HITT : publishes annual figures 2011

Press release

Annual figures 2011

HITT N.V.

Press release annual figures 2011

Highlights HITT again records a significant profit growth in 2011

Revenue increased with 12% to EUR 40.7 million (2010: EUR 36.2 million)
Growth of business activities in both segments (Traffic and Hydrography) as a result of earlier realized large orders.
Positive revenue and profit contribution through acquisition of IVS 3D. One-off net gain of EUR 0.8 million by release of pension provision Net profit increased to EUR 3.4 million (2010: EUR 2.2 million)
Negative free cash flow especially due to acquisition of IVS 3D and increase of working capital need from projects
Order backlog decreased to EUR 37 million per December 31, 2011 due to less order intake in
2011. However, more own added value is included.

Key figures of the year:

x EUR 1,000; except per share data and headcount

2011 2010 difference in %

Revenue 40,662 36,234 4,428 12% Operating profit (loss) 4,487 2,368 2,119 89% Profit (loss) 3,413 2,240 1,173 52% Free cash flow * -2,833 6,380 -9,213 -144% Solvency 61% 55% 0% Order intake 33,122 54,017 -20,895 -39% Average number of employees 182 158 24 15%

Outstanding number of shares 4,494,158 4,494,158 0 0% Weighed average number of shares 4,494,158 4,658,542 -164,384 -4% Earnings per ordinary share 0.73 0.52 0.21 40%

* Cash flow from operating and investing activities

HITT N.V.

Press release annual figures 2011

General developments

HITT looks back on a number of important successes in 2011. Both revenue and profitability reached an all-time high. The revenue and added value show a fine increase compared to 2010, in the Traffic and the Hydrography segment.
An important milestone was the strengthening of the Hydrography segment through the acquisition of IVS 3D in 2011. In the meantime the activities have been fully merged with QPS and a new organization has emerged with 56 highly qualified employees. Through is this combination of forces, HITT is now well positioned in this segment. IVS contributed positively to the result in the first year. The revenue of the existing activities in this segment also increased although profit margins were somewhat lower. At the same time, the new portable pilot units were successfully implemented by the Dutch and Belgium pilot associations.
HITT has been very busy with a number of large orders in the maritime operation of the Traffic segment in the Netherlands, Belgium and China. There were also positive developments in various other countries. HITT entered the rapidly developing Vietnam market with the supply of a vessel traffic management system. In Barcelona, Spain, HITT was awarded an order to deliver a port management system and in Hong Kong, the Kai Tak Cruise Terminal will be equipped with a new generation radar. Via the new partner in Australia first orders have been received.
HITT notices an increasing demand for integration of traffic control with management information systems, and is now offering these integrated solutions. As a result, the development activities of HITT Traffic and subsidiary Klein systems in this area have been integrated. The revenue of aviation activities also increased, and HITT continues to expand its network with reference projects. At the same time the revenue potential in the aviation portfolio expanded through new cooperation programmes with partners.
The significant increase of revenue and added value in the Traffic segment was mainly realized with temporarily employed staff, which gives a certain flexibility. The total number of employees increased to 188 (end of 2010: 162) due to the acquisition of IVS and due to an increased number of employees at the existing activities.

Financial developments

After a successful 2010, HITT succeeded again in increasing its profitability over the last year, from
EUR 2.2 million to EUR 3.4 million in 2011.
Revenue in 2011 increased from EUR 36.2 million to EUR 40.7 million. The workload was high during the whole year, resulting in an added value that both in the first and in the second half of the year was above the average of the year before. Despite the increase of revenue, the costs of materials and subcontracting were on a lower level: from EUR 15.9 million in 2010 to EUR 14.8 million in 2011. This also reflects that there is an increase of projects in which HITT is providing only the software instead of acting as main contractor. All this resulted in an increase of added value from EUR 20.4 million in
2010 to EUR 25.9 million in 2011.
The increase of added value occurred both in the Traffic and Hydrographic segments. Sales in the hydrographic segment experienced a new boost from the acquisition of IVS 3D at the end of April
2011, and from the sales of a new generation portable pilot units for navigation of vessels by subsidiary Ad Navigation.

HITT N.V.

Press release annual figures 2011
The geographical break down of revenue is again a clear illustration for the international character of
HITT's markets: The Netherlands 38%, rest of Europe 21%, Asia 28% and rest of the world 13%.
The employee benefit expenses increased significantly from 13.1 million in 2010 to EUR 15.7 million in
2011. Included in the 2011 amount is the one-off gain due to release of pension provision with a net effect on employee benefit expense of EUR 1.1 million. There are several main reasons for the increase in personnel costs:
- Since the acquisition of IVS 3D in April, the expenses for its 15 staff members have been consolidated in the costs.
- The boost of activities in the Traffic segment had to be met by additional staff. This was realized
by temporary staff and short-term contracts. These costs can be cut in case demand slows down.
- More termination benefit expenses were paid during 2011.
- A higher profit level generated higher profit related benefits for permanent staff
Both the size of capitalized development costs and the depreciation of these costs grew significantly in
2011. This is largely a result of the acquisition of IVS 3D, where capitalization and amortization of development costs is also applied. Other expense increased as well, mainly in connection with the acquisition. The other expense of IVS companies were consolidated as of May and the costs of the acquisition (around EUR 0.2 million) are accounted for in the results.
Profit from continuing operations rose from EUR 1.7 million in 2010 to EUR 3.4 million in 2011. One-off results from non-continued operations, such as the ones in 2010 (EUR 0.5 million), did not occur in
2011.
With a total of new orders of EUR 33 million during 2011 (2010: EUR 54 million), the year ended with a backlog of EUR 37 million (2010: EUR 45 million). This order backlog comprises a considerable number of long term contracts, which is in line with the strategic objectives of HITT. From the order backlog as of December 31st, approx. EUR 20 million is expected to be realized in 2012, the remaining
EUR 17 million will generate income in the years to follow.
The amount of working capital (excluding cash and cash equivalents) increased by EUR 2.3 million to
EUR 3.5 million at the end of the year. This has a number of reasons:

