisions	-68	-52	-2,944	-49
	-37,628	-9,260	-47,314	-9,186
Cash generated from operations	-11,160	-5,565	-16,830	-2,154
Interest received	451	231	607	490
Interest payments	-1,138	-263	-1,952	-464
Payments/refund of income taxes	-1,203	-712	-1,153	96
Net cash fl ow from operating activities from
continuing operations	-13,050	-6,309	-19,329	-2,032
Net cash fl ow from operating activities from
discontinued operations	0	-1,214	0	-831
Net cash fl ow from operating activities – total	-13,050	-7,523	-19,329	-2,863
Cash fl ow used in investing activities
Purchases of property, plant and equipment	-473	-611	-1,855	-935
Purchases of non-current intangible assets	-83	-258	-145	-306
Purchases of securities and shares	-30,000	-4	-30,000	-4
Payments for acquisition of companies
(less cash and cash equivalents of these companies)	-36	0	-36	-1,880
Payments for acquisition of minority interest	0	0	0	-996
Proceeds from disposal of property, plant and equipment and
intangible assets	0	0	54	0
Proceeds from sale of securities	96	1	553	196
Net cash fl ow used in investing activities from
continuing operations	0	0	0	126
Net cash fl ow used in investing activities
from continuing operations	-30,497	-872	-31,428	-3,800
Net cash fl ow used in investing activities from discontinued operations	0	460	0	270
Net cash fl ow used in investing activities – total	-30,497	-413	-31,428	-3,530

	FY08-Q2	FY07-Q2	FY08-Q2 cum.	FY07-Q2 cum.
Cash fl ow used in fi nancing activities
Contributions from shareholders	0	0	0	0
Increase in share capital	0	0	2,200	0
Increase/decrease in capital reserve less IPO costs	-555	0	65,379	0
Dividends paid to company shareholders	0	0	-7,000	-6,500
Increase/decrease in other non-current fi nancial liabilities	1,712	-37	5,740	196
Increase/decrease in current fi nancial liabilities	1,393	3,461	-7,091	5,455
Net cash fl ow used in fi nancing activities from
continuing operations	2,550	3,424	59,228	-849
Net cash fl ow used in fi nancing activities from
discontinuing operations	0	0	0	-233
Net cash fl ow used in fi nancing activities – total	2,550	3,424	59,228	-1,082
Net decrease/increase in cash and cash equivalents	-40,997	-4,511	8,472	-7,475
Change in cash and cash equivalents
Cash and cash equivalents at beginning of the period	69,872	43,342	20,183	46,725
Net decrease/increase in cash and cash equivalents	-40,997	-4,511	8,472	-7,475
Exchange gains/losses on cash and cash equivalents	-224	-27	-4	-447
Cash and cash equivalents at end of the period	28,651	38,804	28,651	38,804

The notes on the following pages form an integral part of this condensed consolidated interim fi nancial information.

Kapsch Traffi cCom AG – Selected notes to the condensed consolidated interim fi nancial information.

1. General Information

The Kapsch Traffi cCom Group operates mainly in the road traffi c telematics market. It holds shares in several domestic and foreign companies. The parent company is headquartered in Vienna.

For fi nancial reporting purposes, the business activities of the Kapsch Traffi cCom Group are subdivided into the following 3 segments:

• Road Solution Projects (RSP)
• Services, System Extensions, Components Sales (SEC)
• Others (OTH)

The Road Solution Projects segment relates to the installation of road traffi c telematics solutions.

The Services, System Extensions, Components Sales segment relates to the sale of services (maintenance as well as technical and commercial operation) and components in the area of traffi c telematics solutions.

The Others segment represents the non-core business. In this segment, we offer engineering solutions, electronic manufactoring and logistics services to affi liated entities and third parties, including audio solutions equipment and systems for the Austrian E-Card.

2. Basis of preparation

This condensed interim fi nancial information for the half-year ended 30 September 2007 has been prepared in accordance with IAS 34, "Interim fi nancial reporting". The interim condensed fi nancial report should be read in conjunction with the consolidated annual fi nancial statements for the year ended 31 March 2007.

3. Accounting policies

The accounting policies adopted are consistent with those of the consolidated annual fi nancial statements for the year ended 31 March 2007, as described in the consolidated annual fi nancial statements for the year ended 31 March 2007. In order to achieve better disclosure certain items in the comparatives have been reclassifi ed.

