12.02.2007 | Austria

2006: Another Successful Year for S&T AG

Organic growth of more than 18%

Turnover 2006: €463 million (+30%) Turnover 2007p: €530 million EBIT 2006: €12 million (+41%) EBIT 2007p: €16 million
12 February 2007. S&T AG's preliminary results for 2006 are very clear: the Group, with a presence in 18 countries, looks back at another successful year. The increase in turnover and improvement in financial results for its business activities were both significant. More than half of the increase in turnover is due to organic growth. In 2006, its share price and market capitalisation increased by approx. 50%. In 2007, S&T continues its growth and takes its services and solutions business to the next level.

Preliminary results show a turnover of € 463 million for S&T AG in 2006. This is 30% more than the € 356 million in 2005. This big increase in turnover was mainly due to the organic growth in S&T's core business areas. For example, Business Solutions achieved a turnover of € 94 million for 2006 – a 42% increase when compared with the € 66 million it made in 2005. Another major factor was the acquisition of four companies during the course of the year. EBIT increased by 41%, from € 8.5 million in 2005 to € 12 million in 2006. Staff numbers increased from 1,923 (FTE) at the end of 2005 to 2,295 at the end of 2006. More than 700 of them work exclusively in Business Solutions.

Shares Going Up / Sharp Increase in Market Capitalisation
Whereas S&T's share price was € 26.46 (02.01.06) at the start of 2006, it had reached € 39.20 (28.12.06) at the end of the year, showing a 48% increase. At the start of 2007, following the announcement of S&T's takeover of Swiss SAP consultation company IMG, The Information Management Group, its share price soared again. Currently at € 48.50 (09.02.07) it is still going up. Analysts of the Erste Bank recently increased the target price to € 52. This also led to a steep increase in S&T's market capitalisation. While still at € 90.7 million in 2005, it increased by 54% to € 139.89 million in 2006, clearly continuing its uprise after the acquisition of IMG. Currently it is at € 173.07 million (09.02.07).

2007: Another Year of Growth
'S&T will also be a company aiming for growth in 2007. The aim is a clear focus on consultation and services businesses together with IMG AG, expansion through competence centres across the S&T Group, e.g. also in Near Shoring, and further development of our strong market position in the CEE and DACH (Germany, Austria, and Switzerland) regions. Additional acquisitions in the second part of 2007 are not excluded,' says Christian Rosner, CEO of S&T AG. For 2007, S&T is expecting a turnover of € 530 million and an EBIT of € 16 million. As a result of taking over IMG, staff numbers will increase to 3,000, following approval by the competition authorities.

Business Solutions Best Turnover Performer
With a 42% turnover increase, Business Solutions was the best turnover performer of S&T's three core business areas in 2006. This area includes ERP and SAP projects, but also the development and implementation of company-critical applications, e.g. business intelligence. In addition, consultation services also showed a positive development. All company takeovers by S&T in 2006 reinforced Business Solutions in a targeted way. For example, S&T purchased Polish ERP service provider BEELC in January 2006. In September of the same year, it acquired the Hungarian SAP specialist Unitis and the SAP activities of T-Systems in Turkey. S&T's software development gained solid ground through the establishment of its own Software Near Shoring Centres in Bucharest. This business area will also be dramatically reinforced in 2007. The takeover of IMG in January 2007 was an essential step in the process. Rosner: 'With IMG, we now have more than 1,200 SAP advisers and top consultants in the S&T Group. This is in addition to the strong industry and technology competence in our target branches. We will use all this expertise to expand our consultation, SAP, and software activities in a significant manner.'

Managed Services on the Uprise
The highest turnover volume in 2006 was achieved by Enterprise Systems with € 294 million (+31% when compared with the € 225 million turnover in 2005), in particular, in the complex area of Storage Applications and in Network/Security. With € 75 million, Managed Services showed a 15% growth (2005: € 65 million). Partial outsourcing of certain infrastructure aspects, e.g. IT workstations or server systems, is becoming an increasingly interesting option for many company IT managers. Managed Services provides internal IT departments with the extra space required for dealing with strategic tasks in a more efficient way. With its many years of experience in the Managed Services market, S&T is an extremely competent and successful partner for taking over outsourcing und out-tasking projects.

Business Verticalisation
S&T is currently planning the introduction of industry and technology competence centres for all three of its core business areas, which will reinforce the verticalisation of its solution services. Work on some of these competence centres has already begun. 'In 2007, we will deepen our industry competence in S&T target branches, e.g. financial service providers (banks/insurance companies), telecommunications, the manufacturing industry, and energy suppliers. Our clients demand specialists who are familiar with their businesses and processes, and who can provide them with precisely tailored IT solutions. We have such specialists and use them on international projects. Our new IMG colleagues will also make a significant contribution here,' explains Rosner.

Successful Projects
Several of such projects came to a successful end in 2006. For example, a storage consolidation solution for Macedonian telecommunications provider AD Makedonski Telekomunikacii, the installation of an MPLS network for the Financial Agency in Croatia, a monitoring system for Andritz in Austria, and an SAP-based central finance information system for the Ministry of Education in Slovakia.

23 S&T Countries – Multinational Clients
After the integration of IMG, S&T has a presence in 23 countries with over 80 branches. This impressive geographical footprint and a clear focus on the CEE and DACH regions, but also Asia, is of great benefit to S&T's multinational clients, who require solutions for their international IT requirements. Rosner: 'International clients are our main focus in 2007. We are only one of few providers that have such a large international presence, which enables us to guarantee the same level of quality in all countries.'

p = planned

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