SW Umwelttechnik Stoiser & Wolschner AG

euro adhoc: SW Umwelttechnik Stoiser & Wolschner AG
Earnings Forecast
SW Umwelttechnik announces preliminary results for 2005

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28.02.2006

* Revenue up by 19% * EBIT up by 70% * Record EUR10.5 million investment programme * Construction of factory in Timisoara, Romania under way

Further gains in market shares and a new organisational structure in Austria brought SW Umwelttechnik (Vienna Stock Exchange, SWUT) major improvements in revenue and earnings in 2005. Meanwhile the construction of the group’s first factory in Romania is laying the groundwork for sustained growth in this emerging market for environmental technology and infrastructure.

The company’s unaudited preliminary IFRS results show a 19% gain in revenue to EUR91.1 million (m) in 2005 (2003: EUR76.3m). Organic growth accounted for 15% of the increase and initial consolidations for 4%.

The principal geographical market was Hungary, which contributed EUR58.2m or 64% of revenue (2004: EUR53.4m or 70%). Austrian sales advanced from EUR18.9m or 25% of the total in 2004 to EUR25m or 28% last year, boosted by the Alpha Umwelttechnik acquisition among other factors. The proportion of revenue generated by Romania climbed from 1% to 4%, due to infrastructure, drinking water and sewerage projects. The revenue share of the "other EU member states" segment (Germany, Italy and Slovakia) was unchanged at 4%.

An analysis of revenue in business segment terms shows an increase in the contribution of the Water Conservation sector from 27% to 32%, while that of the Engineering sector decreased from 31% to 27%, and that of the Infrastructure sector was almost unchanged at 41%, compared to 42% in 2004.

Earnings before interest and tax (EBIT) surged by 70% from EUR2.3m to EUR3.9m, and the EBIT margin jumped from 3.0% to 4.3%. These improvements were driven by a sharp increase in production capacity, as well as good capacity utilisation and resultant productivity growth.

EBITDA was up by 39%, from EUR6.2m to a record EUR8.6m — providing a secure financial basis for further rapid expansion in Romania.

SW Umwelttechnik streamlined its organisational structures in 2005. Three Austrian subsidiaries were merged, significantly strengthening the group’s competitive position in this challenging market. Meanwhile the merger of Rocla and Strong&Mibet to form Strongrocla also helped extend the group’s leadership of the Hungarian market.

Finance cost mounted by EUR0.3m to EUR2.0m as a result of book exchange losses of EUR0.7m (compared to exchange gains of EUR1.3m in 2004) due to refinancing of the Hungarian operations on a euro basis. A 10% capital increase and the sale of treasury shares during the year made it possible to fund heavy investment without a significant increase in debt.

Higher finance cost trimmed profit from ordinary activities (POA) to EUR1.9m (2004: EUR2.0m), profit after tax to EUR1.3m (2004: EUR1.5m) and profit after minorities to EUR1.4m (2004: EUR1.6m). The strong upturn in operating profits largely compensated for the accounting losses caused by movements in the forint/euro exchange rate; these had no impact on cash flow.

Order backlog at balance sheet date was a record EUR38.5m (year end 2004: EUR35.8m) — a 7% year-on-year gain.

Employees The headcount expanded by 10% to 798, reflecting the growth in output. The group now has 209 employees in Austria, 556 in Hungary and 33 in Romania. The proportion of female employees rose from 14% to 16%.

Capital expenditure In 2005 the group invested a record EUR10.6m (2004: EUR3.5m) in order to exploit growth opportunities in Hungary and Romania. The lion’s share of capital expenditure — 77% of the total — went to Hungary where capacity at the South Budapest was further expanded, and the most modern pipe works in Hungary was built at the site. In Romania work began on a new factory in Timisoara where will start up this summer.

Dividend recommendation Due to the positive earnings performance the Management Board will be recommending an increased divided of EUR0.25 per share (2004: EUR0.20) for the 2005 financial year to the annual general meeting.

Outlook Management is again giving optimistic guidance for 2006, and anticipates further revenue and earnings growth.

* All the group’s business sectors are expected to encounter robust demand in Hungary over the next few years, and the main South Budapest site and the other four factories are well placed to benefit. However this year’s general election may lead to uncertainties regarding public sector contract awards. * The merger of the Austrian operating subsidiaries into a single company and organisational structure should bring a marked improvement in the marketing effort and earnings. Major orders for biogas plants in Austria are unlikely owing to the scrapping of electricity injection tariff subsidies. * Romania is expected to join the EU in 2008, creating good demand conditions for all the group’s businesses. SW Umwelttechnik is planning to invest EUR30m in three Romanian factories over the next five years. The Timisoara works will enter production in mid-2006, and construction of a factory on a 25-hectare site near Bucharest which has already been purchased is due to commence in the second half of this year.

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ots Originaltext: SW Umwelttechnik Stoiser & Wolschner AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:
Heinz Wolschner, member of the Management Board
Tel: +43 (0)463 321090; fax: +43 (0)46337667
Christian Riel, Investor Relations
Tel: +43 (0)664 1924824; fax: +43 (0)1 3688686; e-mail:
christian.riel@sw-umwelttechnik.com
Web: www.sw-umwelttechnik.com

Branche: Technology
ISIN:      AT0000808209
WKN:        910497
Index:    WBI, ATX Prime, ViDX
Börsen:  Börse Berlin-Bremen / free trade
              Baden-Württembergische Wertpapierbörse / free trade
              Börse Düsseldorf / free trade
              Wiener Börse AG / official dealing



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