Summary of ISRA s successful start to the new fiscal year

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2 Summary of ISRA s successful start to the new fiscal year Profitable growth continues ISRA VISION AG, one of the world s leading suppliers of industrial image processing systems (Machine Vision), saw a seamless continuation of its excellent business development of the past few years in the first quarter of the new 2006/2007 fiscal year (October 1 to December 31, 2006), recording increases in net sales and profits. The ISRA group's EBT (Earnings Before Taxes) climbed 14 percent in the period October 1 to December 31, 2006, increasing to 2.5 million euros. The EBT margin (EBT in relation to total operating revenue) improved in comparison to the same period last year, increasing a further percentage point to 19 percent. The return on sales before taxes reached 21 percent (previous year: 20 percent). In the first quarter of 2006/2007, net sales grew by seven percent, reaching 11.9 million euros, and total operating revenue (net sales plus capitalized development) climbed by nine percent, reaching 13.4 million euros. Increases to efficiency in production and further standardization in the product mix led to production costs only growing sub-proportionally. Consequently, gross profit (total operating revenue less production costs) improved by 11 percent to 7.8 million euros. The gross profit margin (gross profit in relation to total operating revenue) thus rose by a further percentage point to 59 percent. The net profit for the period increased by 21 percent to 1.7 million euros. This leads to earnings per share of 0.38 euros (0.35 euros in the same quarter last fiscal year). The cash flow from operating activities reached 0.9 million euros (previous year: 3.7 million euros); the fund assets on the balance sheet date were 14.8 million euros (previous year: 15.5 million euros). ISRA is working intensively to reduce working capital. The company s efforts are showing the first signs of success, with cash assets increasing by one million euros to 15.8 million euros. ISRA aims to further improve the cash flow in the quarters to come. 2

3 The group s total assets saw little change in comparison to the end of the previous fiscal year 2005/2006 (September 30, 2006). Equity capital benefited from the excellent profit situation, rising 1.5 million euros to 65.3 million euros. The equity capital ratio improved from 73.0 to 74.5 percent. Acquisitions strengthen the Glass division and ISRA s presence in the US, Ireland and Great Britain In the first quarter of fiscal year 2006/2007, ISRA took over the British company IAL. In January (i.e. in the second quarter of fiscal year 2006/2007), ISRA then successfully acquired the US company IAI. The two enterprises are sister companies that emerged from the English company Image Automation Ltd. Image Automation was a competitor of ISRA s in the Float Glass division. Unlike ISRA, however, Image Automation used laser scanner technology. Most customers saw IAL as an alternative to ISRA. The companies have not yet made a significant contribution to the ISRA group's net sales and earnings as of the end of the first quarter of 2006/2007. With its excellent market position, ISRA is set to profit from growth opportunities As one of the global leaders on the growth market Machine Vision, ISRA is excellently positioned. With its two fields of technology, optical robot guidance and optical surface inspection, the company, with its innovative products, is concentrating on increasing efficiency for its customers from industry sectors that are particularly strong in growth. This multi-segment strategy provides the company with several profit drivers, to cushion, on the one hand, economic fluctuations in individual areas, and, on the other, to take advantage of growth opportunities in new sectors. The further development of the company s global presence, not just in Eastern Europe, but also in southern Asia and South America, will bring further growth opportunities. Furthermore, acquisitions will accelerate expansion. 3