4. Segment Information

• RSP = Road Solution Projects
• SEC = Services, System Extensions, Components Sales
• OTH = Others

Primary reporting format – business segments

from continuing operations – in TEUR

				Consolidated
FY08-Q2 (cum.)	RSP	SEC	OTH	Group
Revenues	13,223	50,398	5,178	68,799
Operating Result	-823	7,892	-338	6,730
				Consolidated
FY07-Q2 (cum.)	RSP	SEC	OTH	Group
Revenues	36,598	28,830	7,208	72,636
Operating Result	1,188	5,588	-1,197	5,580

5. Capital Expenditure

	Tangible and
All amounts in TEUR	intangible assets
Opening net book amount as of 1 April 2007	15,417
Additions	2,182
Change in consolidated entities	6
Disposals	-553
Depreciation, amortisation, impairment and other movements	-1,757
Currency translation differences	-271
Closing net book amount as of 30 Sep 2007	15,024
Opening net book amount as of 1 April 2006	15,427
Additions	3,221
Change in consolidated entities	369
Disposals	-14
Depreciation, amortisation, impairment and other movements	-2,265
Currency translation differences	19
Closing net book amount as of 30 Sep 2006	16,757

6. Other current fi nancial assets

In July 2007, Kapsch Traffi cCom AG bought fi nancial instruments (securities) in the amount of EUR 30 million, that were classifi ed as securities available for sale.

7. Share Capital

The company issued 2.2 million new no-par value ordinary bearer shares in the course of its IPO. The offer price per share was EUR 32. The shares have a notional value of EUR 1. The total number of shares is 12.2 million (of which 3.7 million are in free fl oat). The total share capital amounts to EUR 12.2 million.

8. Financial Liabilities

All amounts in TEUR	30 Sep 2007	31 March 2007	30 Sep 2006	31 March 2006
Non-current	16,262	10,523	933	1,204
Current	15,033	22,124	13,988	8,299
Total	31,295	32,646	14,921	9,503

Movements in borrowings were as follows:

Opening amount as of 1 April 2007	32,646
Additions	9,593
Repayments of borrowings	-10,944
Currency translation	0
Closing amount as of 30 Sep 2007	31,295
Opening amount as of1 April 2006	9,503
Additions	5,385
Repayments of borrowings	0
Currency translation	33
Closing amount as of 30 Sep 2006	14,921

9. Defi ned benefi t plans

All amounts in TEUR	30 Sep 2007	31 March 2007	30 Sep 2006	31 March 2006
Severance payments	5,162	5,305	5,947	5,979
Pension benefi ts	9,172	9,247	9,244	9,237
Total	14,334	14,552	15,192	15,216

Severance Payments

The obligation to set up a provision for severance payments is based on the respective labor law.

Pension benefi ts

Liabilities for pension recognized at the balance sheet date relate to retirees only. All pension agreements are based on past service cost and are not covered by external plan assets (funds). In addition, contributions are paid to an external pension fund for employees of the Group.

10. Provisions

All amounts in TEUR	30 Sep 2007	31 March 2007	30 Sep 2006	31 March 2006
Non-current provisions	1,634	1,684	1,829	1,796
Current provisions	12,517	15,462	7,122	7,223
Total	14,151	17,146	8,951	9,020

FY08-Q2

		Change in
		consoli			Exchange
		dated	Use/		rate
All amounts in TEUR	1. Apr 2007	entities	disposal	Additions	differences	30. Sep 2007
Obligations for anniversary bonuses	457	7	-21	9	0	452
Costs of dismantling and removing assets	1,227	0	-46	0	0	1,181
Non-current provisions, total	1,684	7	-66	9	0	1,634
Warranties	4,165	0	0	0	30	4,194
Losses from pending transactions
and repairs	881	0	0	142	0	1,023
Legal fees, costs of litigation
and contract risks	2,881	0	-1,607	2,406	41	3,721
Other	7,535	0	-5,553	1,585	12	3,579
Current provisions, total	15,462	0	-7,160	4,134	82	12,517
Total	17,146	7	-7,227	4,142	82	14,151

The reason for the reduction in the provisions are the changes in project work in progress and the associated changes in project risks.

