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Vtion Wireless Technology AG struggles against headwinds in its core market

Results Half-Year 2015
  • Revenues decreased by 29 per cent to EUR 16.3 million year-on-year
  • EBIT margin dropped by 6 percentage point to 2 per cent
  • Guidance for 2015 confirmed with revenues of EUR 37 million and an EBIT margin of approximately 6 per cent


Frankfurt, October 20, 2015

Vtion Wireless Technology AG (Vtion), a supplier of wireless data terminals and associated services for mobile computing via broadband wireless networks in China, generated revenues of EUR 16.3 million in the first six months of 2015, corresponding to a decrease of 29 per cent compared to the same period 2014. The weak demand affected the EBIT margin that dropped by 6 percentage points to 2 per cent, while the gross profit margin remained comparatively stable at 20 per cent (HY1 2014: 21 per cent). 

A distinctive pricing pressure and decreased sales due to weakening demand brought about by technological change that has shifted consumer preference away from mobile data cards and routers, Vtion faced a decrease in its operating figures. The majority of the total revenues was generated in the company's core business with wireless data terminals. This segment comprises of wireless data cards, wireless routers, and wireless high definition sharers. Year-on-year revenues in this segment decreased by 21 per cent to EUR 16.0 million (HY 2014: EUR 20.3 million).

The decrease of total revenues during the reporting period was mainly due to lower sales of wireless data cards using the 3G technology, which dropped by 57 per cent to EUR 4.9 million. The sharp decline is based on the fact that more and more other devices are used to get access to the mobile internet. This development was partly offset by the increasing sales of wireless data cards developed specifically for the storage and transfer of tax data as well as the growth of sales of other Vtion products like the wireless high definition sharer named "PCtoTV". The latter contributed EUR 2.4 million to the total revenues during the reporting period. Vtion's most important products in the core business remained the new wireless data routers based on the 4G-techology for the Chinese operators China Unicom and China Telecom. During the reporting period the company generated revenues of EUR 8.7 million with wireless routers, an increase of EUR 2.3 million or 36 per cent compared to the half-year 2014.

In contrast, revenues in the software-focused business segment remained low. Among these products are a network camera, a health self-checking instrument and particularly the mobile applications, offered by Vtion Anzhou's VMarket and partner sales platforms. Therefore, the Management Board had decided to sell the 100 per cent of equity stake of its subsidiary Vtion Anzhou to its management team via a management buyout (MBO) in March 2015.

"As the margins for more generic hardware products decline sharply we currently focus on specific-use products that generally command higher selling prices. That among these are the wireless data module the company developed to transmit transaction data to tax authorities. We would like to add more sophisticated data modules to our product range. Currently, some of them are in the exploratory phase, but will likely be introduced in 2016 at the earliest", says Vtion's CEO Chen Guoping.

Although the Management was able to reduce the cost of sales by 29 per cent to EUR 13 million year-on-year, the company's EBIT decreased by 86 per cent to around EUR 0.3 million, due to the lower revenues. Compared with the half-year 2014, EBIT margin decreased by 6 percentage points to 2 per cent in the six months 2015. This resulted from a decrease of the overall gross profit margin and an increase of ratios of operating expenses to total sales. As of June 30, 2015, Vtion's cash and cash equivalents amounted to EUR 154.8 million.

The company expects 2015 to be a year of further transition and therefore remain difficult from an operational standpoint. Nevertheless, Vtion predicts total revenues of around EUR 37 million for the full year 2015 and an EBIT margin of approximately 6 per cent. Furthermore, the Management Board emphasizes that it will try to improve its situation in its core business as well as to explore approaches in other sectors that will unlock shareholder value.


About Vtion

The Vtion Group is a leading supplier of wireless data terminals and associated services for the mobile use of computers via broadband wireless networks in the People's Republic of China. Vtion Wireless Technology AG was established in 2002 and currently has 228 employees. The 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:

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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