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Vtion Wireless Technology AG - Profitability Maintained in 2012

2012 Full Year Results

  • Revenues of 75.6 million Euros;
  • EBIT margin of 9 per cent;
  • Core business of wireless data terminals remained strong, accounting for approximately 85 per cent of revenues;
  • Current net cash position of 113.5 million Euros;
  • Vtion confirms 2013 full year guidance of revenues of between 60 million and 70 million Euros, with the EBIT margin between 8 per cent and 10 per cent;
  • Net Profit of 5.35 million Euros, EPS 0.37 Euro;
  • Vtion will recommend to again pay a dividend of 15 per cent of net profit, to be paid the day after the company's AGM;


Frankfurt, 25 April 2013

Vtion Wireless Technology AG, one of the leading suppliers of wireless data solutions for mobile computing in China, announces its financial results for FY 2012. The company achieved revenues of 75.6 million Euros and an EBIT margin of 9 per cent. Vtion generated the majority of its 2012 results through its core wireless data terminal business, which accounted for approximately 85 per cent of total revenues. The company finished the year with a strong cash position of 113.5 million Euros, this corresponds to 7.83 Euros per share. The company will continue its pre-established dividend policy of issuing a dividend in the amount of 15 per cent of the previous year's net profit.


Demand and Profitability Stable in Core Business Area

Vtion's revenues for 2012 were driven primarily by results in the company's traditional core business, wireless data terminals, which is comprised of hardware devices such as wireless data cards, embedded modules and wireless routers. The wireless data terminal business segment accounted for 85 per cent of the company's revenue for the year, a proportion similar to that in 2011. Though there was a significant drop-off in both revenues and margins in the company's wireless data terminal business in 2011, Vtion has seen demand and margins in that segment stabilize thereafter. Due to the company's strong supplier and customer relations along with a lean cost structure, Vtion has been able to continue to be profitable in this segment despite the decline in the overall market.

"We are pleased to see that the traditional core of our business remains profitable," states Vtion CEO Chen Guoping. "Though there was cannibalization of the wireless data card market with the introduction of the smartphone and tablet PC, we have seen that a baseline market demand for wireless data cards remains as many business users still prefer to connect via laptop computers. Further our stronger than expected wireless router sales have also helped to compensate for the decline in wireless data card sales. Going forward we expect to remain profitable in this business segment, though growth will have to be driven by our newer business segments."


Difficult Market Environment Remains

Vtion experienced sea change in its core market early in 2011 and has been in the process of adapting its business model to meet these new challenges. Further, macroeconomic factors such as the overall slowing of the Chinese economy as policy makers try to engineer a "soft landing" has proved to be a headwind for the majority of companies active in the Chinese market. Vtion has been putting increased emphasis on software and hardware/software combination solutions, though monetizing these businesses has proved slower than originally expected.

"Fortunately we still see steady profitability in our wireless data terminals business segment," states Vtion CEO Chen Guoping. "This gives us a cushion of dependable financial results and profitability as we continue to adapt our business model to a changing market environment. Though progress in this transition has been slower than expected, we are strongly advancing and will remain supported by steady results in our core business."


Outlook for 2013

Vtion expects revenues and margins in the wireless data terminal business segment to experience a slight decrease in 2013 compared to 2012, primarily due to continued erosion in the wireless data card market that slightly exceeds the gains made in wireless router sales. Though the company is making steady progress in its newer business segments, wireless data terminal sales will likely continue to account for approximately 80 per cent of the company's financial results for 2013. For the year, the company expects revenues between 60 and 70 million Euros, with an EBIT margin between 8 and 10 per cent.



Vtion will recommend to the AGM that the company pay a dividend on the first business day after the 2013 AGM equivalent to 15 per cent of the company's net profit in 2012. This corresponds to a dividend of 0.055 Euros per share and is consistent with the company's past dividend practice.


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 tablet PC products and support services through its mobile intelligent terminals business segment, including both to the consumer market and industry-specific clients. Through its wholly owned subsidiary, Vtion Anzhuo, the company offers online applications for the Android operating system. For 2012, the company reached sales revenues of 75,6 million Euros with an EBIT margin of 9 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
Dr Kay Baden, tel.: +49 40 60 91 86 0,


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.

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