FY07-Q2

		Change in
		consoli			Exchange
		dated	Use/		rate
All amounts in TEUR	1. April 2006	entities	disposal	Additions	differences	30. Sep 2006
Obligations from anniversary bonuses	620	8	-29	0	0	599
Costs of dismantling and removing assets	1,176	100	-46	0	0	1,230
Non-current provisions, total	1,796	108	-75	0	0	1,829
Warranties	3,711	0	0	0	36	3,748
Losses from pending transactions
and repairs	793	0	-102	0	0	691
Legal fees, costs of litigation
and contract risks	0	0	0	0	0	0
Other	2,719	0	-418	382	0	2,683
Current provisions, total	7,223	0	-519	382	36	7,122
Total	9,020	108	-594	382	36	8,951

11. Operations result

The income statement for the fi rst half-year of FY08 includes one-time costs in connection with the IPO in the amount of TEUR 912. There were no comparable costs in the fi rst half-year of FY07.

12. Income taxes

Income tax expense is recognized on management's best estimate of the weighted average annual income tax rate expected for the full fi nancial year. The estimated tax rate for the fi rst half-year FY08 is 27 % (the estimated tax rate for the fi rst half-year FY07 was 26 %).

13. Earnings per share

Earnings per share attributable to equity holders of the company arises from continuing and discontinued operations as follows:

	FY08-Q2 cum.	FY07-Q2 cum.
Earnings per share for profi t from continuing operations attributable to the
equity holders of the company (expressed in euro per share)	0.47	0.44
Earnings per share for profi t from discontinuing operations attributable to the
equity holders of the company (expressed in euro per share)	0.00	-0.03

Earnings per share in FY08-Q2 related to 12.2 million shares, in FY07-Q2 related to 10.0 million shares.

14. Dividends

In a general meeting held on 5 June 2007 the shareholder of the parent company Kapsch Traffi cCom AG, Vienna, resolved a dividend for the year 2006/07 in the amount of TEUR 10,000. TEUR 7,000 – thereof TEUR 3,500 from the remaining dividend for the year 2005/06 – were paid in June 2007, the remaining amount will be paid in December 2007.

15. Discontinued operations

Effective as of 8 March 2007, the Kapsch Traffi cCom AG disposed of its product portfolio "mobile rail communications on GSM-R technology" to Funkwerk Systems Austria GmbH, Vienna, by means of an asset deal. Activities in this business formed part of the Services, System Extensions, Component Sales segment.

As a result of the sale, the group has applied IFRS 5 in the fi nancial year ending 31 March 2007

All amounts in TEUR	FY08-Q2	FY07-Q2	FY08-Q2 cum.	FY07-Q2 cum.
(a) Analysis of the result of discontinued operations
Revenues	0	2,011	0	3,158
Expenses	0	-1,885	0	-3,461
Result from discontinued operations	0	127	0	-304
(b) Cash fl ows from discontinued operations
Net cash fl ow from operating activities		-1,214	0	-831
Net cash fl ow used in investing activities	0	460	0	270
Net cash fl ow used in fi nancing activities	0	0	0	-233
Total cash fl ow	0	-755	0	-794

16. Business Combinations

On the basis of a share purchase agreement dated 26 April 2007 the Group has acquired 100 % of the shares of VTI Industrial (Pty) Ltd., Gemiston, South Africa. The assets and liabilities arising from this acquisition, provisionally determined, are as follows:

VTI Industrial (Pty) Ltd

All amounts in TEUR
Cash paid	209
Fair value of net assets acquired	209
Goowill	0

The assets and liabilities arising from the acquisitions	Fair value	Acquiree's carring amount
Intangible assets	145	0
Property, plant and equipment	2	2
Receivables and other assets	70	70
Cash and cash equivalents	46	46
Payables, other liabilites and accruals	-54	-54
Net assets acquired	209	64

17. Contingent liabilities

The Group's contingent liabilities primarily result from major projects. Other commitments mainly relate to contract and warranty bonds, bank guarantees, performance und bid bonds, sureties and acceptance of guarantees for subsidiaries vis-à-vis third parties. Details of contingent liabilities and other commitments were as follows:

Contract and warranty bonds	30 Sep 2007	31 March 2007
City Highway Santiago	14,002	15,358
City Highway Sydney and Melbourne	2,081	7,901
	16,083	23,259
Performance, bid and other bonds
Truck Tolling System Austria	12,500	12,500
Truck Trolling System Czech Republic	48,814	89,424
Other	8,294	4,658
	69,608	106,582
Bank guarantees	2,998	12,179
Sureties	28	30
	3,026	12,209
Total	88,717	142,050

The decrease in contingent liabilities is attributable to the changes in the progress of projects.

