SW Umwelttechnik Stoiser & Wolschner AG

Earnings Release • Apr 29, 1999

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Ad-hoc | 29 April 1999 09:31

Ad hoc-Service: SW Umwelttechnik englisch

Ad hoc-Mitteilung verarbeitet und übermittelt durch die DGAP. Für den Inhalt der Mitteilung ist der Emittent verantwortlich. —————————————————————————— SW Umwelttechnik reports improved results Turnover up by 51%, net income for the year more than doubled Core businesses strengthened by acquisitions in Austria and Hungary SW Umwelttechnik Management Board members Heinz Wolscher and Dr. Bernd Wolscher told a press conference today: “During the current financial year we achieved a further strengthening of our core business, environmental technology, and of our position in Hungary – a growth market for environmental technology. To secure our future market shares, in 1998 we more than tripled our capital expenditure from the previous year’s level and stepped up our research and development effort. Backlogs in investment needed to comply with EU environmental standards represent vast potential for future growth, particularly in candidate EU member states in Central and Eastern Europe – and this is where we can exploit our experience to the full”. Further progress with acquisition strategy In 1998 the SW Umwelttechnik Group again pursued its growth strategy, making two acquisitions for its core business sectors. An Austrian company, Biogest, was taken over with effect from 1 April 1998. The firm is the Austrian market leader in municipal wastewater treatment plants with capacities of up to 60,000 population equivalent, and as such is an ideal addition to the wastewater treatment product range. Biogest is an engineering services company, and besides its headquarters in Vienna has three subsidiaries, in the Czech Republic, Hungary and Poland. SW Umwelttechnik acquired a 51% interest in a Hungarian company, OMS Hungaria Kft., with retroactive effect from 1 January 1998. OMS Hungaria is also an engineering company, and is the Hungarian market leader in municipal wastewater treatment plants. The acquisition was a major step towards expansion in Hungary, which is a growth market for environmental technology. Turnover up by 51%, output by 59% As a result of the acquisitions consolidated turnover rose by 51.2% to TS 526.9 million (1997: ATS 348.4 mn). Total output – an increasingly significant indicator for SW Umwelttechnik due to the engineering acquisitions – climbed by 59% to ATS 554.6 mn. The share of turnover accounted for by the Group’s environmental technology sector increased markedly, to stand at ATS 421.3 mn (1997: ATS 225.3 mn) or 80% of the total. The turnover of the building products sector fell to ATS 105.7 mn (20% of turnover), mainly as a result of the difficult conditions in the Austrian housing market. In terms of geographical markets, 1998 was a year of rapid expansion in Hungary, which accounted for 53.6% of turnover compared with 25% in the previous year. Austria accounted for 41.9% of turnover, and the rest of the EU 3.1%. Earnings, cash earnings up sharply In 1998 EBIT grew by 7% to ATS 38.4 mn. At 7.3% the EBIT margin was down from the previous year’s level, but it will rebound in the future as a result of recent heavy investment activity. There were variations in the EBIT margins recorded by the Group’s business sectors and country operations. In Austria the margin was 5.8% and in Hungary 8.6%, while the environmental technology sector’s 7.8% margin compared with one of 5.2% for the building products sector. The profit on ordinary activities was up by 45.3% to ATS 58.0 mn (1997: ATS 39.9 mn). Among the factors responsible for this was the high financial result of ATS 19.5 mn, which was mainly attributable to the sale of part of the Group’s interest in a non-core Hungarian operation. This also contributed to the jump in net income for the year from ATS 22.1 mn in 1997 to ATS 50.3 mn in 1998 – an increase of 127.6%. The ÖVFA profit after minorities rose by 23.2% to ATS 34.0 mn (1997: ATS 27.6 mn), while cash earnings improved by 60.5% to stand at ATS 74.3 mn (1997: ATS 46.3 mn). Capital expenditure trebled Capital expenditure more than trebled in 1998. The Group invested ATS 69.3 mn in fixed assets, some 60% of this amount going to the expansion and modernization of production plant and equipment at the Hungarian factories. In Austria, most investment was channelled into the core businesses, chiefly being directed towards increasing productivity. Most of the new production equipment will be commissioned in the second quarter of 1999. Research and development spending boosted again In 1998 research and development spending was again raised to reach ATS 12.6 mn (1997: ATS 11.7 mn). The focus was on product developments including new road inlet shafts, and systems for the retention of sludge and sediments, as well as a new generation of grease separators, chemical resistant shaft soles, and a process for the use of a new raw material in the production of wood-concrete building blocks. Recommended dividend The Management Board is proposing the distribution of ATS 9 mn and retention of ATS 15.9 mn from the profit for the financial year of ATS 25.0 mn. The dividend per share will thus be ATS 10.00 plus a bonus of ATS 5.00, for a total of ATS 15.00 (EURO 1.09) per share. Outlook In Austria, and still more in Central European candidates for EU membership, investment in environmental technology in order to comply with EU directives is set for rapid expansion. SW Umwelttechnik is responding to the growing shortage and rising expense of drinking water with appropriate product developments (rainwater reclamation systems). In the building products sector, there is no end in sight to the weakness of the Austrian market for wood-concrete building blocks. However, there is a large construction backlog in East- Central Europe, and this should more than offset the fall in demand in Austria. SW Umwelttechnik plans to continue to force the pace of its expansion by making further acquisitions, for which the equity ratio of 58.9% provides an excellent platform. Address any queries to: Heinz Wolschner, member of the board SW Umwelttechnik, Tel +43/463/32109-0, Fax +43/463/37667 Christian Riel, investor relations, Tel +43/664/433 71 05, Fax +43/463/37667 e-mail: sw_rch@magnet.at Consolidated results of the SW Umwelttechnik Group 1996 1997 1998 1) 1998 1) 1998 vs ATS mn ATS mn ATS mn EURO mn 1997 Turnover 220.5 348.4 526.9 38.3 +51.2% Total output 227.5 347.2 554.6 40.3 +59.7% EBIT 19.3 35.9 38.4 2.8 +7.0% EBIT margin2) in% 8.8 10.3 7.3 7.3 -29.1% POA 24.6 39.9 58.0 4.2 +45.3% Net income for the 20.1 22.1 50.3 3.7 +127.6% year Profit after 15.7 27.6 34.0 2.5 +23.2% minorities3) Consolidated cash 24.0 46.3 74.3 5.4 +60.5% earnings3) Capital expenditure 16.7 20.6 69.3 5.0 +236.4% Equity ratio3) in% 34.5 66.7 58.9 58.9 -11.7% Employees 213 411 482 +17.3% thereof Austria 108 202 206 + 2.0% Hungary 105 209 276 +32.1% Market indicators 1997 1998 1998 in ATS in ATS in EURO High 680 880 64.0 Low 645 510 37.1 Closing price (last 665 510 37.1 trading day) Book value per share 369 372 27.0 PER (last trading day) 14.5 9.0 9.0 Earnings per share4) 46 57 4.1 Dividend per share 6 155) 1.095) 1) Additions to the consolidated Group due to the acquisitions in 1998 2) EBIT/turnover 3) Calculated in accordance with the ÖVFA method 4) 600,000 shares 5) Recommendation to the Annual General Meeting Ende der Mitteilung