Viscom AG — Interim / Quarterly Report 2016

Aug 12, 2016

A question of perspective. Vision Technology.

Interim Report as of 30 June 2016

Contents

01	Foreword from the Executive Board
02	The Viscom share
04 04	Interim Group Management Report 04 Description of the Group Group business model
06 06	Economic Report Macroeconomic and sector development
08	Brief Analysis of the Net Assets, Financial Position and Results of Operations and Business Developments
08	Results of operations
09	Regional developments
10	Financial position
11	Net assets
12	Key figures on the Group's net assets, financial position and results of operations

• Report on post-balance sheet date events
• Opportunities and risks report

Forecast report 2016

Economic conditions

Other Disclosures

• Significant transactions with related parties
• General information on the company

IFRS Consolidated Interim Financial Statements

• Consolidated income statement
• Consolidated balance sheet Assets
• Consolidated balance sheet Shareholders' equity and liabilities
• Consolidated cash flow statement
• Statement of changes in shareholders' equity

Special disclosures

• Declaration of compliance
• Basic principles of preparation
• Disclosures regarding financial instruments and financial risk management

Responsibilty statement

• Financial calendar 2016
• Viscom structure
• Imprint

Operating figures

Profit and loss

		6M 2016	6M 2015
Revenues	K€	31,209	30,061
EBIT	K€	2,001	3,054
Net profit for the period	K€	681	1,613

Balance sheet and cashflow statement figures

		6M 2016	6M 2015
Total assets	K€	56,824	56,044
Equity ratio	%	80.3	83.4
CF from current business	K€	-3,588	-931
CF from investment	K€	-991	-1,154
CF from financing	K€	-3,554	-8,885
End of period capital	K€	3,708	6,150

Shares

		6M 2016	6M 2015
Result per share	€	0.08	0.18

Employees

	6M 2016	6M 2015
Employees on 30 June	372	353

Segment InfoRmation

* in consideration of consolidation differences

Figures 6M 2016

38,290 Incoming orders in K€

2,001 EBIT in K€

6.4 EBIT-Margin in %

80.3 Equity Ratio in %

Foreword from the Executive Board

We can look back on quite a positive first half of the year for the Viscom Group.

At € 38,290 thousand, incoming orders in the first six months were up approximately 20.4 % on the previous year's already excellent figure. Cumulative revenue in the first half of 2016 was also around 4 % higher than the corresponding figure from the previous year. With these figures, we succeeded once again in setting historic records and were consequently able to show that Viscom has justifiably continued to expand its headcount, adding a total of 19 staff from 30 June 2015 to 30 June 2016. Due to these investments for the future aimed at further growth in the years ahead, as well as salary increases that were made during the year, personnel costs were higher than they were in the previous year. In addition, other operating income decreased primarily due to lower currency effects. As a result, EBIT was down by 34.5 % on the first six months of 2015 at € 2,001 thousand. At 6.4 %, the EBIT-Margin was therefore below the previous year's figure of 10.2 %.

What is the outlook for the second half of the year? As of 30 June 2016, the order backlog on our books still amounted to € 18,897 thousand, which needs to be worked off in the coming months. There has been no sign of a downturn in demand for inspection systems; rather, we have profited from the continuously growing interest of our customers in 3D inspection. Our strength here can be found particularly in rapid and precise 3D analysis through the use of high-performance sensors with impressive throughput rates. These sensors deliver optimum contrasts in both automated optical and X-ray inspection and provide our customers with outstanding image quality. In the 3D AOI business area, we succeeded in achieving various benchmarks and winning over existing and new customers, also when viewed in a direct comparison to competitors.

We also managed to expand our global market position for 3D X-ray inspection and further increase our brand awareness. Due to the continuous trend towards miniaturisation and the corresponding reduction in the size of the layout for printed circuit boards, an increasing number of small and medium-sized enterprises are discovering our inline X-ray products. In addition, the need for power electronics, for example at companies focused on electronics for energy production and storage, as well as in the field of e-mobility, stands to ensure a positive order situation both today and in future.

Ladies and gentlemen, the world of technology is in the middle of a rapid transformation. It is becoming faster, more complex and increasingly connected. With the right technologies, structures and strategies, we are excellently positioned to handle the challenges of tomorrow, and we are certain that we will easily achieve the targets we have set for the 2016 financial year. We therefore confirm the annual forecast that was already given, with revenue of between € 70 million and € 75 million and an EBIT-Margin of between 13 % and 15 %.

The Executive Board

Dr. Martin Heuser Volker Pape Dirk Schwingel

The Viscom share

WKN		784686
ISIN		DE 000 7846867
Abbreviation		V6C
Listing		Regulated market (Prime Standard)
Category		No-par value bearer common shares
Share capital in €		9.02 million
Share capital in units		9,020,000
Number of voting shares		8,885,060
High on 15 March 2016 *	€	15.60
Low on 27 June 2016 *	€	11.56
Market capitalisation as of 30 June 2016	million €	109.59
Earnings per share	€	0.08

Basic information on Viscom share

* All share price information is based on XETRA daily closing prices

The first six months of 2016 were highly turbulent for the German stock market. According to media reports, the DAX recorded its worst start in 28 years and fell to a January's low of 9,314 points on 20 January 2016. While the prices recovered slowly in the months that followed, they failed to demonstrate any noticeable momentum in their performance. The DAX was unable to establish a sustained foothold in the 10,000-point range and oscillated at around 9,810 points for the half-year average. Weak labour market data from the United States and uncertainty regarding the economic effects of the United Kingdom's potential exit from the EU, known as Brexit, increasingly unsettled market players in June. The unexpected outcome of the Brexit referendum subsequently caused share prices to plummet again. Over the course of the day, the DAX dropped by more than 10 % at times, hitting a daily low of 9,226 points. At the close of trading for the day, the DAX slightly made up some lost ground and closed at 9,557 points. At the end of six-month period, the index closed at 9,680 points.