4 Development of the company segments Growth impulses again in Industrial Automation The Surface Vision business division exceeded the volume of total operating revenue from the same period last year, posting 9.4 million euros in the first quarter. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) improved by seven percent to 2.5 million euros and EBIT remained stable, posting 1.7 million euros. The EBIT margin decreased slightly, falling 0.2 percentage points to 18.0 percent. A positive trend can be observed in the Industrial Automation business division. Total operating revenue in this segment rose 34 percent to 4.0 million euros. EBITDA improved nine percent to reach 1.0 million euros; EBIT increased by 51 percent to reach 0.7 million euros. Return on sales saw an increase of two percentage points to 17.1 percent. Development of the Business Units Success in strategic fields of expansion In the Glass business unit, ISRA is the innovation and market leader for fully automated quality control in the Flat Glass field. Europe saw strong business development; new impulses are expected in America from the acquisition of Image Automation. The emphasis of business in Asia is shifting from the stagnating business in China to other countries such as India. In the new Display Glass business unit (FPD Flat Panel Display), one of the company s strategic fields of expansion, ISRA is continuing to work intensively on expanding its market in Asia, where approximately 90 percent of production capacity for FPD glass is located. ISRA expects new developments, such as the inspection of TFT structures on FPDs, to bring new impulses here. 4

5 The Plastics business unit expanded its turnover both from existing key accounts and by winning new major customers. Turnover growth was achieved in America and Europe; the company plans to increase turnover in Asia by stepping up sales activities. Market penetration in Eastern Europe continues to be intensified. The Paper business unit began the new fiscal year in Europe better than anticipated. The restrained expectations for America and Asia were confirmed. In the Print division, the new sales management is recording its first successes: sales figures increased, particularly in Europe and America. Alongside the new Display Glass, Food & Packaging and Metal divisions, Print Inspection is a further important strategic field of expansion. ISRA is one of the worldwide market leaders in sheet offset print inspection. The company is continuing to develop its leading position and is expanding its expertise to the new field of printed sheet materials. The Metal division is continuing its successful development in Europe. Tests with a large German steel producer are proceeding very successfully. Food & Packaging has intensified its business in America, particularly in Can Inspection. Here, several major orders have been drawn up with global players for can inspection systems; these orders are expected to be concluded shortly. The Automotive business unit is stabilizing its business. The innovations have been well received by customers. In the wake of strategically important sales successes, ISRA has increased its net sales in Europe. In America, business is becoming more firmly established; in Asia, however, there has been no growth to record: development work is being continued here. Ensuring sales success worldwide through exhibition presence International trade fairs are ISRA's best opportunity to persuade customers of the great benefits its products can bring them such as the rapid return on investment (ROI) and reliable defect recognition. This is where key con- 5

6 tacts are made with customers. To further develop their position as an international market leader, ISRA regularly visits all of the important trade fairs around the world. This ensures sales success and, by extension, the company's sustained growth. In the first quarter of fiscal year 2006/2007, ISRA was represented at the following trade fairs: Factory Automation ASIA, Shanghai, October 10 to 13, 2006 Glasstec, Düsseldorf, October 24 to 28, 2006 VISION 2006, Stuttgart, November 7 to 9, 2006 Stahltag Düsseldorf, Düsseldorf, November 9, 2006 Hofer Vliesstofftage, Hof (Germany), November 8 9, 2006 Metal-Expo, Moscow, November 14 17, 2006 Paper For, St. Petersburg, November 21 24, 2006 ZAK Glasstech, New Delhi, December 8 10, 2006 The coming months will see visits at: Prosweets, Cologne, January 29 February 1, 2007 Duisburger Extrusionstagung, Duisburg (Germany), March 13 14, 2007 FPD China, Shanghai, March 13 15, 2007 ICE, Munich, March 27-29, 2007 GulfGlass, Dubai, March 27 29, 2007 Finetech, Tokyo, April 11 13, 2007 Bopp Film 2007, Dubai, April 16 18, 2007 Idea, Miami, April 24 26, 2007 Cannex, Las Vegas, April 25 27, 2007 SVC, Louisville (USA), April 30 May 1,

