STOCK EXCHANGE RELEASE
Free for publication June 1, 2007 at 8.00 am. (EEST)
ELEKTROBIT CORPORATION SELLS ITS PRODUCTION SOLUTIONS BUSINESS TO
ROHWEDDER AG, REARRANGES BUSINESS SEGMENTS AND GIVES A NEW GUIDANCE
THE SALE OF PRODUCTION SOLUTIONS BUSINESS
Elektrobit Corporation ("EB") and Rohwedder AG ("Rohwedder") have
signed an agreement on June 1, 2007, under the terms of which EB
agreed to sell its Production Solutions business to Rohwedder (the"Transaction"). The Transaction comprises EB's subsidiaries belonging
to the Production Solutions business.
The Production Solutions Business Unit provides production testing
and automation technology especially for telecommunications equipment
manufacturers and for the automotive and consumer goods industries.
The Production Solutions Business Unit has belonged to EB's Test and
Automation Business Segment and employs 112 people in Finland and 280
people abroad, mainly in Europe.
The price for the acquisition is EUR 29 million on a cash and
interest-bearing debt free basis. Furthermore, there is a purchase
price component that will depend on the Business Unit's financial
performance in 2007 and 2008. The selling of the Production Solutions
business increases EB's net profit of the second quarter of 2007 by
approximately EUR 15 million non-recurrently. The net cash flow
increases by approximately EUR 15 million non-recurrently and, at the
latest in a six months time, EUR 5 million more. The assets in the
transferring Balance Sheet of May 31, 2007 are approximately EUR 30
million. The purchase price is subject to a post completion
adjustment based upon the level of net assets in the Production
Solutions business in the end of May 2007.
The Transaction comprises the following subsidiaries owned by
Elektrobit Production Solutions Ltd.: OÜ JOT Eesti, JOT Automation
Italia S.r.l, Elektrobit Hungary Kft, S.C. Elektrobit S.R.L, JOT
Automation Korea Ltd., Elektrobit Technologies (Beijing) Ltd.,
Elektrobit GmbH, Elektrobit Production Solutions Inc. and Elektrobit
Da Amazonia Ltda, as well as Elektrobit Technologies India Private
Ltd. owned by Elektrobit Production Solutions Ltd. and Elektrobit
Corporation.
The Production Solutions products and product brands (such as JOT
Automation) are included in the Transaction.
The net sales and operating profit (loss) of the Production Solutions
business unit during January 1, 2006 to March 31, 2007 were as
follows:
+-------------------------------------------------------------+
| (MEUR) | Jan - March 2007 | Jan - Dec 2006 |
|-------------------------+------------------+----------------|
| Net sales | 8.6 | 60.4 |
|-------------------------+------------------+----------------|
| Operating profit (loss) | -1.6 | 3.1 |
|-------------------------+------------------+----------------|
| Percentage of net sales | -18.5 % | 5.1 % |
+-------------------------------------------------------------+
The figures presented above include only the direct income and
expenses related to the operations of the Production Solutions
business (IFRS 5.30)."We have been seeking for a strong industrial buyer for our
Production Solutions business and we believe Rohwedder provides a
very good new home for this business. I want to thank all Production
Solutions personnel for their contributions as a part of EB and wish
them success in future", comments on the transaction EB's CEO Mr.
Pertti Korhonen.
Commenting on the acquisition, Mr. Joachim Rohwedder, Chairman of the
Board of Rohwedder said: "This acquisition is the decisive step on
our way to becoming the leading international automation technology
enterprise, especially with regard to our Electronics Production
Solutions (EPS) division. We are looking forward to integrating the
new business unit and the employees into the Rohwedder Group as fast
as possible."
STRATEGY STATUS - BUSINESS SEGMENTS REDUCED TO TWO, SYSTEM TEST
INCLUDED IN THE LONGER-TERM PORTFOLIO
As the Production Solutions Business Unit is no longer a part of EB,
the company has decided to reduce the number of Business Segments to
two. The names of the Business Segments will be simplified to"Automotive" and "Wireless".
The Automotive Business Segment will consist, as also so far, of the
Automotive Software Business Unit.
