06.02.2008 |

S&T Closes its Business Year 2007 with a Record Quarter

6 February 2008. 2007 followed in the footsteps of the record-breaking year of 2006 and means a further year of growth for the S&T Group. After having the best third quarter in the history of the company, S&T broke all its previous records during the fourth quarter of 2007. Sales increased in the fourth quarter by 21% and the EBIT by 53%.
According to the company's preliminary annual results, total sales increased by 14% and the EBIT by 7%. 45% of sales are now generated with consulting and services, a field which will be consequently developed further. For 2008, S&T is expecting sales of 560 to 580 million Euros and an EBIT of 15 to 17 million Euros.

In the 4th quarter of 2007, S&T achieved sales of 172 million Euros and an EBIT of ~6.9 million Euros, making it the most successful quarter in the company’s history. In total during 2007, S&T generated sales of 524 million Euros (+14%) and thereby produced a result considerably above expectations. In addition, S&T achieved its aim of growing significantly more than the market. Consultancy and services provided some 45% of the sales, in 2006 they produced some 37%. In 2010, S&T wants to generate 60% of its business in this area.

EBIT Target Reached: 13 Mill. Euros

The Earnings before Interest and Taxes, Depreciation and Amortization (EBITDA) provided a particularly pleasing picture, increasing by 13% to around 20 million Euros. The company also achieved its EBIT goals of ~13 million Euros (+7%). The number of employees increased in 2007 by 37% to 3,150. 653 of these came by way of the takeover of IMG - more than 200 were new recruitments. "All in all, 2007 was a very successful business year for us. We have almost completely finished our integration of IMG and our takeover, which took place in 2006, is now completely incorporated in S&T. "The advantages provided by our unique geographical location, the development of our business and capabilities across borders, as well as the consequent implementation of our strategy have all made a positive contribution to our results", explained Christian Rosner, S&T's CEO.

Share Price Rises Considerably: +18%

Despite the difficulties in the stock market, the S&T share has performed – the share price at the end of the year 2007 was 18% higher than at the beginning of the year. S&T concluded the stock exchange year 2007 with a market capitalization of 167 million Euros, compared with 140 million Euros at the beginning of the year.

Business Solutions Sales Increases by 60%

The Business Solutions and Managed Services sectors were intensively developed and brought in the desired results. The sales in the Business Solutions area grew by 60% in 2007 to 150 million Euros. In the meantime S&T has become a leading SAP consultant in Central and Eastern Europe (CEE) and in the DACH region (Germany, Austria and Switzerland). Important contracts, such as the Fejerviz water works in Hungary, the soya bean processor Sojaprotein in Serbia and A&D Pharma in Romania formed the driving force in this business sector. In the Managed Services sector, S&T experienced an organic growth of 16% to 87 million Euros.

S&T has established itself above all as a supplier of Managed Desktop Services and was awarded several million-Euro projects, such as for the OMV and the Ministries of Defense in Slovakia and the Czech Republic. Combined, these two sectors together make up 45% of total sales. In the Enterprise Systems sector, S&T concentrated in 2007 primarily on high margin contracts, which, in turn, generated further service projects. Consequently, this led to business in this segment, such as server virtualization and harmonizing IT infrastructure, being pulled along due to the knock-on effect. Amongst others, S&T successfully undertook projects for ORF (Austrian television), Ukrainian High Technologies and Vitana in the Czech Republic. As expected, the Enterprise Systems sector developed constantly to produce sales of 287 million Euros.

Focus on Growth Industries, Technologies and Regions

In 2007, S&T increased its business in those areas in which the company has extensive know-how and international specialists. Projects in Financial Services, Manufacturing and the Retail trade stood in the foreground and were carried out both locally and internationally. In addition, S&T extended its portfolio of partners with JDA Software, thus acquiring a powerful and renowned ally. S&T developed its Competence Centers for key technologies in several regions, increasing the know-how and operative support available for the whole S&T Group. At the same time, these competence centers strengthen S&T's regional presence.

2008: Earnings in Double Figures Expected
S&T's order pipeline is well filled – the company will continue, also by means of further acquisitions, with its undiminished growth. For 2008, S&T expects sales of 560-580 million Euros and an EBIT of 15-17 million Euros, thereby continuing to grow significantly more than the market. "We are convinced that IT expenditure for high quality consulting and service solutions will continue to rise in CEE. We can continue to develop further by making optimal use of our unique geographical presence, our skills and resources and the integrative synergy“, said Rosner. "In addition, we have a stable risk structure, which makes us relatively independent of the current economic and political circumstances. Through our concentration on local and international customers, we have developed a balanced client structure, with our sales distributed evenly across all our customers. None of our customers generates more than 4% of our sales. In other words we are well positioned“.