BEKO Holding AG

ots Ad hoc-Service: BEKO Holding AG Quarter 2/200

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    Vienna (ots Ad hoc-Service) -      In the second quarter of 2000,
BEKO Holding AG experienced a clear slowdown in its course of
business. The main reason for this development is, on the one hand,
the dramatic re- structuring of the Austrian banking system and, on
the other hand, the tight situation on the Austrian labour market as
regards the availability of qualified IT personnel and the consequent
massive increase in employment costs in this field. Because of the
complex market environment BEKO has to face in Germany, its German
subsidiary BEKO Informatik GmbH shows the greatest deviations from
the targeted goals.

    Credibility Problems in the IT Sector Due to the expectations concerning the impact of the so called Y2K problem on the sector which are today perceived as having been rather exaggerated customers exercised considerable restraint in relation to their EDP budgets. Since the predicted effects did not occur, the IT service sector is now facing severe credibility problems. Furthermore, the Austrian market was characterised by a remarkable degree of moderation in investment decisions for new IT projects on the part of large banks. This became particularly obvious in the preparations of the banks EDP departments in the fields of e-commerce and Internet banking. To date, BEKOs business planning was based on the assumption that the current developments would only temporarily obstruct policy-makers in their decisions, and that after the elimination of the IT credibility crisis, this "tailback effect" would result in an increased number of new projects. This justified our adherence to the planned targets.

    Dramatic Re-structuring of the Austrian Banking System The publication of the historic fact that in the future a significant part of the Austrian banking system will be managed from abroad, inevitably leads to the conclusion that in the future a major part of the investment decisions in the field of IT will also be taken outside of Austria. With the benefit of hindsight, this explains the remarkable reluctance in the awarding of projects in the first half of 2000 and implies that BEKO may no longer hope for a catching-up process but must expect a shift in projects.

    Outlook and Strategy

    These massive changes force BEKO even more radically to pursue its current policy of conquering new business areas. However, this induces considerable unbudgeted starting costs for occupational retraining, market development and the search for new partners. Thus, the targeted goals must be entirely re- defined and adjusted to the still unclear new situation on the Austrian market. The aim of the already initiated policy of forming strategic alliances in the first half of 2000, BEKO acquired an interest in and Call & Logistik Center GmbH is to combine swiftness, flexibility and risk minimisation. Further strategic participations will follow this year. In the course of the re-structuring measures within the German BEKO subsidiary BEKO Informatik GmbH, the search for (co- operation) partners will be further intensified. According to plan, investment costs for the establishment of the new business area "" have been incurred in the 2nd quarter of 2000. However, the first turnover from this area is already expected for the 3rd quarter. Currently, a comprehensive cost-cutting programme is being elaborated which will round off the re-structuring measures. The half year results of BEKO Holding AG are available in german and english under


    BEKO Holding AG - Investor Relations Dr. Max Höfferer e-mail: Tel: +43/1/79750-263, Fax: +43/1/79750-8004

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