SURTECO SE looks to its robust financial structure in difficult times

The global economic and financial crisis has now brought about significant declines in sales in the areas of business where SURTECO SE is operating. The Group is among the leading suppliers of surface materials based on raw papers and plastics for technical applications in the international construction and furnishing industry. During the first quarter of the year, it fell short of the equivalent year-earlier figure by 22 percent and recorded sales revenues amounting to € 84.9 million (2008: € 108.6 million) on 31 March.

The Strategic Business Unit Plastics has always recorded positive results in past years but the slowdown in demand abroad has exerted a tangible negative effect in this segment. Sales amounting to € 53.7 million (2008: € 67.2 million) lagged significantly behind the equivalent figures for the first quarter of 2008 after a decline of 20 percent.

The Strategic Business Unit Paper has been subject to very intense competition for a number of years and has been experiencing an extremely adverse environment. The financial crisis has exerted further pressure on the sales problems. SURTECO markets a number of products including edging tapes and flat foils based on specialist papers in this product group. Overall, this division lost 25 percent of its sales volume at € 31.2 million (2008: € 41.4 million) during the period under review compared with the equivalent year-earlier quarter.

The decline in sales performance during the period under review is reflected in the operating result of the SURTECO Group, which was 32 percent below the result for the comparable months in 2008. EBITDA fell from € 19.9 million in the first quarter of 2008 to € 13.6 million. The financial result amounted to € 8.1 million. The amount includes a further impairment of € 6.0 million on account of the negative performance of the share price for the package of shares held by SURTECO in Pfleiderer AG, Neumarkt. This reduced the EBT to € 0.6 million.

SURTECO SE is assuming that the effects of the crisis will continue to impact on its business activity until well into the year 2010. However, SURTECO has the potential to benefit over the long term from the change in framework conditions resulting from the crisis. The Group acted at an early stage to intensify all current cost-reduction programmes and adjustment measures in human resources in response to the changed working conditions. They form the foundation for continuing the strategic growth trajectory of market and technology leadership sustainably over the long term. The pressure towards consolidation in the sector will intensify in the wake of this global economic crisis. Not least on the basis of the robust financial structure, SURTECO SE will be in a position to take advantage of any opportunities that arise.