18. Related-Party Transactions

		Sales to Related Parties	Sales from Related Parties	Amounts owed by Related Parties	Amounts owed to Related Parties
All amounts in TEUR		Q2 (cum.)	Q2 (cum.)	30 Sep	30 Sep
Affi liated companies outside the Kapsch Traffi cCom Group	FY08	1,694	4,759	2,532	10,128
	FY07	2,983	6,366	717	8,614
	FY08	24	667	0	9,423
Others		11	631	0	9,574

Additionally, the related parties KAPSCH-Group Beteiligungs GmbH, Vienna, and Kapsch CarrierCom AG, Vienna, issued payment guarantees in the amount EUR 40 million and EUR 9 million, respectively, in relation to the Czech truck tolling system.

Members of the executive and supervisory boards have management functions or are member in supervisory boards of other companies of the Kapsch Group.

19. Events occurring after 30 September 2007

On 1 October payment of the fi rst installment of the truck tolling system in the Czech Republic occured in an amount of EUR 30.8 million, which resulted a signifi cant improvement in the balance sheet.

Vienna, 22 November 2007

Board of Management

Georg Kapsch, CEO Erwin Toplak, COO

Interim management report.

Economic background

Global traffi c volumes are constantly growing, with Australia, India, New Zealand South Africa, China and Latin American countries showing the fastest growth. Kapsch Traffi cCom already has a presence in all of these high-growth markets with its fully electronic and manual toll collection systems, road traffi c telematics solutions, and electronic access and parking management systems. Kapsch Traffi cCom monitors the latest requirements in these regions on an ongoing basis and very carefully, so that it is in a position to supply technical solutions tailored to the specifi c needs of the market at any time.

Financial performance indicators

This condensed interim fi nancial report for the fi rst half of the 2007/08 fi scal year has been prepared in accordance with the same accounting and valuation policies as the consolidated fi nancial statements for the year ended 31 March 2007.

Earnings

Revenues in the fi rst half of 2007/08 were EUR 68.8 million, slightly short (-5 %) of the EUR 72.6 million recorded in the same period of the previous fi scal year. This was primarily attributable to the volatility of our project business and this particularly in the Road Solution Projects (RSP) segment, which is also visible from the segment analysis.

In the fi rst half fi scal year the segment Services, System Extensions, Components Sales (SEC) recorded a signifi cant increase in revenues thanks to rapidly growing business volumes. At EUR 50.4 million, segment revenue for the fi rst six months was up 75 % on the same period a year earlier (H1 2006/07: EUR 28.8 million). The successful technical and commercial operation of the nationwide truck tolling system in the Czech Republic and the signifi cant increase in sales of components, particularly on-board units (OBUs) made a signifi cant contribution to the segment's encouraging performance. On the other hand, Road Solution Projects (RSP) segment's revenue decreased to EUR 13.2 million (-64 %). In the fi rst half of the previous fi scal year, revenues in an amount of EUR 33.3 million were included for the major part of the construction of phase I of the nationwide truck tolling system in the Czech Republic though. Tenders for other major projects in Central and Eastern Europe (CEE) have been postponed. The Others (OTH) segment fell from EUR 7.2 million to EUR 5.2 million (down 28 %).

For the period under review, Kapsch Traffi cCom reported EBIT up from EUR 5.6 million to EUR 6.7 million. This is refl ected in the signifi cant increase in profi tability and an improvement in the EBIT margin from 8 % to 10 %. Operating results by segment were as follows:

• In the fi rst half fi scal year the operating profi t for SEC advanced in line with expectations, from EUR 5.6 million to EUR 7.9 million (up 41 %).
• In the same period in the RSP segment's revenue expenses relating to preparations in order to participate in tenders for upcoming large-scale projects in Central and Eastern Europe (Slovakia and Hungary) and the United Kingdom resulted in an operating loss for the fi rst six months of the fi scal year of EUR 0.8 million, compared with a profi t of EUR 1.2 million in the same period of the previous fi scal year.
• OTH also posted an EBIT improvement, reducing a EUR 1.2 million loss to EUR 0.3 million.

