Weaving machine sales zoom 70% at ITEMA in H1

Itema closes a strong 1H2013, with a record second quarter (Q2) following the already exceptional growth in Q1 2013 and significantly exceeds its expectations for Consolidated Net Profit and Cash Flow from operations.

Consolidated Net Turnover from sales of weaving machines registers a 70% increase from the prior year. This new record high is primarily attributable to the sound commercial actions implemented in 2012 and to the remarkable market success following the launch of the new Ra- pier Machine R9500 in October 2012.

In addition to the said success of R9500, the biggest contributors to the positive performance of Itema are the particularly encouraging results of Itema’s 100% controlled Chinese Affiliate with YTD deliveries in 2013 more than double the same period last year and the sales of the Projectile Machine P7300HP which have more than tripled since 2012, mostly due to the growing consciousness of customers of the unrivalled quality of Denim produced with Itema’s unique machines.

The Spare Parts Business Unit performed as planned with only a slight decrease due to the in- creasingly challenging underlying market conditions.

- Orders pipeline for Itema’s weaving machines, already significantly up at the end of 2012 (dou- ble compared to 2011), increases by a further 50% in 1H 2013, thus giving Itema a positive outlook to the end of the year and driving the expectations for the number of looms Invoiced up by 60% compared to the previous year.

- Itema closes the first half of 2013 with EBT of €12 million, almost tripling the result of the same period of 2012 (excluding extraordinary revenues). EBITDA is approximately 10% of Turnover.

- Cash Flow from operations is constantly improving (double compared to previous year), thus increasing the Net Financial Position supported by the EBITDA and the overall reduction of the Working Capital, result achieved - notwithstanding the big increase in production volumes - thanks to the streamlining of operations.

- New Investments reach €3 million (of the €6 million planned by year-end), mostly focusing on further boosting product quality and reliability. An important plan for the renovation of CNC machines is already defined also for the coming years with the goal to continue improving qual- ity and production flexibility.

- Additionally, Itema is continuing on the course to streamline its operations with the successful rollout of Lean Manufacturing principles across its worldwide manufacturing sites and by work- ing closely with its first-tier supply chain. As a result, the Company is now better positioned to quickly respond to the growing market demands for its products and this increased flexibility enables Itema to absorb peaks in global demand up to 166% compared to the previous year with only a minimal increase in the workforce.

- New hires during the reporting period included several highly qualified engineers to strengthen the increasingly important R&D activities at the Company’s Headquarters and thus reaffirming Itema’s strong and well-known commitment to innovation and advanced research. A number of other top-tier senior personnel joined the company with the goal to reinforce Itema’s corporate functions globally. Itema’s workforce increased by 30 people (some 7%) to further drive up productivity of the Company.

- Notwithstanding the current satisfactory results and the overall strong financial stability of the company, Itema nevertheless remains cautious for the medium term, taking into consideration the sustained political instability and continuing financial turmoil in some important market are- as for the Company.

ITEMA