Very good progress

SURTECO AG impressively reaffirmed its leading market position worldwide as specialist for surface technologies in the first half of 2007 with an increase in sales of 2 % to € 209.1 million and a significant rise of 10 % in consolidated net income to slightly in excess of € 16 million. The Group is among the leading suppliers of products such as decorative papers, flat foils and edgebandings to the construction and furnishing industries and these results continue the good track record of results from the previous year. SURTECO AG finished the fiscal year 2006 as the best year in the company’s history with sales of € 403.2 million (+2 %) and consolidated net income of € 28.8 million (+32 %).

SURTECO AG has grouped the activities of the Döllken Group in the Strategic Business Unit (SGE) Plastics and the results of this business unit are particularly gratifying. Sales rose by 7 % in the second quarter alone. Sales for the half year amounted to € 122.2 million, 4 % above the equivalent year-earlier figures. Domestic business again played a tangible role in this performance, benefiting from a particularly good first quarter (+7 %) and increasing sales to German customers to € 43.8 million. The performance of product segment plastic edgings generated significant momentum for the SBU Plastics. SURTECO AG is a world leader for plastic edgings and again succeeded in increasing an already high level of sales by 9 %.

The business with coating products applied to papers for technical applications (e.g. flat foils for the furnishing industry) continued to present difficulties. SURTECO AG operates this business segment in the Strategic Business Unit (SBU) Paper. While the Group mainly advanced with the SBU Plastics abroad (+6 %), sales for the half year generated by the SBU Paper at € 86.9 million lagged 2 % behind the comparative sales for 2006 on account of a decline in sales for individual foreign markets. Although the Group succeeded in stabilizing paper sales at € 32.3 million, the sustained downward price spiral, in particular for pre-impregnated foils, has been exerting a strong negative impact on the business. However, SURTECO AG is not dismayed by the situation, rather it is responding to the situation with innovative specialist solutions and high levels of quality. Bausch Decor GmbH is a member of the SBU Paper and the company is demonstrating that “specialization at a high level is the right strategy by increasing foreign sales in specialist printed decorative papers for the first half of 2007 by 21 %, even though the market environment is generally fraught overall.

The very gratifying performance of SURTECO AG overall during the first half of the year is more than confirmed by the disproportionate growth in figures for earnings: EBITDA went up to 8 % to € 39.2 million. EBIT rose from € 27.2 million to € 29.9 million. The group of companies is making very good progress with a return on sales of 12.5 % and 10 % increase in consolidated net income and looks set to continue this trend through to the end of the year. Provided that there is no change in the key framework conditions for SURTECO AG, the Group is likely to again improve on the previous year’s figures for sales and income to report another set of “record figures”.

The performance of SURTECO AG, which some time ago increased the free float from 19.9 % to 23.7 % in order further open up the opportunities presented by the equity market, has also been rewarded by the stock market: The SURTECO share was listed with a price of € 40.20 on 29 June 2007, 23 % up on the price quoted at the beginning of the year.

At the Annual General meeting on 31 August, the Board of Management and Supervisory Board will propose to the shareholders a 25 % increase in dividend for 2006 to € 1.00. SURTECO AG is not only acknowledging the gratifying performance in the previous year but also taking account of the positive trend during the current fiscal year.