DGAP-News: SURTECO GROUP SE: with positive result in the second quarter despite significant negative impacts from the Covid-19 pandemic

SURTECO GROUP SE with positive result in the second quarter despite significant negative impacts from the Covid-19 pandemic

Buttenwiesen, 12 August 2020 - The lockdowns in important sales markets on account of the Covid-19 pandemic have exerted an influence on the sales performance at SURTECO GROUP SE. Sales for the half year at € 297.1 million were consequently 16 % lower than the year-earlier value (€ 352.7 million). Adjusted by currency effects and the impregnating business disposed of in July 2019, the comparable deficit was 11 %. In view of the falling costs of raw materials and a high level of cost flexibility, e.g. as a result of utilizing short-time working, the Group succeeded in achieving earnings before financial result, income tax and depreciation and amortization (EBITDA) of € 35.2 million (Q2-2020: € 11.4 million) and an operating result (EBIT) of € 14.4 million (Q2-2020: € 1.0 million). In spite of the crisis-related burdens, SURTECO posted positive free cash flow of € 8.6 million (H1 2019: € 16.4 million) at the half year. Cash flow from investment activity amounting to € -20.0 million (H1 2019: € -17.5 million) also includes acquisition of the remaining 15 % shareholding in the Nenplas Group and sale of shares in Canplast Mexico. Demand is projected to gather pace again in the second half of the year, though this is likely to be below the equivalent year-earlier level. Thanks to the high quality of the balance sheet and liquidity of more than € 100 million, the company regards itself as being in a good position.

"SURTECO successfully introduced all the measures necessary to protect its employees against the Covid-19 pandemic and to preserve a solid financial platform. This enabled us to report a further sound performance for earnings and free cash flow for the half year. We hope that business will once again gradually gather pace in the second half of the year if the situation does not begin to deteriorate once more," commented Wolfgang Moyses, Chairman of the Management Board of SURTECO GROUP SE, on the situation.

Varying development in the segments

The negative impacts caused by Covid-19 resulted in a tangible setback in sales from € 253.7 million to € 214.6 million in the Segment Decoratives. The segment EBIT fell back from € 17.3 million to € 10.4 million. Conversely, the Segment Profiles succeeded in bucking the crisis trend, with sales increasing by 5 % to € 49.6 million (H1 2019: € 47.2 million). EBIT also rose from € 5.0 million to € 5.1 million. In the Segment Technicals, sales came down from € 51.8 million to € 32.9 million. This was the result of the pandemic-related decline in demand and to the disposal of the impregnating business (year-earlier contribution to sales € 15.3 million). However, improved cost efficiency enabled segment earnings to increase from € 1.1 million to € 1.8 million.

Outlook for 2020: Upturn in demand anticipated in the second half of the year

Thanks to early implemented countermeasures, a slightly positive operating result was achieved in the second quarter despite the effects of the Covid-19 pandemic. Although a gradual upturn in demand is expected for the second half of the year, this is unlikely to achieve the level prior to the crisis. Insofar, the company continues to assume that sales and operating result for the full year will be significantly below the original targets of € 675 to 700 million and € 40 to 45 million as already announced at the end of April.

You will find the Half-Year Report for the year 2020 and other information about SURTECO GROUP SE on the Internet at www.surteco-group.com.

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Profile of SURTECO

SURTECO GROUP SE with registered office in Buttenwiesen is a mid-sized holding company with international operations. The company listed on the stock exchange combines leading national and international brands for surface technology under one roof. The comprehensive product portfolio includes papers printed with decor designs, impregnated materials, release papers, decorative flat foils and edgebandings based on specialist technical papers and plastics. This portfolio is complemented by skirtings made of plastics, technical extrusions (profiles) for industry, and roller shutter systems. With more than 3,100 employees at 22 production sites worldwide, the Group generates annual sales of around EUR 675 million in 2019. 25 % of these sales are generated in Germany, 47 % in European countries outside Germany and a further 28 % in America, Asia and Australia. Customers of the SURTECO Group primarily come from the wood-based, flooring and furniture industries, as well as from interior design.

The shares in SURTECO GROUP 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 and Stuttgart.

Cautionary note regarding forward-looking statements

This press release may contain statements of future forecasts or expectations and other forward-looking statements and involves known and unknown risks and uncertainties. There is therefore no guarantee for the statements and expectations expressed herein. The actual results and developments may differ substantially. The company assumes no obligation to update any forward-looking statements contained herein or to adapt such information to future results or developments.

Important indicators of SURTECO GROUP SE (in € million)

(1) Since July 2019 without Sales from sold impregnation business

(2) Difference to balance of segment earnings due to internal clearing

(3) Based on a number of shares amounting to 15,505,731

(4) Net financial debt to Equity