Recovery in the global economy helps SURTECO to a more favourable first half year

A faster recovery in the global economy enables SURTECO SE to look back on a more favourable first half of the year by comparison with the previous year. A slight recovery during the first quarter was followed by a very gratifying second quarter that enabled the leading international supplier to the construction and furniture industry to record an increase in sales revenues amounting to 191.1 million euros (+13 %). The key growth stimuli were generated in foreign markets. Foreign revenues in the half year under review amounted to 126.9 million euros (+19 %) and represented a share of 66 percent of total sales. By contrast, domestic sales growth (+3 %) could not be increased to the same extent. Nevertheless, an increase of eleven percent in the second quarter took domestic sales out of negative territory of minus five percent in the first quarter. Although the global economy is developing positively, there is no sign yet of a recovery in the German furniture industry.

While the deteriorating situation in the raw materials market is imposing significant burdens, SURTECO is benefiting from the package of measures launched in autumn 2008. This programme has generated efficiency savings and will continue to deliver significant improvements in the cost structure during the course of 2010. The Strategic Business Unit Plastics (SBU) has reorganized its sales and marketing activities for the edgebanding business and adapted to changes in the markets. The establishment of SURTECO Iberia in Spain during the second quarter of 2010 will increase the presence in the marketplace and optimize customer support.

Positive figures were posted in the business units for plastic products and surface coating materials based on specialist technical papers. The business situation in the SBU Plastics underwent a significant improvement during the months April to June compared with the first quarter. The first six months saw an increase in sales of six percent or six million euros to a total of 112 million euros. Foreign business contributed € 75.6 million (+11 %), while supplies in Germany at 36.4 million euros fell short of the equivalent year-earlier volume by three percent. An upswing across a broad front for the SBU Paper generated positive sales growth of 26 percent with 79.1 million euros. Domestic sales contributed 27.8 million euros (+13 %) and foreign sales amounted to 51.3 million euros (+35 %).

Total sales of 191.1 million euros enabled SURTECO SE to generate an improved operating result (EBITDA) of 32.0 million euros, up by 1.1 million euros. After six months, EBIT achieved an increase of five percent and amounted to 21.9 million euros. The EBITDA margin amounted to 16.8 percent (previous year: 18.3 %), the EBIT margin was 11.5 percent (previous year: 12.4 %). Earnings before tax increased by 108 percent from 8.7 million euros to 18.1 million euros. This was driven by a number of factors including a significant improvement in the financial result from € -12.2 million to € -3.8 million. In the first half of 2009, the unfavourable development in the share price for the package of shares in Pfleiderer AG, Neumarkt, held by SURTECO necessitated an impairment amounting to € 6.0 million.
Consolidated net profit rose from 4.1 million euros in the previous year to 12.7 million euros. Earnings per share rose in line with this increase from € 0.37 to € 1.15.

Inventories amounting to € 13.9 million were stockpiled in order to maintain delivery capability and meet the further progressive increase in demand during the second quarter. Financing the stockpiling operations and scheduled repayment for financial liabilities led to a reduction in liquid funds by 21.4 million euros. Nevertheless, the level of debt (gearing) improved from 64 to 63 percent. The equity ratio increased by 3.3 percentage points from 39.8 percent to 43.1 percent (30 June 2010) compared with 31 December 2009.