Portfolio Revision with Significant Cost Cutting

Net sales of State Printing House Plc. for Q1 2012 amounted to HUF 4.1 billion, and consolidated net income is HUF 153 million.

Net sales of State Printing House Plc. for 2012 January-March amounted to HUF 4.1 billion, which is lower by 8.9% than in the previous year. Export sales was HUF 1.2 billion, representing a 30% export sales ratio. EBITDA is HUF 427 million, meaning a margin of 10.5%. Net income is HUF 153 million, which shows a decrease of 32% compared to the previous year’s similar period, but an increase of 104% compared to Q4 2011.�

The main reason of decrease of income is that the commercial and administrative clients still hold back their orders for higher value-added products in the wrong economic environment. Therefore the Board of Directors decided on portfolio revision and further cost-cutting. According to the decision of the Board of Directors in cooperation with the interested parties the management of the Company started to move the operation from Pásztó to Budapest and at the same time it has been terminated in Pásztó. Such traditional printed products have been produced at the premises in Pásztó that’s market has decreased, while their production needs a lot of handwork. The Management forecasts additional charges in an amount of HUF 80 million because of discharges with pecuniary compensation and the required technological movement but also expects a cost-cutting of HUF 151 million in 2013.

Chief Executive Officer of State Printing House Plc., Gábor Zsámboki commented:

“Reacting to the unfavourable market tendencies and economic climate, we have decided to carry out further cost-cuttings. The termination of operation at Pásztó Plant does not risk the strategic product range of the Company, as the market of traditional products manufactured at this plant has significantly decreased and they do not increase the success of the Company. Due to close down of the plant sources will be discharged that can be devoted among others to mobile developments, which can anyhow effect the successfulness of the Company in the future.”

State Printing House Plc.