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Vtion Wireless Technology AG: Strong financial figures 2010, new products in 2011

Financial Statements 2010

  • Vtion maintains strong cash position
  • Dividend payment of EUR 0.21 per share intended
  • Share buyback plan to be initiated beginning April 26
  • New strategy to be implemented throughout 2011

 

Frankfurt, 21. April 2011

Vtion Wireless Technology AG, one of the leading suppliers of wireless data solutions for mobile computer use in China, has shown strong results in 2010: The Company realized sales revenues of EUR 101.66 million for the full year 2010, an increase of 50% compared to 2009. Profit from operations (EBIT) increased by 54% to EUR 29.23 million in fiscal year 2010. This was driven primarily by strong demand in Vtion's wireless data card business segment. Since demand in that segment is expected to weaken in 2011, the company is in the process of diversifying its product and application offerings.

"From the time of our IPO until early 2011, we continued to see strong growth in our core wireless data card business. However, with the emergence of more smartphone offerings and particularly the tablet PC, we now operate in a more diverse marketplace than at the time of our IPO," explains Guoping Chen, CEO of Vtion Wireless Technology. "Therefore, we are adapting our strategy to take advantage of this by developing hardware offerings such as our own tablet PC, along with e-readers, wireless modules and 3G routers. We have identified particular niche markets where we are able to take advantage of our status as a strategic partner of the telecom operators. As Vtion becomes increasingly internationalized, we have also begun to establish ourselves as a key integrator of mobile applications from both China and abroad through our recently established subsidiary ‘Vtion Anzhuo'."

 

Strong financial figures 2010

2010 was a solid year for the Vtion Group's development: Sales increased from EUR 67.64 million in fiscal year 2009 by 50% to EUR 101.66 million in fiscal year 2010. EBIT increased from EUR 18.93 million in 2009 by 54% to EUR 29.23 million in fiscal year 2010. The net profit reached EUR 21.99 million, an increase of 33% from the year 2009. Earnings per share increased by 5% from the year 2009 and reached EUR 1.38.

The net cash position of Vtion as of 31 December 2010 has also strongly improved: Cash and cash equivalents amounted to EUR 98.96 million as of 31 December 2010. The Company generated a positive net cash flow amounting to EUR 30.58 million from operations in 2010, representing a significant increase of EUR 40.22 million compared with the net cash loss of EUR 9.64 million from operating activities in 2009. Vtion finished the year with an equity ratio of 89%.

 

Dividend payment of 15% of 2010 net profit intended
Part of the company's cash will be returned to shareholders in the form of a dividend, which management intends to be 15% of 2010 net profit, corresponding to EUR 0.21 per share. Vtion thus remains well-positioned to invest in new products and business opportunities, while enjoying a strong capital position in the face of the risks associated with such endeavours.

 

Share buyback plan to begin April 26

At the company's 2010 AGM, Vtion was authorized to repurchase up to 10% of its total share capital, valid until 2015. Vtion's management board has resolved to initiate a buyback program, to be executed by an investment bank, beginning not before April 26, 2011 and continuing until April 26, 2012, to repurchase up to 1,000,000 shares. Details of the progress of the program will be posted regularly on Vtion's website.

 

Continuous introduction of new products

The first of Vtions new products were introduced in Q4 2010, which included two 3G routers and an e-reader. In March 2011, Vtion further introduced the PCtoTV device, a wireless terminal that connects to a standard HDTV monitor through an HDMI cable.
The current product portfolio of the Company comprises wireless data cards, wireless modules, 3G routers, e-books, iPhones, the provision of data service solutions and so-called virtual network operation (VNO) packages, dual mode mobile phones, IP servers and customized software.
Vtion will continue to sell its current product offerings through both telecom operator and retail sales channels, while looking to roll out new products in the second half of the year. It will feature tablet PC devices targeted at business and corporate clients, and develop application integration capabilities for the Android platform in order to provide comprehensive solutions tailored to the needs of particular clients in certain industries.

 

Diversified strategy to be implemented in 2011

Instead of producing a one-size-fits-all product for the general populace, as a smaller company, Vtion is agile enough to develop solutions that are tailored to the sector-specific needs of professionals or companies. The Company will continue to use the ties it has to China's telecom operators to sell these solutions, and offer a competitive combination of both hardware and integrated applications.
Vtion intends to position itself as a top provider of comprehensive wireless data service solutions in China, staying ahead of the market and continuously upgrading the company's value chain and integration capacity. The company will continue to be a top-tier provider of hardware in two main segments, namely wireless connectivity terminals, featuring products such as wireless data cards, routers and e-readers, as well as wireless intelligent terminals, which entails products such as the tablet PC. The company is also building up its capacity as an integrator of mobile applications, which it will sell through its own online store, as well as to operator-run appstores, device manufacturer appstores and other online mobile application retailers.
Vtion will remain closely positioned to the telecom operators in order to take advantage of the growth that they drive in the market. By building up its capacity in both the hardware and mobile application spaces, the company is positioned to offer comprehensive solutions tailored to the specifications of both the operators and other business clients. For example, the company is currently pairing its tablet PC prototype with a self-developed application tailored to the insurance industry. This will eliminate the need for salespersons to carry numerous documents when visiting multiple clients in one day, while maintaining constant connectivity with the company database. Vtion will continue to seek out other industries suitable for customized mobile computing solutions.

 

Outlook 2011: Building for the future

Vtion expects 2011 to be a year of transition, as the company rolls out new product and service offerings to meet the needs of a more mature 3G market. Though this will adversely impact Vtion's short-term profitability, the company is well-capitalized to undertake such a process, and management aims for the company to emerge better positioned for long-term competitiveness beginning in 2012, as the company's new products and services gain traction towards the end of 2011 and in early 2012. The company expects a slow start to the year, with momentum gaining as the year progresses; the company reaffirms its previously stated guidance of revenue for 2011 of Euro 75 million to 100 million and an EBIT margin of 10%-12%.

 

About Vtion

The Vtion Group is one of the three leading suppliers of wireless data cards and associated services for the mobile use of computers via broadband wireless networks in the People's Republic of China. The company also offers e-reader, 3G router and embedded module products through network operator and retail distribution channels, as well as several online services. For 2010, the company reached sales revenues of Euro 102 million. 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
Dr Kay Baden, tel.: +49 40 60 91 86 0, baden@kirchhoff.de
Janina Wismar, tel.: +49 40 60 91 86 50, janina.wismar@kirchhoff.de

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