PRESS RELEASE

Zwolle, Thursday 27 August 2015
  
Summary HY1 2015

Highlights HY1 2015 compared to HY1 2014

• RoodMicrotec booked the biggest order in its history: € 25 million over 10 years. The quote portfolio and hitrate remain at a historically high level.
   
• Total sales 3% higher and sales in all business units except for test increased between 3% and 29%.
   
• In the first half year, Roodmicrotec made significant investments in future projects. The related costs have been partly capitalised.
   
• As the result of our strategy to focus on fabless companies (design houses), OEMs (Original Equipment Manufacturers) as well as on recurring business, we have to reckon with higher lead times. This strategy will result in significant sustainable revenue in the future.
   
• Operating expenses increased by € 0.115 million, predominantly due to the lease of a new test machine.
   
• Net result € -0.497 million in the first half of 2015 (HY1 2014: € -0.594 million).
   
• Solvency is at 35% (HY1 2014: 37%).

Philip Nijenhuis, RoodMicrotec CEO:

'We have not been sitting around in the first half year of 2015: we secured the biggest order in RoodMicrotec's history. And promising projects keep coming in. Certainly in the automotive industry, we are considered as an attractive partner. The many requests we are getting from this industry have led us to decide to set up a special programme in support of this sector.'

Report of the board of management

1.    General

Our strategy aims to realise increasing amounts of recurring sales by means of Extended Supply Chain Management. This is different from before, when RoodMicrotec was far more focused on offering individual services that were unconnected and tended to be one-off projects. Now, we are increasingly offering integrated services in the form of a complete product for the entire lifetime of the product/chip. This leads to longer-term projects with more stable, more predictable and less cyclic sales. However, these projects have longer lead times, because we first perform engineering work and make investments before we start generating significant sales. This means that the anticipated sales growth will materialise up to the second quarter of 2016.

Our new strategy involves that we co-invest in new promising projects and also invest in additional sales capacity, the latter mainly in order to compensate for the decline in sales with our 'traditional' product portfolio. By co-investing in promising projects, we aim to try to break through the continuing lending restraint in the financial markets, which often frustrates our customers in their development, many of which are Fabless Companies (FCs) or design houses. With our approach, we aim both to boost the development of FCs/design houses and also increase our sales and our position in this market segment.

The successful issue of bonds with mortgage cover and the strengthening of our equity have had a very positive impact on our balance sheet ratios and on our financial position in general. This improved position enables us to contribute more actively to the development of new products, generating recurring sales.

In the first half year (as in 2014) we have made significant investments in projects that offer attractive future perspectives. These investments resulted into the big 10-year order of € 25 million as published in the press release of 2 July 2015.
Of the more than 20 interesting new projects, currently over seven projects are highly promising. We expect these projects will result in a major boost of our sales over the next few years.

1.1 Developments by business unit (product /service group)

      RoodMicrotec net sales HY1 2015 vs HY1 2014

1.2 Personnel

The strategy change mentioned above has obviously impacted the organisation, leading to a different composition and management of our staff.
The number of permanent employees decreased to 91 FTEs, a decrease of approximately 6% compared to June 2014 (97 FTEs).
     
1.3 Communication with shareholders and bondholders

High on the agenda for this year and the next few years is intensifying communication with our shareholders and bondholders. This is partly in view of our bond loan issue in June 2014 which has significantly raised the number of stakeholders in RoodMicrotec. In this context, we organised the first bondholders meeting on 21 August 2015. We invited our shareholders,  bondholders, analysts and journalists for a visit to our facilities in Germany on 25 August 2015.

1.4 Risk management

The various risks the company is exposed to are listed in RoodMicrotec's 2014 annual report. We strive to limit the risks, inter alia by periodical and systematic risk reviews of selected aspects. These reviews are conducted approx. 8 times every year. Where necessary, corrective measures are taken. In view of the negative developments in the financial markets, the management is devoting additional attention to cash management. Otherwise, the management does not currently foresee any material changes in the risks in 2015.

2.    NOTES TO THE FINANCIAL RESULTS

2.1 Sales and result

Sales in the first half of 2015 were € 4.912 million, an increase of 3% compared to the first half of 2014 (HY1 2014: € 4.770 million).

EBITDA was € -0.033 million (HY1 2014: € -0.112 million), or -1% of sales.
EBIT was € -0.404 million (HY1 2014 € -0.526 million), which equates to -8% of sales.

