SW Umwelttechnik Stoiser & Wolschner AG

Earnings Release • Apr 27, 2000

News Details

Ad-hoc | 27 April 2000 07:58

Ad hoc-Service: SW Umwelttechnik Final Result

Ad-hoc Mitteilung übermittelt durch die DGAP. Für den Inhalt der Mitteilung ist allein der Emittent verantwortlich. —————————————————————————— Press release 27 April 2000 SW Umwelttechnik announces final results for 1999 financial year – Acquisitions in Hungary and Austria strengthen market position – Total output up by 8 % – Difficult business climate led to temporary decline in earnings – Order backlog more than doubled Financial 1999 proved to be an unexpectedly difficult year for the SW Umwelttechnik Group, as a result of temporarily unfavourable market conditions. But as Heinz Wolschner and Dr. Bernd Wolschner, the two Board Members, emphasized in today’s press conference, “We have nevertheless succeeded in using the opportunity to improve the Group’s market position.” Continuation of acquisition strategy in Hungary and Austria The strategy of growth through acquisition was continued in 1999. In Strong Kft, the Group has acquired the largest manufacturer of pre-cast concrete sections in eastern Hungary. Strong is an important supplier of infrastructure elements (e.g., masts for the energy and telecommunications industries). Its merger with Mibet in January 2000 promises major synergies and increased earnings. In Austria the Group acquired 51% of the shares and management control of Stadlbauer Umwelttechnik GmbH. This purchase puts SW Umwelttechnik into the top three manufacturers of concrete pipes and shafts in Austria. Sales up by 8.1%, operating revenues up by 9.0% The Group increased its sales in 1999 by 8.1%, to EUR 41.1 million, and its operating revenues by 9.0% to EUR 43.9 million. The relatively low rate of growth (compared to previous years) is explained by the unexpected extension of the transitional period for Austrian harmonization with EU environmental standards, and by the temporary suspension of environmental subsidies in Hungary due to changing funding guidelines and the effects of the floods. In 1999, Hungary again contributed the largest share of turnover, 51.1%, followed by Austria with 43.9% and the EU with 4.0%. By business sector, Environmental Technology contributed 40.4%, Environmental Engineering 34.3% and Building Products 25.3% Pressure on profits and temporary decline in margins.Operating profit in 1999 declined by 16.4% to EUR 2.3 million. The EBIT margin fell from 7.3% to 5.6%. The core sector Environmental Engineering was particularly badly affected, Building Products somewhat affected and the core sector, Environmental Technology not at all affected by these developments. The engineering sector was particularly hard hit by the postponement of contracts in Hungary, where relatively high costs had been budgeted with the aim of increasing market share, and by pressure on margins in Austria. The worsening of Building Products’ margins reflects current tight market conditions and pressure on prices. The fall in financial profit (in 1998 this included the sale of an investment to the value of EUR 0.87 million) contributed significantly to the decline: the POA fell by 49.7% to EUR 2.1 million and the profit after minority interests (ÖVFA method) fell by 40.3% to EUR 1.5 million. Continuation of investment programme Intensive capital investment continued in 1999, with EUR 5.0 million invested in tangible assets. The overriding aim was improvement of the costs structure and enlargement of capacity in Hungary, and in Austria improvement to production capacity, to allow products to be tailored to customers’ requirements. Further increase in R & D expenditure Research and development forms an important part of the Group’s strategy, and in 1999 EUR 0.85 million (1998: EUR 0.91 million) was invested in it. The emphasis was on new developments in grease separators, the development of a lightweight concrete sanitary unit, a study of sand problems in sewerage, and development of special manufacturing technologies for shaft soles. Outlook For 2000 and succeeding years management anticipates a return to rapid turnover and earnings growth. Turnover is expected to rise to more than EUR 58 million in 2000, in the light of the following factors: – In Hungary the situation with regard to the financing of environmental projects is easing. This means that the process of adaptation to the EU environmental directives – an important condition of fulfilling the country’s aim of accession in 2003 – can be resumed. – Order backlog is at a record level, representing a year-onyear increase of 114%. – Both of the new additions to the Group, Strong and Stadlbauer Umwelttechnik expect to achieve synergy effects and improved profits. The major effort devoted to research and development will enable the Company to bring two new products to market in 2000. The SW Umwelttechnik Group will make intensive use of the opportunities presented by the Internet. Activities planned for 2000 range from the launch of business-to-business applications in conjunction with our clients and suppliers through to the marketing of products to private individuals via the Internet. Meanwhile, potential acquisitions and related new areas of business within our environmental technology market are currently being evaluated. Contacts Heinz Wolschner, member of the Management Board Tel.: (+43) 463 321 09, fax: (+43) 463 37 6 67 Christian Riel, Finance/Investor Relations Tel.: (+43) 664 433 71 05, fax: +(43) 1 368 86 86, e-mail: christian.riel@sw-umwelttechnik.at, www.sw-umwelttechnik.at (photos) Ende der Mitteilung