Nedap N.V. cautiously optimistic about development of turnover and profit

Groenlo, 22 April 2010

The management of the N.V. Nederlandsche Apparatenfabriek "Nedap" is cautiously optimistic about the development of turnover and profit for this year. The recovery that started to emerge during the 2^nd half of 2009 has continued in the early months of this year. Better results are also expected for the coming months. The optimism remains, however, moderate and reserved in light of the uncertainty about the sustainability of the economic recovery across the various markets, together the shadow cast by the anticipated effect of government cutbacks. 

Turnover developed positively within nearly all the market groups of Nedap in the initial months of 2010 compared to the same period in 2009. Only the Agri, AVI, and Education market groups were down.

The turnover growth within the market group Healthcare (computerisation of time registration for the healthcare sector) not only came from new clients, but also from the broadening of activities with existing clients. For example, a number of clients upscaled their activities for domestic services considerably, and several organisations rolled out our planning programme Moves and the iO Touchpro (registration and information via mobile phones) across their entire organisation. PEP, the electronic Nedap alternative for the manual completion of timesheets, used among others by employment agencies, is becoming increasingly successful. This system has already been adopted by several employment agencies this year, including a major multinational employment agency, where it has been welcomed with much enthusiasm.

The market group Retail Support (anti-shoplifting systems, control and information systems to combat stock losses) has won several prestigious orders with large retail organisations in recent months. The greater level of market-orientation in the proposition teams appeared to have an exceptionally stimulating effect during direct customer contact. The product range was streamlined, the communication channels improved, and the sales and marketing teams strengthened.

The Security Management market group (systems for access control, payment, fire and intruder alarms, observation and biometrics) got out of the blocks very quickly this year. The technology platform AEOS, which has become fully mature with the addition of new security features, has provided a good foundation for further growth, also via new international partners.

In the first months of 2010, the turnover of the market group Library Solutions (RFID self-service check-in/checkout systems for libraries) continued to grow strongly. The sharp growth in recent years has also led to an increase in the number of providers in this segment, with price erosion ensuing as a result. The group is continually working on strengthening its distinctive value. For example, Librix Online, a management information system for libraries, was recently introduced.

The turnover of the market groups Power Supplies (switch-mode power supplies for lighting, environments, office automation, medical scanning equipment, and solar energy) and Specials (electronic control systems for home comfort and car comfort, as well as telecom switching equipment) was significantly higher in the first months of this year compared to the same period in 2009. The increase in demand was primarily generated by a number of 'last time buys'. This was because Nedap decided to end its activities in the traditional suppliers market, and to concentrate entirely on the development and marketing of Nedap products. Two marketing areas are central to this: lighting and ‘smart grids' (smart decentral electricity grids). In these markets, the Power Supplies market group has already won its first orders with the Nedap Luxon Lampdriver and the Nedap PowerRouter.

After a hesitant start to the new year in dairy farming, there has recently been a limited improvement in market sentiment. Although price levels fell recently, a certain amount of stability is forecast for the market. In pig farming the revenue varied considerably per country and region, but a limited recovery was also seen here. Nonetheless, as expected this did not directly lead to an increase in investment in ICT systems in the agrarian sectors. The turnover of the Agri market group (ICT systems for the dairy and pig farming industry) was therefore down on the relatively good start to 2009, when orders were still being completed that had been issued in 2008. The process of consolidation in the dairy farming industry should, however, create a greater demand for ICT systems in this sector in the near future. The Agri market group has therefore continued to invest in the development of new products and services, and in its marketing strategy, in recent years. It thus expects to benefit from any recovery in the willingness to invest in the dairy and pig farming industry, perhaps as early as the 2^nd half of this year.

The turnover of the market groups AVI (Automatic Vehicle Identification) and Education (access control and computerised attendance registration of students) is currently down on the previous year. The AVI group has been affected worldwide by an extremely cautious market. Fortunately, the order intake has started to pick up in recent weeks. A growing number of local councils are using our systems for vehicle access control in city centres. This is because our system is easy to manage, provides flexibility, a choice of options, and makes city centres more attractive for everyone. The Education group has built up an excellent reputation within its market segment in recent years. Turnover is therefore expected to grow once more as soon as schools have enough room in their budgets to invest in such systems.

With Inventi B.V. in Neede, Nedap now has a production facility that is an ideal match for the average production run of its products. During the 2^nd half of 2009 and in early 2010, a large number of projects that up until then had been produced at the main facility in Groenlo or by external suppliers were switched to Inventi. The current short supply of electronic components on the world market, and the time necessary to optimise the various production lines, mean productivity is not yet at an ideal level.

Notwithstanding unforeseen circumstances, the management expects that turnover and profit will continue to develop positively this year. With a solvency position of over 45%, the financial position remains undiminished strong.

The financial half-yearly report for 2010 will be published in the first half of August.

The Annual General Meeting of Shareholders will be held on 29 April 2010, at 11 am in the Hermitage, Nieuwe Keizersgracht 1, 1018 DR Amsterdam.

Note for the editor: Nedap has applied the ‘scale of Mock' in this press release.

For more information:

G.J.M. Ezendam
Financial Director
Tel.: 0544-471102
www.nedap.com

PROFILE NEDAP

Nedap is characterised by a development- and entrepreneurship-orientated open, innovative and creative culture.

Nedap's long-term policy is aimed at creating sustainable added value for customers, staff, and shareholders. It wants to achieve this through organic growth in revenues and profit where diversification and innovation, based on the company's expertise, play a central role.

Nedap focuses on the development and supply of distinctive and sustainable

• solutions for the computerisation and management of business processes, in which the identification of people, animals, and goods often play an important role, and
• products in which operating and switch-mode electronics play an important role.

To continue operating in a manner that makes Nedap strong, it pursues an operating profit of at least 10% of the revenues, a return on equity of 15% to 20%, and a solvency ratio of approximately 45%.

Nedap was founded in 1929 and has been listed on the NYSE Euronext since 1947.