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euro adhoc: S&T System Integration&Technology Distribution AG
S&T announces results for the 3rd quarter and first nine months of 2003 (E)

  Disclosure announcement transmitted by euro adhoc.
  The issuer is responsible for the content of this announcement.
• Total sales rise by 2% in the 3rd quarter and by 13% in the first
nine months 
• EBIT of minus EUR 1.4 million in the third quarter, minus EUR 2.2
million in the first 9 months 
• Sales in the high margin solutions business rise by 141% in the 3rd
quarter and by 102% in the first nine months
28 October 2003, Vienna, Austria - S&T System Integration &
Technology Distribution AG (Vienna Stock Exchange: SNT, OTC: STSQY),
a leading IT systems integrator in Central, Eastern and Southeast
Europe announces results for the 3rd quarter 2003 and first nine
months ended 30 September 2003.
As already announced on 14 October 2003, total sales in the 3rd
quarter 2003 amounted to EUR 44 million, a 2 percent increase over
the same quarter in the previous year. In the first nine months of
2003, sales rose from EUR 115 million to EUR 130 million, a 13
percent increase compared to the previous year.
Third quarter sales in the high-value service segment Business
Solutions stand at EUR 10 million. The increase of 141 percent
compared to the 3rd quarter 2002 is the result of the continued focus
on the higher margin solution and service business. On a nine-month
basis, this represents an increase of 102 percent in this segment.
Sales in the Enterprise Systems segment fell by 19 percent in the
reporting quarter compared to the same quarter in 2002. The increase
in the gross margin from 23 percent in the third quarter of the
previous year to some 28 percent in the 3rd quarter 2003 should also
be seen in connection with this pleasing shift in sales. In the first
nine months of the current business year the gross margin rose from
26 percent in 2002 to 28 percent.
EBITDA (earnings before interest, taxes, depreciation and
amortisation) amounts to EUR 0.2 million, a decline of 64% in the 3rd
quarter 2003 and 12% in the first three quarters of 2003. EBIT
(earnings before interest and taxes) is minus EUR 1.4 million in the
3rd quarter and minus EUR 2.2 million for the first 9 months of 2003
(including a EUR 1,1 million impairment adjustment of the Turkish
operation in the 2nd quarter 2003).
The main reasons for this decline in earnings are weak sales in the
summer months and the postponement of planned projects in Romania,
Russia and Ukraine to the 4th quarter 2003. The planned shift toward
higher value solutions and services led to a 37 percent increase in
payroll costs in the first nine months of the current business year.
Outlook
As in previous years, management expects strong sales in the 4th
quarter 2003 (the 4th quarter 2002 accounted for 32 percent of the
total sales for 2002, in 2001 the figure was 38 percent). The
restructuring measures initiated during the year should impact costs
favourably in the next two quarters. Marketing initiatives have been
started to increase the company's presence in the comparatively large
IT markets Austria, Poland, the Czech Republic and Russia. The
recently announced acquisitions of software companies in Slovenia and
Croatia will shift the product portfolio still further in the
direction of solutions and services and thus higher margins. The year
2004 will see the accession to the EU of 10 candidate states. As a
result, S&T will generate over 50% of its sales within the EU. The
expected upturn in direct investments (FDI) should lead to higher
than average market growth in 2004 and the following years. Due to
the weak results in the 3rd quarter 2003, expectations for EBIT for
2003 as a whole will be downscaled to a "black zero." For total
sales, management expects a result of around EUR 190 million.
CONSOLIDATED INCOME STATEMENT (unaudited) in EUR 1,000 for the three
months period ending
on September 30, 2003 and 2002
~
Sales (in EUR 000)                        Q3 2003     Q3 2002    -%+
Business Solutions (BS)                    10,442       4,336   141%
Enterprise Systems (ES)                    24,871      30,884   -19%
Customer Support (CS)                       6,276       6,034     4%
Managed Services (MS)                         814           0      -
Medical (MED)                               1,149       1,491   -23%
Information Technology Distribution (ITD)       0           7      -
Total sales                                43,552      42,752     2%
Other Income                                  790         102   675%
Total Revenues                             44,342      42,854     3%
COGS                                      -31,418     -32,915    -5%
Staff                                      -8,302      -5,850    42%
Other Operating Expenses                   -4,429      -3,554    25%
EBITDA                                        193         535   -64%
Depreciation and amortisation                -952        -648    47%
EBITA                                        -759        -113   572%
Amortisation of goodwill                     -673        -665     1%
