01.03.2007 – 08:03

Andritz AG

euro adhoc: Andritz AG
Annual Reports
Andritz: Record results in 2006 - Order Intake, Sales, and Net Income reach record levels - Significant increase in Order Backlog to almost 3.4 bn EUR - Proposal to increase dividend to 3.00 EUR per share - Plan

  Disclosure announcement transmitted by euro adhoc. The issuer is responsible
  for the content of this announcement.

annual report

01.03.2007

Graz, 1 March 2007.  In 2006, international Andritz Group achieved
record results.  Sales increased to 2,709.7 MEUR (+55.3% vs. 2005),
and Order Intake, at almost 2.9 bn EUR, reached a new record level
(+46.4% vs. 2005).  Order Backlog as of 31 December 2006 amounted to
almost 3.4 bn EUR, thus doubling compared to the end of 2005.  Net
Income was significantly increased to 121.4 MEUR (+51.2% vs. 2005).
At the upcoming Annual General Meeting, the Managing Board will
propose an increase in the dividend to 3.00 EUR per share (2005: 2.00
EUR per share).  In addition, it is planned to make a share split of
1:4; this proposal will be submitted to the upcoming Annual General
Meeting of Shareholders.

Strong Sales growth As a result of continued strong organic growth
and the first-time consolidation of VA TECH HYDRO as of July 1, 2006,
Sales of the Andritz Group surged by 55.3%, to 2,709.7 MEUR (2005:
1,744.3 MEUR).  All Business Areas showed a solid development of
Sales.

First-time consolidated companies in total contributed approximately
449.2 MEUR (of which 390.2 MEUR came from VA TECH HYDRO) to the
Group’s total Sales in 2006.  Organic Sales growth of the Group,
therefore, was approximately 29.6%.

Significant increase in Earnings With higher Sales, Earnings before
Interest and Taxes (EBIT) also increased to 159.8 MEUR in 2006 (2005:
106.7 MEUR).  EBIT margin, at 5.9% for 2006, however, weakened
compared to 2005 (6.1%).  This was mainly due to both the first-time
consolidation of VA TECH HYDRO, whose profitability reached 3.7% in
the Second Half of 2006 as expected, and the slight profitability
decline of the Pulp and Paper Business Area.

The financial result, at 6.1 MEUR in 2006, was significantly higher
than in 2005 (3.4 MEUR).  This was mainly due to both the higher
average cash level and the higher interest rates compared to last
year.  Net Income after deduction of Minority Interests amounted to
118.5 MEUR (2005: 78.7 MEUR).

Order Intake and Order Backlog significantly increased In 2006, the
Andritz Group again showed a very favorable development of Order
Intake, surpassing the very high level of 2005.  At 2,891.0 MEUR,
Order Intake was 46.4% higher than in 2005 (1,974.6 MEUR).  This was
mainly due to the first-time consolidation of VA TECH HYDRO (+474.4
MEUR) and the strong organic growth of the Pulp and Paper, and the
Feed and Biofuel Business Areas.  Order Intake of the Rolling Mills
and Strip Processing Lines Business Area was slightly down compared
to the extraordinarily high level in 2005.

Order Intake of first-time consolidated companies (including VA TECH
HYDRO) amounted to approximately 524.6 MEUR in 2006.

The Group’s Order Backlog also showed a strong increase compared to
the reference date of last year, surging to 3,397.1 MEUR as of
31.12.2006 (31.12.2005: 1,695.6 MEUR).  VA TECH HYDRO added
approximately 1,566.0 MEUR to the Group’s Order Backlog as of
31.12.2006; this amount includes orders with partially very long
delivery times.

Balance sheet Due to the first-time consolidation of VA TECH HYDRO
and the issue of a 200 MEUR corporate bond in June 2006, total assets
of the Andritz Group increased to 2,372.6 MEUR as of 31.12.2006
(1,391.3 MEUR as of 31.12.2005).  As a consequence, the equity ratio
as of 31.12.2006 declined to 17.5% (31.12.2005: 23.6%).

Due to the receipt of extraordinarily high payments during Q4 2006,
the Group’s net liquidity (cash and cash equivalents minus
interest-bearing financial liabilities) was 365.7 MEUR as of
31.12.2006, again exceptionally high as of the end of 2005
(31.12.2005 383.9 MEUR)

Dividend increase Due to the very favorable business development, the
Managing Board will propose an increase in the dividend to 3.00 EUR
per share (2005: 2.00 EUR per share) at the upcoming Annual General
Meeting.

Plan for share split The Managing Board of Andritz AG plans to make a
split of the Andritz shares.  Following the approval of the
Supervisory Board of Andritz AG, this proposal is to be submitted to
the Annual General Meeting of Shareholders on March 29, 2007 and put
to the vote.

In detail, the Managing Board plans to split the shares in a ratio of
1:4 and, at the same time, to increase the capital out of the
company’s retained earnings (capital adjustment).  The proportionate
amount of the capital will then be 2.00 EUR per share.  The share
split is expected to be implemented in early May 2007, provided
approval is given by the Annual General Meeting.

Outlook Assuming a continued positive development of the global
economy, Andritz expects a satisfactory project activity in all of
its Business Areas in 2007.  "Based on the favorable economic
conditions, the high Order Backlog of almost 3.4 billion Euros as of
the end of 2006, and the full-year consolidation of VA TECH HYDRO, we
expect to achieve record results in 2007 again. Sales should increase
to approximately 3 billion Euros, and Net Income should also be up
compared to 2006," says Wolfgang Leitner, President and CEO of
Andritz.

Key figures 2006 at a glance

(in MEUR, IFRS)                               2005         2006        Change
Order Intake                               1,974.6      2,891.0        +46.4%
Order Backlog as of 31.12.                 1,695.6      3,397.1       +100.3%
Sales                                      1,744.3      2,709.7        +55.3%
EBITDA                                       130.9        194.2        +48.4%
EBITDA margin                                 7.5%         7.2%           -
EBITA                                        107.0        159.8        +49.3%
EBITA margin                                  6.1%         5.9%           -
Operating profit (EBIT)                      106.7        159.8        +49.8%
Earnings before Taxes (EBT)                  110.0        165.9        +50.8%
Net Income                                    80.2        121.4        +51.2%
Cash flow from operating activities          237.3        143.1        -39.7%
Capex in tangible and intangible assets       26.7         45.7        +71.2%

Disclaimer Certain statements contained in this press release
constitute "forward-looking statements".  These statements, which
contain the words "believe", "intend", "expect" and words of similar
meaning, reflect the Management’s beliefs and expectations and are
subject to risks and uncertainties that may cause actual results to
differ materially.  As a result, readers are cautioned not to place
undue reliance on such forward-looking statements. The Company
disclaims any obligation to publicly announce the result of any
revisions to the forward-looking statements made herein, except where
it would be required to do so under applicable law.

end of announcement                               euro adhoc 01.03.2007 07:30:00

Further inquiry note:

Dr. Michael Buchbauer
Head of Investor Relations
Tel.: +43 316 6902 2979
Fax: +43 316 6902 465
mailto:michael.buchbauer@andritz.com

Branche: Machine Manufacturing
ISIN: AT0000730007
WKN: 632305
Index: WBI, ATX Prime, ATX
Börsen: Wiener Börse AG / official dealing