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S&T Concludes 2009 With Positive Q4 EBIT of 1.6 mln EUR

Preliminary results of the business year 2009 and Q4 2009:

• Significant restructuring measures and new organizational structure realized
• Cost basis for 2010 considerably optimized, risks reduced
• Preliminary results for FY 2009: Sales EUR 412 million* (2008: 502 million*, - 18%), EBIT EUR 0,3 million*
• Preliminary results for Q4 2009: Sales EUR 129 million*, EBIT EUR 1.6 million*
• Results burdened by devaluations of CEE currencies important to S&T
• Initial successes in Q3 and significant improvement in Q4 earnings confirm cautiously positive assessment for 2010

The first half-year 2009 showed that S&T was particularly hard hit by the difficult market developments due to its industry focus (e.g. automotive and machine industry) and geographical focus (CEE). Budget cuts and project delays by customers negatively impacted consulting services. This was largely compensated by a group-wide cost reduction drive, without correspondingly slashing service quality or expertise. The infrastructure service and outsourcing business have largely remained stable and sustainably profitable.

S&T generated preliminary sales of EUR 412 million* in 2009 and anticipates a positive EBIT of EUR 0.3 million*. These results basically correspond to the latest company outlook. The sales decline is largely due to risk-oriented project selection and (compared to non-restated 2008 results) to the divestments in China, Russia and Turkey. S&T maintains its presence in Russia and China based on strategic partnerships and minority shareholdings. On December 31, 2009 the Group employed ca. 2600 members of staff.

Business strategy and sales offensive

The strong service component (again ca. one-half of total sales) significantly contributed to stability in revenues and profit, especially in Managed Services and Outsourcing. Margins in new customer business remained low. S&T is moving to counteract this situation with an increasingly offensive sales strategy in 2010, and already began in Q3 to expand its sales efforts across all countries and business units.

Q4 2009 business development

Only insignificant restructuring measures were taken in Q4, most notably in Japan. The Group achieved total sales of EUR 129 million* (Q4 2008: 149 million*), generating an EBIT of EUR 1.6 million* (Q4 2008: 5.5 million*).

Summary and outlook

Despite the important measures in 2009, S&T succeeded in expanding its product and service quality and further intensifying its long-term strategic orientation. The cost structure for 2010 was significantly improved, sales and marketing activities were expanded. Management board believes that S&T is well-positioned for the future, while the visibility of the market remains difficult. The order situation is assessed as cautiously positive.

*Note:
All figures contained in this announcement represent preliminary, unaudited figures. Due to the closing of the subsidiary in Turkey, the conversion of the company’s business operations in Russia into a cooperation agreement with a minority shareholding, and the ongoing sale of the subsidiary in China, the previous activities in these markets will be reported as discontinued operations in accordance with the stipulations of IFRS 5. The comparable figures for 2008 are correspondingly adapted.