Profit from Operations / EBIT              -1,432        -778    84%
~
CONSOLIDATED INCOME STATEMENT (unaudited) in EUR 1,000 for the nine
months period ending
on September 30, 2003 and 2002
~
Sales (in EUR 000)                          2003         2002    -%+
Business Solutions (BS)                   23,459       11,600   102%
Enterprise Systems (ES)                   80,621       74,679     8%
Customer Support (CS)                     18,264       18,477    -1%
Managed Services (MS)                      2,063            0     -
Medical (MED)                              5,553        7,040   -21%
Information Technology Distribution (ITD)      0        3,408     -
Total sales                              129,960      115,204    13%
Other Income                               2,095        1,027   104%
Total Revenues                           132,055      116,231    14%
COGS                                     -94,188      -85,026    11%
Staff                                    -22,238      -16,252    37%
Other Operating Expenses                 -12,278      -11,130    10%
EBITDA                                     3,351        3,823   -12%
Depreciation and amortisation             -2,413       -1,837    31%
EBITA                                        938        1,986   -53%
Amortisation of goodwill                  -3,097       -1,715    81%
Profit from Operations / EBIT             -2,159          271     -
~
Total sales per region in EUR 1,000 for the nine months period ending
on September 30, 2003 and 2002
~
                     2003   2002  +/- %
Adriatic           42,621  45,001   -5%
Central            35,860  30,188   19%
Cyrillic           17,072  26,914  -37%
South              34,407  13,101  163%
                  129,960 115,204   13%
~
Adriatic: Slovenia, Croatia, Bosnia-Herzegovina, Republic of
Macedonia, Serbia and Montenegro
Central: Czech Republic, Hungary, Poland, Slovakia
Cyrillic: Russia, Ukraine, Baltics, Moldova, CIS
South: Romania, Bulgaria, Cyprus, Greece, Malta, Turkey
Conference Call
S&T’s management is available for a conference call on October 28 at
4.00 p.m. Central European time, UK: 3.00 p.m., US: 10.00 a.m.
Eastern time. To take part in the conference call, please dial +49 69
50957 8439 a few minutes prior to the start time. For your
convenience, an instant replay will be available from October 28 at
6.00 p.m. Central European time until November 02 at 6.00 p.m.
Central European time. The replay telephone number is: +49 69 50 957
9999 and the conference reference number is 246856. If you have any
questions please call +49 69 957 0000 for assistance.
Disclaimer
This information reflects the situation of S&T as per September 30,
2003. The information contains certain forward-looking statements.
Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
financial condition, performance or achievements of S&T, or industry
results, to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, the
following:
- competition from other companies, 
- changes in operating expenses, 
- attraction and retention of qualified employees, 
- uncertainties arising out of S&T's operation outside Austria, 
- adverse changes in applicable tax laws, 
- adverse changes in governmental rules and fiscal policies, 
- civil unrest, 
- acts of God, 
- acts of war, and 
- other factors referenced in this information. 
Given these uncertainties, prospective investors are cautioned not to
place undue reliance on such forward-looking statements. No
representation or warranty can be given, expressly or implied,
regarding the correctness, completeness or fairness of information
and opinion regarding such forward-looking statements contained in
this information. S&T disclaims any obligation to update any such
forward-looking statements to reflect future events or developments.
S&T and the persons acting on behalf of S&T do not accept any
liability whatsoever arising from any use of this information or its
contents or otherwise arising in connection therewith.  This
information does not constitute an offer or invitation to subscribe
for or purchase any securities of S&T.
About S&T
S&T is a leading provider of IT solutions for customers in 20
countries in Central, Eastern and Southern Europe. The company
provides consulting services, software development, IT solutions
implementation and support services around the clock to the most
demanding customers in telecommunication, banking, energy production
and distribution, government and health care.
end of announcement        euro adhoc 28.10.2003

Further inquiry note:

Karl Tantscher
Chief Executive Officer
mailto:karl.tantscher@snt.at

Henriette Lininger
Investor and Public Relations
mailto:henriette.lininger@snt.at

S&T System Integration & Technology Distribution AG
Gunoldstrasse 16, 1190 Vienna, Austria
Phone: +43 1 367 80 88 0
Fax: +43 1 367 80 88 99
mailto:snt@snt.at
http://www.snt.at/

Branche: Computing & Information Technology
ISIN: AT0000905351
WKN:
Index: ATX Prime, NECI, ViDX
Börsen: Wiener Börse AG / official dealing
Nasdaq Europe / official dealing

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