7 Finance Reporting enhanced Increased margins Reporting has been enhanced in order to point out the strong earning potential of ISRA compared to other companies. Alongside the voluntary presentation of the industry-typical consolidated income statement in accordance with the cost of sales-oriented total-operating-revenue-ebitda- EBIT-statement, the company is also providing the consolidated financial statements according to the IFRS cost of sales format. The most significant difference is that the profit margins (EBIT and EBT margins) in the consolidated financial statements according to the IFRS cost of sales format are higher, since they now relate to the net sales and no longer to the total operating revenue. The EBIT margin reaches 20 percent (instead of 18 percent when related to total operating revenue) and the EBT margin 21 percent (instead of 19 percent when related to total operating revenue). For ease of comparison, and to ensure consistency, the following consolidated income statement is explained using the traditional total-operatingrevenue-ebitda-ebit statement: Increased sales and profit with continued improvement to return on investment Total operating revenue for the ISRA group grew organically in the first quarter of fiscal year 2006/2007 by nine percent to 13.4 million euros. Acquisitions have not yet made a substantial contribution to the expansion of business. Manufacturing costs for production increased sub-proportionally by six percent, to 5.5 million euros. Of this amount, material costs rose ten percent to 2.7 million euros. The proportion of material costs of 20 percent remained stable in comparison to the same period last year. 7

8 Personnel costs increased by only three percent to 2.8 million euros, which resulted in the proportion of personnel costs shrinking by one percentage point to 21 percent. Gross profit improved by 11 percent to 7.8 million euros. The gross profit margin advanced by one percentage point to 59 percent in comparison to the previous year. Innovations generate growth In the Machine Vision market, innovations decide who leads the competition and how companies will grow in the future. Research and Development (R&D) is the basis for innovation. In the first three months of fiscal year 2006/2007, ISRA invested 1.8 million euros, or three percent more, in R&D. R&D activities are to be intensified over the course of the year. Of the 1.8 million euros, 1.5 million euros were invested in the development of new products with impending market launch. These expenditures were capitalized in accordance with IAS 38. At the same time, 0.9 million euros were written off for capitalized developments from previous years and the reporting period. The ratio of capitalized developments to R&D expenditures demonstrates the efficiency with which research and development are carried out at ISRA. This means the majority of R&D expenditures can be apportioned to products that are about to be brought onto the market. The rest goes toward basic research and expenditures for maintaining existing products, and is not capitalized. Sales costs increased by eight percent to 1.8 million euros and administration costs grew by six percent to 0.8 million euros. Taken together, administration and sales costs developed slightly sub-proportionally to total operating revenue, climbing eight percent to 2.6 million euros. Depreciation reached 1.2 million euros (previous year: 1.1 million euros) and other operational profits amounted to 0.1 million euros (previous year: 0.4 million euros). 8

9 Profitable growth EBIT grew over-proportionally in relation to total operating revenue, rising ten percent to reach 2.4 million euros. The EBIT margin (ratio of EBIT to total operating revenue) improved by one percentage point to 18 percent. After a positive financial result of 0.1 million euros (previous year: 0.02 million euros) and taxes in the amount of 0.8 million euros (previous year: 0.8 million euros), a net profit of 1.7 million euros (a rise of 21 percent) remains. The net return on sales (net profit in relation to total operating revenue) advanced by one percentage point to twelve percent. Earnings per share reached 0.38 euros (0.35 euros in the same period last year). Liquidity and financial situation Operational cash flow reached 0.9 million euros (previous year: 3.7 million euros). Following investments of 1.6 million euros (previous year: 1.4 million euros), fund assets (net cash flow) were down by 0.7 million euros to 14.8 million euros on the balance sheet date. ISRA is continuing to work vigorously on optimizing working capital. The company s efforts are showing the first signs of success, with cash assets climbing by one million euros to 15.8 million euros. Finances remain an important focus in the administrative development of the company. The goal is to achieve significant improvements in cash flow in the next two quarters. This was one of the reasons why personnel have been enhanced to Financial Management both in America and at headquarters in Darmstadt. Share of equity capital rises to 74.5 percent The group s total assets saw little change in comparison to the end of the previous fiscal year 2005/2006 (September 30, 2006), rising 0.2 million euros to 87.6 million euros. Fixed assets grew by 1.2 million euros to 36.3 million euros. The most significant changes were a 0.6 million euro increase in goodwill, yielding 13.5 million euros (resulting from the acquisition of the British company IAL), and a 0.7 million euro increase in capitalized developments, yielding 12.2 million euros. 9

