SURTECO GROUP SE: Economic slowdown and cost of materials create a negative impact

DGAP-News: SURTECO GROUP SE: Economic slowdown and cost of materials create a negative impact

DGAP-News: SURTECO GROUP SE / Key word(s): Quarterly / Interim Statement 14.11.2018 / 07:00 The issuer is solely responsible for the content of this announcement. Economic slowdown and cost of materials create a negative impact - Nine-month sales increase by 3 % to EUR 534.2 million - EBIT falls by 5 % to EUR 31.9 million on account of weak demand in the third quarter and high costs of materials - Additional slowdown in the economic sector - Launch of an optimization programme Buttenwiesen, 14 November 2018 -Although the economic environment of SURTECO GROUP SE, the holding company of leading national and international brands for surface technology, slowed significantly during the third quarter, the Group reported an increase in sales of 3 % to EUR 534.2 million (9M 2017: EUR 516.4 million) on account of the sales contributions from the Probos Group acquired in June 2017. After adjustment for exchange rates, the sales growth would have increased by 6 % and would have been around EUR 12 million higher. On account of continuing high cost of materials, which can only be partly passed on, EBIT (earnings before financial result and income tax) decreased by 5 % to EUR 31.9 million (9M 2017: EUR 33.7 million). Conversely, consolidated net profit grew from EUR 18.4 million to EUR 19.3 million after three quarters thanks to an improved financial result. In view of the ongoing difficult framework conditions, the Group once more needed to correct the sales and earnings targets for the entire year 2018. Group sales are now projected to be between EUR 685 and EUR 695 million and EBIT is likely to range between EUR 37 and EUR 39 million. Since the next business year looks set to witness continued weak demand alongside high raw materials costs, the company has launched an optimization programme. This includes the adjustments for processes and structures in the Group to meet the market-related changes. One-off expenses of approximately EUR 7 million are likely to be incurred for this programme. After they have been worked out in detail, they will be set aside as provisions in the fourth quarter and will form an additional burden for the result in 2018. "Unfortunately, we have been compelled to correct our forecasts for the year 2018 further downwards in view of the continued weakening of the economic sector particularly in our European core markets and owing to sustained high raw material costs. We have responded at an early stage by launching an optimization programme so that we can continue to grow profitably in the future,"statedDr. Herbert Müller, Chairman of the Board of Management of SURTECO GROUP SE, in commenting on the development. Plastics line increased significantly owing to acquisitions - paper line weakening After nine months of the year 2018, the two reporting segments of the SURTECO Group reveal significantly different development. Primarily due to acquisitions, the plastics segment underwent significant growth in sales (from EUR 236.0 million to EUR 264.0 million) and EBIT (EUR 18.7 million to EUR 23.9 million). Conversely, the paper segment experienced a drop in sales of around 4 % to EUR 270.2 million (9M 2017: EUR 280.3 million) and a fall in EBIT of EUR 20.3 million to EUR 12.9 million owing to an unfavourable product mix, sustained high pressure on the raw materials side and exchange rate effects. The quality of the balance sheet is unchanged and remains favourable - equity ratio is 41.9 % The balance sheet total increased only slightly to EUR 847.0 million at 30 September 2018 compared with year-end 2017. Since equity increased to EUR 354.6 million during the reporting period, the equity ratio improved from 41.4 % to 41.9 %. Primarily on account of the reduced factoring since January 2018, net financial debt increased from EUR 190.0 million to EUR 220.3 million and the level of debt rose from 54 % to 62 %. Against the background of reduced cash flow from investment activities, free cash flow improved from EUR -58.0 million in 2017 to EUR -17.5 million in 2018 during the first three quarters. You can find the report on the first three quarters of the business year 2018 and other information about the SURTECO GROUP SE on the Internet at www.surteco-group.com. Contact:
SURTECO GROUP SE
Martin Miller Investor Relations and Press Office T: [phone]
F: [phone] www.surteco-group.com [e-mail]
Profile of SURTECO SURTECO GROUP SE with registered office in Buttenwiesen is a mid-sized holding company with international operations. The company listed on the stock exchange combines leading national and international brands for surface technology under one roof. The comprehensive product portfolio includes papers printed with decor designs, impregnated materials, release papers, decorative flat foils and edgebandings based on specialist technical papers and plastics. This portfolio is complemented by skirtings made of plastics, technical extrusions (profiles) for industry, and roller shutter systems. The Group has a workforce of more than 3,300 employees at 23 production sites worldwide, generating annual sales of around EUR 690 million (status 2017). 25% of these sales are generated in Germany, 46% in European countries outside Germany and a further 29% in America, Asia and Australia. Customers of the SURTECO Group primarily come from the wood-based, flooring and furniture industries, as well as from interior design. More information on the company is available at:www.surteco-group.com The shares in SURTECO GROUP SE are listed on the official market (Prime Standard) of the Frankfurt and Munich Stock Exchanges under the ticker symbol SUR and ISIN DE0005176903. They are also traded on the stock markets in Berlin, Düsseldorf and Stuttgart. Cautionary note regarding forward-looking statements This press release may contain statements of future forecasts or expectations and other forward-looking statements and involves known and unknown risks and uncertainties. There is therefore no guarantee for the statements and expectations expressed herein. The actual results and developments may differ substantially. The company assumes no obligation to update any forward-looking statements contained herein or to adapt such information to future results or developments. Important indicators of SURTECO GROUP SE(in EUR million)
		9M-2017	9M-2018		Q3-2017	Q3-2018
Consolidated sales		516.4	534.2		182.3	169.0
- of which Paper		280.3	270.2		92.2	85.6
- of which Plastics		236.0	264.0		90.1	83.4
Foreign sales in %		74	75		76	75
EBITDA		62.1	62.2		25.1	18.4
EBITDA margin in %		12.0	11.7		13.7	10.9
EBIT1		33.7	31.9		14.4	8.4
- of which Paper		20.3	12.9		7.3	2.0
- of which Plastics		18.7	23.9		7.5	7.8
EBT		26.2	28.0		11.6	7.0
Consolidated net profit		18.4	19.3		8.5	4.2
Earnings per share in EUR2		1.19	1.25		0.55	0.27
Cash flow from current business operations		44.2	16.8		9.2	2.1
Free cash flow		-58.0	-17.5		-38.0	-11.0
	31/12/2017			30/09/2018
Balance sheet total	842.6			847.0
Equity	349.2			354.6
Net debt	190.0			220.3
Level of debt in %3	54			62
Equity ratio in %	41.4			41.9
Employees	3,295			3,333
(1) Difference to balance of segment earnings due to internal clearing (2) Based on a number of shares amounting to 15,505,731 (3) Net debt / Equity 14.11.2018 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de

Language:	English
Company:	SURTECO GROUP SE
	Johan-Viktor-Bausch-Str. 2
	86647 Buttenwiesen
	Germany
Phone:	[phone]
Fax:	[phone]
E-mail:	[e-mail]
Internet:	www.surteco-group.com
ISIN:	DE0005176903
WKN:	517 690
Listed:	Regulated Market in Frankfurt (Prime Standard), Munich; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Stuttgart, Tradegate Exchange

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