SW Umwelttechnik Stoiser & Wolschner AG

euro adhoc: SW Umwelttechnik Stoiser & Wolschner AG
quarterly or semiannual financial statement
SW Umwelttechnik unveils results for first three quarters of 2006

-------------------------------------------------------------------------------- Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement. -------------------------------------------------------------------------------- 08.11.2006 • Q1-Q3 revenue up by 11%, profit for period by 24% • First Romanian factory commissioned • Forint weakness weighing on profits • Positive outlook for operating results The improvement in operating results which began in the second quarter gathered pace in the third, with year-on-year gains of 18,5% in revenue and 31% in EBIT. This was mainly due to excellent capacity utilisation at the Hungarian factories, some of which have gone over to three-shift working. Cumulative revenue for 2006 rose by 11% to EUR70.5 million (m) (Q1-Q3 2005: EUR63.5m). Hungarian operations accounted for 68% (2005: 65%) of total revenue, revenue growth being driven by the outstanding performance of the South Budapest site, which recorded a 15% year-on-year increase. The revenue contribution of the Austrian operations declined to 24% (2005: 29%) due to two factory closures and the unsatisfactory performance of the biogas business. Revenue growth is highly encouraging in Romania, despite the fact that most deliveries are still being made from Hungary, and this market’s revenue share reached 5% (2005: 4%). Other EU countries — principally Italy, Slovakia and Slovenia — generated 3% of total revenue (2005: 2%). In business segment terms, there was a further shift towards the increasingly important Infrastructure sector, which contributed 47% of total revenue (2005: 45%). This was mainly at the expense of the Engineering sector which retreated further, to a 23% share (2005: 26%), while the role of the Water Conservation sector in sales was little changed at 30% (2005: 29%). Cumulative earnings before interest and tax (EBIT) were up by 24% to EUR2.5m from EUR2.0m in the like period of the previous year, boosting the EBIT margin from 3.1% to 3.5%. This year’s excellent showing in Hungary was partly offset by the impact of the factory closures in Austria which will give rise to a one-time charge of some EUR800,000 for the year as a whole. Cumulative EBITDA progressed by 3% to EUR5.7m (2005: 5.5m), and the EUR4.9m figure posted in the third quarter, for a 16% year-on-year gain, was the best quarterly result in the group’s history. As in the first half, finance cost was impacted by the weakness of the forint (HUF 273 /EUR) at balance sheet date. Finance cost climbed from EUR1.1m in the comparative period to EUR2.6m, largely reflecting the fall in the forint exchange rate. This year the foreign exchange risk exposure affecting net profit is to be reduced by shifting about half of the outstanding — euro denominated — borrowings from the Hungarian subsidiaries to the parent. Cumulative finance cost kept POA marginally negative, by EUR0.1m (2005: positive by EUR0.9m). However the recovery of the forint in recent weeks means that a significant improvement in finance cost is likely over the next few months. Already, a third quarter turnaround brought finance income of EUR 0.6m, compared to finance cost of EUR0.6m in the previous year. The group headcount rose from 771 to 821. Most of the growth related to the phased increase in the Romanian payroll and the expansion of the South Budapest site; it was partly offset by the personnel reductions in Austria. Property portfolio to fuel profits The group currently owns about 150 hectares (ha) of land, of which 45 ha are in the Bucharest area. There are plans to acquire a further 15 ha in Turgu Mures, northern Tansylvania, this year. Due to the extent of the group’s operations investments are frequently made in land. SW Umwelttechnik intends to exploit the opportunities presented by this side-effect of expansion, and dispose of developed properties that are not required for operations at a profit over the next few years. Management is looking closely at all the factories situated near town centres to assess whether undisclosed reserves can be realised by moving them to new sites. The production equipment at the Csepel works in Budapest is to be relocated to the South Budapest operation in the next 18 months, and the six hectare