S&T System Integration & Technology Distribution AG: Improved operating result from the prior-year

Earnings burdened by non-recurring restructuring expenses

Vienna (pta033/30.06.2011/16:55 UTC+2) Highlights
* Revenue decline to EUR 66.1 million, down 8% 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 - Reductions in individual working capital financing mean increasing limitations to the operating business.
* Turnaround initiated in Austria, initial success achieved. However, earnings of several CEE countries remained below the prior-year quarter.
* 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.

Results

in EUR million	Q1 2011	Q1 2010 **	Q1 2010***
Revenue	66.1	82.7	72.1
Operating result*	-3.0
EBIT	-6.8	-5.9	-2.9

* Before restructuring expenses
** Revenue/earnings in 2010 as announced in the first-quarter report
*** Reclassified pursuant to IFRS 5

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 negotiations with potential investors which have been taking place.
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.

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.

The operating result (before restructuring expenses) 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.

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.

The Report on the First Quarter of 2011 will be published on July 15, 2011.

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