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• 2011

S&T: Improved Operating Result in Q1 2011 from the Prior-Year Level

Earnings burdened by non-recurring restructuring expenses

• Revenue decline to EUR 66.1 million, down 8.3 % from the previous year
• Restructuring efforts show initial success, but require higher expenses and provisions
• Focus on long-term successful markets, discontinuation of loss-generating operations
• Comprehensive financing package for group financing implemented in Q1
• Turnaround initiated in Austria, initial success achieved
• Investor participation not yet finalized, increasingly hampers operational restructuring efforts and results in a deterioration of the market position and earnings prospects, especially in the second half of the year

The operating result (before restructuring costs) of the S&T Group in the first quarter of 2011 totalled EUR -3.0 million, an improvement from the prior-year performance of EUR -5.9 million, which also encompassed the results of the company’s business in the Ukraine and Moldova. There is no major change from the EBIT of EUR -2.9 million in the prior-year quarter which was reclassified pursuant to IFRS 5. This reclassification according to IFRS 5 of companies which were closed due to bankruptcy and eliminated from the scope of consolidation as “discontinued operations” means that the revenue and results of these companies are not included in the above-mentioned business results, and also have to be eliminated from the corresponding prior-year figures. As expected, restructuring costs negatively impacted earnings.

Group revenue in the first quarter of 2011 amounted to EUR 66.1 million. On the basis of the overall restructuring measures initiated in the previous year, savings could be realized for materials and staff costs in line with the revenue decline.

Positive developments in the restructuring process

In the first quarter far-reaching restructuring and reorganization steps were initiated, particularly at S&T Austria, which have already been communicated: In the financing package, it was agreed that the payment of the bonds due for redemption in 2011 will be delayed until April 1, 2012 for the time being, and the basis was created for concluding the intensive talks with investors which have been taking place. The aim of the Management Board is to successfully conclude the negotiations with potential investors as quickly as possible.

The main loss-making operations have either been terminated due to bankruptcy (Germany and Switzerland), redimensioned (Japan) or subject to restructuring (Austria). Initial savings could be achieved at the parent company. Non-recurring restructuring expenses arose in the first quarter for all the above-mentioned measures, which will first have a positive impact in subsequent quarterly periods. The restructuring expenses in 2011 primary encompass restructuring costs as well as extraordinary legal costs and other consulting costs at the parent company and to a lesser extent in Austria and Japan in connection with the financing package and preparations for the participation of an investor in the S&T Group.