Viscom share price in the first half of 2016

The Viscom share had a response that was similar to the general stock market environment. After opening the year at € 14.59, the Viscom shares experienced a highly volatile price development in the following months. The preliminary business figures for 2015 published on an ad hoc basis on 23 February 2016 then led to a positive price performance. The Viscom shares reached their highest value of € 15.60 on 15 March 2016, only to see higher volatility once again at the end of March. The shares hit an annual low on 27 June 2016, with a daily closing price of € 11.56. The Viscom shares hovered around € 13.54 on average during the first six months of the year, with a closing price of € 12.15 on 30 June 2016.

Shareholder structure

The high degree of involvement by Viscom AG company founders and CEOs Dr. Martin Heuser and Volker Pape shapes the shareholder structure of the company. 59.6 % of the shares are

Viscom share price in the first six months of 2016

held by Dr. Martin Heuser and Volker Pape, either directly or via HPC Vermögensverwaltung GmbH. Viscom AG owns 1.5 % of its own shares, which the company repurchased in 2008/2009 as part of a share buy-back programme. 9.5 % of the shares are held by Allianz. The 29.4 % of shares that are free floating are spread principally among investors in Germany and other European countries.

Annual General Meeting

The Annual General Meeting of Viscom AG took place on 1 June 2016 in the Old Town Hall in Hanover. Of the company's voting share capital totalling € 8,885,060.00, divided into 8,885,060 no par-value shares, 6,586,293 no-par value shares with as many votes were represented during the voting process. This equals 74.13 % of the voting share capital. All agenda items were adopted by the shareholders and shareholder representatives with the necessary majority.

The next Annual General Meeting of Viscom AG is scheduled to take place on 31 May 2017 in the Old Town Hall in Hanover.

Investor Relations

The objective of our investor relations work is to allow all participants in the capital market the opportunity to evaluate Viscom AG fairly. We do this by means of continuous, open communication. All information on Viscom shares is published as it becomes available on our website at www.viscom.com/ europe under Investor Relations.

In addition, you can contact our Investor Relations department directly at the following address:

Viscom AG Investor Relations Anna Borkowski Carl-Buderus-Straße 9-15 30455 Hanover Germany E-mail: investor.relations@viscom.de Tel.: +49 511 94996-861 Fax: +49 511 94996-555

Interim Group Management Report Description of the Group

Group business model

Structure of the company and its investees

Viscom AG, Hanover (hereinafter: Viscom AG), is the parent company of the Viscom Group (hereinafter referred to as Viscom). With subsidiaries in Asia, America, Europe and Africa that are directly or indirectly 100 % owned by Viscom AG, the Group has an efficient, market-oriented organisational structure. All of the companies are focused on their respective customer groups and their requirements. This enables them to act and respond quickly and in a flexible manner. They also benefit from the advantages of belonging to a larger group, thus allowing mutual exchange and utilisation of knowledge and experience. Production takes place exclusively in the Group's home base, Hanover. This means that Viscom enjoys the production advantages of one of the most highly developed industrial locations, allowing it to guarantee a very high quality level for its products.

In 2001, Viscom GmbH changed its legal form to that of a German stock corporation (Aktiengesellschaft) and became Viscom AG. The company's share capital is divided into 9,020,000 shares, of which 59.64 % are held directly or indirectly through HPC Vermögensverwaltung GmbH by the company's founders and Executive Board members Dr. Martin Heuser and Volker Pape. Viscom AG owns 1.50 % of its own shares, which the company repurchased in 2008/2009 as part of a share buy-back programme. 9.51 % of the shares are held by Allianz.

On 29 July 2008, the Executive Board, with the approval of the Annual General Meeting on 12 June 2008 and after consultation with the Supervisory Board, decided to acquire up to 902,000 of the company's own shares by 31 March 2009. By the reporting date of 31 March 2009, the company had bought back 134,940 shares. As of 30 June 2016, Viscom AG held approximately 1.5 % of its own shares.

The Executive Board of Viscom AG consisted of three members as of 30 June 2016: Dr. Martin Heuser: Technology Volker Pape: Sales Dirk Schwingel: Finance

The Executive Board is monitored by the three members of the Supervisory Board: Bernd Hackmann (Chairman) Klaus Friedland (Deputy Chairman) Prof. Dr. Ludger Overmeyer

Segments and key locations

Viscom develops, manufactures and sells high-quality automated inspection systems for use in industrial production. The company's business activities are broken down on the basis of work required for the project-specific adaptation of standard components and systems, as well as the technology used to identify potential production errors using the inspection systems.

In geographical terms, the company's business incorporates the European market with its headquarters in Hanover and a subsidiary in Paris, France; the American market with its subsidiary in Atlanta, USA; and the Asian market with its subsidiary in Singapore, which in turn has its own subsidiary in Shanghai, China. The sales company in Tunis, Tunisia, a subsidiary of the French subsidiary, is allocated to the geographical segment Europe. The company is developing the North African sales market.

