Stock Exchange & Press Releases 2007

STOCK EXCHANGE RELEASE

 

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:

                                                     

 

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."

 

 

 

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:

 

 

"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.

 

 

(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

 

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

 

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.