31.07.2007 |

S&T AG: 39% Growth in consulting and solution business

First half year of 2007 demonstrates consistent implementation of strategy and the integration of most recent acquisitions.

  • Total sales 1st half year 2007: 228.7 Mil. Euro (+11%)
    • Sales Business Solutions: 63.2 Mil. Euro (+39%)
    • Sales Managed Solutions: 39.4 Mil. Euro (+13%)
    • Sales Enterprise Systems: 126.1 Mil. Euro (+0.5%)
  • EBITDA 1st half year 2007: 7.1 Mil. Euro
  • EBIT 1st half year 2007: 3.6 Mil. Euro
July 31, 2007 - Vienna. The S&T Group realised their strategic goals of massively expanding the consulting and solutions business, as well as the Managed Services division in the first half year of 2007 consistently and successfully. Total sales grew in the first half of 2007 11% as compared to the first half of 2006 to 228.7 Mil. Euro. The consulting and solutions business grew 39% to 63.2 Mil. Euro. The Managed Services division generated revenue growth of 13% at 39.4 Mil. Euro for the company thereby delivering results far above market growth. The Enterprise Systems business division developed steadily at 126.1 Mil. Euro (+0.5%). EBIT was at 3.6 Mil. Euro at the half-year point and EBITDA at 7.1 Mil. Euro.

In the first half of 2007 the S&T Group further developed based on a consistent implementation of their strategic goals. The revenue distribution between the three core divisions of the business also fulfilled the plans of the company. S&T is therefore well on its way toward achieving the goal of generating 60% of total sales with Business Solutions and Managed Services. Sales of these two divisions already constitutes 45% of total sales. In the first half year of 2006 this figure was at 39%. In the second quarter of 2007, this figure reached 49%, (practically half), of sales from these two business areas. Sales in the Enterprise Systems division grew slightly. This sales segment must carry the higher unit costs associated with hardware sales. At the same time a rapid price decline for devices took place, resulting in lower sales even with an increase in quantity.

Q2 2007: +61% in Consulting and Solutions Business
The second quarter of 2007 also developed according to strategy. From April to June S&T produced sales of 124.3 Mil. Euro and thereby increasing 19% compared to the same time period in 2006. Particularly notable is the increase in sales in the Business Solutions area – of 61% to 40.9 Mil. Euro. The Managed Services division grew 11% to 19.9 Mil. Euro, Enterprise Systems reported growth of 3.5% at 63.5 Mil. Euro. EBIT in the second quarter was 2.0 Mil. Euro and EBITDA hit 3.9 Mil. Euro.

S&T Stock: All Time High in April
The S&T stock climbed to new heights in 2007. In April it reached an all time high with a price of 59.20 Euro (for comparison: at the end of 2006 the price was at 39.20 Euro). At the end of July (27.07.07) the price finally reached 56.25 Euros, which represented a price gain of 43% since the beginning of the year. The market capitalisation also increased rapidly. At the end of 2006 it stood at 139.9 Mil. Euros, in July 2007 (27.07.07) at 200.7 Mil. Euros.

Investments: About 2 Mil. Euro for Integration and Restructuring
The intensive growth and associated investments and increasing orientation of the company toward consulting and solutions business, as well as the corresponding restructuring costs naturally impact EBIT that reached 3.6 Mil. Euro in the first half of 2007. “We’re on the right track. In the first half of 2007 we successfully implemented our strategy. The integration and restructuring did however require intensive management attention and about 2 Mil. Euro of investments.” explained Christian Rosner, CEO S&T AG.

Competence and Service Expansion
The first half of 2007 at S&T was occupied predominantly with the acquisition and integration of IMG The Information Management Group, as well as the implementation of numerous initiatives and investments of the company to achieve its strategic goals. In addition to the opening of three Competence Centers (Competence Center for IBM Tivoli in Ljubljana, Customer Concept Center in Bucharest and EMC Velocity² Signature Solution Center in Ljubljana), S&T concentrated on the expansion of the SAP and other strategic business areas, as well as on competency enhancement through technology certifications. Among other projects, S&T executed an SAP offensive targeting mid-sized companies in several countries, the opening of a certified SAP Training Center, the qualifications as SAP Gold Partner, Cisco Technology Excellence Partner of the Year and Best Partner in IBM Technologies. Rosner: “In order to optimally satisfy the needs of our customers in the future and to actively develop the company, we are continually investing in the expansion of our services and sector-specific solutions, as well as the know-how of our employees."

Successful Projects
S&T successfully completed or advanced numerous projects in the first half year of 2007 – for example the build-out of WIMAX network for Ukrainian High Technologies, A&D Pharma in Romania, Fejérviz in Hungary, ORF in Austria and E.ON in Bulgaria.

Due to the political environmental situation and light weakening of the economy in some countries new orders were restrained – some examples include weak domestic demand due to the savings program in Hungary, reduced demand in Turkey due to restrictive monetary policies, as well as uncertainty related to the political situation and elections and light cooling of the economic boom and political uncertainty in Romania. In the meantime (after the elections and confirmation of the governments in Turkey and in Romania) these difficulties have been diminishing. In addition there is a general global tendency for proposals and contracts to increase in the second half of the calendar year. However, many S&T customers have already been utilising the country border-spanning advantage of S&T support. The demand for ‘global delivery’ is clearly increasing. An increasing number of clients want consulting and service support in several countries. In addition, we are actively rolling out our services professional trans-national tools that the customers truly appreciate,” described Rosner.

Outlook 2007 remains Valid
S&T’s expectation for business year 2007 remains unchanged forecasting sales of over 500 Mil. Euro. The company is producing some large contracts in the second and third quarters with other agreements in preparation or implementation phases. All of which should produce positive results in the second half of the year. Example: OMV recently commissioned S&T with operation of the electronic billing system (managed desktop service) for more than 500 filling stations throughout Austria. S&T will make first and second level support available 7x24x365, as well as on-site staff for monitoring, servicing and fault elimination. The project will run for several years and comprises a total volume of around 6 Mil. Euros. The economic and IT market prognoses for 2007 are for good growth rates, with the limiting factors of difficult environmental aspects declining or virtually disappearing during the second half of the year. Rosner: “We are confident. The second half of the year is traditionally considerably more effective with respect to results and the effect this year appears to be even stronger than usual. We have intensively invested in the first half of the year in further expansion and transformation of the company for the future.”
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