E2V.L Regulatory News (E2V)

25 July 2012

e2v technologies plc

Interim Management Statement

e2v technologies plc, the specialist provider of technology solutions for high performance systems, is today providing an Interim Management Statement covering the period from 1 April 2012 to the current date.

Current year-to-date trading and outlook

The general external environment has become more challenging in certain end user markets and this is expected to continue.

Management's expectations for the Group's full year trading performance remain unchanged.

The Group's trading performance for the first three months has been slightly below our expectations, though has benefited from the flexibility established in our cost base. We anticipate a stronger second half performance compared to the first half, reflecting conversion of key strategic orders from our solid order pipeline.

RF power solutions

OEM demand in radiotherapy has remained steady with the demand for spares reflecting the increasing installed base with multiyear contract renewals with two of our strategic customers anticipated to be booked by the end of September 2012. Electronic countermeasures has delivered good growth from the existing programmes including the ALE-55 programme for the F18 Super Hornet. Progress is being made on our development contract for an F15 upgrade programme which we anticipate will move into production in the second half.

In industrial processing systems, we are continuing discussions with our strategic partner Rio Tinto, to support the development of larger RF/Microwave generators for use in copper recovery. The vermiculite system continues its extended field trials, though certain technical challenges remain unresolved.

Activity in the remaining product lines in the division is down on the comparable period reflecting some softening of demand in commercial and industrial markets. The cost flexibility built into the business has been instrumental in dealing with this softening and, as a continuation of this, a further consolidation and restructuring of RF Power Solutions is in hand.

High performance imaging solutions

Within High performance imaging solutions, scientific imaging has shown moderate growth, reflecting end user demand and the introduction of our new high performance sensor for life science applications. Machine vision has experienced some further softening in demand for industrial process control applications, although our new CMOS based line scan camera is winning orders for next generation inspection systems.

Space imaging was steady despite the strong order book as technical issues on some programmes in Grenoble resulted in delayed milestones; these issues have now been resolved. We are pleased to have now booked a multiyear order for China Academy of Space Technology (CAST) for the provision of imaging sensors. Due to the timing of the receipt of the order, its sales have been re-phased to start in the second half. The remaining product lines in the division have shown good growth reflecting strong demand, primarily for our dental sensors.

Hi-rel semiconductor solutions

In Semiconductor Lifecycle Management (SLiM™), as anticipated, revenue is lower than the comparable period last year, which included the completion of the first phase of our 68k microprocessor SLiM™ programme. In the other product lines, demand for our legacy products in the US has remained steady, with customer demand generating increased activity for assembly and test services in Europe in the second half. Current trading includes the anticipated decline in the smart sensor business. Order intake has remained steady. The staffing flexibility that we had established in our Grenoble business allowed us to cope with the lower levels of activity.

Geographic expansion

The fit out of our new facility in the US has been completed on schedule and resources have now been transferred. In Asia, we are establishing the team in China and anticipate that local manufacture will commence in the second half of the year.

Order Book

The Group's total order book as at 30 June 2012 was £136m (30 June 2011: £152m), representing a decrease of £16m. Similarly, the order book for delivery over the coming 12 months was £113m (30 June 2011: £122m), a decrease of £9m. This anticipated decrease arises from the fulfilment of last time buy orders, the disposal of the non-core businesses, delivery of the first phase of our major SLiM™ programme for the 68k microprocessors, along with the cycle of radiotherapy orders and continued short term arrangements for one of our radiotherapy customers. There is modest growth in the remaining order book, compared with the prior year.

Net Borrowings

Net borrowings (see note 2) at 30 June 2012 were approximately £18m (31 March 2012: £30m). The decrease primarily reflects the proceeds received from the sale of the non-core businesses on 16 May 2012.

Additional AGM matter

At the AGM later today, it will be stated that Chris Geoghegan informed the Board on 24 July 2012 that he will not stand for re-election at next year's AGM. The Board will initiate a process to appoint a suitable successor.

Further enquiries:

Notes to editors

1. Net borrowings exclude capitalised borrowing costs.

2. All financial information included in this release is sourced from unaudited management accounts and excludes any exceptional items.

3. Statements made in this announcement that look forward in time or that express management's beliefs, expectations or estimates regarding future occurrences are "forward-looking statements" within the meaning of the United States federal securities laws. These forward-looking statements reflect the Group's current expectations concerning future events and actual results may differ materially from current expectations or historical results.

4. The Company anticipates providing its trading update for the six months ending 30th September 2012 on 11 October 2012.