10 Current assets decreased by one million euros to 51 million euros. The value of finished products rose 0.7 million euros to 1.6 million euros, trade receivables increased by 0.6 million euros to 23 million euros, and cash assets decreased by 0.7 million euros to 14.8 million euros. The liabilities side of the balance sheet benefited from the sound profit situation. Equity capital thus rose by 1.5 million euros to 65.3 million euros. The share of equity capital improved from 73.0 to 74.5 percent. The increase in accruals and amortization of accruals of 0.7 million euros was offset by the decrease of 1.4 million euros in liabilities, mainly from trade payables. Staff The ISRA group s most important asset are its employees. In order to make them better qualified and to develop their potential as best as possible, the Human Resources division was expanded. The sales teams were further strengthened in order to achieve the dynamic growth goals. On average, 281 people were employed by the ISRA group in the first three months of the fiscal year (average for the previous fiscal year: 273). Research and Development New products, nine of which are to be brought onto the market in the course of fiscal year 2006/2007, are at the center of R&D activities. Reflecting our growth strategy, the focus of R&D lies on new products and applications for existing markets. By more deeply penetrating customers production processes with ISRA products in various production stages, ISRA can strengthen its position with customers and increase its market share in the relevant business unit. R&D efforts are currently concentrated in particular on the areas of Print, Display Glass and Robot 3D Applications. Where the development of products is concerned especially in surface inspection the motto is "faster, more precise, more intelligent." But the 10

11 customer does not just want reliable detection of even the tiniest defects; he also wants to be able to classify the defects so the data can be used to optimize production even globally by means of Web-based databases. Rapid and precise classification is an important step in increasing the customer s ROI (Return On Investment), and reduces the time it takes to amortize the investment. By intensifying and extending its collaborations with selected universities, ISRA expects a transfer of know-how and important impulses for future trends and developments. Interest in ISRA stock continues to increase In the three months between September 30, 2006, and the end of the year, ISRA stock gained a good 4.8 percent. It was, however, unable to completely mirror the TecDAX s strong recovery since the middle of The TecDAX gained 12.8 percent in the last quarter of the 2006 calendar year. On October 20, 2006, ISRA stock reached euros, its lowest mark in the first quarter of fiscal year 2006/2007, only to recover and reach its highest mark of euros on December 11, ISRA stock ended the 2006 calendar year at a price of euros. Ever increasing interest in the high-growth company ISRA was shown at the many events at which the Chairman of the Executive Board presented the company to institutional investors, analysts and journalists. This is reflected in the sharp rise in business volume. The average number of ISRA shares traded daily on XETRA and the Frankfurt stock exchange rose to 11,300, up by roughly a quarter over the same period last year. The company s current market capitalization of more than 90 million euros means it is a focus for the most important small-cap institutional investors. On November 27, 2006, ISRA conducted its annual analysts' conference at the German Equity Forum in Frankfurt. In addition, ISRA presented itself at 11

12 Commerzbank s German Technology Conference and staged a press roadshow in Munich. ISRA encountered substantial interest at these events, which was reflected in broad media coverage. We warmly invite all shareholders to the Annual General Meeting for fiscal year 2005/2006 in Darmstadt on March 20, Outlook Profitable growth remains ISRA s goal ISRA s strategy is to grow from a basis of several business units. This basis is continuously being enlarged. Following successful entry to the Metal market, the agenda for the new fiscal year 2006/2007 includes expansion into the Display Glass segment and continued development of the Food & Packaging activities into a separate business unit. In the Glass business unit, ISRA expects the strongest growth impulses from Asia and North America. Activities are also being initiated in regions where ISRA has not been represented before. The full acquisition of IAL allows ISRA to further expand both its position as the worldwide innovation and market leader in the Glass division and its presence in America as well as in Ireland and the UK. IAL s highly experienced management will add expertise to the ISRA sales team. Three innovative products will be brought onto the market for existing customers. ISRA anticipates further sales from the refitting of existing systems with new technology. For Display Glass, there will be over 25 percent growth in the end markets. Trade in inspection solutions for FPDs should also benefit from this. The growth in numbers of cellular phones, notebooks and flat screens for computers and entertainment products continues. With the panels becoming ever larger and more valuable, the importance of one hundred percent inspection is on the increase. 12