Net financing costs were € 0.093 million, a 40% increase on the first half of 2014. This mainly comprises the interest on the bond loan.

2.2 Cash flow

In the first half year of 2015, the cash flow realised from operating activities was €-537,000 (HY1 2014: € 551,000).

3. Events after balance sheet date
    

• On 2 July 2015, 250,000 options have been exercised at a exercise price of € 0.217.
• On 2 July 2015, 448,040 shares (€ 100,000) were issued.
• On 10 July 2015, 1,196,000 warrants were issued at an exercise price of € 0.13. This concerns the warrants series of 2014
• On 10 July 2015, 221,626 warrants were issued at an exercise price of € 0.15. This concerns the warrants series of 2013.
• On 3 August 2015, 814,931 shares (€ 200,000) were issued.

On 2 July 2015 RoodMicrotec concluded a share issue agreement for 5 years. In which RoodMicrotec has the option to issue shares of € 2.0 million in total. Share issues will executed in monthly trenches of between € 100,000 - 200,000.

4. Audit costs

The costs invoiced by Grant Thornton exceed the estimated costs of approximately € 64k as agreed in the engagement letters (signed in November and December 2014) by about € 200,000, totalling approximately € 264K. To date, RoodMicrotec has paid an amount of € 142K and denies any further liability for audit costs relating to the financial year 2014. Accordingly, it has not made any provisions in this respect.

5. Appointment of the auditor for the 2015 financial year

The Supervisory Board has the intention of appointing Baker Tilly Berk as company auditor for the 2015 financial year. The Supervisory Board was authorised to appoint the auditor by the Annual General Meeting of 25 April 2013.

6. Outlook for 2015

In view of the high hitrate, the rising quote portfolio and new orders booked, RoodMicrotec now expects to realise at least clear sales growth in the second half of 2015 and significant sales growth in 2016 and beyond.

We have reached the invoicing stage of a start-up or are already investing in the preparation phase of over 50% of new projects. These relate to our core segments Automotive (50%) and Industrial/Medical (30%), but also high-end consumer business (20%). Automotive and Industrial/Medical are fast growing market segments.

There is now strong ground for maintaining our previously stated long-term objective of annual autonomous growth of between 3% and 13% at an average growth of the semiconductor market of 6% and thus improve the operating result and the net result.

7. Financial Agenda 2015 and 2016

About RoodMicrotec
With more than 40 years' experience as an independent value-added service provider in the area of micro and optoelectronics, RoodMicrotec offers Fabless Companies, OEMs and other companies a one-stop shop proposition. With its powerful solutions RoodMicrotec has built up a strong position in Europe.

Our services comply with the industrial and quality requirements of the high reliability/space, automotive, telecommunications, medical, IT and electronics sectors.
Certified by RoodMicrotec concerns inter alia certification of products to the stringent ISO/TS 16949 standard that applies to suppliers to the automotive industry. The company also has an accredited laboratory for test activities and calibration to the ISO/IEC 17025 standard.
Its value-added services include failure & technology analysis, qualification & burn-in, test & product engineering, production test (including device programming and end-of-line service), ESD/ESDFOS assessment & training, quality & reliability consulting, supply chain management and total manufacturing solutions with partners.

RoodMicrotec has branches in Germany (Dresden, Nördlingen, Stuttgart), United Kingdom (Bath) and the Netherlands (Zwolle).

Further information:
Philip Nijenhuis, CEO                  Telephone: +31 38 4215216
Postal address:
RoodMicrotec N.V., PO Box 1042, 8001 BA  Zwolle
Email:       investor-relations@roodmicrotec.com
Website:    www.roodmicrotec.com

1. Consolidated income statement

2. Consolidated comprehensive income

3. Consolidated balance sheet

4.  Statement of changes in equity

5. Consolidated cash flow statement

6. Notes to the consolidated financial statements

General information
RoodMicrotec N.V. is a company with its registered office in Zwolle, the Netherlands. The consolidated interim financial statements of the company for the period ended 30 June 2015 comprise the company and its subsidiaries (jointly referred to as the 'Group'). The Group includes the wholly-owned subsidiaries RoodMicrotec GmbH (Nördlingen, Germany), RoodMicrotec Dresden GmbH (Dresden, Germany) and RoodMicrotec International B.V. (Zwolle, The Netherlands).

