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S&T Closes its Business Year 2007 with Record Results

EBIT Target Reached

The S&T company amounted total sales of more than 524 million Euros (+14%), and also achieved its EBIT goals of ~13 million Euros. 45% of S&T Group sales are now generated with consulting and services, a field which will be consequently developed further. Despite the difficulties in the stock market, the S&T share has performed – the share price at the end of the year 2007 was 18% higher than at the beginning of the year. S&T concluded the stock exchange year 2007 with a market capitalization of 167 million Euros, compared with 140 million Euros at the beginning of the year.
For 2008, S&T is expecting sales of 560 to 580 million Euros and an EBIT of 15 to 17 million Euros. The number of employees increased in 2007 by 37% to 3150; in Serbia this number is above 100.
"All in all, 2007 was a very successful business year for us. We’ve recorded growth in all business parameters: revenue, EBIT, quality of service, number of customers, share price, number of employees. Numerous successfully realized projects have contributed to such good results; I will list the most important ones: in public sector, big projects are realized with Public Enterprise of PTT Communications "Srbija" and Mihajlo Pupin Institute (SAP implementation projects), in the telecommunication sector there were projects with Telenor, Telekom Srbija, and SBB (Serbia BroadBand). In addition, S&T Serbia won Diskobolos award for first SAP CRM implementation project in the country in SBB (biggest cable operator in Serbia). Also, business solutions implementation projects were concluded, such as SAP implementation project in Direct Trade, Infor ERP solution in Sojaprotein, WMS solution in companies Milsped and Jugohemija.
The part of the company whose main focus are IT solutions for financial institutions (firm merged by acquisition) is now completely incorporated in S&T, and now represent a well-organized and consolidated entity, providing even better quality of service for banks and insurance companies.”, said Mr. Predrag Vraneš, managing director of S&T in Serbia.
"The advantages provided by our unique geographical location, the development of our business and capabilities across borders, as well as the consequent implementation of our strategy have all made a positive contribution to our results", explained Christian Rosner, S&T's CEO.

Business Solutions Sales Increases

The Business Solutions and Managed Services sectors were intensively developed and brought in the desired results. On the international level, the sales in the Business Solutions area grew by 60% in 2007 to 150 million Euros. In the meantime S&T has become a leading SAP consultant in Central and Eastern Europe (CEE) and in the DACH region (Germany, Austria and Switzerland). Important contracts, such as the Fejerviz water works in Hungary, the soya bean processor Sojaprotein in Serbia and A&D Pharma in Romania formed the driving force in this business sector. In the Managed Services sector, S&T experienced an organic growth of 16% to 87 million Euros. S&T has established itself above all as a supplier of Managed Desktop Services and was awarded several million-Euro projects, such as for the OMV and the Ministries of Defense in Slovakia and the Czech Republic. Combined, these two sectors together make up 45% of total sales. In the Enterprise Systems sector, S&T concentrated in 2007 primarily on high margin contracts, which, in turn, generated further service projects. Consequently, this led to business in this segment, such as server virtualization and harmonizing IT infrastructure, being pulled along due to the knock-on effect. Amongst others, S&T successfully undertook projects for ORF (Austrian television), Ukrainian High Technologies and Vitana in the Czech Republic. As expected, the Enterprise Systems sector developed constantly to produce sales of 287 million Euros.

Focus on Growth Industries, Technologies and Regions

In 2007, S&T increased its business in those areas in which the company has extensive know-how and international specialists. Projects in Financial Services, Manufacturing and the Retail trade stood in the foreground and were carried out both locally and internationally. In addition, S&T extended its portfolio of partners with JDA Software, thus acquiring a powerful and renowned ally. S&T developed its Competence Centers for key technologies in several regions, increasing the know-how and operative support available for the whole S&T Group. At the same time, these competence centers strengthen S&T's regional presence.

2008: Earnings in Double Figures Expected

S&T's order pipeline is well filled – the company will continue, also by means of further acquisitions, with its undiminished growth. For 2008, S&T expects sales of 560-580 million Euros and an EBIT of 15-17 million Euros, thereby continuing to grow significantly more than the market. "We are convinced that IT expenditure for high quality consulting and service solutions will continue to rise in CEE. We can continue to develop further by making optimal use of our unique geographical presence, our skills and resources and the integrative synergy“, said Rosner. "In addition, we have a stable risk structure, which makes us relatively independent of the current economic and political circumstances. Through our concentration on local and international customers, we have developed a balanced client structure, with our sales distributed evenly across all our customers. None of our customers generates more than 4% of our sales. In other words we are well positioned“.