SMARTRAC N.V. continues along its growth path

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DE Amsterdam (euro adhoc) - Amsterdam, 16 August 2006. SMARTRAC N.V. continued
along its growth path in the first half of 2006 and further strengthened its
earnings. SMARTRAC, the leading RFID manufacturer and supplier of components for
contactless credit cards (ePayment) and passports (ePassports), increased its
total revenues in the first six months of this year compared with the same
period of 2005 from EUR 8.3 million to EUR 22.5 million. The Group’s first-half
EBITDA increased to EUR 4.7 million, more than triple the figure for the
prior-year period (EUR 1.5 million). At EUR 3.3 million, net profit for the
first half of 2006 was already higher than the figure of EUR 3.0 million
reported for full-year 2005. The company has posted a net profit every year
since its foundation.

"In this reporting period, we more than fulfilled our operating and financial
expectations," said Dr. Christian Fischer, CFO of SMARTRAC. "We want to continue
along our successful path, following the progress we made in the achievement of
our strategic goals: the initial public offering and the expansion of our
production capacities."

Part of this positive development was the performance in the Standard segment
including the areas of Mass Transportation, Access Systems and Logistics, which
increased its revenues compared with the prior-year period by 69 percent (from
EUR 7.4 million to EUR 12.6 million). The main contribution however came from
the High Security segment (ePayment and ePassport), which increased its revenues
to EUR 9.9 million, more than tenfold compared with the prior-year period. With
approximately EUR 3.3 million, the High Security segment made an important
contribution to EBITDA in the first half of 2006.

First-half EBITDA in the Standard segment (EUR 1.5 million) grew at a lower rate
than revenues during the same period and at a lower rate than EBITDA in the
first half of last year. This was due to regional changes in the order structure
and the strategic expansion of chip sourcing in the Standard segment. Chip
sourcing in the Standard segment burdened the ratio between revenues and
earnings compared with the prior-year period due to the fact that only a low
proportion of SMARTRAC’s value creation is accounted for by the purchased memory
chips. However, it enables SMARTRAC to improve its long-term customer retention.

In addition to preparing the successful IPO, the main strategic focus in the
first half of 2006 was on expanding production capacity, in particular in the
High Security segment. With investments of EUR 4.4 million (H1 2005: EUR 1.3
million), SMARTRAC expanded its production capacity with a new facility in
Germany and an additional plant in Thailand, that should be fully operational by
the end of this year.

"In order to meet the strong demand for our products, our main goals for the
second half of the year are to continue expanding our production capacity and to
further increase our investment in research and development," said Dr. Christian
Fischer.

For full-year 2006, SMARTRAC anticipates substantial growth in revenues and
EBITDA compared with 2005.

Overview: 
EUR thousand        H1 2006  H1 2005  Change  Change in % 
Revenues            22,471   8,280    +14,191 +171.4
EBITDA              4,681    1,502    +3,179  +211.7
Net profit          3,324    827      +2,497  +301.9
Earnings per share  0.33     0.08     -       -

About SMARTRAC N.V.
SMARTRAC is a leading supplier of inlays for contactless credit cards (ePayment)
and passports with integrated contactless chips (ePassports). The company, which
was founded in 2000, is incorporated under Dutch law and has its head office in
Amsterdam. SMARTRAC has its main production and R&D center in Bangkok
(Thailand), as well as subsidiaries in Germany and Singapore. Through an
agreement with Xytec Solutions (Kulim, Malaysia), in which SMARTRAC holds a 30%
stake, the company has exclusive access to proprietary manufacturing equipment.
In two product segments - Standard and High Security - SMARTRAC manufactures
components for RFID applications in public transport, access control and
logistics, as well as in the high-security applications of ePayment and
ePassport.

Disclaimer:
To the extent that this Press Release contains forward-looking statements, such
statements are based on assumptions, planning and forecasts at the time of
publication of this Press Release. Forward-looking statements always involve
uncertainties.
Business and economic risks and developments, the conduct of competitors,
political decisions and other factors may cause the actual results to be
materially different from the assumptions, planning and forecasts at the time of
publication of this Press Release. Therefore, SMARTRAC N.V. does not assume any
responsibility relating to forward-looking statements contained in this Press
Release. Furthermore, SMARTRAC N.V. does not assume any obligation to update the
forward-looking statements contained in this Press Release.

Further inquiry note:
Contact:
Max Hohenberg
Media Relations SMARTRAC N.V.
Tel.: +49 711 6569 2616
E-mail: [email protected]
http://www.smartrac-group.com

end of announcement euro adhoc 16.08.2006 08:46:29
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emitter: SMARTRAC N.V.
Parnassusweg 103
NL-1077 DE Amsterdam
phone: +31 20 57 888 38
FAX: +31 20 57 888 39
mail: [email protected]
WWW: http://www.smartrac-group.com
ISIN: NL0000186633
indexes:
stockmarkets: official dealing/prime standard: Frankfurter Wertpapierbörse, free
trade: Börse Berlin-Bremen, Baden-Württembergische
Wertpapierbörse, Börse Düsseldorf, Bayerische Börse
sector: Technology
language: English

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