Funkwerk AG in a difficult market environment in the first half of 2014

Kölleda, 27 August 2014 - At € 39.4 million, Funkwerk AG's consolidated sales in the first half of 2014 on the basis of continuing operations were slightly below the previous year's level of € 41.0 million. The main reason for this was the difficult market and competitive environment. The Funkwerk Group's incoming orders from continuing operations totalled EUR 47.2 million (previous year: EUR 50.7 million). In the Traffic & Control Communication (TCC) segment, the company recorded good demand, particularly in the DACH region (Germany, Austria, Switzerland), and was able to acquire several new orders. In addition, the planned internationalisation was driven forward and the countries of Zambia and South Africa were newly developed. In contrast, foreign demand in the Security Communication (SC) division remained well below plan. The Group-wide order backlog for continuing operations stood at EUR 62.6 million on 30 June 2014 (previous year: EUR 65.3 million).

In the first six months of 2014, the Funkwerk Group's earnings situation was burdened in particular by high start-up costs for new projects and increased development expenses. In addition, the increase in international sales activities and additional expenses in the area of materials had a noticeable impact. On balance, the operating result from continuing operations fell from EUR -1.3 million to EUR -4.0 million in the first half of the year. Initial effects from the efficiency improvement measures of recent years and the proceeds from the sale of Funkwerk eurotelematik GmbH completed in the reporting period, which were recognised in the extraordinary result, had a positive impact on earnings. The net loss for the period totalled EUR 2.6 million in the first half of 2014 (previous year: EUR 1.8 million).

After the syndicated loan expired at the end of March 2014, the financing of Funkwerk AG was taken over by Hörmann Holding GmbH & Co. KG and Hörmann Finance GmbH, both companies belonging to the majority shareholder. The development of the financial position and net assets remained in line with expectations in the first six months. For 2014 as a whole, Funkwerk expects a slight increase in consolidated turnover (previous year: € 94.0 million) and a positive operating result based on continuing operations, although the general conditions are more difficult than expected, particularly in the SC division.

As the Funkwerk share has been listed on the OTC market since 2013, the interim consolidated financial statements as at 30 June 2014 were no longer prepared in accordance with IFRS but in accordance with the German Commercial Code (HGB). In order to ensure comparability with the previous year, only continuing operations (in line with IFRS 5) were taken into account in the 2013 income statement figures. Accordingly, the Operations Control and Signalling Technology division and the former subsidiary Funkwerk eurotelematik GmbH in Ulm were adjusted.