Good foreign business powers SURTECO SE

Not least on the back of sustained good business with foreign customers, SURTECO SE was again able to continue the gratifying sales development reported for the first six months of 2010 in the third quarter. The Group, one of the world’s leading suppliers to the construction and furnishing industry, succeeded in increasing sales to 291.7 million euros during the reporting period. This exceeded the equivalent value for the previous year by 15%. The share of foreign sales in total sales again rose from 63% to 67% and this highlights the extent to which export business is currently powering SURTECO. In the third quarter alone, the surface specialist, which currently sells more than 80% of its product portfolio to purchasers from the furnishing industry, generated an increase in sales of 25% with customers from abroad. 194.8 million euros (+21%) of sales were attributable to sales from foreign purchasers; 96.9 million euros (+4%) came from domestic customers.

The two strategic business units of SURTECO – plastics products and surface coating materials based on papers for technical applications – were both equally responsible for the gratifying sales development. The plastics business unit was again able to continue the positive development of the previous months in the third quarter of 2010 and contributed to accumulated total sales of this strategic business unit with 171.9 million euros, an increase of 14% compared with the third quarter from the previous year.

The performance of the Strategic Business Unit Paper was also extremely satisfactory and sales gathered further impetus (+25 %) in the third quarter when they increased by 26% compared with the equivalent year-earlier figures, reaching 119.8 million euros after nine months. Even though SURTECO SE succeeded in generating an increase of 14% in domestic markets with the SBU Paper, the significant rise occurred in foreign business, which grew by 33% to 78.0 million euros. This business unit received a strong surge from the product segment flat foils and this segment currently leads the ranking of paper products with an increase of 32%.

After nine months, SURTECO SE has recorded EBITDA of 48.9 million euros (43.1 million). The EBITDA margin remained at the level of the previous year with 16.8%. Pre-tax earnings (EBT) rose by 95 % from € 13.6 million to a very respectable € 26.4 million. This was the result of a number of factors including the significant improvement in the financial result from € -14.4 million to € -6.7 million. During the first quarter of 2009, the unfavourable development in the share price for the package of shares in Pfleiderer AG, Neumarkt, held by SURTECO led to an impairment amounting to € 6.0 million. The consolidated net profit increased after three quarters to 19.4 million euros and is hence significantly above the equivalent year-earlier value (7.7 million)
Despite the positive development of the furniture industry, which is a dependable indicator for business at SURTECO SE, the current cost situation in the raw materials market is causing the Group concerns. The scenario there is defined by continuously rising prices. No easing of the situation on the price front is expected for plastics or papers. SURTECO SE is even anticipating further increases in procurement costs and – as a consequence of full utilization of capacities with suppliers – some volume quotas and longer lead times for delivery. Irrespective of this, the company continues to maintain its sales forecast for 2010, projecting an increase of 10% (sales 2009: 341.1 million euros). The excellent figures from the third quarter promise even greater expectations. Despite the emerging trend of significantly increasing material costs, the operating result (EBIT) is likely to rise disproportionately to sales.