13 In addition to America and Eastern Europe, the Plastic division is placing its focus on Asia, and recently, in particular on southern Asia. ISRA has developed new low-budget products especially for developing regions. To distinguish itself even more from the competition in existing customers eyes, and to increase sales, ISRA offers intelligent product extensions. The Print segment is expected to deliver substantial growth under new leadership. The sales team has been enlarged and new applications for various kinds of printed surfaces developed. In the Paper business unit, no growth is to be expected this year. New products and applications are expected to generate growth in the Automotive segment. The sales team in the Metal segment will continue its intensive efforts to convince the sector s large multinational customers of the quality of ISRA products. An important competitive advantage of ISRA systems is their intelligence, defect classification being an example of this. New orders are expected from Europe and Asia. Sales activities will start in North America in the second quarter of the current fiscal year. Following the first successful installations of beveragecan inspection systems, the new Food & Packaging segment anticipates further orders from the world s largest manufacturer of beverage cans and from one of the world s largest beverage producers. Alongside further growth in turnover, principally through expansion of the market share, ISRA s strategic focus is on increasing efficiency through faster time-to- market for new products, by taking advantage of economies of scale, through further increases in productivity in all organizational units and in particular from improved cash management. It is ISRA s clear objective in the next two quarters to significantly reduce working capital and improve cash flow. Simultaneously with the geographical expansion into Eastern Europe, ISRA will devote greater efforts to extending sales activities in southern Asia and South America if market analyses confirm expectations. Work here will begin in the field of optical surface inspection. ISRA s attainment of its growth goals is inseparably linked with the success of its staff. In order to find new, suitably qualified staff and to support ISRA employees in their development, the Human Resources division has been 13

14 enlarged. The Business Development team has the task of systematic development of new regional and sector-specific business fields. The sales teams in the Print, Automotive and Paper segments were further strengthened in the first quarter of fiscal year 2006/2007. With a current order book of 17 million euros, ISRA intends to grow profitably for the tenth year in succession. Based on current planning, ISRA management anticipates double-digit percentage growth in turnover and revenue for fiscal year 2006/2007. Traditionally, the growth will be again generated during the second half year. Darmstadt, February 26,

15 Consolidated income statement *)***) from October 1, 2006 to December 31, 2006 in T FY 2006/ months (Oct. 01, 2006 to Dec. 31, 2006) FY 2005/ months (Oct. 01, 2005 to Dec. 31, 2005) Net sales 11, % 11, % Cost of sales 5,630 47% 5,294 48% Gross operating result (gross profit) 6,242 53% 5,781 52% Research and development 1,283 11% 1,545 14% Total costs 1,820 15% 1,773 16% Depreciation 986 8% 948 9% Grants -24 0% 0 0% Capitalized development -1,499-13% -1,212-11% Sales and marketing costs 1,857 16% 1,705 15% Administration costs 817 7% 763 7% Sales and administration costs 2,674 23% 2,468 22% Other operational revenue 84 1% 379 3% Financial result 112 1% 29 0% EBT 2,481 21% 2,176 20% Taxes on earnings 828 7% 813 7% Net profit for the period 1,653 14% 1,363 12% Earnings per share in before tax**) Earnings per share in **) Shares issued 4,337,940 3,947,940 *) according to IFRS/IAS, unaudited **) Per-share result undiluted and diluted ***) The Company s annual consolidated financial statements were prepared in accordance with the International Accounting Standards (IASs) of the International Accounting Standards Board (IASB). In the year under review the IFRS/IASs and SICs which must compulsorily be applied were followed. 15

