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May

Telvent Announces First Quarter 2009 Financial Results

May 21, 2009

On Track to Meet the Annual Guidance

  • Pro Forma Revenues Increase 30.6% to € 177.8 Million
  • Pro Forma EBITDA of € 27.8 Million, an increase of 118.8%
  • New Order Bookings of € 228.4 Million, a 35.3% increase

May 21, 2009 – Telvent GIT, S.A. (NASDAQ: TLVT), the IT company for a sustainable and secure world, today announced its unaudited financial results for the first quarter ended March 31, 2009.

Pro forma revenues for the first quarter of 2009 were € 177.8 million, reflecting an increase of 30.6% from € 136.1 million pro forma revenues in the first quarter of 2008. Organic growth for the quarter was 3.8%.

Pro forma gross margin was 38.7% in the first quarter of 2009, compared to 26.6% in the first quarter of 2008.

Pro forma earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter of 2009 were € 27.8 million, or 15.6% of total pro forma revenues for the period, compared to € 12.7 million and 9.3% in the first quarter of 2008.

Pro forma operating margin for the first quarter of 2009 was 13.6%, compared to 7.9% in the first quarter of 2008. Pro forma income from operations increased 123.5% to € 24.2 million in the first quarter of 2009, compared to € 10.8 million in the same period of the prior year.

Pro forma net income attributable to the parent company for the first quarter of 2009 was € 10.6 million, 47.0% above the € 7.2 million reported in the first quarter of 2008. Basic and diluted pro forma EPS for the first quarter of 2009 was € 0.31, compared to € 0.25 in the first quarter of 2008. Basic and diluted pro forma EPS were determined by using a weighted average number of shares issued and outstanding in the first quarter of 2009 of 34,094,159 and a weighted average number of shares issued and outstanding in the first quarter of 2008 of 29,247,100.

New order bookings, or new contracts signed, during the first quarter of 2009 totaled € 228.4 million, representing a 35.3% increase from € 168.8 million recorded in the same period of 2008.

Backlog, representing the portion of signed contracts for which performance is pending, was € 902.2 million as of March 31, 2009, reflecting 25.1% growth over the € 721.4 million in backlog at the end of March 2008.

Pipeline, measured as management’s estimates of real opportunities for the following six to twelve months, is approximately of € 3.8 billion.

As of March 31, 2009, cash and cash equivalents were € 51.0 million and total debt, including net € 41.8 million credit line due to related parties, amounted to € 339.7 million, resulting in a net debt position of € 288.7 million. As of December 31, 2008, the Company’s net debt position was € 208.6 million.

For the first three months of 2009, cash used in operating activities was € 62.9 million compared to € 39.2 million used in the same period last year. Cash provided by investing activities in the first three months of 2009 amounted to € 21.7 million compared to € 41.8 million provided in the same period of 2008.

Manuel Sanchez, Telvent’s Chairman and Chief Executive Officer, said, “I am very satisfied to have started a very challenging year with a very strong quarter of top and bottom line growth, with an outstanding performance of our North American base”. He added, “Bookings during the quarter soared to more than € 228 million, allowing us to record the third strongest quarter and the best first quarter in terms of bookings in our history, and as a result, our backlog today is stronger than ever.”

Mr. Sanchez concluded, “This quarter is a solid base to reiterate our confidence in meeting our anticipated guidance for the year. In addition, the DTN integration is progressing better than expected."

Business Highlights

Energy

Some of the most relevant projects signed during the first quarter of 2009 were as follows:

  • Contract signed with PEMEX, Mexico’s state-owned petroleum company, to implement Telvent’s SCADA control system in seven product pipelines in the PEMEX Refining division’s national pipeline network. The scope of work defined by the contract includes integration, monitoring, and control of 129 PEMEX Refining product storage and injection sites located throughout the northern, central, Gulf, and south-eastern regions of Mexico. The control system will integrate nearly 2,568 kilometers of pipeline, representing 19% of the total length of the national network spanning eight sectors of the Mexican Republic. The new Telvent system will yield greater security in the operation of facilities and is expected to improve efficiency and reliability by optimizing the management of operational data and information.
  • Contract with Red Eléctrica de España (REE) to supply, install and start up various Integrated Control Systems for substations of Spain’s electrical power transmission grid. This contract confirms Telvent’s position as the benchmark provider for REE in charge of managing all electrical power flow of Spain’s high-voltage grid. The requirements involved in supplying these solutions are extremely demanding due to their significant impact on the country’s electrical power management system.
  • Contract with Williams Electric Co., in the United States, to provide SCADA support to the U.S. Navy in San Diego, California. These systems are used for managing electrical power distribution; controlling water treatment, distribution, wells, and tank levels; sewage lift stations; and pressurized air distribution.