The Wireless Business Segment will comprise Mobile Terminal Solutions
and Radio Network Solutions Business Units. In addition, the company
has decided to include the System Test Business Unit in its
longer-term business portfolio, under the Wireless Business Segment.
This decision is based on the confirmation of the System Test
Business Unit's undisputed global product leadership and critical
role in generating leading-edge radio propagation know-how for the
integrated use of the whole company. Since June 2006, EB has been
reviewing and developing the strategy of System Test Business Unit.
The company has decided to focus the Business Unit's operations on
advanced wireless emulation and engineering tools and started to
invest in the development of new products in order to expand the
application domain and the product portfolio of the Propsim radio
channel emulator product family. To better describe the refined focus
of the System Test Business Unit, it is renamed as the Wireless
Communications Tools Business Unit.
Also, EB has decided to formulate its RFID and related industrial
wireless network solutions businesses into a business unit called
Wireless Sensor Solutions within the Wireless Business Segment. A
line of RFID reader products introduced in November 2006 together
with EB's industrial WLAN products represents the initial product
portfolio of the new Business Unit.
Elektrobit Corporation's reporting will be based on the following
business segments from April 1, 2007:
Automotive Business Segment Wireless Business Segment
Automotive Software Business
Unit Mobile Terminal Solutions Business Unit
Radio Network Solutions Business Unit
Wireless Sensor Solutions Business Unit
Wireless Communications Tools Business
Unit"EB has now completed the first phase of the implementation of the
new strategy as defined in the spring 2006 and has reduced the number
of businesses to five. This is a solid base for the next steps of the
strategy implementation concentrating on clear growth businesses",
says Dr. J. T. Bergqvist, Chairman of the Board, Elektrobit
Corporation.
OUTLOOK FOR THE FIRST HALF OF 2007
(Continuing Operations without Production Solutions business)
EB expects the revenue during the first half of 2007 to be on the
same or slightly higher level compared to the second half of 2006
(MEUR 61.0). The company will continue to invest in:
- Software platform based products in the Automotive Software
Business Unit.
- Development of mobile WiMAX radio base station module products in
the Radio Network Solutions Business Unit.
- Expanding the application domain and the product portfolio in the
Wireless Communications Tools Business Unit.
- The technical core competence areas defined in the strategy.
- Developing the Sales and Marketing organization.
- Building up efficient and unified support functions and platforms
to enable global business operations according to the strategy.
Mainly due to these continued considerable investments, EB expects
the operating loss in the first half of 2007 to be approximately
double compared to the operating loss of the second half of 2006
(MEUR -7.8).
Oulunsalo, June 1, 2007
Elektrobit Corporation
Board of Directors
Further information:
Pertti Korhonen
CEO
Elektrobit Corporation
Tel. +358 40 344 3889
Seppo Laine
CFO
Elektrobit Corporation
Tel. +358 40 344 2250
Maija-Liisa Fors
Director, Investor Relations
Elektrobit Corporation
Tel. +358 40 344 2875
DISTRIBUTION:
OMX Helsinki
Principal media
Elektrobit Corporation, EB
EB creates advanced technology and turns it into enriching end-user
experiences. EB is specialized in demanding embedded software and
hardware solutions for automotive and wireless technologies. The net
sales for the year 2006 totalled MEUR 181.5. Elektrobit Corporation
is listed on OMX Helsinki. www.elektrobit.com
Rohwedder
The Rohwedder Group with around 600 employees is a leading provider
of complex system solutions for automation technology in the
Mechatronics Production Solutions and Electronics Production
Solutions divisions. The Group serves its customers directly in the
three growth markets Europe, North America and Asia. Rohwedder
automation lines are mainly used in the following industries:
Automotive supplies, telecommunications and electronics industry as
well as medical technology. Rohwedder AG stock (ISIN DE0007057705) is
listed on the Frankfurt Stock Exchange in the Prime Standard segment.
ELEKTROBIT CORPORATION SELLS ITS PRODUCTION SOLUTIONS BUSINESS TO ROHWEDDER AG, REARRANGES BUSINESS SEGMENTS AND GIVES A NEW GUIDANCE
| Source: Bittium Oyj