There were no changes in the Group's activities or structure during the reporting period.

Business processes

The inspection systems are developed and produced at Viscom AG's headquarters in Hanover. This is where all the centralised functions, such as business administration, development, production, marketing and sales management, are based.

The company's product development activities are focused on fundamental development work for future generations of inspection systems, as well as project-specific development for the adaptation of basic machine types to meet customer-specific requirements.

A large part of production is order-based. This draws on in-house pre-production of various assemblies.

Sales activities are performed by sales employees of Viscom AG and its Group companies, as well as by agents acting on the market as industry representatives for mechanical engineering firms.

Major business processes are managed and supported with the help of the business software proALPHA. The order processing module included in this system is used by all Viscom locations around the world.

Legal and economic factors

There have been no fundamental changes in the legal and economic framework which had a material effect on the company in the first half of the 2016 financial year. For more details regarding the development of the overall economy, please refer to the economic report below.

Management system

The key performance indicators according to which the Viscom Group is managed are incoming orders, revenue, EBIT (operating profit or segment results) and the EBIT-Margin (EBIT/revenue).

The management of the Group is based on a reporting system that takes the form of monthly reports submitted to management and the heads of the business areas. These monthly reports include the consolidated income statement and individual breakdowns for the various Group companies.

The reports also include a detailed presentation of the cost structure at Viscom AG and its Group companies. They provide information on revenue in its machine installation regions, incoming orders, order backlog, the number of employees, cash and cash equivalents, total receivables and receivables from subsidiaries, orders placed for the purchase of goods and the inventories of goods as well as partially completed and completed systems.

In addition, they provide an overview of employee turnover, sickness absence rate and per capita revenue, as well as key indicators for project management, product development, production and logistics.

The statements contained in the monthly reports are analysed in regular meetings between the company's management and the heads of the business areas. Any action that may be necessary results in decisions which are usually implemented in the short term.

Research and development

The main focus of development activities is on the further development of existing system solutions as well as the implementation of new market requirements in the field of optical and X-ray inspection processes. The focus of these activities is described in the Annual Report 2015 and did not change during the first six months of the current year.

Expenditures for research and development, excluding customerspecific development, remained at the previous year's level. Development costs totalling € 782 thousand (previous year: € 773 thousand) were capitalised in the first half of 2016. Capitalised development costs of € 551 thousand (previous year: € 514 thousand) were written off as scheduled.

Economic Report

Macroeconomic and sector development

Macroeconomic development

The global economy started off the financial year 2016 with weak economic development.

The euro area increased GDP during the first quarter by 0.6 %. A moderate increase in employment levels continued in many countries, and a rise in real disposable income was also recorded. Private consumption proved to be an important pillar of economic growth in Europe as well.

Germany had a strong start to the year, which was driven by the development of a flourishing domestic economy. Thanks to the continued positive trend on the labour market, private consumption in Germany was brisk. However, a renewed rise in energy prices and employment levels that stopped growing as vigorously as they had been caused private consumption to tail off some over the course of the period under review.

China recorded only a slight increase in gross domestic product. Plans call for further reducing the nation's dependence on exports and modernising its economy. The service sector saw strong gains, while business in the industrial sector turned in a weaker performance. The Beijing Municipal Bureau of Statistics reported that China's economy grew by 6.7 % during the second quarter of 2016. Growth is therefore on par with the first quarter.

In America, gross domestic product increased only slightly in the first quarter of 2016. The second quarter was marked by weak labour market data and an increase in the unemployment rate to approximately 5 %.

Sector developments

Inspection of electronic assemblies is Viscom's main revenue contributor. Viscom is primarily represented in the electronics industry − one of the largest branches of industry in the world – and here particularly within the automotive supplier segment.

Technical developments in the electronics industry are an innovation driver for Viscom, as in the last few years. Both the volumes and quality requirements of increasingly complex and miniature electronic assemblies are seeing constant growth and can therefore only be reliably tested by automated inspection systems. The automotive electronics sector is the main market for Viscom products.

Viscom is stepping up its efforts to gain a foothold in other industries, such as telecommunications, industrial electronics and semiconductor production. The company has by now established itself with a broader base among SMEs in Europe. At the same time, the company continues to focus on electronic manufacturing services (EMS) in the computers, communication and consumer (3C) sector, especially in Asia.

Target sectors, target markets and target customers

The inspection systems Viscom manufactures are employed primarily within the electronics industry. Producers of electronic assemblies are the main customer segment at 81 % of revenue (previous year: 89 %). Some of these companies are involved in production for end consumers. However, the majority of Viscom's customers are suppliers for other companies that manufacture products, such as electronic assemblies, which are integrated into end products as parts from suppliers − for example, engine control units in vehicles. In addition, an increasing proportion of customers are from the EMS sector. These are companies that do not have their own brand products, but instead serve exclusively as an extended workbench for product suppliers.

With the increasing use of electronics in today's automobiles and the high reliability requirements for vehicle systems, the automotive industry has developed into one of the most significant customer groups for the inspection of electronic assemblies. As a rule, these assemblies, which often represent safetyrelated components such as ABS, ESP or airbags, are inspected by systems such as those offered by Viscom.

