SW Umwelttechnik Stoiser & Wolschner AG
euro adhoc: SW Umwelttechnik Stoiser & Wolschner AG
quarterly or semiannual
financial statement
SW Umwelttechnik unveils third quarter results
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quaterly report
07.11.2007
SW Umwelttechnik unveils third quarter results
* POA up by E0.7 million * Third quarter order intake E42 million * E25 million investment programme close to completion
Vienna-listed Stoiser & Wolschner AG recorded a sharp rise in order intake to E42 million(m) in the third quarter of 2007. This pick-up in business signals an end to the subdued demand encountered in Hungary and Romania earlier in the year.
For much of 2007 trading conditions in Hungary were shaped by budget consolidation measures which led to the marked reduction in public sector orders. In Romania, urgently needed public sector investment was held up by delays in the release of EU Structural Organisational Programme (SOP) funding for environmental protection and infrastructure projects.
At E68.5m, revenue for the year to 30 September was only 3% short of the figure for the like period of 2006 (E70.5m). However the trend in Hungary and Romania impacted EBIT more strongly, resulting in a decrease from E2.5m to E2.0m;
EBITDA held steady at E5.6m. POA for the first three quarters improved to E0.6m from a loss of E0.1m in the previous year.
Revenue of E27.0m for the third quarter of 2007 was down on the E34.3m recorded in the same period of 2006 - an exceptionally strong quarter. This was reflected in falls in EBIT to E2.2m (Q3 2006: E3.7m) and in EBITDA to E3.5m (Q3 2006: E4.9m).
Hungary's contribution to revenue for the first three quarters declined from E47.6m to E42.4m, slipping to 62% of the group total (Q1-Q3 2006: 68%). The proportion of the total accounted for by Austria fell from 24% to 21% as expected. Meanwhile Romania's share was up to 8% from 5% a year earlier. Other EU countries - chiefly Italy, Slovakia and Slovenia - contributed 9% of the total compared to 3% in the like period of 2006.
The group's Infrastructure sector put in another highly positive performance, with revenue rising to E36.6m (Q1-Q3 2006: E33.4m). However the Water Conservation and Engineering businesses returned lower revenue, with sales in Hungary particularly hard hit. The Infrastructure sector's contribution was up from 47% to 54%, while that of Water Conservation edged down from 30% to 28%, and that of the Engineering sector's shrank from 23% to 18%.
An improvement in finance cost was driven by lower interest expense and modest exchange gains. Finance cost fell to E1.4m from E2.6m in the first three quarters of 2006 when this item was affected by the devaluation of the Hungarian forint. As a result POA turned positive by E0.6m, compared with a E0.1m loss in the like period of 2006.
Employees The average head count dropped by 5%, from 821 to 777, due to rationalisation in Hungary (down by 7%) and Austria (down by 21%). By contrast expansion in Romania was reflected in an increase in the workforce from 55 to 90.
Hungary There was a general weakening in Hungarian demand, and dramatic declines in wastewater disposal and road construction. According to the Hungarian Central Statistical Office tenders in these segments ran at 70% of the previous year's level. SW Umwelttechnik again significantly expanded its shares of these smaller markets thanks to its cost leadership. The Water Conservation business sector has recently won a number of major orders including a contract to supply products for the collecting sewer in Budapest. It involves a 2-kilometre section beneath the bed of the Danube, which is being built using trenchless technology. Among other projects are a wastewater collection system for south Budapest, pipes and shafts for Debrecen, and a E5m drainage system for the M7 motorway.
The Infrastructure sector also made strong progress, and sales to industrial and commercial customers were up by 15% whereas the overall market contracted by 11%.
Romania The Infrastructure sector is experiencing very strong demand in Romania, particularly from industrial and commercial customers. As already reported, the first two phases of factory construction project in Bucharest for this business are under way. A nationwide sales organisation has been built up, resulting in an overall increase in start-up losses. The effects of the record investment programme will not be felt until 2008 as commissioning is due to take place in November.
The current focus of the Water Conservation sector's activities is on supplying drainage systems for factories and business parks. SW Umweltechnik will not receive large municipal orders for wastewater treatment plants until early 2008 when the SOP funding is released. EU finance for the 2007-2013 period will amount to E3.2 billion, starting at E390m in 2008 and rising to about E500m in subsequent years.
The Infrastructure sector has already won contracts to supply logistics and shopping centres in Constanta, Targu Mures and Cluj with products to a total value of E17m, ensuring good capacity utilisation for the group's new factory in the greater Bucharest area when it starts up this month.
Austria Following last year's restructuring the Austrian operations have achieved turnaround, and earnings exceed expectations. The Water Conservation sector has now won contracts for its innovative surface water protection systems in northern Italy.
