SW Umwelttechnik Stoiser & Wolschner AG

EANS-Adhoc: SW Umwelttechnik unveils annual results

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annual report

22.04.2009

* Revenue up by 14% to EUR109.8 million * Restructuring programme launched in fourth quarter * Positive outlook thanks to strong order books (EUR37 million)

Vienna, 22 April - At the press conference today joint  chief   executives  Bernd Wolschner and Klaus  Einfalt  unveiled  SW   Umwelttechnik's  results  for  2008. Revenue was up by 14% despite economic headwinds, particularly in  Hungary,  and good order intake should ensure that capacity  utilisation  remains  strong  for the rest of this year.

Revenue Following a  bright  first  half,  in  the  second  half  of 2008  Central  and Southeastern Europe - SW Umwelttechnik's main   market  -  was  battered  by  the global economic and financial crisis. Hungary was  worst  hit,  with  an  abrupt fall-off in investment in industrial and commercial buildings, bringing EUR11m in order cancellations for SW Umwelttechnik.

The revenue contribution of the Hungarian market slipped to 55% (2007:  60%)  or EUR61m, while that of the Romanian market doubled to an on-target 19%  (2007: 9%) or EUR21m, and that of Austria was almost unchanged at 19% or EUR21m (2007: 20%).

The revenue share of SW Umwelttechnik's Infrastructure sector rose   to  EUR58m or 53% (2007: 51%). The Water Conservation sector generated EUR35m or 32% of revenue (2007: 30%), buoyed  by  revenue   growth  on  the  Romanian  market, while  the Engineering sector accounted for EUR16m or 15% of revenue  (2007: 19%)  owing  to the Hungarian government's restrictive fiscal policies in the 2007-2008 period.

The revenue contributions of the Water Conservation and Engineering sectors  are set to continue to improve in 2009 thanks to the lift for  municipal  investment from the announced stimulus packages and efforts to comply with  European  Union environmental  directives,   which  are  now  being  backed  by  the    IMF.    The Engineering sector, which tends to be  a  good  indicator  of  local  government demand, recorded strong order intake at the start of 2009.

Earnings Earnings before interest and tax (EBIT) mirrored harsh   market  conditions,  and weak trading in Hungary had a  particularly negative  impact.  EBIT  more  than halved to EUR2.2m in 2008 (2007: EUR4.6m). This result already includes the cost  of the restructuring actions implemented in Hungary  to  adjust  to  poor economic situation. Management moved quickly to ensure that the company was well  placed to ride out the downturn, laying off 200 agency workers and 200 internal  staff in Hungary in the fourth quarter of 2008. These staff reductions  will  only  be visible in the 2009 head count.

EBIT before non-recurring items was up on the previous year's figure at EUR5.1m.

Despite the restructuring programmes  EBITDA  was  only  18%  below   the  record figure in 2007, at EUR7.7m.

SW Umwelttechnik's recent expansion in Southeastern  Europe  has   increased  its exposure to currency risk. Sharp movements in the   Hungarian  forint  (HUF)  and Romanian lei (RON) exchange rates towards the end of the year led  to  temporary book losses of EUR5m for financial 2008.

Consequently net finance costs jumped to EUR7.2m from EUR3.3m a  year earlier; EUR3m of the increase came from noncash costs. Management expects  the volatility  of these currencies to abate in the medium term, and the exchange rates  to  return to their normal ranges, meaning that items that have been written  down  can  be revalued accordingly.

Higher finance costs meant that SW Umwelttechnik swung into a loss   on  ordinary activities of  EUR5.0m  (2007:  +EUR1.2).  However   underlying  profit  on ordinary activities - excluding noncash   exchange  losses  and  one-time charges  -  was EUR0.9m.

Due to the noncash exchange losses and non-recurring expenses  SW   Umwelttechnik posted a loss attributable to equity shareholders of EUR3.6m (2007: +EUR1.8m). This figure includes the restructuring costs.

Assets and finances Over the past  three  years  SW  Umwelttechnik   has  invested  some  EUR50m  in a modernisation and expansion programme focused on Hungary and  the  fast growing Romanian market. This will enable the Company to generate rapid  revenue  growth without making additional investments once the trading environment brightens.

Although investment totalled EUR9.4m - well above depreciation  of   EUR5.6m  - non-current assets rose only slightly, from EUR74.5m to   EUR75.2m.  The  impact of  the financial crisis was reflected in the instability of  the  HUF  and RON,  which were both devalued by around 10% against the euro in the final quarter of  2008, wiping EUR3.9m off the carrying value of non-current assets.

Current assets also shrank, falling from EUR44.5m to EUR39.7m, of   which EUR1.9m  was attributable to exchange rate declines and EUR2.9m to reduced volume. Total assets contracted from EUR120.2m to EUR117.4m.

Equity was down from EUR27.2m to EUR20.3m as a result of the loss for the period  of EUR3.6m, currency translation losses of EUR1.7m and  a charge  of  EUR0.9m resulting from application of the net  investment approach  -  all  items influenced  by exchange rate movements. The equity ratio declined to 17.4% (2007:  22.6%).  In consequence one of management's main priorities in 2009 will  be  strengthening the balance sheet.

In terms of the intrinsic value of property, plant  and  equipment  - excluding the currency depreciations in 2007 and 2008 - SW Umwelttechnik's equity  amounts to EUR35m, and the equity ratio is 27%.

Borrowings were up from EUR72.2m  to  EUR77.6m  at  balance  sheet   date; long-term borrowings accounted for 62% of the total (2007: 52%). In order to ensure  that the company is able to meet its financing requirements management is aiming  for an increase in long-term  borrowings  to  66%  -  the  same ratio  as  that  of property, plant and equipment to total assets.