Due to rising technological demands, even in the consumer goods industry, quality pressure is also far higher than in previous years. Here, the emphasis is on process quality, since a stable process improves the delivery quality, but also results especially in fewer rejects and therefore higher levels of production efficiency. At the same time, Asian electronics manufacturers, in particular, are increasingly trying to position themselves as premium suppliers, although they were still seen as low-price suppliers just a few years ago.

Close, long-term customer contacts form the basis for comprehensive, individual service. The results of cooperation are incorporated into the development of new system solutions and the refinement of proven systems. This allows Viscom to develop new solutions and thereby open up future markets with a high degree of innovation and customer proximity.

Customer structure

Viscom generated approximately 51 % of its revenue with its five largest customers (previous year: 55 %). A further 30 % of revenue was generated with 18 customers and the rest with 249 different customers.

Markets

With its optical, X-ray and combined inspection systems, Viscom is particularly well represented in production operations with the very highest quality requirements.

Accordingly, the main customers are companies that make product safety and reliability top priorities. The automotive electronics sector accounts for a particularly high volume in this respect. Viscom has been a world leading provider of inspection systems for quality assurance and process control in this and other industries for years.

Technological developments and subsequent technical and economic progress, combined with its international sales and service presence, helped Viscom to strengthen its market position and achieve greater customer retention in the long term. By continuously developing its products, improving its business processes and adapting its sales organisation to the changing general conditions, Viscom is able to face the challenges of the future and thereby continue to assert its successful market position.

Brief Analysis of the Net Assets, Financial Position and Results of Operations and Business Developments

Results of operations

Incoming orders/order backlog

In the first six months of the year, orders totalling € 38,290 thousand (previous year: € 31,815 thousand) were received. This constituted a 20.4 % increase year on year.

As of 30 June 2016, order backlog increased to € 18,897 thousand (previous year: € 15,785 thousand) and corresponded to full capacity utilisation for more than three months.

Development of revenue

Viscom's revenue amounted to € 11,124 thousand in the first quarter of 2016 (previous year: € 17,195 thousand), which is a year-on-year decrease of 35.3 %. The reason for this was the delayed processing of orders due to supply bottlenecks in individual system components procured externally. In the second quarter of 2016, Viscom generated revenue of € 20,085 thousand (previous year: € 12,866 thousand), which is a year-on-year increase of 56.1 %. This rise in revenue was, in particular, the result of a reduction in supply bottlenecks and increased system sales as a result. In total, Viscom's revenue amounted to € 31,209 thousand in the first half of 2016 (previous year: € 30,061 thousand), which is a year-on-year increase of 3.8 %.

Operating profit/EBIT-Margin

Operating profit (EBIT) amounted to € 2,001 thousand (previous year: € 3,054 thousand). This corresponds to an EBIT-Margin of 6.4 % (previous year: 10.2 %). The reason for this decline was, in particular, increased personnel costs due to staff additions in the areas of production, sales and service. This increase is a result of higher revenue, the expanded installation base and the development of the distribution structure for further strategic alignment. In addition, other operating income decreased primarily due to lower currency effects.

Net profit for the period

Net profit for the period declined from € 1,613 thousand in the previous year to € 681 thousand. The effects already mentioned under operating profit also had an impact on net profit for the period. In addition, individual tax transactions and payments for previous years had a negative effect on the tax burden, and consequently on net profit for the period as well.

The ratio of net profit before taxes was 6.4 % (previous year: 10.0 %).

Earnings per share

On the basis of 8,885,060 shares, earnings per share as of 30 June 2016 amounted to € 0.08 (diluted and undiluted) compared to € 0.18 in the previous year.

Financial result

Owing to the lower interest level for short-term financial investments and reduced cash and cash equivalents due to the dividend payment, the financial result fell by € 16 thousand year on year. In contrast, interest payments on taxes were due in the same period the previous year, which were not applicable during the first six months of 2016. This resulted in a positive net impact of € 42 thousand on the financial result. During the course of the first half of 2016, the financial assets were either invested in term deposits or held flexibly in direct-access savings accounts.

Exchange rate result

As it operates internationally, Viscom is exposed to exchange rate risks. Due to the company's relatively low business volume with foreign currencies, the current level of exchange rate risk was deemed acceptable; 6.9 % of total revenue was subject to a direct influence from exchange rates (previous year: 13.6 %). Viscom reserves the right to conduct hedging measures in individual cases.

Employees

In the first half of 2016, the number of Group employees increased by 19 persons year on year. As a result, Viscom employed 372 employees (excluding trainees) globally as of 30 June 2016 (previous year: 353 employees).

Europe	Americas	Asia	Total
			372
			348
			24
11	0	0	11
	302 279 23	18 17 1	52 52 0

Regional developments

Europe

Comprising some 66 % of revenue, Europe was by far the Viscom Group's strongest region and generated revenue of € 20,545 thousand in the first half of 2016 (previous year: € 18,171 thousand). Revenue was up approximately 13 % year on year. The increased processing of orders already mentioned primarily affected the Europe segment. Revenue in Germany amounted to € 8,263 thousand (previous year: € 7,938 thousand).

Segment results in Europe amounted to € 1,627 thousand (previous year: € 1,787 thousand), which corresponds to a margin of 7.9 % (previous year: 9.8 %). Higher personnel costs were the main reason for this decline. At a highly positive € 23,818 thousand, incoming orders were up considerably year on year (previous year: € 19,615 thousand).

