Pulp & Paper News

SURTECO 1H 2014 results: EBITDA up 50% from year ago to Euro 39.6 million

BUTTENWIESEN-PFAFFENHOFEN, Germany , Aug. 14, 2014 (Press Release) - 

  • Sales at the Group rose by 59 % to 315.3 million euros
  • EBITDA increased by 50 % to 39.6 million euros - consolidated net profit went up by 60 % to 12.8 million euros

  • Integration of Süddekor continues apace

  • Outlook for 2014 confirmed

SURTECO SE - one of the world's leading manufacturers of decorative surface materials - continued to post a high level of dynamic growth after the first six months of the business year 2014. A key factor in the 59 percent increase in sales to 315.3 million euros (first half of 2013: 198.4 million euros) was the consolidation of the Süddekor Group taken over at the end of 2013. However, modest organic growth was also generated. The Group also increased its profit. Earnings before interest, tax, and depreciation and amortization (EBITDA) climbed by 50 % from 26.4 million euros to 39.6 million euros by the end of the first half year. Consolidated net profit rose by 60 % to 12.8 million euros (1st half of 2013: 8.0 million euros).

"Even after six months, we can be satisfied with the development of our indicators for 2014, even if the framework conditions have not been conducive to assisting our endeavours. The integration of Süddekor is proceeding as planned", stated the Chairman of the Board of Management of SURTECO SE, Friedhelm Päfgen.

Organic growth in both business units

The increase in sales of 144 % to 200.4 million euros in the paper segment was primarily due to the Süddekor takeover, with organic growth also going up by 2.2 %. Although the Business Unit Plastics remained slightly below the level of the previous year at 114.9 million euros in the reported sales, adjusted by the divested cladding business of the Vinylit GmbH it also posted an increase of 2.4 %. Earnings in both segments similarly showed increases over the amounts for the previous year. The disproportionately lower increase in earnings per share from 0.72 euros to 0.83 euros is explained by the capital increase carried out in November 2013.

Free cash flow increased by 79 % to 11.1 million euros

Since Süddekor was already consolidated in the balance sheet at the close of 2013, there have been no major changes on this front. The equity ratio at 48.5 % (end of 2013: 49.7 %) continues to remain robust alongside the gearing (level of debt) at 50 % (end of 2013: 49 %). The platform for this was a stable development of net financial debt (first half of 2014: 153.8 million euros compared with 151.2 million euros at 31/12/2013). The good earnings performance is also reflected in the free cash flow, which went up by 79 % from 6.2 million euros to 11.1 million euros.

Forecast for 2014 confirmed - uncertainties about the impact of the Ukraine crisis

SURTECO SE is continuing to operate in a difficult environment with the focus on customers in the furniture industry. Nevertheless, the company holds to its forecasts given in April 2014: Consolidated sales are projected to increase to 630-640 million euros (2013: 404 million euros). Potential impacts on business in Eastern Europe as a consequence of the deteriorating crisis in Ukraine cannot be predicted at present. Nevertheless, pretax earnings (EBT) are projected to increase significantly compared with the previous year. The pretax earnings of the previous year (28.1 million euros) were defined by a positive one-off effect amounting to 13.5 million euros from the purchase-price allocation of the Süddekor companies.

This forecast does not include restructuring expenses which arise from relocating the printing activities of Süddekor GmbH, Laichingen, to the Buttenwiesen site. The conditions for creation of provisions are not yet in place.

The integration of Süddekor is proceeding in accordance with expectations.

A uniform sales structure has been implemented, and as planned a start has been made on the concentration of the Group's printing activities at the Buttenwiesen site. The first synergies from the merger of the printing activities will flow into consolidated earnings starting in 2015.

Profile of SURTECO

SURTECO SE, Buttenwiesen-Pfaffenhofen, is a leading international specialist for surface technologies. The product portfolio includes papers printed with decorative designs, impregnated products, release paers, decorative flat foils and edgebandings based on specialist papers for technical applications and plastics. The extensive product portfolio is completed by skirtings made of plastic, technical extrusions for industry and do-it-yourself ranges and shutter systems.

The Group currently has a workforce of appr. 2,700 and manufactures at 21 sites on four continents, currently generating approximately 30 % of sales in Germany, 45 % in European countries outside Germany and the remainder in America, Asia and Australia. Customers of SURTECO generally come from the wood based materials, flooring and furnishing industry and the interior industry.

The shares of SURTECO SE are listed on the official market (Prime Standard) of the Frankfurt and Munich Stock Exchanges under the ticker symbol SUR and ISIN DE0005176903. They are also traded on the stock markets in Berlin, Düsseldorf, Hamburg, Hannover and Stuttgart. The stock is listed on the SDAX of Deutsche Börse.

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