16 Consolidated Total-Operating-Revenue- EBITDA-EBIT-statement **) from Oct. 1, 2006 to Dec. 31, 2006 in T FY 2006/ months (Oct. 01, 2006 to Dec. 31, 2006) FY 2005/ months (Oct. 01, 2005 to Dec. 31, 2005) Net sales 11,871 89% 11,075 90% Capitalized development 1,499 11% 1,212 10% Total operating revenue 13, % 12, % Cost of materials 2,723 21% 2,479 20% Cost of labor excluding depreciation Production cost excluding depreciation 2,800 21% 2,727 22% 5,523 41% 5,206 42% Gross Profit 7,847 59% 7,081 58% Research and development costs total excluding depreciation 1,820 14% 1,773 14% Sales and marketing costs 1,789 13% 1,651 13% Administration costs 787 6% 739 6% Sales and administration costs excluding depreciation 2,576 19% 2,391 19% Other operational revenue 108 1% 379 3% EBITDA 3,560 27% 3,296 27% Depreciation 1,191 9% 1,149 9% Total costs 5,587 42% 5,314 43% EBIT 2,369 18% 2,147 17% Financial result 112 1% 29 0% EBT 2,481 19% 2,176 18% Taxes on earnings 828 6% 813 7% Net profit for the period 1,653 12% 1,363 11% Earnings per share in before tax**) Earnings per share in *) Shares issued 4,337,940 3,947,940 *) Per-share result undiluted and diluted **) This pro forma statement is an additional presentation based on the comprehensive presentation given in previous years and not part of the IFRS consolidated financial statements. 16

17 Consolidated Balance Sheet *)**) as of December 31, 2006 in T Assets Dec. 31, 2006 Sep. 30, 2006 Current Assets Cash and cash equivalents 14, Trade receivables 23,009 23,606 Inventories 11,513 10,908 Prepaid Expenses Other assets 1,577 1,828 Total current assets 50,997 51,977 Fixed assets Goodwill 13,525 12,907 Other intangible assets 20,192 19,581 Tangible assets 2,630 2,681 Deferred tax assets Total fixed assets 36,563 35,385 Total assets 87,560 87,362 Equity and liabilities Dec. 31, 2006 Sep. 30, 2006 Short-term liabilities Trade payables 2,835 4,039 Accruals Tax accruals 1, Deferred income Other liabilities ,178 Total short-term liabilities 11,155 11,910 Long-term liabilities Deferred tax liabilities 9,103 9,644 Bank liabilities 1,200 1,200 Accruals for obligations to employees Total long-term liabilities 11,097 11,626 Equity Issued capital 4,338 4,338 Capital reserves 37,082 37,082 Currency exchange variations Profit brought forward 23,179 16,896 Net profit for the period 1,653 6,283 Total equity 65,308 63,826 Total equity and liabilities 87,560 87,362 *) according to IFRS/IAS, unaudited **) The Company s annual consolidated financial statements were prepared in accordance with the International Accounting Standards (IASs) of the International Accounting Standards Board (IASB).In the year under review the IFRS/IASs and SICs which must compulsorily be applied were followed. In the first quarter of 2005/2006 Share-based Payment has been used for the first time; prior year results have been restated accordingly. 17

