SW Umwelttechnik Stoiser & Wolschner AG

euro adhoc: SW Umwelttechnik Stoiser & Wolschner AG
Quarterly or Semiannual Financial Statements
SW Umwelttechnik announces results for first three quarters of 2002 (E)

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Marked fall in revenue in third quarter One-time impairment writedowns weigh on results EBITDA stable at previous year’s level Positive outlook due to 30% increase in order backlog

SW Umwelttechnik’s revenue retreated by 8.3% to EUR 48.6 million (m) in the first three quarters of 2002, from EUR 53.0m in the like period of 2001. This decline reflected the company’s withdrawal from low-margin, standard products in its Austrian and German markets, and the weakness of construction activity there, as well as delays in the placement of orders in Hungary due to the elections held in the spring. There were no changes in the distribution of revenue by geographical markets, with Hungary accounting for 60%, Austria for 32%, and Germany and other EU member states for 8%.

Likewise, there were no shifts in the segmental distribution of revenue. The Water Conservation sector contributed 39% of revenue, the Engineering sector 28% and the Infrastructure Products sector 33%.

Due to EUR 1.4m in one-time impairment writedowns of property, plant and equipment, and goodwill, earnings before interest and tax (EBIT) declined to EUR 1.2m (Q1-3 2001: 2.7m). However on a like-for-like basis excluding one-time impairment writedowns, EBIT was almost constant at EUR 2.6m or 5.1% of total output. Despite the difficult trading environment earnings before interest, tax, depreciation and amortisation (EBITDA) - the main indicator of the company’s financial strength - was only marginally lower, at EUR 5.5m compared to EUR 5.6m in the like period of 2001.

Due to the sale of a minority interest in a Hungarian company finance cost fell from EUR 1.0m to EUR 0.3m, cushioning the fall in the profit on ordinary activities, which was down to EUR 1.0m from the EUR 1.8m recorded in the first three quarters of 2001.

The headcount was adjusted to market conditions, and was 5.1% lower at 783 employees as of 30 September.

Capital expenditure

Owing to positive Hungarian market expectations and the launch of new products in Austria and Germany, capital expenditure rose to EUR 6.5m (Q1-Q3 2001: EUR 5m).

The lion’s share of investment was channelled into the Hungarian operations which claimed 76% of total capital expenditure. The main item was expansion of the capacity of the new factory to the south of Budapest, where the second project phase was commissioned on schedule in September. In Austria and Germany investment went to the Water Conservation sector (e.g. production of cisterns for rainwater reclamation) and the Infrastructure sector (e.g. new production plant for round masts).

Strategy and outlook

In the light of a 30% increase in order backlog to EUR 28.1m, management expects this year’s revenue losses to be made good in the fourth quarter, leading to unchanged revenue for 2002 as a whole. However, a sharp year-on-year fall in earnings is anticipated as a result of the one-time writedowns of property, plant and equipment, and goodwill, leading to a small after tax loss and net loss for the year.

Despite the difficult trading climate SW Umwelttechnik’s financial strength will increase in 2002, due to ongoing investment and restructuring programmes. Management anticipates a modest year-on-year increase in EBITDA.

In 2003 the following factors are seen leading to major improvements in revenue and earnings:

* SW Umwelttechnik is investing in expanding its strong   market position in EU candidate member Hungary, where it   has a longstanding presence.

* The current political situation in Austria has led to   delays and uncertainties with regard to the use of   renewable energy sources. However SW Umwelttechnik is   well placed to profit from future demand thanks to its   pilot biogas plant which won the Province of Upper   Austria’s Agricultural Innovation Prize in September.

* The contraction of the Austrian and German markets is   set to continue, leading to a shakeout and concentration   in the industry. SW Umwelttechnik will continue to drive   its cost reduction programme ahead, and to replace low-   margin, commoditised products by innovative, high-growth   ones in its range.

* Preparations are being made for phased entry to the   markets of other EU candidate countries. In Romania   construction of a factory will commence in 2003. In   the third quarter of 2002 SW Umwelttechnik’s Engineering   sector won its first order in that country, for the   construction of a wastewater treatment plant and a sewer   network. An environmental engineering company was   founded in Slovakia during the period.

end of announcement            euro adhoc 05.11.2002

Further inquiry note: DI Heinz Wolschner, Vorstand der SW Umwelttechnik Tel.: 0043/463/32109-0, Fax: 0043/463/37667 MMag. Christian Riel, Finanzen/Investor Relations Tel.: 0043/664/4337105, Fax: 0043/1/3688686, mailto:christian.riel@sw-umwelttechnik.at Website: http://www.sw-umwelttechnik.at

Branche: Technology
ISIN:      AT0000808209
WKN:        080820
Index:    ATX Prime, ViDX, WBI
Börsen:  Baden-Württembergische Wertpapierbörse / free trade
              Berliner Wertpapierbörse / free trade
              Börse Düsseldorf / free trade
              Wiener Börse AG / official dealing

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