04.11.2014 | Austria
S&T AG registers strong growth in the third quarter of 2014 – record amount of orders on hand promises further rise in 2015- Consolidated income for the first three quarters of 2014 increases to EUR 7.4 million (2013: EUR 6.2 million)
- Sales climb to EUR 253.6 million (2013: EUR 238.3 million)
- Highly-profitable Appliances technologies segment grows by 66%
S&T AG (www.snt.at) accelerated its growth during the first nine months of the 2014 financial year. Its revenues for the third quarter came to EUR 88.8 million (2013: 80.7 million). Its revenues for the first nine months amounted to EUR 253.6 million (2013: EUR 238.3 million).
The positive ramifications of cost-cutting measures and improvements rendered in processes increasingly manifested themselves in the results achieved. The EBITDA in the third quarter came to EUR 5.2 million (2013: EUR 4.4 million); for the nine months, to EUR 15.1 million (2013: EUR 12.5 million). Consolidated income in the third quarter amounted to EUR 2.4 million (2013: 2.1 million). The total for the three quarters was EUR 7.4 million (2013: EUR 6.2 million). The achievements caused the key indicators of earnings to rise by 20% on a y-on-y basis. The earnings per share for the nine months came to 17 cents, as opposed to 15 cents in the previous period of comparison.
Driver of growth was once more the Appliances segment. Its sales for the first nine months rose by EUR 18.2 million to EUR 45.7 million (2013: EUR 27.5 million). This partially ensued from the acquisitions made in 2014 of companies operating in the smart energy sector. The Services Eastern Europe segment registered convincingly steady growth. Its sales rose by EUR 3.1 million to EUR 144.4 million (2013: EUR 141.3 million). The positive development of both segments more than offset the drop in sales registered by the Services in Germany, Austria and Switzerland (formerly Products) segment. This drop was a product of corporate strategy, and was induced to yield rises in average margins. The sales achieved by the latter segment amounted to EUR 63.6 million (2013: EUR 69.4 million).
The gross margin has developed gratifyingly well in financial year 2014, increasing from 32.5% to 33.5%. This rise is attributable to two effects. One of them is the strong, 66% rise in sales achieved in 2014 by the high-margin Appliances technologies segment. Driven by the new Smart Energy business area, this segment's growth – expressed in absolute terms – will be even greater in 2015. The second effect is that of the purposeful implementation of the “Red Flag” program. This program complements or replaces on a step-by-step basis sales earned from hardware featuring especially low margins with those from services. The implementation of this program is already achieving its intended effects: gross margin rose from 19.6% to 23.1%. Further increases are expected for the future. The gross margins achieved by the Appliances (55.8%) and Services Eastern Europe (31.0%) segments were stable.
Operative expenditures were also further optimized. Costs had amounted in the first nine months of 2013 to a mere 31.7% of the sales (EUR 75.5 million). This percentage was further improved upon during the first nine months of 2014 by 0.9 percentage points, and thus amounted to 30.8% of sales (EUR 78.2 million).
S&T's assets, finances and liquidity continue to be stable and to evince the company's potential for further growth. As of September 30, 2014, its liquid funds came to EUR 33.4 million (31.12.2013: EUR 42.9 million). The Group's net liabilities amounted to EUR 10.6 million (31.12.2013: EUR 9.3 million). Equity increased as of 30.09.2014 to EUR 90.7 million (31.12.2013: EUR 71.2 million). This boosted the equity rate to 37.4% (31.12.2013: 32.4%).
As of the end of the third quarter of 2014, S&T's orders on hand came to a record EUR
157.3 million – up from the EUR 106 million three months ago. Overcoming the decline in sales experienced by the Products/hardware segment, expected for 2014 as a whole are record consolidated sales of at least EUR 375 million, a 10% y-on-y rise. This will be powered by an all-time corporate best fourth quarter. Consolidated income is set to outpace that. It is expected to exceed EUR 12 million for the year. This is a strong rise over 2013's adjusted result. S&T's gratifyingly large amount of orders on hand is leading its management to forecast the Group's achieving in 2015 a 20% rise in sales, which will come to some EUR 465 million.
About S&T AG
S&T AG (www.snt.at, ISIN AT0000A0E9W5, WKN A0X9EJ, SANT) is listed on the Prime Standard segment of the Frankfurt Stock Exchange. S&T's some 2,200 employees staff subsidiaries and offices in 20 countries. S&T has a wide-ranging portfolio of products and services. Many of them feature proprietary technologies. These are in the cloud, security and mobile IT solutions sector. This portfolio is supplied throughout the Central and Eastern Europe region. In 2014, S&T entered the “smart energy” market. S&T's successful development of the market has been driven by the taking of a 40% stake in the California-based Networked Energy Services Corp.