EANS-Adhoc: SW Umwelttechnik third-quarter results show marked recovery

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9-month report

26.11.2009

* Sharp year-on-year increase in Q3 earnings
* Q3 EBITDA margin back to normal
* Restructuring shows positive effects

SW Umwelttechnik — a Vienna-listed family firm — beat all
year-earlier earnings figures in the third quarter, despite a 34%
decline in revenue. The EBITDA margin was back to normal at 13%,
demonstrating the effectiveness of the action taken to adjust to the
current harsh trading environment.

The decline in revenue has eased in the course of the year (Q1: 55%;
Q2 44%; Q3: 34%) and earnings have steadily improved. "During the
third quarter demand began bottoming out at a low level in our key
Hungarian and Romanian markets, both of which have been particularly
hard hit by the recession," said SW Umwelttechnik CEO Bernd
Wolschner. The restructuring programmes rapidly launched in response
to changed market conditions are now showing positive effects. The
company has taken tough action to cut fixed costs and strengthened
its focus on winning local government business. SW Umwelttechnik has
adapted to current conditions, and anticipates further improvements
in earnings despite lower revenue.

Third-quarter earnings up Revenue for the first three quarters was
42.5% down at EUR47.0 million (m) (Q1-Q3 2008: EUR81.7m). Revenue
slumped by 55% in Hungary and also fell heavily in Romania; only in
Austria was it largely stable. Despite the massive decline in
revenue, cumulative EBITDA for the first three quarters was positive
by EUR2.0m as a result of the cost reduction programmes (Q1-Q3 2008:
EUR7.1m). EBIT for the first nine months of the year was negative by
EUR2.5m (Q1-Q3 2008: + EUR2.8m).

Results for the third quarter alone reflect the recent improvement in
the company´s fortunes. Revenue was down by only 34% year on year at
EUR20.2m (Q3 2008: EUR30.5m). Due to the success of recent
restructuring measures EBIT jumped to EUR1.1m in the third quarter
(Q3 2008: EUR0.4m), and EBITDA advanced to EUR2.6m (Q3 2008:
EUR1.9m). A significant feature of quarterly performance was the fact
that the EBITDA margin for the period returned to the level recorded
in recent years, at 13%. With net finance costs of only EUR0.6m due
to reduced interest expense, the Company returned a third-quarter
profit on ordinary activities (POA) of EUR0.5m, compared to a loss of
EUR1.9m for the like period in 2008.

There was a marked shift in the segmental composition of revenue in
favour of the company´s Water Conservation sector over the first
three quarters, and it accounted for EUR24.4m (Q1-Q3 2008: EUR23.8m)
or 52% of the total. The Infrastructure sector was impacted by the
plunge in sales to industrial and commercial clients — which was
especially severe in Hungary but also affected Romania — and its
revenue contribution slid to EUR15.5m (Q1-Q3 2008: EUR46.4m) or 33%
of the total. The anticipated pick-up in municipal environmental
investment has taken longer than expected to materialise, especially
in Romania, where it has been held back by funding delays. However
the Engineering sector´s contribution held steady at 15%, although it
dropped to EUR7.1m in absolute terms (Q1-Q3 2008: EUR11.5m).

Although sales in Hungary more than halved year on year, to EUR20.7m
(Q1-Q3 2008: EUR45.5m), it remained the main market for SW
Umwelttechnik, generating 44% (Q1-Q3 2008: 56%) of total revenue.
Thanks to the relatively stable trading environment in Austria, this
market´s revenue contribution rose from 19% to 29%. Romania´s revenue
share edged up to 21% from 18% in the comparative period. Slovakia
made up 2% (Q1-Q3 2008: 4%) and other countries such as Slovenia,
Italy and Germany 5% (Q1-Q3 2008: 3%) of overall revenue.

