S&T 4Q 19 - FY 20 guidance suspended, but 1Q seems on track so far
S&T's 4Q 19 EBITDA and profitability came in above our and consensus expectations, driven by a strong IoT Solutions | Europe result. This comes despite sales lagging the management forecast, our and consensus expectations. Profitability surged in 4Q, thanks to improvements from the PEC efficiency programme and despite about EUR 2.1 mn restructuring cost and FX effects. On the back of higher D&A, the beat on net income was less pronounced. On a FY 19 basis, S&T posted 6% organic revenue growth, excluding new and discontinued businesses. S&T recorded improving margins in its Service and IoT Solutions business in Europe, with EBITDA profitability net of headquarter cost up yoy to 4.9% and 15.6%, respectively, according to our calculations. Only IoT Solutions | America remained a laggard, with new orders not yet making up for the loss of two large customers and restructuring cost burdening results.S&T AG is an Austria-based supplier of information technology (IT) solutions, specializing in Industry 4.0, embedded computer systems and Internet of Things (IoT) technology. The Company operates through three segments: IT Services, which handles the end-to-end realization of IT projects, from planning (consulting), through implementation (integration) to long-term operation (outsourcing); IoT Solutions, which focuses on the development of IoT and Industry 4.0 solutions combining hardware, middleware and services marketed to the industrial automation, medical technologies, infotainment and smart energy sectors, and Embedded Systems, which provides hardware featuring embedded technologies used by the transport, aviation and communication sectors. The Company is a full-service-provider of IT services in Central and Eastern Europe. Its core markets are Germany, Austria, Switzerland, Eastern Europe and North America.
The Institutional Equity Research team of Raiffeisen Bank International AG covers 85 stocks from Austria, Central & Eastern Europe with sell-side research and thus levers our local broker status with excellent company relationships. For corporates in Austria, CEE and Western Europe, we offer co-sponsored research, which includes research coverage and marketing activities to investors. Additionally, through our Spotlight Research product we also shed light on leading European small and micro-caps, seeking greater visibility with investors.
The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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