EMTS Technologie AG
EMTS Technologie AG part 1
EMTS AG: Part 1 of 2
Ad-hoc-announcement processed and transmitted by DGAP.
The issuer is solely responsible for the content of this announcement.
——————————————————————————–
Part 1 of 2:
“Additional Informations to the Ad-hoc 10-2003 from April 24, 2003”
Dear Shareholders,
2002 was extremely difficult and unpleasant for EMTS Technologie AG. The
negative market situa-tion in the field of mobile telecommunications, such as
overly saturated markets, few new products/services emerging and delays
encountered in introducing UMTS, additionally intensified due to a persistent
weakness on the markets throughout the economy, and this had a sustained,
negative impact on the company. Likewise, operators have largely restricted
their highly subsidized sales programs due to a lack of attractive products
and, therefore, poorer revenue growth; a further decline in sales of mobile
phones was inevitable. The service market was also hard hit by this negative
trend; there were fewer products to service, there was more competition due to
oversupply on the service market, further fueling the ongoing crowding-out
effect as the necessary market con-solidation in the service and repairs
industry failed to fully eliminate prevailing excess capacities.
An additional burden to this extremely difficult market situation was a sharp,
unforeseeable decline in margins for services provided by mobile phone
manufacturers who wanted to check the decline in earnings attributable to poor
revenue figures. However, this resulted in an enormous additional burden on the
service providers’ profits since a speedy response to such developments is not
possible in the highly labor-intensive service division.
Being the service leader in its markets, the impact of all these negative
developments was particu-larly severe on EMTS Technologie AG. Moreover, apart
from the generally poor market develop-ment in 2002, EMTS was affected by the
following changes:
* Termination of agreements with Nokia and Sony Ericsson
* Closure/insolvency/liquidation of several subsidiaries, and sale of shares
* Enormous changes in financial statements
* Significant reduction in revenues and workforce
* Adaptations to the structure of the company headquarters
* Discovery of accounting discrepancies in fiscal 2001
* Audit certificate revoked for 2001 financial statements
* New Board of Management and new Supervisory Board
The company’s results for fiscal 2002 were as follows:
> Revenues Eur 126.6 million
> EBITDA minus Eur 36.1 million
> Loss per share Eur 20,50
> Net loss for the year under review Eur 119.2 million
The revised results for fiscal 2001 following the discovery of accounting
discrepancies and revocation of the audit certificate are as follows:
> Revenues Eur 161.0 million
> EBITDA Eur 19.8 million
> Earnings per share Eur 0.72
> Net profit for the period under review Eur 4.2 million
The results reported by EMTS in the previous year for 2001 were as follows:
> Revenues Eur 163.1 Mio.
> EBITDA Eur 22.8 Mio.
> Earnings per share Eur 1.13
end of ad-hoc-announcement (c)DGAP 08.05.2003
Issuer’s information/explanatory remarks concerning this ad-hoc-announcement:
Termination of the Nokia and Sony Ericsson agreements, and the consequences
Nokia, EMTS’ biggest customer with a share of revenues exceeding 50%,
terminated its coopera-tion agreement, which led to severe business
difficulties for most of EMTS’ subsidiaries as it was not possible to switch to
other products/services at such short notice. The withdrawal by Nokia took
place in steps and in different timeframes per country, by March 2003. As a
result, the subsidiaries in France, Switzerland and the Netherlands had to file
for insolvency. In March 2003 this step like-wise became inevitable in Austria,
Norway and Sweden. This dramatic development is just as painful for the
company as for its employees and, of course, its shareholders. The search is
still under way for a purchaser of the company’s Estonian operations, failing
which preparations are being made for liquidation. This company had little
Baltic business of its own but primarily served as an extended, “low-price
workbench” for the countries of Sweden and Norway.
This situation also induced Sony Ericsson to terminate its service agreement
with EMTS Technologie AG, causing a further loss of revenues that was likewise
impossible to absorb by finding other products/services. The countries of
France, Austria and Norway were particularly affected in the process.
Within the scope of its personal contacts and presentations, the management has
made great efforts to sell the respective companies. As excess capacities
continued to prevail, however, this was only possible in Monaco, where the sale
of the 51% shares to minority stockholders was brought to a successful
conclusion, as was the case in Finland in 2003.
The subsidiary in Denmark has also been seriously impacted by the 40% loss in
revenues due to Nokia terminating its agreement; however, the management is
making an effort to secure the loca-tion with other strategic partners and
potential new customers. A sale or shift of repair resources is also still
possible.
The core countries
Following the reorganization, above all Italy, Spain and Germany remain the
core countries of EMTS Technologie AG. They operate successfully amid stable
revenues and positive EBITDA and cash flows and are performing according to
schedule. All three countries managed to cope with the loss of the Nokia and
Sony Ericsson contracts quite well as the respective portion of revenues was
not as high as in the other countries. The key contracting partners in the core
countries are Siemens, Motorola, Telefonica, and Telecom Italia.
The management is convinced that it will be able to continue operating in these
countries successfully with a low level of administrative overheads at the
company’s headquarters. To what extent Denmark will also belong to the core
countries in future remains to be seen in the next several weeks.
Further measures adopted by the management
In addition, resources at the company headquarters in Elsbethen/Austria were
adjusted accordingly to take account of the necessary downsizing of its
structure. In addition, enormous changes were made to the financial statements,
among them goodwill and amortization thereof, loans to associated companies and
valuation adjustments to receivables from customers and inventories. It was
important above all to minimize the adverse effects of the
closures/insolvencies and cash-out, liability, etc. or avoid these impacting on
EMTS Technologie AG.
Adjustment of leverage structure
Fortunately, it was possible to reach appropriate agreements with the banks to
restructure the company’s borrowed funds and make necessary payment deferrals
in line with its new financial status on account of the amortization of
goodwill, the companies referred to above, the strained liquidity position of
the Group as a whole and the loans to operations in the countries listed above.
As a result, despite the already existing 60-day time limit according to
insolvency law it was possible to prevent the company both from becoming
overindebted and illiquid. We would like to take this occasion to thank all
those responsible for their highly positive cooperation in recent months.
Revocation of audit certificate for 2001
A very unpleasant factor for the company was the revocation of the audit
certificate for the 2001 annual financial statements on account of
discrepancies determined (revenues, earnings, man-agement policy) by the
appointed auditor, Deloitte & Touche, in January 2003. This had a decisive
influence on the preparation of the financial statements for 2002 and on the
chronological sequence of the necessary steps to be taken, which ultimately had
to lead to substantial delays. All steps under criminal and securities
supervisory laws were initiated or taken by the Board of
Management/Supervisory Board on the basis of the available expert opinions.
Further proceedings under civil law still remain to be settled, not least for
budgetary reasons.
——————————————————————————–
WKN: 616516; ISIN: AT0000926266; Index: SWX New Market
Listed: Swiss Exchange; Freiverkehr in Berlin-Bremen, Frankfurt, München und
Stuttgart
081324 Mai 03
Aktuelle News
Aktuelle Berichte
Keine Berichte gefunden
Anstehende Events
Keine Events gefunden
Webcasts
Keine Webcasts gefunden