Another record year planned for 2007

SURTECO AG, leading manufacturer of surface materials based on plastics and technical papers for the international building and furnishing industry, ended the fiscal year 2006 with new sales and earnings records. Consolidated sales revenues broke through the € 400 million barrier at € 403.2 (+2 %) for the first time. Pre-tax profit increased by 23 % to € 46.0 million. Hence a proposal for a 25 % increase in dividend to € 1.00 will be submitted to the Annual General Meeting on 31 August 2007. The Board of Management of SURTECO AG is assuming that sales and earnings will again increase in the fiscal year 2007.

The Chairman of the Board of Management of SURTECO AG, Friedhelm Päfgen, expressed appropriate satisfaction: “2006 was a good year for SURTECO AG. Sales and earnings were increased to a record level. Return on sales was also gratifying at 11.4 %. In view of the respectable start to the new fiscal year, we are confident that we can make further progress over the course of 2007.”

Sales growth of average 18.5 % since 1993 The improvement in sales of around 2 % to € 403.2 million should be regarded as a significant success. Although the German furnishing industry was able to post an increase after four years of negative growth, there were still no signs of consistent and sustainable upswing. Since 1993, the company has reported average annual sales growth of 18.5 %. Despite increasing pressure in the market, SURTECO AG succeeded in increasing domestic sales to € 145.6 (+ 2 %) and this continues to represent 36 % of total business. Foreign business also advanced by 2 % to € 257.6 million. Slight setbacks in North America and Asia were balanced by increases in the European core markets. The Strategic Business Unit (SBU) Plastics achieved an increase in sales of 3 % to € 231.3 million. While foreign markets grew by 5 %, sales within Germany remained at the year-earlier level due to strategic streamlining of the product portfolio in the do-it-yourself retail trade. Although the market environment has become much more difficult as a result of increasing competition, most importantly in the area of preimpregnated flat foils, the SBU Paper succeeded in almost matching the previous year’s sales at € 171.9 million.

Return on sales 11.4 % During the year under review, SURTECO increased EBITDA – Earnings before Interest, Income Tax, Depreciation and Amortization went up from € 69.1 million to € 71.7 million. EBIT – Earnings before Interest and Income Tax – increased by € 2.8 million to € 54.1 million. Earnings before Income Tax (EBT) for the SURTECO Group amounted to € 46.0 million for 2006 after € 37.6 million in the previous year. The increase of 23 % is another best result for the Group in the company’s history. Even taking restructuring expenses of € 3.8 million into account from the previous year, an increase in profit of 11 % was reported. Overall, consolidated net income after taxes rose by 32 % to € 28.8 million. Net income per share (earnings per share) climbed from € 1.97 to € 2.60.

Balance sheet structure further improved SURTECO succeeded in continuing to improve the key balance-sheet indicators in 2006. Net financial liabilities were reduced from € 134.6 million to € 127.8 million. The gearing, or level of debt, came down from 90 % to 77 %. The equity ratio also improved significantly from 40.2 % to 44.4 %. Operating cash flow increased by € 4 million to € 66.6 million. The shareholders of SURTECO AG should also benefit from the favourable development of business. The Board of Management and Supervisory Board will therefore propose to the Annual General Meeting to be held on 31 August 2007 that the dividend payout is increased by 25 % to € 1.00 per share. SDAX listing remains important corporate goal After the increase in free float from 7.6 % to 14.5 % in the previous year, shareholders also continued to reduce their shareholdings over the course of 2006, in order to increase the liquidity of shares. At the end of the year under review, the free float was 19.9 %. In order to achieve the medium-term aim of a listing in the SDAX, the free float needs to increase further, despite the rise in market capitalization to around € 440. Measures are being planned in this respect for 2007. Further potential for 2007 SURTECO got off to a good start in the new fiscal year 2007. Apart from the slight increase in sales, earnings underwent above-average increase during the first quarter. Detailed figures will be communicated on 11 May 2007. SURTECO AG will derive reasonable benefit from the positive overall economic development in the fiscal year 2007 and the anticipated growth in the furniture and construction industries. We are also assuming that sales will again undergo a moderate advance in 2007. However, this will only occur if the price situation on the raw materials markets and in the energy sector remains relatively stable and development in the foreign-exchange markets does not exert a negative effect on economic performance. It should also be possible for the consolidated result to exceed the result for the previous year, due to consistent implementation of all the internal measures directed towards minimizing costs and increasing efficiency.