Americas

The high level of incoming orders in the Americas region during the second quarter more than compensated for the weaker first quarter. It was not possible to realise the revenue in the same period, however. As a consequence, the segment's result for the first half of the year is positive, though below expectations. Extremely high order backlog for the region is linked to correspondingly high revenue expectations, which should be positively reflected in the result.

At € 3,859 thousand, revenue was down by approximately 37 % year on year (previous year: € 6,167 thousand). The segment result in this region of € 72 thousand was subsequently considerably below the previous year (previous year: € 621 thousand). The margin amounted to 1.9 % (previous year: 10.1 %). At € 6,525 thousand, incoming orders were up by approximately 23 % year on year (previous year: € 5,313 thousand).

The American market is characterised, as before, by automotive investments in Mexico and Latin America. Small and mediumsized service providers in the United States show a willingness to invest and see Viscom's product range as providing suitable inspection systems for the market that are powerful in a comparison with competitors.

Asia

Despite a weaker market situation during the first half of 2016 as compared to the same period in the previous year, it was possible to gain new customers in the electronic manufacturing services (EMS) segment, particularly with the series 7056 AXI product line. The revenue and earnings contributions from the service business area lagged behind expectations, due also to lower demand from the mobile devices segment. The automotive business recovered during the second quarter, however, and resulted in a good order backlog and revenue situation in the Asia region as of the end of the first half of 2016.

in K€	Europe		Americas		Asia		Consolidated		Total
	2016	2015	2016	2015	2016	2015	2016	2015	2016	2015
External sales	20,545	18,171	3,859	6,167	6,805	5,723	0	0	31,209	30,061
Segment result	1,627	1,787	72	621	295	969	7	-323	2,001	3,054

Disclosures on the Group's geographic segments by sales markets

At € 6,805 thousand, Group revenue in Asia was above the previous year's figure (previous year: € 5,723 thousand), which corresponds to an increase of approximately 19 %. Segment results in the Asian region amounted to € 295 thousand (previous year: € 969 thousand) and the margin was 4.3 % (previous year: 16.9 %). This drop was due to the structure of revenue, in particular as a result of a weaker service business. Incoming orders amounting to € 7,947 thousand were up around 15 % year on year (previous year: € 6,887 thousand).

Financial position

Capital structure

There were no liabilities to banks as of 30 June 2016.

Investments

Investments in intangible assets and property, plant and equipment totalled € 1,041 thousand in the first half of 2016 (previous year: € 1,154 thousand). At € 782 thousand (previous year: € 773 thousand), the bulk of the investments applied to the capitalisation of company-produced assets, while € 259 thousand (previous year: € 381 thousand) was allocated to operating and office equipment, leasehold improvements, software, technical equipment and machinery.

Liquidity

Viscom was able to continue providing the required liquidity from its own funds in the first half of 2016. The subsidiaries did not require any loans either. Liquidity declined compared to 31 December 2015, especially on account of the dividend payment in June 2016.

Cash and cash equivalents/cash flow

Cash flow from operating activities amounted to € -3,588 thousand (previous year: € -931 thousand). The negative net profit for the period and the smaller increase in inventories, receivables and other assets, as well as the decline in liabilities and income taxes paid due to tax and interest payments related to the securities lending transactions in 2006, were primarily responsible for this. The payment – of the sum for which provisions were already made at the end of 2015 – meant that accrued interest on the liabilities to the tax authorities were suspended until the matter is clarified legally.

Cash flow from investing activities amounted to € -991 thousand (previous year: € -1,154 thousand). This change was primarily a result of the capitalisation of development costs.

Cash flow from financing activities amounted to € -3,554 thousand (previous year: € -8,885 thousand) and resulted from the payment of the dividend.

Cash and cash equivalents amounted to € 3,708 thousand (previous year: € 6,150 thousand) and declined by around € 8.2 million compared to the end of 2015.

Net assets

Fixed assets

In the category of fixed assets, intangible assets included mainly company-produced assets. Intangible assets slightly increased in the first half of 2016 compared to 31 December 2015, from € 7,628 thousand to € 7,819 thousand.

Receivables

At € 17,558 thousand, trade receivables were slightly below the level recorded as of 31 December 2015 (€ 18,126 thousand). Value adjustments on trade receivables totalled € 812 thousand, which was on par with the level as of 31 December 2015 (€ 812 thousand).

Inventories

The book value of inventories stood at € 23,537 thousand, which is an increase in comparison to the end of the 2015 financial year (€ 22,352 thousand). Pre-production of completed systems to process the high order backlog and the expected incoming orders were responsible for this.

Liabilities

Trade payables increased from € 1,558 thousand at the end of 2015 to € 2,659 thousand.

Shareholders' equity

Total shareholders' equity plus reserves fell from € 48,657 thousand at the end of the 2015 financial year to € 45,637 thousand. This was primarily due to the lower net profit for the period. At 80.3 %, the equity ratio was higher than the figure as of 31 December 2015 (77.1 %). The amount of the corresponding previous-year period was at 83.4 %.