Financial position and cash fl ows

Kapsch Traffi cCom has been listed in the Prime Market segment of the Vienna Stock Exchange since 26 June 2007. With total assets of EUR 286 million (as of 30 September 2007) and total equity of EUR 109.1 million (as of 30 September 2007), the Company's equity ratio is 38 %. After deduction of all associated expenses, the initial public offering raised EUR 65 million, which contributed to improving liquidity. Net debt as of 31 March 2007 in an amount of EUR 12.5 million was transformed into net assets of EUR 27.1 million, despite the fact that the fi rst instalment from the implementation of the nationwide truck tolling system in the Czech Republic (phase I) in the amount of EUR 30.8 million was received on 1 October 2007 and is not refl ected in the results for the fi rst half year. According to the payment plan, the next instalment of another 25 % is scheduled for the end of September 2008. Increased cash outfl ows from operating activities of EUR 19.1 million compared with outfl ows of EUR 2.9 million during the same period of the previous fi scal year are project-related increases in inventories and trade receivables, and a signifi cant decrease in trade payables. Net cash outfl ows from investment activities amounted to EUR -31.4 million (H1 2006/07: EUR -3.5 million) and are attributable to the acquisition of securities amounting to EUR 30 million. These securities do not form a long-term investment, but are held to provide liquidity in order to fi nance future projects or strategic acquisitions of companies.

Details of major transactions with related parties

In connection with the Czech truck tolling system, KAPSCH-Group Beteiligungs-GmbH and Kapsch CarrierCom AG issued payment guarantees in the amount of EUR 40 million and EUR 9 million, respectively. Details of business with related parties are discussed under note 18.

Risk reporting

As an international group, Kapsch Traffi cCom is exposed to exchange rate and infl ation risks. The weakness of the USD plays only a minor role, as Kapsch Traffi cCom invoices in EUR, SEK or local currencies. Exchange rate risk is hedged with forward exchange contracts, if required.

Kapsch Traffi cCom gives its customers, suppliers and creditors on and off guarantees and warranties, mainly in the form of performance guarantees. Based on experience from previous projects, the associated risks are small and unlikely to materialize to any signifi cant extent.

Outlook for the second half of the year

The second half of the fi scal year will be shaped by our participation in tenders and by project awards in Australia, Chile, Hungary, Slovakia, South Africa and the United Kingdom. It should be noted that orders have already been taken in Chile, New Zealand and South Africa in the fi rst half year of the fi scal year. For the Czech Republic, the tolling stations on those "fi rst class roads" were defi ned which will go into operation on 1 January 2008. The fi rst part payment of EUR 30.8 million for phase I was made in line with the payment plan. Kapsch Traffi cCom is currently negotiating an amendment regarding the extension of the Czech nationwide truck tolling system (phase II).

Declaration of the Management Board pursuant to Section 87 Para. 1 No. 3 BörseG (Austrian Stock Exchange Act)

We confi rm, to the best of our knowledge and belief, that according to the principles of proper interim group reporting applied, the condensed consolidated interim report prepared in accordance with the relevant accounting standards gives a true and fair view of the Group's assets and liabilities, its fi nancial position and results of operations pursuant to the requirements stipulated in the Austrian Stock Exchange Act, that the half-yearly management report for the Group presents the course of business including the results and position of the Group in such a way that a true and fair view pursuant to the requirements stipulated in the Austrian Stock Exchange Act is given and that the material risks and uncertainties regarding the Group's prospective development in the remainder of the fi nancial year are described.

The condensed consolidated interim report has neither been audited nor been reviewed by an auditor.

Vienna, 22 November 2007

Board of Management

Georg Kapsch, CEO Erwin Toplak, COO

Kapsch Traffi cCom is an international supplier of innovative road traffi c telematics systems, products and services. Its principle business is the development and supply of electronic toll collection (ETC) systems, in particular MLFF (multi-lane free-fl ow) ETC systems, and the technical and commercial operation of such systems. Kapsch Traffi cCom also supplies traffi c management systems, with a focus on road safety and traffi c control, and electronic access systems and parking management. With more than 130 installed tolling systems in 30 countries in Europe, Australia, Latin America, the Asian/Pacifi c region and South Africa, and more than nine million transponders and 11,000 equipped lanes, Kapsch Traffi cCom has positioned itself among the market leaders in ETC systems worldwide. Kapsch Traffi cCom is headquartered in Vienna, Austria, and has subsidiaries and representative offi ces in 18 countries.

Kapsch Traffi cCom AG I Wagenseilgasse 1 I A-1120 Vienna, Austria I www.kapschtraffi c.com Investor Relations I Marcus Handl I Tel.: +43 (0)50811 1122 I Fax: +43 (0)50811 99 1120 I E-Mail: ir.kapschtraffi c@kapsch.net Public Relations I Brigitte Herdlicka I Tel.: +43 (0)50811 2705 I Fax: +43 (0)50811 99 2705 I E-Mail: brigitte.herdlicka@kapsch.net