The changed market environment is apparent in the 28% year-on-year
fall in order books. Order backlog was EUR31.6m as at 30 September
2009 (end of Q3 2008: EUR44.1m), reflecting the shift between market
segments; as expected, this has led to an increase in short-term
contracts.

Smaller balance sheet Non-current assets as at 30 September 2009 were
down to EUR70.7m (end of Q3 2008: EUR79.5m) due to exchange rate
movements. Current assets shrank from EUR49.4m to EUR35.6m over the
period, reflecting improved inventory and receivables management.
Total assets were EUR108.7m as at the interim balance sheet date (end
of Q3 2008: EUR130.5m).

The main liabilities category is EUR79.0m in borrowings, most of
which were taken up to fund the investments made in connection with
the expansion programme. Ensuring that the Company has access to
adequate liquidity during the coming year has already been discussed
with the lending banks, and they have confirmed that sufficient
credit lines will be available. Total liabilities decreased to
EUR95.4m as at 30 September 2009 from EUR102.1m a year earlier.

Equity fell to EUR13.3m at the interim balance sheet date from
EUR20.5m at year end 2008, and the equity ratio slid from 17.4% to
12.2%. The company plans to include surplus land, valued in
accordance with IAS 40, in its balance sheet for 2009. This will
increase reported equity by some EUR5m, which would have had the
effect of raising the IFRS equity ratio to 16% as at 30 September
2009T.

Recognising the intrinsic value of the non-current assets by applying
the exchange rates ruling at 31 December 2007 lifts equity to
EUR24.1m, and this would result in an equity ratio of about 20%.

Management is currently evaluating other means of increasing
liquidity and strengthening the company´s equity base, and is
examining the feasibility of another capital increase.

Outlook It is hard to make reliable predictions about the outlook for
SW Umwelttechnik´s markets because of wide discrepancies between
recent economic forecasts.

Since mid-2009 SW Umwelttechnik´s markets have been bottoming out at
a low level, as shown by recent order intake. They will gain
additional momentum from the implementation of the promised stimulus
packages which has been held up in Hungary and Romania. Management
therefore expects revenue to remain on its present trajectory and
sees earnings continuing to improve in line with the positive trend
in the third quarter.

The company´s long-term strategy of aiming for top-three positions in
the markets it serves and capitalising on the growth opportunities in
CSE countries remains in place, and in management´s view current
trends show that it is working. The EUR60m invested in modern plant
and equipment over the past few years means that SW Umwelttechnik is
particularly well placed to profit from the anticipated upswing in
2011.

Financial highlights

|EUR m |Q3 2009 |Q3 2008 |Q1-Q3 2009 |Q1-Q3 2008 |
|Revenue |20.2 |30.5 |47.0 |81.7 |
|EBITDA |2.6 |1.9 |2.0 |7.1 |
|EBITDA margin |13% |6% |4% |9% |
|EBIT |1.1 |0.4 |-2.5 |2.8 |
|POA |0.5 |-1.9 |-5.8 |-0.3 |

Founded in 1910, SW Umwelttechnik remains a family business, though
it has been listed on the Vienna Stock Exchange since 1997. The Group
is known for its commitment to sustainable enterprise and rapid
expansion in Central and Southeastern Europe (CSE). Its innovative
environmental products are contributing to infrastructure renewal in
CSE.

end of announcement euro adhoc
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ots Originaltext: SW Umwelttechnik
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

Bernd Wolschner

Member of the Management Board

Tel: +43 (0)7259 31350

Mobile: +43 (0)664 3413953

Michaela Werbitsch

Investor Relations

Tel: +43 (0)7259 31350

Mobile: +43 (0)664 8117662

Fax: michaela.werbitsch@sw-umwelttechnik.com

Web: www.sw-umwelttechnik.com

Branche: Technology
ISIN: AT0000808209
WKN: 910497
Index: WBI
Börsen: Berlin / free trade
Frankfurt / free trade
Wien / Regulated free trade