Approval of interim management statement at 30 september 2008

Amaro (Udine), 14 November 2008

Consolidated revenues: +25% from € 50.22 million to € 62.81 million
Consolidated gross profit: +40% from € 24.78 million to € 34.68 million
Consolidated EBITDA: up from € -0.37 million to € 3.35 million
Consolidated EBIT: from € -3.60 million to € -2.49 million
Consolidated EBT: from € -2.71 million to € -4.97 million
Net financial debt: € -9.07 million

Today the Board of Directors of Eurotech SpA reviewed and approved the results relating to the first nine months and third quarter of 2008 and also co-opted three new directors.


In the first nine months of the year (9M08), Group sales revenues grew by 25% over the same period in 2007 (9M07), rising from € 50.22 million (mn) to € 62.81 mn. 9M08 results featured the change in the consolidation area due to acquisition of the Japanese Group Advanet, completed during the second half of 2007. By way of example, we point out that based on straight-line 9M07 exchange rates, consolidated revenues would have been € 67.20 mn and therefore would have shown total growth of 33.8% YoY.

Gross profit in 9M08 amounted to € 34.68 mn (+40% vs. 9M07) with a 55.2% margin on sales, with clear growth vs. 9M07 (€ 24.78 mn with a 49.3% margin on sales). This was by virtue of the combination of three main factors: business model followed by the Group, based on the sale of premium products; the contribution of the Japanese group, in terms of higher profit margins; and a decrease in COGS, thanks to the better integration and harmonisation of purchasing processes among the Group's affiliates.

EBITDA in 9M08 was positive by € 3.35 mn, with a tangible increase vs. € -0.37 mn in 9M07. EBITDA margin on sales also improved, rising from -0.7% to 5.3%. The corporate policy of integration between group companies and the consequent activation of synergies and economies of scale between the various affiliates, with special reference to the USA, has led to natural and tangible reduction of costs already as from this last quarter. Moreover, in 9M08 the higher revenues achieved also with higher margins led to better absorption, in outright terms, of operating costs, which in Eurotech’s case are prevalently fixed.

EBIT amounted to € -2.49 mn, with -4.0% margin on revenues, whereas in 9M07 it was € -3.60 mn with a -7.2% margin on revenues. 9M08 EBIT, even if better than 9M07 EBIT, was significantly affected by the non-cash effects of depreciation & amortisation of the PPA (purchase price allocation) relating to the acquisitions of Applied Data Systems Inc., the Arcom Group, and the Advanet Group: the negative effects of PPA amounted to € 3.50 mn in 9M08 and to € 1.69 mn in 9M07.

20081114a_cs_en.pdf : .pdf 0.2 MB Approval of interim management statement at 30 september 2008

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