SW Umwelttechnik Stoiser & Wolschner AG: preliminary results

Klagenfurt (pta008/29.02.2012/09:00 UTC+1) * Turnover amounts to around Eur 70 m
* Operative EBITDA has been increased by 15 %
* Operative EBIT of Eur +1.4 m has been achieved
* Negative (non cash) exchange losses debit the financial result

SW Umwelttechnik, a family-led company, has achieved a turnover of around Eur 70 m in 2011 (- 6% compared to the previous year). By stabilising prices and concentrating on profitable products, SW was able to increase its gross earnings. The operative result was improved through a flexibility of personnel costs and a reduction of fixed costs. Therefore our operative EBITDA increased by 15 % to Eur 5.3 m (2010: Eur 4.7 m) and our operative EBIT increased by Eur 2 m to Eur 1.4 m.

Ongoing unstable markets in all the areas SW works in marked the past fiscal year. The economic activity in Hungary and Romania remained unchanged while Austria already saw first positive tendencies in 2011, which in turn improved our turnover.
We were able to make good use of the positive business trends in Austria. Due to the development of the market and by introducing new and innovative products, we were able to increase our turnover by 15 %, from Eur 15.6 m to Eur 17.9 m.

Building construction in Hungary is still doing poorly. This also affected SW Umwelttechnik - our turnover decreased by 20 % to Eur 29.3 m (2010: Eur 36.7 m). Our consistent focus on keeping prices stable and at the same time acting flexibly in terms of our fixed costs, meant that we were, nonetheless, able to significantly improve our operative results, even though our turnover decreased.

The downward trend of industry and trade clients in Romania continued to decrease. Due to our strategic decision of shifting our product portfolio around and focusing on water conservation products for EU-subsidised projects, we were still able to achieve a turnover of Eur 17.1 m (2010: Eur 18.0 m), even considering the major slump in the industry and trade sector. By concentrating on our profitable water conservation products and because of implementing cost saving measures, we have seen a significantly improved EBIT.

The water conservation sector has been further developed and has remained our biggest business segment in 2011 amounting to Eur 32.0 m (2010: Eur 31.6 m). The low margin industry and trade sector saw a decrease in turnover - now amounting to Eur 22.6 m (2010: Eur 27.8 m). Our project engineering segment remained unchanged with a turnover of Eur 14.8 m (2010: Eur 14.4 m).

Our operative EBITDA (before extraordinary results and IAS 40 fair value assessments) increased to Eur 5.4 m (2010: Eur 4.7 m) and our operative EBIT to Eur 1.4 m (2010: Eur -0.6 m) even considering the market slumps in Hungary and Romania. The fair value assessment result of financial properties amounts to Eur 0.4 m (2010: Eur 1.9 m). The temporary, non-cash-affecting market trends - especially from the devaluation of the Hungarian forint to the Ultimo 2011 - are reported at Eur -2.2 m (2010: Eur -0.7 m) in our financial result. The FX developments and high financing costs negatively impacted our profit or loss on ordinary activities. The operative profit/loss on ordinary activities (before extraordinary events, IAS 40 and FX developments) however improved to Eur -2.3 m (2010: Eur -3.4 m).

Volume of orders
The volume of orders amounts to Eur 28.3 m (2010: Eur 27.7 m). The trend in Austria remains consistent, whereas the public contracting in Hungary only increased in the 4th quarter. In Romania the calls for bids are now continuously increasing for EU-subsidised wastewater projects.

Employees
We were able to be more flexible in terms of our personnel costs by using temporary workers in Hungary and Romania. Due to this measure our personnel costs were adapted in proportion to our turnover and were reduced to Eur 12.9 m (2010: Eur 13.7 m). SW Umwelttechnik employed an average of 540 people in 2011 (2010: 629 employees).

Investments
Our investments of Eur 1.8 m were used to adapt our product portfolio to the changed market conditions - so mainly for the water conservation sector. We made no investments into expansions or acquisitions in 2011.

Structure simplification Austria
The SW Umwelttechnik group has taken over the 26 % of the SW Österreich GmbH from the Salzburg family company Betonwerk Rieder GmbH with retroactive effect of 01 January 2012 and therefore now holds 100 % of the company focused on water conservation. In return, we ceded our 50 % share of the Iso Span Baustoffwerk GmbH in Ramingstein to the Betonwerk Rieder GmbH. This means that SW Umwelttechnik has simplified its share structure and now focuses on its core segment of water conservation in Austria.

Treasury
The SW group is mainly financed through bank loans, which were - to a large extent - taken out during our modernisation and expansion phase between 2005 and 2008 and amounted to a total of Eur 60 m. In order to secure these debts (according to the frame work agreements of August 2011), we are working on making the necessary changes in the financing lines with our banks. Scenario calculations are being used as a basis for these talks. The adjustment of our repayment schedules to the changed market environment should be agreed upon by mid 2012.

Our long-term strategy of being one of the top three players in all the markets we work in by taking advantage of sustainable growth opportunities in CEE countries has proven itself even in these economically challenging times. In addition, SW Umwelttechnik will be able to profit disproportionately from an economic upswing due to its implemented investments into modern facilities.

In Eur m	2011	2010
Turnover	69.4	73.8
Operative EBIT	1.4	-0.6
Operative EBITDA	5.3	4.7

SW Umwelttechnik, a family firm founded in 1910 and listed on the Viennese stock exchange since 1997, stands for sustainable management and consistent growth in Eastern and South-eastern Europe. With our innovative technology to protect the environment we provide an important contribution to the development of necessary infrastructure in Central and South-eastern Europe.

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