property sold within the nex two years. In addition, a 15 ha property at a gravel pit lake near Miskolc is to be lanscaped into attractive parkland this year, and disposed of in plots, starting in 2007. The group plans to realise about EUR1m in income in this way over the coming five years. These resources will mainly be used to fund the investment drive in Romania. Capital expenditure The group invested a total of EUR9.4m during the first three quarters, and capital expenditure is seen reaching EUR12m for the year as a whole. The main focus of investment is on the construction of the Romanian factories in Timisoara and Bucharest, which have claimed some 40% of total spending this year. The Timisoara works, which manufactures products for the Water Conservation sector, went into operation on schedule at the start of September, and is already running at full capacity on a single-shift basis. All the necessary building permits have been obtained for the Bucharest works, and work has begun on the mixing plants. Commissioning is due to take place during the first half of 2007. Capital expenditure in Hungary will amount to EUR4m in 2006. The spending is going into the accelerated relocation of production equipment from Csepel to the South Budapest site, expansion of the prestressed floor element and binder capacity at the South Budapest works, and initial investment in a new mast production facility in Alsoszolca. Outlook The high level of order fulfilment in the third quarter and the changes in Austria reduced order backlog to EUR30.9m (2005: EUR37.6m ). Owing to the excellent results for the third quarter the Management Board is standing by its optimistic outlook for the year as a whole. It anticipates single-digit revenue growth and attainment of the forecast operating results. The current trend in the HUF/EUR exchange rate should mean that the finance cost position eases considerably. However the impact on reported results remains difficult to assess. • In Austria the effects of the two factory closures and the related streamlining of the product range should be highly positive from 2007 on. However a one-time charge of around EUR800,000 is expected for 2006. • In Hungary group operations are expected to continue to perform well, as high capacity utilisation through to the middle of next year is already assured. Investment in capacity expansion — particularly at the South Budapest site —should result in a further strengthening of the group’s market position. • In Romänia commissioning of the Water Conservation sector’s factory in Timisoara went smoothly, and the Infrastructure sector’s Bucharest works is due to start up in the summer of 2007. The search for a site in the Turgu Mures area, in northern Romania, has already been initiated, and construction of this third factory is set to commence near the end of 2007. 2006 is an important year for SW Umwelttechnik, during which the groundwork is being laid for a positive performance in 2007. Management anticipates that continued growth in Hungary and the group’s successful entry to the Romanian market will more than compensate for the revenue effects of the closures in Austria. The actions taken and investments made should result in double-digit EBIT growth in 2007. SW Umwelttechnik is aiming for readmission to the ATX Prime Market next year, provided that results meet expectations. Financial highlights Third quarter In EUR m 2006 2005 Revenue 34.3 28.9 EBIT 3.7 2.8 EBITDA 4.9 4.2 POA 4.2 2.2 First to third quarter In EUR m 2006 2005 Revenue 70.5 63.5 EBIT 2.5 2.0 EBITDA 5.7 5.5 POA -0.1 0.9 end of announcement euro adhoc 08.11.2006 08:00:00 -------------------------------------------------------------------------------- ots Originaltext: SW Umwelttechnik Stoiser & Wolschner AG Im Internet recherchierbar: http://www.presseportal.ch Further inquiry note: Dr. Bernd Wolschner, member of the Management Board of SW Umwelttechnik Tel. +43 (0)463 32109; mob. +43 (0)664 3413953; fax +43 (0)463 37667 Michaela Wolschner, Investor Relations Tel. +43 (0)664 8117662; fax +43 (0)1 3688686 E-mail: michaela.wolschner@sw-umwelttechnik.at Website: www.sw-umwelttechnik.at Branche: Technology ISIN: AT0000808209 WKN: 910497 Index: WBI Börsen: Börse Berlin-Bremen / Regulated free trade Frankfurter Wertpapierbörse / Regulated free trade Wiener Börse AG / Regulated free trade

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