Contact:
Matthias Sturm
Phone: +43 1 402 48 51-173
E-Mail: sturm@temmel-seywald.at
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Vienna (pts018/27.03.2003/10:54) - S&T System Integration and Technology Distribution AG (S&T) (NASDAQ Europe: SNTS, OTC: STSQY), a leading IT service provider in Central and Eastern Europe, today announced consolidated and audited results for FY 2002.
Summary of Developments in FY 2002
In line with our preliminary announcement from January 23, total revenues amounted to EUR 171.1 million in 2002, an increase of 6% over the prior year level of EUR 161.6 million, and sales in core businesses rose 25%. After an adjustment for the hardware distribution unit, which was discontinued effective July 2002, organic growth constituted 10% of the total growth in 2002, bolstered especially by strong performance in Ukraine, Russia and Croatia. Prior to the spin-off, the hardware distribution business contributed EUR 3.4 million to the 2002 revenues, compared with EUR 16 million in 2001. This sale was a part of the move by S&T to shift its portfolio toward services and thus improving margins.
EBITDA decreased 6.2% to EUR 7.6 million. The main factor for the reduced EBITDA is the under-recognition of revenues during 4Q 2002. For example, only EUR 7 million of a EUR 17 million contract where recognized during the final quarter, a period of time that is crucial for the annual results due to the traditionally increased order flow. S&T also reported a strong backlog of orders at the end of 2002, which will produce a strong start for 2003. Another reason was the acquisition of the Turkish company Protek, which resulted in integration costs and exposed S&T to a depressed local economy.
EBIT declined 35% to EUR 2.6 million in 2002, partly as a result of the conditions mentioned above and partly due to higher expenses for the amortization of goodwill resulting from acquisitions.
Earnings per share went down to EUR 0.06 from EUR 0.42 in 2002. One of the main reasons of this decrease was the foreign exchange loss caused by the depreciation of local currencies against the Euro and the volatility of the Euro-Dollar exchange rate.
Karl Tantscher, CEO of S&T, commented: "2002 was significantly more challenging than we anticipated and the effects of this bearish economic environment were reflected on our year end results. However, we successfully expanded our customer base by focusing on consulting and value-added services that provided our customers greater returns on their investments. With the EU expansion moving forward as planned, we still expect investments in IT to grow significantly in Central and Eastern Europe (CEE) and we are very well positioned to reap the rewards."
During 2002, Enterprise Systems (ES) and Business Solutions (BS) (former Information Technology Solutions- ITS) made up 76% of total sales with a 24% YoY growth while the remaining units of Customer Support (CS-14% of total sales), Medical Systems (MED- 8% of total sales) and Information Technology Distribution (ITD- 2% of total sales) covered the rest of 2002 sales.
Developments in 4Q 2001 (unaudited, consolidated)
S&T's sales decreased 11% in 4Q 2002 compared to 4Q 2001. Total revenues were down 10% and the EBITDA and EBIT declined 10% and 23% respectively. The reduced numbers were again caused by the economic environment, under-recognition of revenues and higher amortization costs during the quarter.
Outlook for 2003
Driven by EU enlargement and pent-up demand, growth in Central and Eastern Europe is expected to outpace the global average in 2003. Real GDP is expected to go up by a minimum of 4% in several of the S&T markets such as Russia, Ukraine, Romania and Slovakia. Increased IT investments in those CEE states that are scheduled to join the EU in 2004 will also be fuelled by institutional and foreign direct investment. As a result, S&T expects its revenues to at least keep pace with the market growth.
S&T's business strategy calls for selective acquisitions to increase the company's regional coverage and position in large markets and accelerate growth of IT services. The rapid integration of the acquisitions made in 2002 and the exploitation of synergies will support the profitable development of S&T's business and result in improved EBIT numbers.
Finally, S&T will continue to focus on value-added services in order to improve margins and overall results.
Conference Call
S&T's management is available for a conference call on March 27 at 4.00 p.m. Central European time, UK: 3.00 p.m., US: 10.00 a.m. Eastern time.
To take part in the conference call, please dial toll free 00800 369 369 60 (US: 011 800 369 369 60) or 0049 69 50 957 7554 a few minutes prior to the start time.
For your convenience, an instant replay will be available from March 27 at 6.00 p.m. Central European time. The replay telephone number is: 0049 69 50 957 9999 and the conference reference number is 208070. If you have any questions please call 0049 69 50500600 for assistance.
Disclaimer
This Information reflects the situation of S&T as per December 31, 2002.
The Information contains certain forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, financial condition, performance or achievements of S&T, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following:
- competition from other companies,
- changes in operating expenses,
- attraction and retention of qualified employees,
- uncertainties arising out of S&T's operation outside Austria,
- adverse changes in applicable tax laws,
- adverse changes in governmental rules and fiscal policies,
- civil unrest,
- acts of God,
- acts of war, and
- other factors referenced in this Information.
Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements. No representation or warranty can be given, expressly or implied, regarding the correctness, completeness or fairness of information and opinion regarding such forward-looking statements contained in this Information. S&T disclaims any obligation to update any such forward-looking statements to reflect future events or developments.
S&T and the persons acting on behalf of S&T do not accept any liability whatsoever arising from any use of this Information or its contents or otherwise arising in connection therewith.
This Information does not constitute an offer or invitation to subscribe for or purchase any securities of S&T.
About S&T - www.snt.at
S&T is one of the leading providers of IT solutions to customers in 16 countries in Central and Eastern Europe and Turkey. S&T offers IT consultancy services, develops and implements tailor-made IT solutions and provides 24-hour service and consultancy. S&T has the specialized knowledge of backup and disaster recovery functions required for highly critical applications. S&T focuses on meeting the needs of large and medium-size enterprises, in particular those in the telecoms, banking, energy, public authorities and health sectors.
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