Kapsch TrafficCom sets a course for higher profitability and growth.

• Revenue in the first three quarters of 2014/15 slightly below the previous year
• EBIT significantly increased despite the lack of new large projects
• Agenda 2020 already in implementation, initial successes apparent
• Improved earnings and dividend distribution planned for the full 2014/15 fiscal year
   

Vienna, February 25, 2015 – Kapsch TrafficCom AG (ISIN AT000KAPSCH9), listed in the Prime Market of the Vienna Stock Exchange, experienced stable business developments in the first three quarters with existing installation and operation projects. The Kapsch TrafficCom Group was also able to obtain a number of new orders in Australia during the third quarter, although new major orders – upon which the innovation and growth plans are based – remained elusive due to the lack of corresponding invitations to tender. The group-wide Agenda 2020, which lays out the organizational and strategic plans for a future growth course, has already contributed to an EBIT improvement during the current reporting period.

Financial position.

The revenue of the Kapsch TrafficCom Group during the first three quarters of the 2014/15 fiscal year was EUR 349.5 million, slightly below the previous year’s value of EUR 355.0 million. In the segment Services, System Extensions, Components Sales (SEC), the operation projects in Belarus and South Africa that began in the previous year were instrumental in enabling an increase of 12.1%. In the segment Road Solution Projects (RSP), however, the decline in revenue by 43.1% reflects the advanced stage of the existing large installation projects and the lack of new major projects.

For this reason, the EBIT of the segment RSP remained negative at EUR -37.4 million, and it was not possible to cover the expenses for development work and preparations for potential tenders. The fact that the EBIT at the Group level nevertheless increased by an impressive 177.5% to EUR 23.7 million is due – in addition to the one-time effects at mid-year – to the two additional operation projects as well as the initial successes of the realized cost reductions.

As in the first two quarters of the fiscal year, Kapsch TrafficCom Group was forced again in the third quarter to record an impairment of the stake in Q-Free ASA. The total impairments in the first three quarters of 2014/15 amounted to EUR 18.5 million. The profit for the period, which was negative in the comparison period of the previous year at EUR -1.3 million, only improved to EUR 1.0 million as a result. Due to this circumstance, the profit per share remains negative at EUR -0.36.

Overall, the balance sheet of the Kapsch TrafficCom Group reflects a continual improvement in the reporting period. The equity ratio rose from 37.6% to 41.0%, the net debt has been halved since the start of the current fiscal year and cash and cash equivalents reached EUR 94.8 million at the end of the third quarter. The net working capital declined significantly, and Kapsch TrafficCom Group recorded a free cash flow of EUR 59.4 million for the reporting period. These figures also reflect that there are currently no new large installation projects to be financed.

Agenda 2020.

In consideration of the changed market conditions, the Kapsch TrafficCom Group has developed an intensive, group-wide agenda. This Agenda 2020 is intended to quickly improve the profitability of the existing business while also laying out a long-term growth strategy for the Kapsch TrafficCom Group. All associated measures were identified in recent months and immediately put into action. The key pillars consist of cost savings realized from both material and staff costs alongside a further focusing of the portfolio in the area of intelligent transportation systems (ITS). The initial successes can already be seen in the EBIT for the first three quarters.

Outlook.

Agenda 2020 will also be reflected in the results for the full 2014/15 fiscal year. On this basis, the executive board hopes to once again distribute dividends, in contrast to the previous year.

In the coming 2015/16 fiscal year, Agenda 2020 should enable an EBIT margin of roughly 10%. The Kapsch TrafficCom Group views a cost structure corresponding to the current revenue as the basis for this calculation, although the Group will strive for growth even beyond this level.

The next months will be characterized by the continuation of existing projects. The Kapsch TrafficCom Group also expects a further expansion of existing toll systems, such as those in Belarus and Poland. In addition, several new ITS systems are approaching their decision phases, including one large project.

The company also looks positively on the increasing attention being given to toll systems within Europe. “Among other indications, the discussion in Germany demonstrates the continued existence of the major trend of financing the maintenance and expansion of infrastructure – an important market driver,” explains Georg Kapsch, CEO of Kapsch TrafficCom AG. Kapsch TrafficCom also remains engaged in active discussions with potential toll system customers and expects these efforts to lead to successes as well.

Notification.

The reports on the first three quarters of fiscal year 2014/15: 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 design to the installation and operation of systems. The solutions of Kapsch TrafficCom help to finance infrastructure, 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 44 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 3,300 employees revenues of EUR 487.0 million in fiscal year 2013/14.