SW Umwelttechnik Stoiser & Wolschner AG: Publication of annual result for 2011

Klagenfurt (pta007/13.04.2012/08:00 UTC+2) Operative EBIT in the plus with Eur 1.1 m
Non-cash-affecting negative FX reported in our financial result
Financing secured

Klaus Einfalt and Bernd Wolschner, the managing directors of the listed family company SW Umwelttechnik AG, presented the annual result for 2011 at the press conference on April 13th 2012. Operative EBIT has been increased by Eur 1.7 m to now plus Eur 1.1 m at a turnover of Eur 69.4 m. This is mainly thanks to careful product selection, stabilising prices as well as the effects of our optimisation measures in terms of our operating costs. In March 2012 our financing banks agreed to adjust our repayment profiles to the current economic climate in the CEE area, which means that the financing of our company is now secured.

The past fiscal year has continued to be a challenge for SW Umwelttechnik due to the on-going market instabilities in the areas we work in. In Austria the economic recovery showed a more positive trend for 2011, however, in Hungary and Romania this has not been the case so far.

We have succeeded in increasing turnover in Austria by sticking to our strategy of developing our products in saturated markets. Our turnover has thus been significantly increased by 14 %, from Eur 15.6 in 2010 to Eur 17.9 m in 2011. By simplifying our structure in February 2012, with retroactive effect as of 1st of January 2012, we are continuing our focus on our primary business segments of water conservation and specialized infrastructural projects.

The negative effects of the construction sector in Hungary also had an impact on our company - our turnover decreased by 20 % to Eur 29.3 m (2010: Eur 36.7 m). Thanks to our consistently implemented price stabilisation measures and the variability of our fixed costs, we were, however, able to improve our operative EBIT significantly even with the decrease in our turnover.

The downward trend in the industry and trade sector in Romania confirms our decision to restructure our production site in Bucharest in 2011 to provide for civil engineering projects - with products for the water conservation and infrastructure sector. This has meant a significant improvement in our operative result even though our turnover decreased to Eur 17.1 m (2010: Eur 18.1 m).

SW increased its export activities in 2011 to efficiently make use of our production capacities of our high-margin products. Our export business, especially in Italy, but also in Germany and Slovakia, developed very positively. A total turnover outside our core markets of Austria / Hungary / Romania increased to Eur 5.1 m (2010: Eur 3.4 m), this reflects an increase of exports of 50 % compared to the previous year.

We were able to further expand our water conservation sector to Eur 32.0 m (2010: Eur 31.6 m) and it remains our biggest business segment with 46 %. Turnover in the industry and trade sector remains weak and reached only Eur 22.6 m, which is significantly below the previous year (Eur 27.8 m). Our turnover from our engineering projects remains on a similar level with Eur 14.8 m (2010: Eur 14.4 m).

Operational figures
Despite the market downturns in Hungary and Romania, we were able to increase our operative EBITDA (before IAS 40 fair value property valuations) to Eur 5.0 m (2010: Eur 4.7 m) and we turned our operative EBIT into the plus, now amounting to Eur 1.1 m (2010: - Eur 0.6 m). The result from the fair value valuations of investment properties was below the previous year's value with Eur 0.4 m (2010: Eur 1.9 m). The temporary non-cash-affecting exchange rate losses resulting especially from the devaluation of the Hungarian currency on the last trading days 2011 are reported in our financial results at - Eur 2.2 m (2010: - Eur 0.8 m). The FX developments and also the current high interest and financing costs have negatively impacted our profit / loss on ordinary activities. The operative profit / loss on ordinary activities (before IAS 40 and FX losses) however, improved to - Eur 2.5 m (2010: - Eur 3.4 m).

Earnings
Fixed assets of Eur 66.7 m decreased by Eur 6.4 m mainly due to investments of Eur 1.7 m being significantly below depreciation of Eur 3.9 m as well as due to the negative currency fluctuations. Current assets went down to Eur 26.8 m (2010: Eur 30.8 m) due to the decreased turnover and the optimisation of our stocks. Total assets have therefore significantly decreased due to these components and now amount to Eur 96.3 m (2010: Eur 107.6 m).

Equity is reported at Eur 7.1 m - without consideration of non-cash-affecting book losses from revaluation effects it amounts to Eur 18.9 m and the equity ratio amounts to 17.5 %.

Financial liabilities remained constant with Eur 77.5 m (2010: Eur 76.8 m) while other short-term liabilities decreased to Eur 9.4 m (2010: 12.3 m) mainly resulting from delivery and service.

Treasury
The financing of the SW group is mainly secured through bank loans, which were taken during our modernisation and expansion phase between 2005 and 2008. In order to secure these liabilities - in accordance with our framework agreements of August 2011 - scenario evaluations have been calculated so as to incorporate the necessary changed financing lines. In March 2012 a general consensus was found in terms of our mid-term repayment schedule - a term sheet for the restructuring and repayment agreements was signed. The elaboration of detailed contracts by mid 2012 is targeted in this agreement. The banks have also assured us of their support in terms of our annual extension of current short-term liabilities.

Our long-term strategy of being one of the top 3 players making use of the sustainable growth opportunities in CEE countries has proven itself even in these economically challenging times and due to the investments we have made into modern facilities, SW Umwelttechnik will be able to overproportionately profit from an economic recovery.

Fact box

In Eur m	2011	2010
Turnover	69.4	73.8
Operative EBIT	1.1	-0.6
Operative EBITDA	5.0	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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