26 Jan 2009 07:00
26th January 2009
e2v technologies plc
Interim Management Statement
e2v technologies, the specialist developer and manufacturer of high technology components and sub-systems, is providing an Interim Management Statement covering trading from 1 October 2008 to 23 January 2009.
There has been a progressive weakening in demand since December which is continuing through January across some of the industrial market sectors and the radiotherapy market sector. In addition we have experienced further recent technical issues, that are now largely resolved, on major space imaging programs delaying delivery. These factors will have an adverse impact on profits in the current financial year.
Despite these difficulties the order book at 31st December 2008 was strong at £165m (2007:£131m) at reported exchange rates. At constant currency this equated to £141m, a 6% improvement. On a like for like basis*, orders for delivery in the fourth quarter are 5% below last year's level.
In the electronic devices and sub-systems division, sales into the defence market are at expected levels. Whilst our order book has recently been replenished, as expected, with orders for radiotherapy products, a number of our radiotherapy customers are experiencing lower than anticipated growth in demand for new systems. Some hospitals, particularly in the USA, are experiencing difficulty in obtaining finance for new equipment and related infrastructure and instead are upgrading existing equipment, which will not generate sales for e2v. In the cargo screening market sector one of our major customers has recently advised that they wish to defer delivery of any product scheduled for the current quarter due to reduced end market demand. Elsewhere in the industrial market demand is at expected levels.
Our imaging division continues to experience levels of demand consistent with our expectations in the space and scientific sector, but has seen a rapid decline in demand from the commercial and industrial sector for process control image sensors and cameras, particularly in Asia. We have experienced further technical issues and supplier quality issues on some of our major space programs. These issues are now largely resolved and deliveries under these contracts have restarted but this will defer sales into the next financial year.
In the specialist semiconductors division, QP Semiconductor is performing in line with expectations, following the completion of this acquisition in October 2008. The established business based in Grenoble continues to show an improving performance in the second half, although demand weakness is being experienced in the commercial and industrial market sectors. This will not impact current year performance.
The sensors division is showing good growth overall, though the impact of the automotive slowdown has been more significant than anticipated and overall the range of businesses in this division will not generate sufficient profits to offset the ongoing cost of the R&D investment programme in Biosensors. The net losses will only be marginally improved against last year.
The outlook for the fourth quarter, historically by far the most significant for the group, is increasingly challenging. The full year adjusted profit before interest and tax is now expected to be below market expectations and, based on current exchange rates, similar to last year. This is despite the inclusion of the QP Semiconductor acquisition for the second half.
Debt levels are at the expected levels in local currencies but the recent sharp falls in the value of Sterling increases the reported debt and cash generation remains a major priority.
Keith Attwood commented: "Whilst short term demand for the linear accelerator components we sell into the radiotherapy and cargo screening sectors is disappointing, the underlying fundamentals for those markets remain solid and this is reflected in the orders we booked late in December and early January. The weakness being experienced in the commercial and industrial sectors, such as automotive and process control however, is unlikely to improve in the medium term. e2v's increased exposure to the aerospace and defence sector, including the timely acquisition of QP Semiconductor, will provide additional insulation from this weakness. e2v's strong order book remains a positive feature and reinforces our view that the business remains in good shape to come through the current economic turmoil, well positioned for growth".
A briefing for analysts and investors concerning e2v's current view of the group's markets will be held on the 27th January 2009. A copy of the presentation will be available on the group website from 5pm on that day.
* at constant exchange rates and excluding the impact of the QP Semiconductor acquisition completed in October 2008
For further information:
| e2v technologies plc | Tel: +44 (0)1245 493493 |
| Keith Attwood/Mike Hannant | |
| www.e2v.com | |
| Financial Dynamics | Tel: +44 (0)20 7831 3113 |
| Jon Simmons/Sophie Kernon |
NOTES FOR EDITORS
e2v
e2v's objective is to be a global leader in the design and supply of specialised components and sub-systems that enable the world's leading systems companies to deliver innovative solutions for medical and science, aerospace and defence, and commercial and industrial markets.
e2v has 4 major product groups:
High performance electron devices and subsystems for applications including defence electronic countermeasures, radiotherapy cancer treatment, and radar systems
Advanced Imaging sensors and cameras for applications including industrial process control, dental X-ray systems, space science and life sciences
Specialist semiconductors, including logic, memory and microprocessors for high reliability mission-critical programs in avionics, defence and telecommunications, sensor data acquisition, and high speed data conversion
A range of professional sensing products for applications including fire, rescue and security thermal imaging, X-ray spectroscopy, and military surveillance, targeting and guidance
For the year ended 31 March 2008, e2v achieved sales of £205m and is listed on the London Stock Exchange. In October 2008 e2v acquired QP Semiconductor, a leading US-based designer and supplier of specialty semiconductor components used in military and aerospace applications, establishing e2v's first US manufacturing base.
The Company is headquartered in the United Kingdom and has approximately 1800 employees in six production facilities across Europe and North America. e2v also operates a global network of sales and technical support offices, supported by local distributors and resellers.
Further information is available from www.e2v.com