Key figures on the Group's net assets, financial position and results of operations	30.06.2016 K€	31.12.2015 K€
Tier 1 liquidity (cash and cash equivalents less current liabilities and provisions)	-5,538	-671
Tier 2 liquidity (tier 1 liquidity plus receivables and other assets less non-current liabilities)	13,318	17,789
Tier 3 liquidity (tier 2 liquidity plus inventories)	36,855	40,141
Current assets:
Cash and cash equivalents	3,708	11,868
Receivables and other assets	19,439	18,983
Inventories	23,537	22,352
	46,684	53,203
Liabilities and provisions:
Current liabilities and provisions	9,246	12,539
Non-current provisions	583	523
	9,829	13,062
Net debt
Liabilities and provisions (-)	-9,829	-13,062
+ Cash and cash equivalents	3,708	11,868
+ Receivables and other assets	19,439	18,983
= Net debt	13,318	17,789
Working capital
Current assets - liabilities and provisions	36,855	40,141
Equity ratio
Shareholders' equity/total assets	80.3	77.1 %
	30.06.2016	30.06.2015
	K€	K€
Cash flow:
Net profit for the period after taxes	681	1,613
+ Depreciation and amortisation expense	852	759
	1,533	2,372
Return on equity
Net profit for the period/shareholders' equity	1.5 %	3.4 %
Return on Investment (ROI)

Net profit for the period/total assets 1.2 % 2.9 % Return on revenue EBT/revenue 6.4 % 10.0 % Return on Capital Employed (ROCE) EBIT/(total assets - cash and cash equivalents - current liabilities and provisions) 4.6 % 7.3 %

REPORT ON POST-BALANCE SHEET DATE EVENTS

There were no other significant events after the first six months of 2016.

OPPORTUNITIES AND RISKS REPORT

The statements on opportunities and risks remain applicable. Please refer to pages 47 – 51 of the company's Annual Report 2015.

Forecast report 2016

Economic conditions

According to recent reports, the further course of economic development will be influenced by the continued weakening of the Chinese economy and the ongoing recession in Brazil. The extended sanctions against Russia and the potential impact of Brexit are also curbing global economic expectations and forecasts.

Private consumption was a key driver of growth in Europe in the first half of the year. In the opinion of the German Institute for Economic Research (DIW), however, this development will not pick up additional steam. Investments, on the other hand, are set to increase again, but will be more subdued on account of Brexit and other political and economic factors.

Although Germany's growth forecast will cool down slightly, the Kiel Institute for the World Economy (IfW) sees Germany continuing to grow. The downgrade results from a slower flow of refugees into the country and the associated absence of government consumption expenditure. However, brisk domestic demand resulting from the good labour market situation and low inflation are driving the upward trend. Consumption is also likely to remain a pillar of growth in Germany. The lacklustre performance of key markets in emerging countries, on the other hand, will weaken. German exports are being strained by the slashing of overcapacities in China, the civil wars in the Middle East and the continued recession in Brazil. Political reasons, such as the sanctions against Russia, are also reportedly making it hard for the German mechanical engineering sector to generate business. Thilo Brodtman, Executive Director of the VDMA (Verband Deutscher Maschinen- und Anlagenbau, Mechanical Engineering Industry Association), therefore anticipates "zero production growth year on year".

On account of the global economy's weak start to 2016, the DIW expects growth of only 3.2 % in 2016. Rising disposable incomes are poised to strengthen private consumption and residential construction in the US, thereby boosting corporate investment and contributing to a 1.8 % rise in GDP. Weakening emerging markets are contributing to a slowdown. With the weakest growth since the financial crisis, China is also unable to provide relief. Positive signals from Russia and Brazil are also not expected. A slight economic recovery is still forecast. However, it will not be able to completely offset the weak development in the first half of the year.

Results of operations

The development of incoming orders and revenue will largely depend on the overall economic situation in 2016, especially in the automotive industry. Based on the asserted assumptions, the forecast for performance indicators remains unchanged compared to the end of the 2015 financial year. At a target revenue and order intake of € 70 million to € 75 million, Viscom continues to expect to generate significantly positive earnings once again in 2016.

The EBIT-Margin is likely to be between 13 % and 15 % in the 2016 financial year, which corresponds to EBIT of € 9.1 million to € 11.3 million.

Financial position

There are no plans for borrowing in the remaining months of 2016 thanks to the ongoing good, albeit reduced liquidity position. Most of the funds, invested in direct access savings accounts and term deposits, are available at short notice.

The other assumptions and forecasts relating to the economic conditions described on pages 52 to 54 of Viscom AG's Annual Report 2015 remain valid.

Other disclosures

Significant transactions with related parties

There are rental agreements for eight properties in Carl-Buderus-Strasse and one property in Fränkische Strasse in Hanover between the Company and Dr. Martin Heuser / Petra Pape GbR, Hanover, Marina Hettwer / Petra Pape GbR, Hanover and HPC Vermögensverwaltung GmbH, Hanover. All these contracting parties are classed as related parties within the meaning of IAS 24.

Viscom AG has also concluded lease contracts for company vehicles with HPC Vermögensverwaltung GmbH. HPC Vermögensverwaltung GmbH provides further services such as company childcare, cleaning services and other miscellaneous services.

General information on the company

Viscom AG is domiciled in Hanover, Germany, and is entered in the local commercial register under HR B 59616. The company's business address is Viscom AG, Carl-Buderus-Strasse 9-15, 30455 Hanover, Germany.

The company's business activities consist of the development, manufacture and sale of automated inspection systems for industrial production. Inspection is performed by the computerbased optical and/or X-ray comparison of the inspected objects with the specifications defined in the inspection system.

