Transics publishes Q3 2008 trading results

Significant contract wins in spite of challenging market

Highlights

  • Third quarter sales down 18% year-on-year at €9,096k
  • Year-on-year revenue up 14 % for the first 9 months of 2008
  • New customer wins in core and development markets despite adverse economic environment

Q3 results affected by the economic downturn

Transics revenues in the third quarter totalled €9,096k, down 18% from €11,174k achieved in the same quarter a year ago.

For the first nine months of 2008, Transics shipped 9,290 on-board computers and generated a turnover of €34,336k, representing a 14% growth compared to the same period in 2007. In the core markets of the Benelux and France, Transics increased sales by 12% year-on-year, from €25,388k in the first nine months of 2007 to €28,529k in the year to September 2008. A 25% increase was achieved in developing markets across Europe, where total revenues rose from €4,645k to €5,807k.

The weak performance in the third quarter resulted from a combination of factors. After two traditionally slow summer months, Transics experienced a sharp slowdown in September when the deterioration of the economic climate created temporary uncertainty among its customers who delayed their purchasing decisions. This slowdown was compounded by the fact that some customers postponed their purchasing decision following the introduction of Transics’ new TX-MAX on-board computer, which was launched in late August. Furthermore, the sudden tightening of the financing market, which some customers of Transics rely on to obtain lease financing, has also caused the postponement of shipments and revenue recognition on some deals previously signed.

Contract wins in core and developing markets testify to the resilience of Transics

Transics has signed 21 deals greater than 20 OBCs each in September and October.

The most significant deals signed in the last months include a number of contracts signed with Eastern European transport companies such as Észiás in Hungary, Jas-FBG and PSW in Poland and Virem in Slovakia. In Romania Transics closed a deal with Dunca for 300 trucks. In Germany, Transics signed a contract with Schmelzer (53 trucks) and DTH Speditionsgesellschaft (102 trucks). The successful launch of the TX-MAX, Transics’ next generation on-board computer, contributed to the closing of several large deals in the Dutch market: Van der Wal (140 trucks), Verhoek Europe (325 trucks) and Bakker Logistiek (450 trucks).

These new customers have confidence in Transics’ market leadership and feel that the Transics solution will help them optimise their operations in this tough economic environment. Jaap Verhoek, technical director of logistics provider Verhoek Europe: “Our search for an alternative fleet management solution quickly led to Transics – a reference beacon in advanced fleet management solutions that perfectly combines high quality with superior services.” Gerrit Kolk, financial director of Verhoek Europe, added: “Transics offers a powerful, all-in-one solution that sets itself apart from all other solutions on the market. We are confident the switchover will help us streamline our processes, optimise our operations and reduce costs.”

CEO statement

“Transics cannot fully escape the pressures of a global economic environment that deteriorates more suddenly than we ever experienced during our 18-year history. Our Q3 results are a stark reminder of this reality. I remain confident in the ability of my team to navigate through these uncertain times. The new deals we continue to sign every week provide evidence that my optimism is not unfounded,” said Walter Mastelinck, CEO of Transics. “We will no doubt continue to face a challenging trading environment in the months to come and we are preparing for this by managing our cost base very carefully. I believe though that we are relatively well equipped to face these adverse market conditions as we can count on a significant stream of recurring revenues and we benefit from a brand new product range that increases our competitiveness. I believe also that none of our direct competitors can boast a greater installed base, more recurring revenues or a greater geographic diversification.”

Changes in the board of Directors

Following the recent private placement of existing shares Transics has amended the composition of its Board of Directors with 1 additional independent director and 2 directors from reference shareholders. Independent director Vladimir Lasocki, Managing Director of Transics’ former investor The Carlyle Group, Felix Oberdorfer, Investment Director at Parcom Quoted Equity and Ana Vizcaino, representing EQMC Europe Development Capital Fund, will strengthen the Board of Directors of Transics with their expertise.

Outlook

In view of the economic slowdown and its expected impact on the company’s short term performance, Transics’ management forecasts for the full year 2008 revenues of at least €43.5m with an EBITDA margin around 20%.

Transics International NV, established in 1991, develops and commercialises high-end fleet management solutions for the transport and logistics sector. Thanks to many years of experience, thorough R&D efforts and an intensive focus on the customer experience, Transics has become the leading European player in its sector. In addition to its headquarters in Ypres (Belgium), Transics is active throughout Europe. The company has been quoted on the stock exchange (Euronext Brussels) since June 2007.