Even if the figures for the first quarter of this year can undoubtedly be regarded as positive, SURTECO SE does not have the all-clear signal for the rest of the business year. It is still not certain whether the recovery in the global economy predicted by the IMF will materialize in the construction and furniture industries. As a leading international manufacturer of surface materials based on plastics and technical papers, the business of SURTECO is substantially based on these sectors. The fact that the problems being experienced in these industries did not impact on SURTECO SE in full over recent months was essentially due to the package of cost-reduction and energy-enhancing measures introduced by the surface specialist at an early stage. The optimizations achieved in all operating sectors of the Group are reflected in the result for the first three months.
Compared with the equivalent year-earlier period, sales of SURTECO SE improved by more than 6 % to € 90.3 million (€ 84.9 million). Foreign business commenced an upswing after a long period of stagnation and contributed a significant share to this performance with sales to € 58.9 million (€ 51.9 million) amounting to an above-average rise of 13 %. The foreign share of sales went up accordingly by 4 percentage points to 65 %.
The sales of the Strategic Business Unit Paper (including decorative printing, flat foils) increased compared to the previous year by 20 % to € 37.4 million. While domestic sales remained at the level of the first quarter, foreign sales went up by 33 % to € 24.2 million. In particular, significant growth was achieved in European markets.
Sales of the Strategic Business Unit Plastics (including edgebandings) underwent stable development during the first three months of this year and sales of € 52.9 million only just fell short of the sales level in the previous year (€ 53.7 million). Foreign markets (+ 3 %) also outperformed the domestic market which fell back by 9 % to € 18.2 million as a result of the evident constraint in consumption.
Rising raw material prices and shortages will impact negatively on the result
During the first quarter of 2010, operating earnings (EBITDA) of the SURTECO Group amounted to € 15.2 million (+7 %). Earnings before tax (EBT) increased from € 0.6 million to € 8.1 million. This rise was brought about by a number of factors including the significant improvement in the financial result from € -8.6 million to € -2.1 million. During the first quarter of 2009, an impairment of € 6.0 million was necessary on account of the unfavourable development in price of the package of shares in Pfleiderer AG, Neumarkt, held by SURTECO.
Negative impacts arising from the increase in price of raw materials, plastics and on the paper side will exert downward pressure on the result in 2010. Another factor relates to volume quotas that have already caused production to come to a stop at some points.
The demand side sees sustained consumer restraint and manufacturers of furniture and interior fittings continue to act very cautiously. It is still not clear how sustainable the improvement in demand will be in the different product areas and regions. Nevertheless, the Board of Management anticipates that consolidated sales overall will undergo a slight upward trend during the business year 2010 compared with the previous year (€ 341.1 million).
