euro adhoc: SW Umwelttechnik Stoiser & Wolschner AG / quarterly or semiannual financial statement / SW Umwelttechnik unveils results for first three quarters of 2006

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08.11.2006

• Q1-Q3 revenue up by 11%, profit for period by 24%
• First Romanian factory commissioned
• Forint weakness weighing on profits
• Positive outlook for operating results

The improvement in operating results which began in the second
quarter gathered pace in the third, with year-on-year gains of 18,5%
in revenue and 31% in EBIT. This was mainly due to excellent capacity
utilisation at the Hungarian factories, some of which have gone over
to three-shift working.

Cumulative revenue for 2006 rose by 11% to EUR70.5 million (m) (Q1-Q3
2005: EUR63.5m). Hungarian operations accounted for 68% (2005: 65%)
of total revenue, revenue growth being driven by the outstanding
performance of the South Budapest site, which recorded a 15%
year-on-year increase. The revenue contribution of the Austrian
operations declined to 24% (2005: 29%) due to two factory closures
and the unsatisfactory performance of the biogas business. Revenue
growth is highly encouraging in Romania, despite the fact that most
deliveries are still being made from Hungary, and this market’s
revenue share reached 5% (2005: 4%). Other EU countries — principally
Italy, Slovakia and Slovenia — generated 3% of total revenue (2005:
2%).

In business segment terms, there was a further shift towards the
increasingly important Infrastructure sector, which contributed 47%
of total revenue (2005: 45%). This was mainly at the expense of the
Engineering sector which retreated further, to a 23% share (2005:
26%), while the role of the Water Conservation sector in sales was
little changed at 30% (2005: 29%).

Cumulative earnings before interest and tax (EBIT) were up by 24% to
EUR2.5m from EUR2.0m in the like period of the previous year,
boosting the EBIT margin from 3.1% to 3.5%. This year’s excellent
showing in Hungary was partly offset by the impact of the factory
closures in Austria which will give rise to a one-time charge of some
EUR800,000 for the year as a whole.

Cumulative EBITDA progressed by 3% to EUR5.7m (2005: 5.5m), and the
EUR4.9m figure posted in the third quarter, for a 16% year-on-year
gain, was the best quarterly result in the group’s history.

As in the first half, finance cost was impacted by the weakness of
the forint (HUF 273 /EUR) at balance sheet date. Finance cost climbed
from EUR1.1m in the comparative period to EUR2.6m, largely reflecting
the fall in the forint exchange rate.

This year the foreign exchange risk exposure affecting net profit is
to be reduced by shifting about half of the outstanding — euro
denominated — borrowings from the Hungarian subsidiaries to the
parent.

Cumulative finance cost kept POA marginally negative, by EUR0.1m
(2005: positive by EUR0.9m). However the recovery of the forint in
recent weeks means that a significant improvement in finance cost is
likely over the next few months. Already, a third quarter turnaround
brought finance income of EUR 0.6m, compared to finance cost of
EUR0.6m in the previous year.

The group headcount rose from 771 to 821. Most of the growth related
to the phased increase in the Romanian payroll and the expansion of
the South Budapest site; it was partly offset by the personnel
reductions in Austria.

Property portfolio to fuel profits The group currently owns about 150
hectares (ha) of land, of which 45 ha are in the Bucharest area.
There are plans to acquire a further 15 ha in Turgu Mures, northern
Tansylvania, this year. Due to the extent of the group’s operations
investments are frequently made in land. SW Umwelttechnik intends to
exploit the opportunities presented by this side-effect of expansion,
and dispose of developed properties that are not required for
operations at a profit over the next few years.

Management is looking closely at all the factories situated near town
centres to assess whether undisclosed reserves can be realised by
moving them to new sites. The production equipment at the Csepel
works in Budapest is to be relocated to the South Budapest operation
in the next 18 months, and the six hectare property sold within the
nex two years. In addition, a 15 ha property at a gravel pit lake
near Miskolc is to be lanscaped into attractive parkland this year,
and disposed of in plots, starting in 2007.

