SURTECO has made good provision for further growth

Although the turbulence due to the subprime crisis has been exerting an influence on the business performance of SURTECO SE, the surface specialist has succeeded in again increasing sales and earnings during the past year. The leading global manufacturer of surface materials based on plastics and technical papers, completed 2007 with consolidated sales amounting to € 414.5 million (+ 3%) and earnings outperformed the comparable figures for the previous year with an EBIT of € 55.5 million (+ 3%). Although a best-case scenario for 2008 entails only moderate growth due to the negative effects triggered by the US recession and the ongoing downward pressure on export business exerted by the strong euro, SURTECO SE intends to continue its unbroken 15-year record of profitable growth over the medium term. The Group is the leading supplier for interior design and the furnishing industry as a full-line supplier of high-quality, decorative surfaces comprising edging strips and flat foils. By 2011, SURTECO SE would like to increase sales to about 800 million euros and the EBITDA margin from the current 18 percent to more than 20 percent.

Local presence in key markets

SURTECO SE generates 65 percent of its business abroad and entered key future markets at the right time. This presence has enabled the Group to effectively counter the difficult market conditions in North America where sales are currently declining. For example, business volume in the Asia/Pacific area increased by eight percent in 2007 and already accounts for nine percent of sales at the SURTECO Group. This confirms the company’s strategy of having in-house sales structures in the relevant regions. The takeover of the sales company SDCA S.A.S. should also be seen in this context. This has enabled direct access to be established with the French furnishing industry. Acquisition of the skirtings and edging systems from the Gardinia Home Decor Group strengthens the position of the Group in the key future markets of Eastern Europe. An in-house sales company has been established in Turkey to meet the demands of booming development in Turkey.

Renewed dividend increase

The shareholders are also entitled to participate in the gratifying business performance of SURTECO SE achieved in spite of difficult macroeconomic conditions. Shareholders enjoyed a dividend increase of 25 percent to € 1 per share for the financial year 2006, and the dividend is to be increased again by a further 10 percent to € 1.10 per share. This represents a payout rate of nearly 39 percent. The ultimate aim is for the SURTECO share to achieve a listing in the SDAX Index and the share continues to represent a “good deal” over the long term: Assuming an initial share portfolio of € 10,000 (converted) purchased 14 years ago, the shares would have yielded an average annual return of nearly 30 percent for growth in value + dividends.