Capital expenditure As at 30 September 2007 capital expenditure for the year amounted to E20m. The main items were construction of a E9m factory in Bucharest. The first and second phases of the project, to provide capacity for the Infrastructure sector, are scheduled for commissioning in November 2007.
Investment in Hungary also amounted to E9m over the first three quarters. Relocation of large pipe production from the Csepel site to the south Budapest works will significantly improve efficiency. The move is scheduled for completion by the end of November.
Most of the E2m invested in Austria was devoted to relocating plant and equipment in the first half of 2007 following a plant closure.
Order backlog Third quarter order intake of E42m lifted order backlog to E41.5m as of the end of the third quarter, compared to E30.9m a year earlier. This marks a reversal of the decline in order backlog seen in the first half.
In 2008 large-scale EU funding programmes such as the SOP in Romania, and strong demand for the Infrastructure sector's products is expected to bring excellent order bookings.
Balance sheet The heavy investment programme swelled non-current assets to E71.7m (30 September 2006: E51.1m), while inventory growth raised current assets to E46.5m (30 September 2006: E44.8m). Total assets rose by 24% to E118.5m (30 September 2006: E95.9m). Financial liabilities climbed from E51.1m to E67.9m due to borrowing to finance expansion. The improved profit was reflected in a 25% increase in equity from E21.6m to E26.8m.
Share price performance The decline in SW Umwelttechnik's share price from its high of E139 in May 2007 to its current level of around E100 reflects a combination of unsettled financial markets and the fact that earnings have fallen short of expectations.
Thanks to SW Umwelttechnik's clear strategy of targeting growth markets in Central and Southeastern Europe, and its rapid expansion driven by a very heavy investment program in 2007, the share price is nevertheless more than 150% up on the start of the year.
Outlook As reported, management sees earnings for 2007 to remain at about the same level as 2006. This is chiefly due to the sharp decline in public sector contract awards in Hungary and Romania during the first half.
. Austria: the turnaround has been successfully completed and capacity
utilisation is very high at all sites thanks to the stable market
situation.
. Hungary: SW Umwelttechnik's unchallenged market and cost leadership has
largely cushioned the effects of weak public sector demand. Large
contracts for sewerage schemes and wastewater treatment plants are
expected to revive in 2008.
. Romania: High orders of products for industrial and commercial
construction projects will underpin good capacity utilisation when the
Bucharest plant starts up. Capacity utilisation in Timisoara is expected
to rise sharply from mid-2008, as by then the SOP project funding will be
feeding through.Management's forecast of stronger earnings in 2008 remains in place due to the record investment programme implemented in 2007 and the marked increase in order intake in Romania.
Changes on the Management Board Heinz Wolschner will retire from the Management Board at the end of 2007. In accordance with the corporate governance rules, he will not immediately move over to the Supervisory Board, despite the fact that this has been approved by the Annual General Meeting. For the next three years he will oversee property acquisitions and disposals, focusing on the 500,000 square metres of land surplus to operational requirements that the group holds in Hungary and Romania.
Klaus Einfalt has been appointed to the Management Board of SW Umwelttechnik Stoiser & Wolschner AG with effect from January 2008. Klaus Einfalt, an industrial building engineer, has played a leading role in expanding the group's Hungarian operations, working his way up from production assistant to plant manager and finally CEO. He has lived with his family in Budapest for nine years. He is the first member of the fifth generation of the family to join the top management.
|Financial | | | |highlights | | | | | | | |Q3 2007 | | | | | | | |EUR m |2007 |2006 | |Revenue |27.0 |34.3 | |EBIT |2.2 |3.7 | |EBITDA |3.5 |4.9 | |POA |0.3 |4.2 | | | | | |Q1-Q3 2007 | | | | | | | |EUR m |2007 |2006 | |Revenue |68.5 |70.5 | |EBIT |2.0 |2.5 | |EBITDA |5.6 |5.7 | |POA |0.6 |-0.1 |
Founded in 1910, SW Umweltechnik 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. In 2006 SW Umwelttechnik employed a total of 836 people at 16 sites and posted revenue of E102m.
end of announcement euro adhoc 07.11.2007 08:03:57
Further inquiry note:
Dr. Bernd Wolschner
Member of the Management Board
Tel: +43 (0)7259 31350
Mobile: +43 (0)664 3413953
Fax: +43 (0)463 37667
Romed Lackner
Investor Relations Officer
Tel: +43 (0)664 8117670
Fax: +43 (0)463 37667170
E-mail: romed.lackner@sw-umwelttechnik.com
Website: 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