The group plans to realise about EUR1m in income in this way over the
coming five years. These resources will mainly be used to fund the
investment drive in Romania.

Capital expenditure The group invested a total of EUR9.4m during the
first three quarters, and capital expenditure is seen reaching EUR12m
for the year as a whole.

The main focus of investment is on the construction of the Romanian
factories in Timisoara and Bucharest, which have claimed some 40% of
total spending this year. The Timisoara works, which manufactures
products for the Water Conservation sector, went into operation on
schedule at the start of September, and is already running at full
capacity on a single-shift basis. All the necessary building permits
have been obtained for the Bucharest works, and work has begun on the
mixing plants. Commissioning is due to take place during the first
half of 2007.

Capital expenditure in Hungary will amount to EUR4m in 2006. The
spending is going into the accelerated relocation of production
equipment from Csepel to the South Budapest site, expansion of the
prestressed floor element and binder capacity at the South Budapest
works, and initial investment in a new mast production facility in
Alsoszolca.

Outlook The high level of order fulfilment in the third quarter and
the changes in Austria reduced order backlog to EUR30.9m (2005:
EUR37.6m ).

Owing to the excellent results for the third quarter the Management
Board is standing by its optimistic outlook for the year as a whole.
It anticipates single-digit revenue growth and attainment of the
forecast operating results.

The current trend in the HUF/EUR exchange rate should mean that the
finance cost position eases considerably. However the impact on
reported results remains difficult to assess.

• In Austria the effects of the two factory closures and the related
streamlining of the product range should be highly positive from 2007 on.
However a one-time charge of around EUR800,000 is expected for 2006.
• In Hungary group operations are expected to continue to perform well, as
high capacity utilisation through to the middle of next year is already assured.
Investment in capacity expansion — particularly at the South Budapest site
—should result in a further strengthening of the group’s market position.
• In Romänia commissioning of the Water Conservation sector’s factory in
Timisoara went smoothly, and the Infrastructure sector’s Bucharest works is due
to start up in the summer of 2007. The search for a site in the Turgu Mures
area, in northern Romania, has already been initiated, and construction of this
third factory is set to commence near the end of 2007.
2006 is an important year for SW Umwelttechnik, during which the groundwork is
being laid for a positive performance in 2007. Management anticipates that
continued growth in Hungary and the group’s successful entry to the Romanian
market will more than compensate for the revenue effects of the closures in
Austria. The actions taken and investments made should result in double-digit
EBIT growth in 2007.

SW Umwelttechnik is aiming for readmission to the ATX Prime Market
next year, provided that results meet expectations.

Financial highlights

Third quarter

In EUR m 2006 2005
Revenue 34.3 28.9
EBIT 3.7 2.8
EBITDA 4.9 4.2
POA 4.2 2.2
First to third quarter
In EUR m 2006 2005
Revenue 70.5 63.5
EBIT 2.5 2.0
EBITDA 5.7 5.5
POA -0.1 0.9

end of announcement euro adhoc 08.11.2006 08:00:00
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ots Originaltext: SW Umwelttechnik
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:
Dr. Bernd Wolschner, member of the Management Board of SW Umwelttechnik
Tel. +43 (0)463 32109; mob. +43 (0)664 3413953; fax +43 (0)463 37667
Michaela Wolschner, Investor Relations
Tel. +43 (0)664 8117662; fax +43 (0)1 3688686
E-mail: michaela.wolschner@sw-umwelttechnik.at
Website: www.sw-umwelttechnik.at

Branche: Technology
ISIN: AT0000808209
WKN: 910497
Index: WBI
Börsen: Börse Berlin-Bremen / Regulated free trade
Frankfurter Wertpapierbörse / Regulated free trade
Wiener Börse AG / Regulated free trade


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