Order backlog Order backlog at year end was a satisfactory EUR37.4m. While this failed to match the record EUR46m reported at year end 2007 it  was  still  well  above the  2006 figure of EUR25.9m. Current robust order intake in Hungary and Romania, driven  by public sector  environmental  and  infrastructure investment,  is   particularly encouraging in view of the challenging trading environment.

Employees The average head count rose to 896 in 2008  (2007:  797)   due  to  expansion  in Romania. The Romanian workforce grew to 221 (2007: 99) as a result of the start- up of the Bucharest factory. The reduction of 200 in the permanent labour  force in Hungary, initiated during the fourth quarter, is  included  in  expenses  for 2008, but the positive impact on costs will not be seen until 2009.

Investment Following the record EUR26m investment programme in 2007, in 2008 a healthy EUR9.4m went to completing the new plants; EUR5.1m was  spent  in  Hungary  and EUR3.2m  in Romania.

Dividend recommendation The Management Board will recommend to the AGM forgoing payment  of  a  dividend for 2008 financial year because of the overall economic situation and  the  loss for the year.

It should be noted that the Management Board received no  variable   (performance related) remuneration for the 2008 financial year.

Outlook SW Umwelttechnik's investment of EUR50m in expansion in Hungary  and  Romania has created strong positions in these markets, and its modern production facilities have given it cost leadership there.

The expectation is for a further sharp decline in all forms  of   industrial  and commercial investment across the entire CSE region in 2009,  offset  by  growing public sector investment as a result of   the  announced  stimulus  packages.  SW Umwelttechnik has a good name as a public sector contractor, as shown by  recent orders.

Management anticipates the following trends in the company's main markets:

@@start.t2@@. In Romania, economic growth will slow, but is expected to remain positive.
         Municipal environmental and infrastructure investment cofinanced by the EU
         should continue to expand rapidly in 2009. Romania will  remain  the  main
         growth driver for SW Umwelttechnik. Investment  in  further  expansion  is
         currently on hold but should restart in 2010. The company plans  to  offer
         its full product range  across  the  entire  country.  This  will  involve
         further expansion of the Bucharest plant and the development of additional
         production facilities in Transylvania (a site has already been acquired in
         Targu Mures) and the Moldova region.
      . Hungarian GDP is forecast to contract by 3%, leading to a  sharp  fall  in
         industrial and commercial investment. The Water Conservation  sector,  and
         probably also the Engineering sector, look set for further growth - partly
         as a result of a mooted stimulus package.
      . Compared with Central and Southeastern Europe, the situation in Austria is
         relatively stable.  Restructuring  programmes  have  been  implemented  in
         recent years, and SW Umwelttechnik is now well established as a successful
         niche player. In Austria the main  business,  Water  Conservation,  should
         continue to grow as a result of new product developments and the  stimulus
         package.

All in all, SW Umwelttechnik expects only a slight decline in  revenue  in  2009 due to its strong market shares, and is looking forward to a profitable year  as@@end@@

a result of the restructuring measures that are already in place.

Financial highlights

Summary balance sheet

@@start.t3@@|EUR '000            |2008          |%            |2007        |%          |2006      |%          |
|                         |                 |interest |              |interest|            |interest|
|ASSETS                |117,379      |100         |120,194  |100        |95,474  |100        |
|Non-current        |77,664        |66.2        |75,707    |63.0      |57,911  |60.7      |
|assets                |                 |              |              |            |            |            |
|Current assets  |39,715        |33.8        |44,487    |37.0      |37,563  |39.3      |
|EQUITY AND         |117,379      |100         |120,194  |100        |95,474  |100        |
|LIABILITIES        |                 |              |              |            |            |            |
|Equity                |20,459        |17.4        |27,211    |22.6      |26,490  |27.7      |
|Long-term          |51,762        |44.1        |41,153    |34.3      |24,833  |26.0      |
|liabilities        |                 |              |              |            |            |            |
|Current              |45,158        |38.5        |51,830    |43.1      |44,151  |46.3      |
|liabilities        |                 |              |              |            |            |            |

Summary income statement
|EUR m                                                              |2008            |2007                    |
|Revenue                                                          |109.8          |96.1                    |
|EBIT                                                                |2.2              |4.6                      |
|ebit*                                                              |5.1              |4.6                      |
|EBITDA                                                            |7.7              |9.4                      |
|POA                                                                 |-5.0            |1.2                      |
|poa*                                                                |0.9              |2.0                      |
|Profit/loss for the period attributable to  |-3.8            |1.7                      |
|equity shareholders                                        |                  |                          |

ebit*= before non-recurring items poa*= underlying POA

Founded in 1910, SW Umwelttechnik remains a family business, though it has  been listed  on  the  Vienna  Stock  Exchange  since  1997.  The  company  is  widely identified with sustainable  enterprise  and  rapid  expansion  in  Central  and Southeastern  Europe.  Its  innovative  environmental  technology  products  are contributing to infrastructure renewal in CSE countries.@@end@@

@@start.t4@@end of announcement                                                 euro adhoc
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ots Originaltext: SW Umwelttechnik Stoiser & Wolschner AG
Im Internet recherchierbar: http://www.presseportal.ch

Further inquiry note:
Contacts
Dr. Bernd Wolschner
Member of the Management Board
Tel: +43 (0)7259 31350
Fax: +43 (0)463 37667

Michaela Werbitsch
Investor Relations
Tel: +43 (0)664 8117662
Fax: +43 (0)463 37667
E-mail: michaela.werbitsch@sw-umwelttechnik.com
Web: www.sw-umwelttechnik.com

Branche: Technology
ISIN:      AT0000808209
WKN:        910497
Index:    WBI
Börsen:  Börse Berlin / free trade
              Börse Frankfurt / free trade
              Wiener Börse AG / Regulated free trade



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