Transportation

During the first quarter of 2009 some of the significant contracts signed were:

  • Contract with the New York Department of Transportation, in the United States, for a traffic management operation center. Telvent will be in charge of operating and managing the center in 24x7 mode, and in doing so will provide the customer with a technical team with a great deal of expertise in traffic management. The contract will have duration of two years, with the possibility of a one-time two-year extension.
  • Contract with the Tennessee Department of Transportation, in the United States, to implement Telvent’s traffic management system, MIST®, for managing and controlling highway traffic in Memphis, Tennessee. Telvent previously implemented MIST® in this state in the main metropolitan areas of Nashville and Knoxville. This project is part of the continuation of the successful program for implementation of Intelligent Transportation Systems (ITS) and offers cities a service of vital importance, enhancing the security and efficiency of the transportation infrastructure network.
  • Extension of the contract with the Municipal Corporation of Greater Mumbai, in India, for supply, installation and start-up of an Urban Traffic System. This contract represents expansion of the original contract and is indicative of the customer’s satisfaction with the system we are presently installing. This contract will enable us to expand our presence in India.
  • The project for global management of Valladolid’s centralized control center, which will provide the city of Valladolid, Spain, with a mobility management center. The project consists of integrating most of the mobility management systems into a single centralized application, thereby enabling more effective global management of mobility within the city. Thanks to this project, the citizens of Valladolid should enjoy shorter travel times throughout the city, as well as a reduction in delays and backups due to traffic congestion. Traffic flow within the city should be improved and the work of traffic operators should benefit from being able to use installations that are designed to help them operate and manage urban mobility more efficiently. This should reduce their response time. All of these enhancements are expected to reduce both the emission of contaminating agents and noise pollution in the city.

On February 3, 2009, we signed an asset purchase agreement through which we acquired certain of the assets of North Lakes Data Corp. (NLDC), including TollPro back office software. The acquisition of NLDC´s back office will enable us to offer our customers worldwide a complete end-to-end electronic toll collection (ETC) solution, which combines the most highly accurate, independently audited in-lane system of Telvent with the fully auditable NLDC back office. With this acquisition, we reinforce our position as a leading supplier of ETC systems worldwide, helping to manage toll operations accurately throughout the enterprise while minimizing drivers’ inconvenience.

Environment

During the first quarter of 2009, significant contracts signed were:

  • Contract with Enel, in Spain, to supply and install a continuous particle-monitoring system. The project consists of engineering, supply, installation and start-up of Enel’s PM10 and PM2.5 particle-measuring system in Algeciras. This project is assisting those in charge of the plant in controlling emissions levels.
  • Contract signed with Abener, a subsidiary of Abengoa S.A. that promotes integrated solutions for energy and industrial construction fields, for the provision of a Continuous Emission Monitoring system for the bio-ethanol plant of 480,000 m3 that Abener is currently building in Rotterdam, The Netherlands. Telvent will provide a system that will allow continuous measuring of emissions of pollutant gases from the combustion process generated by the plant in its daily activity.

Agriculture

All revenues in our Agriculture segment were generated in North America and principally arise from the sale, through subscriptions, of critical agricultural business information, weather and real-time market data solutions to top farm producers and agribusiness. We continue to maintain subscription retention rates above 90% in our Agriculture segment, which proves the resilience of this business segment.

We have over 700,000 subscribers to our business information in our Agriculture segment, including 60,000 of the top farm producers paying for premium content, 12,000 originators including the top elevators, ethanol plants and feedlots, and over 1,000 agribusiness customers using our risk management platform. Our top customers include Bunge, FC Stone, John Deere, Con Agra and Cargill along with the majority of the top corn and soybean producers in the U.S. During the first quarter of 2009, over 10 million bushels of grain were transacted though our grains trading portal between our 900 agribusiness portal locations and our 21,000 registered portal producers.

