Kapsch TrafficCom makes significant project progress in the first quarter.

• Expansion phase 1 of the major project in Belarus concluded
• Increased revenue thanks to project progress and operation of the toll system in Poland
• EBIT returns to positive territory despite strains
• Fiscal year 2013/14 marked by implementation projects and project decisions

Vienna, August 19, 2013 – Kapsch TrafficCom AG (ISIN AT000KAPSCH9), listed in the Prime Market of the Vienna Stock Exchange, achieved significant progress on its existing projects in the first quarter of the fiscal year 2013/14. Expansion phase 1 of the nationwide electronic toll collection system in Belarus was completed and went into operation after the balance sheet date. While the toll system in Poland made a significant contribution to the revenue and earnings of the Kapsch TrafficCom Group during the reporting period, the completed system in the South African province of Gauteng still did not go into operation. The revenue and earnings of the Kapsch TrafficCom Group improved significantly compared to the same period of the previous year.

“The quarterly result is not exceptional, and it still leaves us far from our target EBIT margin. It does, however, demonstrate the progress in our existing installation and operation projects. It also shows that the media reports in July regarding our project in South Africa were overblown,” summarizes Georg Kapsch, CEO of Kapsch TrafficCom AG.

The commissioning of the toll system in South Africa has been postponed several times over a long period. Since the end of 2012, the conditions have been established; as before, it remains only for the corresponding law to be signed by the President of South Africa and for the starting date to be announced. The installation of the system has been largely paid for, and the customer is reimbursing the costs for maintaining the operational readiness. Due to the lack of operation revenue as well as additional costs, however, this project is currently a significant drain on the earnings of Kapsch TrafficCom.

In Belarus, Kapsch TrafficCom completed the first phase of the order for installation and operation of the nationwide electronic toll collection system in the quarter under report; the technical operation began on July 1st, followed by commercial operation on August 1st. A fluid transition to expansion phase 2 occurred at the same time. Each individual phase of this major project is being prefinanced by Kapsch TrafficCom, with full payment to be received within three years of the start of operations.

Kapsch TrafficCom achieved yet another success in North America. After our contract with the E-ZPass Group, which operates the world’s largest interoperable toll system in 14 US states, was extended in July 2011, the company received in June 2013 a new five-year order from the Canadian toll authority Cantoll to deliver the next generation of on-board units for the Toronto metropolitan region. This should secure the high volume of on-board units in North America for the coming years.

In Chile, Kapsch TrafficCom received an order for a traffic management system. This shows – if only on a small scale – the increasing importance of intelligent transportation systems (ITS), an area in which Kapsch TrafficCom has devoted increased attention for some time.

Revenue and earnings.

The revenue of the Kapsch TrafficCom Group reached EUR 121.4 million in the first quarter, which is 14.1 % above the previous year’s comparison value of EUR 106.4 million. The EBIT, which was negative in the first quarter of the previous year at EUR -5.2 million was EUR 3.7 million in the reporting period. The company therefore achieved a significant improvement in earnings over the previous year – even despite the burden of the continued delay in commissioning of the system in South Africa.

The segment RSP (Road Solution Projects) recorded revenues of EUR 36.5 million after EUR 34.9 million in the same period of the previous fiscal year, an increase of 4.7 %. The greatest contribution was supplied by the installation project in Belarus, which is also reflected in the improved operating result. Additional revenue contributions were made by the projects in Texas, USA, and Sydney, Australia. The EBIT in the first quarter reached EUR -1.6 million after EUR -7.2 million in the previous year, whereby the expenditures attributed to this segment could not be entirely covered.

In the segment SEC (Services, System Extensions and Components Sales), revenues increased by 19.3 % from EUR 67.7 million in the previous fiscal year to EUR 80.8 million in the first quarter of 2013/14. This increase was driven primarily by the operation and further expansion of the Polish system. The number of on-board units sold also increased in the quarter under report. On this basis, the EBIT reached EUR 5.1 million after EUR 1.9 million in the previous year, despite the drain on earnings due to the project in South Africa.

The profit before taxes and the profit for the period are still negative. This results from the decline in the financial result to EUR -5.3 million due to exchange rate fluctuations concerning the conversion of group-internal receivables with a negative impact as at the key date.

Financial position and cash flows.

The balance sheet of the Kapsch TrafficCom Group at the end of the first quarter of 2013/14 reflected the progress and the prefinancing of the project in Belarus: Both receivables and financial liabilities increased relative to the balance sheet date of 31 March 2013, as did the net working capital. The free cash flow is again negative at EUR -37.2 million, in contrast to the previous quarters. With the conclusion of the first expansion phase, payment by the customer has now begun.

Outlook.

The next quarters will be characterized by the continuation of existing orders. The next expansion phase in Belarus should go into operation toward the end of the fiscal year in spring 2014. Then phase 3 begins, which entails a further expansion of the system by 1,500 km. The implementation of the ongoing projects in France, Australia and Texas should be largely completed by the end of the fiscal year.

Kapsch TrafficCom looks forward with great interest to the coming developments in South Africa as well as Slovenia, where the tender for a toll system was recently canceled. Further invitations to tender are also expected. In parallel to this, the company is also actively contacting possible interested parties for toll systems, an approach that already proved successful in Belarus. The management can report great interest in other countries as well. With its ITS strategy and the new company structure, the Kapsch TrafficCom Group considers itself well-positioned for all growth opportunities.

The report on the first quarter of fiscal year 2013/14: English, German

Kapsch TrafficCom is a provider of intelligent transportation systems (ITS) in the application fields of road user charging, urban access and parking, road safety enforcement, commercial vehicle operations, electronic vehicle registration, traffic management and V2X cooperative systems. Kapsch TrafficCom covers with end-to-end solutions the entire value creation chain of its customers as a one-stop shop, from components and subsystems to their integration and operation. The solutions of Kapsch TrafficCom help to provide funding for infrastructure projects, to increase traffic safety, to optimize traffic flow, and to reduce environmental pollution from traffic. The core business is to design, build and operate electronic toll collection systems for multi-lane free-flow traffic. References in 43 countries on all continents make Kapsch TrafficCom a recognized supplier of electronic toll collection worldwide. As part of the Kapsch Group, a family-owned Austrian technology group founded in 1892, Kapsch TrafficCom, headquartered in Vienna, Austria, has subsidiaries and representative offices in 33 countries, has been listed on the Vienna Stock Exchange (KTCG) since 2007, and generated with more than 3,000 employees revenues of EUR 488.9 million in fiscal year 2012/13.