1. Significant events during the first six months of 2013

New toner: ICE
At a press conference on June 13, which formed part of the press campaign in the run-up to Labelexpo Europe 2013, Xeikon launched a new dry toner: ICE. This toner is part of the Xeikon Self-Adhesive Label Suite (Xeikon’s suite of solutions for self-adhesive labels), and was specially developed for the printing of heat-sensitive materials such as thermal labels and PE. The ICE toner builds on Xeikon’s tried and tested QA toner technology. It can be used in all new and existing presses in the 3000 Series, and opens up further possibilities for digital label printers. ICE will be demonstrated at Labelexpo Europe 2013 in Brussels (September 24-27, 2013), and will be available in the course of the fourth quarter of this year.

Launch of the ThermoFlexX 80
During the same press conference in June, Xeikon also announced that it would demonstrate its first ThermoFlexX 80 at Labelexpo. This imager, the largest in the ThermoFlexX series, has been further developed in recent months. The ThermoFlexX 80 exposes flexographic plates up to 1270 x 2032 mm, and is suitable for wide web applications such as flexible packaging and packaging made of corrugated and folded cardboard.

Trillium on schedule
In early July, Xeikon issued a status update on Trillium, the liquid toner technology it had announced at Drupa 2012. During an online press conference attended by over 30 experts and journalists from the sector, Xeikon confirmed that development work is on schedule. The first test machines will be installed at the premises of beta users during the first quarter of 2014. The official launch of the first Trillium presses is scheduled for spring 2014, and the presses should be brought onto the US market six months later.

Trillium presses use of a system of high viscosity liquid toner that has several advantages over a dry toner system. High viscosity liquid toner is capable of even higher printing speeds without compromising on image quality. Moreover, the toner layer is thinner than with dry toner. This makes printing considerably cheaper, and the look and feel is closer to that of conventional offset printing. Trillium is therefore the perfect answer to the competition on the document market from high-volume inkjet systems (transactional printing and direct marketing), in which printing on coated paper with water-based inks and printing of pages with high page coverage cause problems. The Trillium presses print the same widths as those in the Xeikon 8000 Series. The test machines have initially achieved a printing speed of 60m/min, or 800 A4 pages/min in one-passduplex, and a monthly capacity of at least 5 million pages.

2. Discussion of the half-yearly results

Sales for the first half of 2013 were 2% higher than in the same period last year. Digital Printing Solutions sales rose by 12% from their 2012 level, while Prepress Solutions sales fell by 26%. Analysis per activity shows that equipment sales were up 8% compared with the first half of 2012. Recurring income from consumables and service activities fell slightly, by around 2%. The decrease in sales in Europe is mainly due to lower sales of Prepress Solutions. The sales growth reported for North and South America is mainly due to South America.

EBITDA
Compared with the same period in the previous financial year, EBITDA rose by 25% to EUR 12.6 million (H1-2012: EUR 10.1 million). This increase is a consequence of the higher sales, a better product mix and strict cost management.

Operating result (EBIT)
The operating result (EBIT) was EUR 8.6 million, which represents a 62% increase compared with the same period last year (H1-2012: EUR 5.3 million). This increase was due to higher sales, a better product mix and strict cost management. Depreciation, impairments and provisions came to EUR 4.0 million (H1-2012: EUR 4.7 million).

Financial result
Due to the positive interest result and (modest) exchange rate gains in the first half of 2013, the financial result was a gain of EUR 0.5 million (H1-2012: gain of EUR 0.5 million). The exchange rate gains were limited due to the slight rise in the US dollar against the euro.

Result of associates accounted for by the equity method and result before tax
The share in the result of associates accounted for by the equity method consists of the share in the net result of the real estate holding company Accentis nv, in which Xeikon holds a 43.74% stake (as of June 30, 2013). For the first half of 2013, the result of associates accounted for by the equity method was nil (H1-2012: EUR 0.1 million). The result before tax for the first half of 2013 was EUR 9.2 million (H1-2012: EUR 5.9 million).

Net result
The net result (group share) was EUR 7.3 million (H1-2012: EUR 4.6 million).

Balance sheet
Shareholders’ equity at the end of the reporting period was EUR 192.9 million. The net increase compared with the end of December 2012 arises from the net profit for the first half (EUR 7.3 million). Investments for the first half of 2013 totaled EUR 4.6 million (H1-2012: EUR 4.4 million). On June 30, 2013, Xeikon held a receivable from Punch International nv of EUR 9.4 million (December 31, 2012: EUR 8.3 million) and a receivable from Accentis nv of EUR 26.0 million (December 31, 2012: EUR 26.0 million). Both are shown under long-term receivables.

Cash flow statement
Cash from operating activities was EUR 1.0 million for the first half of 2013, resulting from an operational cash flow of EUR 11.6 million and an increase in working capital of EUR 10.6 million. Cash used in investing activities totaled EUR 4.8 million and consisted among other items of EUR 2.7 million of capitalized R&D projects. Cash from financing activities came to EUR -5.2 million (H1-2012: EUR -5.1 million), and included the repayment of EUR 5 million on the syndicated loan taken out with a bank consortium.

3. Forecasts

The group does not wish to announce any concrete targets for 2013.

4. Purchase of treasury shares

The management has decided to make use of the authority granted to it to purchase treasury shares. Under this authority, the management is empowered to purchase treasury shares up to the maximum quantity that may be vested in the company by virtue of the law and the articles of association at the time of acquisition, at a price between their par value and 110% of the stock-market price at the time of acquisition. In its quarterly trading updates, the company will report periodically on the number of treasury shares purchased and the average acquisition price. Since the authority was granted, the company has purchased a total of 3,152,332 treasury shares at an average price of EUR 2.68 (as at the end of August 2013). This represents 10.98% of the total number of shares outstanding. Xeikon has not purchased any treasury shares in the course of 2013.