Global Services

Significant contracts signed in the first quarter of 2009, among others, were:

  • Contract with Carlson Wagonlit, in Spain, for virtualization consolidation of its platform through which it provides service to its customers. Service includes outsourcing the company’s platform management in two separate data centers, provision of communications between centers, system monitoring, back-up management and the added value of managing services and processes through a shared Remedy platform.
  • Contract with the Andalusian Water Agency of the Regional Government of Andalusia, in Spain, for Microcomputer Support Service for all of its networks. The aim of the project is to model the microcomputer service (based on ITIL) for all Andalusian Water Agency headquarters. Incident management and service requests will be handled through the corporate NAOS platform, also developed by Telvent.

Use of Non-GAAP Financial Information

To supplement our consolidated financial statements presented in accordance with U.S. GAAP, we use certain non-GAAP measures, including pro forma net income attributable to the parent company and EPS. Pro forma net income attributable to the parent company and EPS are adjusted from GAAP-based results to exclude certain costs and expenses that we believe are not indicative of our core operating results. Pro forma results are one of the primary indicators management uses for evaluating historical results and for planning and forecasting future periods. We believe pro forma results provide consistency in our financial reporting which enhances our investors’ understanding of our current financial performance as well as our future prospects. Pro forma results should be viewed in addition to, and not in lieu of, GAAP results.

Pro forma revenues exclude the impact of joint ventures. Pro forma net income attributable to the parent company excludes the amortization of intangible assets arising from the purchase price allocations performed in our acquisitions, stock and extraordinary compensation plan expenses and mark to market of derivatives and hedged items that Telvent believes are not indicative of its core performance or results. Reconciliation between GAAP and pro forma figures is provided in this release in a table immediately following the unaudited condensed consolidated financial statements.

Conference Call Details

Manuel Sanchez, Chairman and Chief Executive Officer, and Barbara Zubiria, Chief Accounting and Reporting Officer and Head of Investor Relations, will conduct a conference call to discuss first quarter 2009 results, which will be simultaneously webcast, at 1:00 P.M. Eastern Time / 7:00 P.M. Madrid Time on Thursday, May 21, 2009.

To access the conference call, participants in North America should dial (800) 374-0724 and international participants +1 (706) 634-1387. A live webcast of the conference call will be available at the Investor Relations page of Telvent’s corporate website at www.telvent.com. Please visit the website at least 15 minutes prior to the start of the call to register for the teleconference webcast and download any necessary audio software.

A replay of the call will be available approximately two hours after the conference call is completed. To access the replay, participants in North America should dial (800) 642-1687 and international participants should dial +1 (706) 645-9291. The passcode for the replay is 97595842.

About Telvent

Telvent (NASDAQ: TLVT) is a global IT solutions and business information services provider that improves the efficiency, safety and security of the world’s premier organizations. The company serves markets critical to the sustainability of the planet, including the energy, transportation, agriculture, and environmental sectors (www.telvent.com)

Investor Relations Contact

Barbara Zubiria

Tel. +34 902 335599

Email: ir@telvent.com

Lucia Domville

Tel. +1 646 284 9416

Email: lucia.domville@us.grayling.com

Communications Department Contact

Patricia Malo de Molina

Tel. +34 954 93 71 11

Email: comunicacion@telvent.com


This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often are proceeded by words such as “believes,” “expects,” “may,” “anticipates,” “plans,” “intends,” “assumes,” “will” or similar expressions. Forward-looking statements reflect management’s current expectations, as of the date of this press release, and involve certain risks and uncertainties. Telvent’s actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors. Some of the factors that could cause future results to materially differ from the recent results or those projected in forward-looking statements include the “Risk Factors” described in Telvent’s Annual Report on Form 20-F for the year ended December 31, 2008, filed with the Securities and Exchange Commission on March 18, 2009.

Telvent does not intend, and does not assume any obligation, to update or revise the forward-looking statements in this press release after the date it is issued. In light of the risks and uncertainties described above, and the potential for variation of actual results from the assumptions on which certain of such forward-looking statements are based, investors should keep in mind that the results, events or developments disclosed in any forward-looking statement made in this press release may not occur, and that actual results may vary materially from those described herein, including those described as anticipated, expected, targeted, projected or otherwise.

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