- Partly it is a consequence of the increase of construction contract revenue, which partly is acquired via public tenders. This type of contract is usually characterized by an obligation for prefinancing of around 10% to 20 % of the value of the contract.

- HITT received relatively many prepayments from new customers at the end of 2010, which situation did not repeat itself at the end of 2011.

- HITT realized net receipts of income tax in 2010, whereas this turned into a payment situation in 2011 where payments were more in line with the actual tax expense level.

Projects in India still require a relatively high level of prefinancing.
This resulted in a cash outflow from operating and investing activities of EUR 2.8 million (2010: inflow EUR 6.4 million). The solvency remained on an acceptable level in 2011, despite pay-out of dividend and acquisition of IVS 3D.

Outlook

At the end of 2011, HITT's order book was well filled whilst the quality of the backlog improved during the year. Central governments in Western countries are now strongly focused on cutbacks; this however does not automatically stop local investments in higher efficiency, safety and sustainability of

HITT N.V.

Press release annual figures 2011
the infrastructure. At the time of the compilation of this report the impact of the events around the euro on the macro economy and the financial sector could not be predicted.
The outlook for 2012 is reasonably good, not taking into account possible external economic upheaval. Both in the aviation and the shipping segment as well as in hydrography, HITT is working with a robust installed base of systems and well functioning products and solutions. There is a continuous demand from all over the world for expansion and upgrading of existing systems from all parts of the world. With new partners, Value Added Resellers, HITT covers a wider geographical area and sometimes reaches customers not thought of before. With the developed off-the-shelf software, HITT's systems are becoming increasingly interesting to smaller ports, airports and regional services. In order words, at HITT, there are more challenges than threats. Barring unforeseen external circumstances, the management is therefore cautiously optimistic for 2012.

Dividend

Despite the payment of dividend and acquisition of IVS in 2011, the financial position is healthy at balance sheet date. Management underlines that the cash position is often at its optimum on December 31 and gives a flattered view of the situation during the year. It is expected that the cash position will decrease in the first half year. Management Board proposes to pay out a cash dividend of EUR 0.26 per ordinary share.

Auditors' involvement

This press release is based upon the annual accounts 2011 drawn up by the management and is a summary only. Deloitte Accountants B.V. has issued an unqualified auditors' report. The annual accounts will be presented for approval to the Annual General Meeting on March 27, 2012.
Annexes: 1. Consolidated statement of income
2. Consolidated statement of financial position
3. Consolidated statement of cash flows

Profile HITT

HITT is a leading player in the worldwide markets for traffic management and navigation systems. The company develops technology aimed at safety enhancement and traffic flow improvement, whilst also enabling significant cost reductions in infrastructure and logistics. The core activities of HITT consist of developing and selling management & control systems and services for air and vessel traffic and hydro-graphic and navigation systems.

In 2010 HITT achieved a revenue of EUR 36 million and a net profit of EUR 2.2 million. The number of staff at year-end 2010 was 162. HITT is listed on Euronext Amsterdam NV since June 1998.

Further information: Sjoerd Jansen (CEO); t [phone] e: [e-mail]

HITT N.V.

Annex 1 to press release annual figures 2011

2010

36,234

(15,882) (13,123)

2,089 (2,252)

(4,698)

2,368 (56)

	2,312
	(617)
	1,695
	545
	2,240
	2,404
	(164)
	2,240
EARNINGS PER SHARE
From continuing and discontinued operations:
Basic	0.52
Diluted	0.52
From continuing operations:
Basic	0.40
Diluted	0.40

HITT N.V.

Annex 2 to press release annual figures 2011

2010

506

1,280

5,140

311

7,237

221

12,501

57

268

11,009

24,056

31,293

17,322 (31)

17,291

1,280

879

26

2,185

10,213

1,383

221

-

11,817

14,002

31,293

HITT N.V.

Annex 3 to press release annual figures 2011

2010

2,368

3,700 (14)

(310)

344

1,790

117

7,995

(51)

181

8,125

(202) (2,089)

1

-

545

(1,745)

(970) (657) (21)

94

(1,554)

4,826

6,661 (478)

Cash and cash equivalents at end of period

11,009

***End of press release***