IFRS Consolidated Interim Financial Statements Consolidated income statement

Consolidated income statement	01.01.-30.06.2016 K€	01.01.-30.06.2015 K€
Revenue	31,209	30,061
Other operating income	872	1,332
	32,081	31,393
Changes in finished goods and work in progress	1,274	3,509
Other capitalised company-produced assets	782	773
Cost of materials	-12,147	-14,176
Staff costs	-12,322	-11,045
Depreciation / amortisation	-852	-759
Other operating expenses	-6,815	-6,641
	-30,080	-28,339
Operating profit	2,001	3,054
Financial income	0	16
Financial expenses	0	-58
Financial result	0	-42
Income taxes	-1,320	-1,399
Net profit for the period	681	1,613
Earnings per share (diluted and undiluted) in €	0.08	0.18
Other earnings
Currency translation differences	-147	448
Items that can be reclassified to the income statement	-147	448
Other earnings after taxes	-147	448
Total earnings	534	2,061

Consolidated balance sheet Assets

Assets	30.06.2016 K€	31.12.2015 K€
Current assets
Total cash and cash equivalents	3,708	11,868
Trade receivables	17,558	18,126
Current income tax assets	418	40
Inventories	23,537	22,352
Other financial receivables	94	142
Other assets	1,369	675
Total current assets	46,684	53,203
Non-current assets
Property, plant and equipment	1,520	1,541
Intangible assets	7,819	7,628
Financial assets	7	7
Loans originated by the company	20	15
Deferred tax assets	774	736
Total non-current assets	10,140	9,927
Total assets	56,824	63,130

Consolidated balance sheet Shareholders' equity and liabilities

Liabilities	30.06.2016 K€	31.12.2015 K€
Current liabilities
Trade payables	2,659	1,558
Advance payments received	0	65
Provisions	1,554	1,531
Current income tax liabilities	810	3,249
Other financial liabilities	1,707	3,365
Other current liabilities	2,516	2,771
Total current liabilities	9,246	12,539
Non-current liabilities
Non-current provisions	583	523
Deferred tax liabilities	1,358	1,411
Total non-current liabilities	1,941	1,934
Shareholders' equity
Subscribed capital	9,020	9,020
Capital reserve	21,321	21,321
Retained earnings	14,482	17,355
Exchange rate differences	814	961
Total shareholders' equity	45,637	48,657
Total shareholders' equity and liabilities	56,824	63,130

Consolidated cash flow statement

Consolidated cash flow statement	01.01.-30.06.2016 K€	01.01.-30.06.2015 K€
Cash flow from operating activities
Net profit for the period after interest and taxes	681	1,613
Adjustment of net profit for income tax expense (+)	1,320	1,399
Adjustment of net profit for interest expense (+)	0	58
Adjustment of net profit for interest income (-)	0	-16
Adjustment of net profit for depreciation and amortisation expense (+)	852	759
Increase (+) / decrease (-) in provisions	85	-110
Gains (-) / losses (+) on the disposal of non-current assets	-31	0
Increase (-) / decrease (+) in inventories, receivables and other assets	-1,889	-3,435
Increase (+) / decrease (-) in liabilities	-3,500	-1,199
Income taxes repaid (+) / paid (-)	-1,106	0
Net cash from operating activities	-3,588	-931
Cash flow from investing activities
Proceeds (+) from the disposal of non-current assets	50	0
Acquisition (-) of property, plant and equipment and non-current intangible assets	-259	-381
Capitalisation of development costs (-)	-782	-773
Net cash used in/from investing activities	-991	-1,154
Cash flow from financing activities
Dividend payment (-)	-3,554	-8,885
Net cash and cash equivalents from financing activities	-3,554	-8,885
Changes in cash and cash equivalents due to changes in exchange rates	-27	187
Cash and cash equivalents
Changes in cash and cash equivalents	-8,133	-10,970
Cash and cash equivalents as of 1 January	11,868	16,933
Total cash and cash equivalents	3,708	6,150

Statement of changes in shareholders' equity

Shareholders' equity	Subscribed capital K€	Capital reserve K€	Exchange rate differences K€	Retained earnings K€	Total K€
Shareholders' equity as of 1 Jan. 2015	9,020	21,321	532	22,711	53,584
Net profit for the period	0	0	0	3,529	3,529
Other earnings	0	0	429	0	429
Total earnings	0	0	429	3,529	3,958
Dividends	0	0	0	-8,885	-8,885
Shareholders' equity as of 31 Dec. 2015	9,020	21,321	961	17,355	48,657
Shareholders' equity as of 1 Jan. 2016	9,020	21,321	961	17,355	48,657
Net profit for the period	0	0	0	681	681
Other earnings	0	0	-147	0	-147
Total earnings	0	0	-147	681	534
Dividends	0	0	0	-3,554	-3,554
Shareholders' equity as of 30 June 2016	9,020	21,321	814	14,482	45,637

Special disclosures

Declaration of compliance

The present interim consolidated financial statements for the 2016 financial year were prepared on the basis of uniform application and compliance with all of the applicable International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) for interim financial reporting as adopted by the EU as of the reporting date 30 June 2016.

Basic principles of preparation

The IFRS interim consolidated financial statements are prepared in euros. Figures are generally presented in thousands of euros (K€). The segment report is included in the consolidated interim management report.

Essentially, the same accounting and valuation methods as in the 2015 consolidated financial statements were applied.

The income statement was prepared in accordance with the total expenditure format.

Pursuant to IAS 1, assets and liabilities carried on the balance sheet are classified as either current or non-current. Current assets or liabilities are those designated for disposal / redemption within a one-year time horizon.