Summary of significant accounting policies
These consolidated financial statements have been prepared in accordance with IAS 34 (interim financial reporting). They do not include all the information required for full annual financial statements, and should therefore be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2014.

The accounting policies applied in these consolidated interim financial statements are the same as those applied in its consolidated financial statements as at and for the year ended
31 December 2014.

The consolidated interim financial statements and the reconciliations included in this report and its enclosures have not been audited by the external auditors.

Changes according to IAS 8 - Accounting Policies, Accounting Estimates and Prior Period Adjustments
As of December 31, 2013, the Group applied for the first time IAS 19 revision that required restatement of its previous financial statements.

Segment reporting
The Group operates in one business segment. Sales are reported in various product/service groups, and sales are fundamental to RoodMicrotec's decision-making. A consolidated income statement is prepared every month based on which an analysis and a management report are communicated. If necessary, specific consolidated reports are prepared ad-hoc per product/service group; these are not part of the internal management reports.

Financial risk management
The activities are exposed to a variety of financial risks: market risks (including currency risk and interest rate risk), credit risks and liquidity risks. The overall risk management programme focuses on the unpredictability of markets (debtor management) and tries to minimise potential adverse effects on the Group's financial performance by intensifying cash management. Derivative financial instruments are used to a limited extent. These financial instruments include US Dollar hedges and interest swaps.

Overview of interest-bearing loans and borrowings
This note provides information about the contractual terms of the interest-bearing loans and borrowings.

On June 30, 2014, the Group issued € 2,500,000 bond loan with mortgage cover. The bond loan is composed of 2,500 bonds with €1,000 nominal value at an issue price of 94% payable in six years. The annual coupon rate is 6% and the effective interest rate is 7.44%. The bondholders will receive 1,000 warrants per bond on RoodMicrotec's shares, amounting to € 0.13 per warrant. These warrants are valid for 14 months from 1 November 2014 up to and including 31 December 2015.

Terms, repayment schedule and interest

The nominal interest rate of the bond loan is 6%. The fair values of the finance lease do not materially differ from the book value. The interest rates of the interest-bearing loans and borrowings are fixed during the term of the contracts.

Secured bank loans
As of 30 June 2015, the bond loans are secured by a mortgage amounting to € 2,500,000 on land and buildings. As of 30 June 2015, there are no guarantees or security issued to banks or credit institutions.

Interest rates
All of the Group's long-term borrowings have a fixed interest rate. Generally, the Group raises new long-term borrowings at fixed rates.

The average interest rates are as follows:

Statement of cash and cash equivalents

Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate credit facility. Management monitors rolling forecasts of the Group's liquidity reserve and cash and cash equivalents. Furthermore, liquidity planning is one of the major elements in the Group's budget cycle. Due to company's working capital ratio and market conditions, management has tight monitoring procedures in place regarding direct cash flows. Both the cash position and sales forecasts are frequently reviewed.

Statement of trade and other receivables
Within the Group's customer portfolio, the Group is exposed to credit risk and currency risk. The management has set up credit control policies to reduce the credit risk and foreign exchange risk as much as possible. The foreign exchange risk is mitigated by exchange rate clauses in most of the Group's contracts. The average credit rating of the Group's customers is comparable to the industry.

The table below shows the Group's outstanding trade receivables positions:

Net sales of HY1 2015 compared to HY1 2014

Currency risk

Due to the Group's international activities, currency risks cannot be excluded. However, the value of the customer orders that are concluded in other currencies than euros are negligible.

7. Statement from the board of management

This statement is based on Article 5:25c, paragraph 2C of the Financial Supervision Act. The statements following this law are obliged as a ruling for the interim financial statements.

Our opinion of the interim financial statements is that it gives a true and fair view of the assets, liabilities, financial position and the result of RoodMicrotec N.V. and the companies included in the consolidation.

The interim financial statements gives a true and fair view of the situation on balance sheet date and the developments during the first half year of 2015 of RoodMicrotec N.V. and the group companies for which the financial information is recognised in its financial statements. Due to the negative developments in the financial markets, the board of management is devoting extra attention on cash management. Otherwise the risks are not expected to change materially in the second half of 2015.

The members of the board of management have signed the annual report and financial statements in fulfilment of their legal obligations on the grounds of Article 5:25c, paragraph 2C of the Financial Supervision Act.

Zwolle, 27 August 2015

Board of management
Philip M.G. Nijenhuis, Chief Executive Officer