Regulated Communication - Interim business report on May 10, 2010

Goods ID in steady progress, and People ID strong in its « build and operate» contracts and very active in business development.

Brussels – May 10, 2010 - Zetes (Euronext Brussels : ZTS), the European leader in automatic identification solutions and services for goods and people today announced its interim business report.

The start of 2010 is following the same pattern as the last quarter of 2009:

  • In Goods ID, the company continues to see an improvement in order taking, a moderate growth compared to the same period in 2009. Retail remains the most dynamic sector. Other substantial projects, primarily driven by new regulatory constraints, are also underway in the pharmaceutical sector.
    Project demands have the software teams working near capacity and project maintenance remains stable compared to previous years. 
    Although the bottom line contributions of the last two acquisitions remain slightly negative, the ImageID solutions are generating a lot of interest, and the subsidiary in Greece is developing synergies with the other companies in the southern region.
  • People ID, long term contracts constitute the major part of the revenues: passports in Côte d’Ivoire; and electronic ID cards in Portugal and in Belgium, where the renewal of cards issued in 2005 is underway. In Israel, production should start at the beginning of the summer. Small, non-recurrent projects are also under execution in Africa.

Throughout the first half of the year, the cash flow from operations is used to pursue the investment plan regarding production infrastructure for People ID (in the order of 1.5 million EUR); and for the acquisition of the subsidiary in Greece (0.5 million EUR plus the integration of the acquired company’s debt (1.8 million EUR), the majority of which related to the financing of its real estate).

Finally, cash is allocated for the repurchase of its own shares (estimated to be 0.6 million EUR) and to the payment of dividends (2 million EUR).

Outlook

The company thinks that the improvement observed in Goods ID will continue throughout the year 2010 and that, thanks to its position on solutions that provide value-add and generate productivity gains, it can continue to strengthen its position on the market.

In People ID, the contribution of all the long term contracts in 2010 is in line with the expectations. Furthermore, the outcome of business development efforts should allow the conclusion of one or more contracts on the projects being targeted in Europe as well as in Africa.

The company reiterates its goal to have a year 2010 that is better than the previous year.

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