The preparation of the interim report requires certain assumptions and estimates to be made which affect the amounts and classification of the assets, liabilities, income, expenses and contingent liabilities recognised. Actual amounts may differ from these estimates.

Disclosures regarding financial instruments and financial risk management

Presentation of the categories of financial instruments and the corresponding net profit in accordance with IFRS 7

The presentation below provides information on the carrying amounts from individual measurement categories. The fair values for each class of financial instrument are also displayed. The presentation enables carrying amounts and fair values to be compared.

Assets

	Measurement category	Total		Nominal value		Amortised cost
				Liquid assets / cash reserve		Loans and receivables (LaR) as well as financial instru ments held to maturity (HTM)
30.06.2016 in K€		Carrying amount	Fair Value	Carrying amount	Fair Value	Carrying amount	Fair Value
Financial assets and other receivables	LaR	1,174	1,174	0	0	1,174	1,174
Trade receivables	LaR	17,557	17,557	0	0	17,557	17,557
Liquid assets	LaR	3,708	3,708	3,708	3,708	0	0
Total		22,439	22,439	3,708	3,708	18,731	18,731

Liabilities

	Measurement category	Total		Amortised cost
				Financial liabilities (FL)
30.06.2016 in K€		Carrying amount	Fair Value	Carrying amount	Fair Value
Trade payables	FL	2,659	2,659	2,659	2,659
Other financial liabilities	FL	1,667	1,667	1,667	1,667
Total		4,326	4,326	4,326	4,326

Assets

	Measurement category	Total		Nominal value		Amortised cost
				Liquid assets / cash reserve		Loans and receivables (LaR) as well as financial instru ments held to maturity (HTM)
31.12.2015 in K€		Carrying amount	Fair Value	Carrying amount	Fair Value	Carrying amount	Fair Value
Financial assets and other receivables	LaR	283	283	0	0	283	283
Trade receivables	LaR	18,126	18,126	0	0	18,126	18,126
Liquid assets	LaR	11,868	11,868	11,868	11,868	0	0
Total		30,277	30,277	11,868	11,868	18,409	18,409

Liabilities

	Measurement category	Total		Amortised cost
					Financial liabilities (FL)
31.12.2015 in K€		Carrying amount	Fair Value	Carrying amount	Fair Value
Trade payables	FL	1,558	1,558	1,558	1,558
Other financial liabilities	FL	3,263	3,263	3,263	3,263
Total		4,821	4,821	4,821	4,821

Please refer to pages 104 – 107 of Viscom AG's Annual Report 2015 for more information on financial instruments.

Events after the balance sheet date

There were no other significant events after the first six months of 2016.

Audit of the accounts

As in the case of previous consolidated quarterly accounts, the interim report as of 30 June 2016 was neither examined by an auditor, nor subjected to an audit review.

Responsibility statement

"To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting and proper accounting standards, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the interim management report of the group includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group for the remaining months of the financial year."

Hanover, 12 August 2016

Dr. Martin Heuser Volker Pape Dirk Schwingel

Financial calendar 2016

12 August 2016	Interim Report as of 30 June 2016, Analyst Telephone Conference	Hanover
14 November 2016	Interim Report 9M/2016, Analyst Telephone Conference	Hanover
22 November 2016	German Equity Forum 2016	Frankfurt/Main

Viscom StruCturE

Supervisory Board	Bernd Hackmann (Chairman) Klaus Friedland (Deputy Chairman) Prof. Dr. Ludger Overmeyer
Executive Board	Dr. Martin Heuser Volker Pape Dirk Schwingel
Headquarters	Carl-Buderus-Straße 9 – 15, 30455 Hanover Commercial Register of Hanover District Court HR B 59616
Subsidiaries	Viscom France S.A.R.L., Cergy Pontoise Cedex, France Viscom Inc., Atlanta, Georgia, USA Viscom Machine Vision Pte Ltd., Singapore
Subsidiary of Viscom Machine Vision Pte Ltd., Singapore	Viscom Machine Vision (Shanghai) Trading Co., Ltd.
Subsidiary of Viscom	Viscom Tunisie S.A.R.L., Tunis, Tunisia

Imprint

France S.A.R.L., France

Publisher	Viscom AG, Carl-Buderus-Straße 9 - 15, 30455 Hanover, Germany Tel.: +49 511 94996-0, Fax: +49 511 94996-900 info@viscom.de, www.viscom.com
	Entered in the Commercial Register of Hanover District Court under HR B 59616
Responsible	Viscom AG, represented by the Executive Board
Editorial staff	Dr. Martin Heuser (Member of the Executive Board) Volker Pape (Member of the Executive Board) Dirk Schwingel (Member of the Executive Board) Anna Borkowski (Investor Relations)
Layout and design	CL*GD – corinna.lorenz.grafik.design, www.clgd.de
Printing	gutenberg beuys Feindruckerei, www.feindruckerei.de
Copyright	All photographs and content are protected by copyright. Reproduction in any form requires the written permission of Viscom AG.

Headquarters: Viscom AG Carl-Buderus-Straße 9 -15 · 30455 Hanover · Germany Tel.: +49 511 94996-0 · Fax +49 511 94996-900 info@viscom.de

Contact Investor Relations: Viscom AG, Anna Borkowski

Carl-Buderus-Straße 9 -15 · 30455 Hanover · Germany Tel.: +49 511 94996-861 · Fax +49 511 94996-555 investor.relations@viscom.de

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