DGAP-News: Vtion Wireless Technology AG / Key word(s): Half Year Results Vtion Wireless Technology AG ensures its profitability despite lower revenues 21.08.2014 / 08:17 --------------------------------------------------------------------- Results H1 2014 Vtion Wireless Technology AG ensures its profitability despite lower revenues - Revenues of 22.9 million Euros decreased by 18 per cent compared to H1 2013 (Euro 27.8 million Euros) with EBIT margin remained at 8 per cent - Adjusted guidance for 2014 predicts revenues of at least 48 million Euros and an EBIT margin of approximately 7 per cent Frankfurt, August 21, 2014. Vtion Wireless Technology AG (Vtion), one of the leading suppliers of wireless data solutions for mobile computing in China, generated revenues of 22.9 million Euros in the first 6 months of 2014, corresponding to a decrease of 18 per cent compared to the same period of 2013. Due to the lean cost structure of the group, the EBIT margin stayed at 8 per cent (H1 2013: 7 per cent). Year-on-year the gross profit margin increased by 2 percentage points up to 21 per cent. During the reporting period, Vtion realized revenues of 11.96 million Euros in Q2 2014, an improvement of 9.2 per cent compared to Q1 2014 while the EBIT margin increased by 4 percentage points to 10 per cent. The decrease of revenues in H1 2014 was mainly caused by lower sales of wireless data cards and network cameras, while there were positive developments in the wireless router business segment as well as the industry-specific computing solutions area. The majority of sales (20.3 million Euros) were still coming from wireless data terminal business, contributing 88.7 per cent to Vtion's total revenues over the course of H1 2014. With the secular pricing pressure and limited core demand in this segment, the group seeks to promote more specialized products. Among these are wireless data cards developed specifically for the storage and transfer of tax data, which partly offset the decrease of traditional sale in this segment over the first half of the year. In H1 2014, Vtion generated 6.4 million Euros from its wireless router business, an increase of 7 per cent compared with the same period in 2013, because of higher sales of upgraded wireless routers with High-Fidelity. Currently, the company offers 3G mobile routers for the Chinese operators China Unicom and China Telecom. Given that the growth of demand for mobile routers, Vtion plans to work on a router for China Mobile's fourth generation TD-LTE technology standard. Further products for two other operators will remain centered on the 3.5G technologies primarily because the manner in which they will enter the 4G market remains uncertain. For the 4G market in China, the company has not received as many orders for 4G products as originally expected because the operators have decided to promote 4G routers instead of wireless data cards. Thereby, Vtion adjusts its 4G product scheme according to the demand of three telecom operators and will concentrate on developing 4G data router for the remainder of this year. In the second quarter, the revenues generated with VCAM, a mobile camera product, decreased sharply. The cooperation with the telecom operators in promoting VCAM has been cancelled because of the increased taxes and costs of the original sales model of the pricing package impacted by the tax discipline reform in China. Hence, Vtion has decided to exit the VCAM mobile camera product segment in the coming half-year 2014. Vtion continues to see progress in its software-oriented business in terms of client development and an obvious improvement of the revenue, though monetization remains difficult. The revenues from this business contributed 0.36 million Euros (1.6 per cent) to the total revenues. By the end of the first half of 2014, the company had 11 clients in its industry-specific computing solutions area. For the remainder of the year, Vtion will be centered increasing revenues from current clients while also seeking to expand its client base with a particular emphasis on larger state-owned insurance concerns. The mobile application business 'Vmarket' provided by Vtion Anzhuo and partner sales platforms currently offers a total amount of 9,802 applications. In order to increase the revenues in this segment, Vtion will focus on strengthening its presence as a third party designer and operator of online application stores for other companies, particularly large-screen device manufacturers as Internet TV's. Thereby the business model will change from "Business to Customer" towards Business to Business" in future. Guidance adjustment for the full year Based on H1 operating results that lagged behind the company's expectations, combined with the ongoing difficult environment for its core business segment, Vtion has decided to adjust its guidance for the full year of 2014. The Management Board now expects revised revenue of at least 48 million Euros and an EBIT margin of approximately 7 per cent. Well capitalized By the end of the reporting period as of June 30, 2014, Vtion had a net cash position of 116.8 million Euros, which implies net cash per share of 8.78 Euros. This cash position allows the company to return cash to shareholders while keeping cash on hand for both working capital needs and investment opportunities. Although Vtion's equity position declined from 136.3 million Euros to 132.2 million Euros year-on-year, the group still enjoys a comfortable position. The equity ratio increased from 89.6 per cent to 93.6 per cent in the first half of 2014. About Vtion The Vtion Group is a leading supplier of wireless computing solutions and products for mobile Internet access via broadband wireless networks in the People's Republic of China. The company offers industry-specific computing solutions to the insurance industry through its E-Agency platform. Through its wholly owned subsidiary, VtionAnzhuo, the company offers online applications for the Android operating system. For 2013, the company generated sales revenues of nearly 60 million Euros with an EBIT margin of 8 per cent. Vtion Wireless Technology AG shares are being traded in the Prime Standard on the Frankfurt Stock Exchange with the ISIN DE000CHEN993. The company's ticker symbol is V33. For further information, please contact: Kirchhoff Consult AG Andreas Friedemann, phone: +49 40 60 91 86 0, mail: [email protected] or visit the company website: www.vtion.de Disclaimer concerning prognoses This communication contains forward-looking statements. Forward-looking statements are statements that are not historical facts instead they reflect Vtion's current views and expectations and the assumptions underlying them about future events. Forward-looking statements are subject to many risks and uncertainties. If any of such risks and uncertainties materialise or if the assumptions underlying any of Vtion's forward-looking statements are proving to be incorrect, Vtion's actual results may be materially different from those expressed or implied by such forward-looking statements. Vtion does not intend or assume any obligation to update these forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. --------------------------------------------------------------------- 21.08.2014 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: Vtion Wireless Technology AG Westhafenplatz 1 (Westfalen Tower) 60327 Frankfurt Germany Phone: +49 69 710 456 245 Fax: +49 69 710 456 248 E-mail: [email protected],[email protected] Internet: www.vtion.de ISIN: DE000CHEN993 WKN: CHEN99 Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, München, Stuttgart End of News DGAP News-Service --------------------------------------------------------------------- 283254 21.08.2014