18 Consolidated Cash-flow Statement *)**) from October 1, 2006 to December 31, 2006 in T Oct. 1, 2006 to Dec. 31, 2006 Oct. 1, 2005 to Dec. 31, 2005 Consolidated net profit for the period 1,653 1,364 Taxes paid Changes in the deferred tax assets and the accruals for deferred tax liabilities Changes in accruals Depreciation 1,191 1,148 Changes in inventories Changes in trade receivables, other assets, prepaid expenses 1,178 1,380 Changes in trade payables, other liabilities, deferred income -2, Changes in other accruals 1, Cash-flow from operating activities 934 3,685 Investments in tangible assets Investments in intangible assets -1,649-1,311 Investments in acquisitions 81 0 Cash-flow from investment activities -1,596-1,391 Deposits arising from equity increase 0 0 Deposits arising from financial liabilities 0 0 Interest paid and received Cash-flow from financing activities Changes in value resulting from exchange rate variations Change in fund assets ,281 Net Cash-flow Fund assets as per Oct. 01, 2006/ Oct. 01, ,515 5,863 Fund assets as per Dec. 31, 2006/ Dec. 31, ,794 8,144 *) according to IFRS/IAS, unaudited **) The Company s annual consolidated financial statements were prepared in accordance with the International Accounting Standards (IASs)of the International Accounting Standards Board (IASB).In the year under review the IFRS/IASs and SICs which must compulsorily be applied were followed. 18

19 Consolidated Statement of Changes in Equity October 1, 2006 to Dec. 31, 2006*)**) in T Common stock Capital reserves Retained earnings Profit brought forward Net income for the period Equity October 1, ,338 37, , ,826 Differences resulting from exchange rates Net income for the period Dec. 31, ,338 37, ,179 1,653 65,308 Consolidated Statement of Changes in Equity October 1, 2005 to Dec. 31, 2005*)**) in T Common stock Capital reserves Retained earnings Profit brought forward Net income for the period Equity October 1, ,948 28, , ,800 Differences resulting from exchange rates Net income for the period ,363 1,363 Dec. 31, ,948 28, ,896 1,363 50,121 *) according to IFRS/IAS, unaudited **) The Company s annual consolidated financial statements were prepared in accordance with the International Accounting Standards (IASs) of the International Accounting Standards Board (IASB).In the year under review the IFRS/IASs and SICs which must compulsorily be applied were followed. In the first quarter of 2005/2006 Share-based Payment has been used for the first time; prior year results have been restated accordingly. 19

20 Segment Reporting by Division for selected positions of the consolidated income statement In T *)**) Industrial Automation Division Oct. 1, 2006 to Dec. 31, 2006 Oct. 1, 2005 to Dec. 31, 2005 Oct. 1, 2006 to Dec. 31, 2006 Surface Vision Division Oct. 1, 2005 to Dec. 31, 2005 Total Output 3,952 2,945 9,418 9,342 Revenues 3,596 2,437 8,275 8,638 EBITDA 1, ,526 2,351 EBIT ,695 1,701 *) according to IFRS/IAS, unaudited **) The Company s annual consolidated financial statements were prepared in accordance with the International Accounting Standards (IASs) of the International Accounting Standards Board (IASB).In the year under review the IFRS/IASs and SICs which must compulsorily be applied were followed. In the first quarter of 2005/2006 Share-based Payment has been used for the first time; prior year results have been restated accordingly. Basic Principles of Accounting and Assessment The Company s annual consolidated financial statements were prepared in line with the International Accounting Standards (IFRS/IASs) of t he International Accounting Standards Board (IASB). In the year under review the IFRSs and SICs which must compulsorily be applied were followed. In the first quarter of 2005/2006 Share-based Payment has been used for the first time; prior year results have been restated accordingly. Details to Shares Hold by members of the Executive and Supervisory Board Executive Board No. of shares as per Dec. 31, 2006 E. Ersü 1,002,794 H.-J. Christ 60 W. Rothermel 0 S. Wienand 0 Dr. J. Giet 0 No. of shares as Supervisory Board per Dec. 31, 2006 Prof. Dr. H. Tolle 900 Dr. W. Witz 0 Dr. R. Moog 0 G. Riske 103 Dr. D. Willasch 0 F. Haun 0

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