S&T AG increases profitability and prepares for next surge in growth

Thursday, 3rd November 2016

Austria

Sales for first 9 months of 2016 stable at EUR 301.3 million (PY: EUR 302.4 million)
Consolidated income for first 9 months rises 21% to EUR 11.0 million (PY: EUR 9.1 million)
Orders backlog rises 22% in 2016

Linz, 03.11.2016. S&T AG (www.snt.at) was able during the first nine months of financial year 2016 to record stable sales and rising profits - as foreseen in corporate plans. The sales achieved during the first nine months of the financial year came to EUR 301.3 million (PY: EUR 302.4 million), and were thus at the previous year's level. Revenues from sales in the third quarter of 2016 amounted to - with this being a result of the sale and further scaling down of the low-margin hardware business done by the “Services” segments - to EUR 105.0 million (PY: EUR 114.2 million).

This stability of sales was joined by a further increase in profits during the financial year. The EBITDA for the first three quarters rose 16% to EUR 19.4 million (PY: EUR 16.7 million). The third quarter's EBITDA was EUR 6.3 million (PY: EUR 5.9 million). Consolidated income for the first nine months came to EUR 11.0 million, 21% above the previous year's value of EUR 9.1 million. The third quarter's figure was EUR 4.4 million (PY: EUR 3.1 million). Despite the withdrawal from low-margin business, the third quarter's gross margin remained virtually the same at EUR 36.4 million (PY EUR 35.9 million).

Technologies yield profits - stable assets and liquidity
The technology segments remain the drivers of the profits being achieved by S&T. Sales registered by these areas increased to EUR 91.9 million (PY: EUR 81.1 million) Their EBITDA amounted to EUR 11.4 million (PY: EUR 8.4 million). This yielded a rise in the EBITDA rate to 12.4% (PY: 10.4%). The “Services” segments realized sales of EUR 209.5 million (PY: EUR 221.3 million) and an EBITDA of EUR 8.0 million (PY EUR 8.3 million). This kept their EBITDA rate at 3.8%.

S&T's assets and liquidity continued to testify to its stability of operation and potential for further expansion. Its equity rose to EUR 107.1 million as of September 30, 2016 - as compared to EUR 102.2 million as of January 1, 2016. S&T's equity rate climbed from the 32.0% as of the end of 2015 to 35.5% as of 30.09.2016. The net indebtedness came as of the date of this financial reporting to EUR -27.8 million. As is the case in each year, seasonal influences will greatly improve this figure by the end of 2016. Operative cash flow for the first nine months of 2016 amounted to EUR -5.8 million (PY: EUR -0.1 million).

Surge in growth in 2017 and 2018
The sale of proprietary hardware manufacturing is causing the management to forecast sales for financial year 2016 of EUR 480 million, slightly less than the some EUR 500 million foreseen in corporate plans. Management is retaining its plans for corporate income, which is set to rise to EUR 19.0 million. As of September 30, 2016, the order backlog amounted to EUR 220.0 million (31.12.2015: EUR 181.0 million). The project pipeline outpaced this strong rise, coming as of September 30, 2016 to EUR 878.0 million (31.12.2015: EUR 701.0 million). These figures form the base for the forecast of S&T's achieving solid growth of 15% in 2017. In October, 2016, S&T AG made an investment in Kontron AG, in order to attain with it a leading role in the Internet of Things and Industry 4.0 sector. Upon the completion of the planned consolidation of Kontron AG, S&T's sales should - in a corporate first - exceed in 2018 the one billion euros mark.