SURTECO GROUP SE with significant increase in earnings in the third quarter, EBITDA margin increases to 15.2 %

Buttenwiesen, 13 November 2020 - In the third quarter of 2020, the business situation has significantly recovered in line with expectations after the major collapse during the second quarter. Group sales of the SURTECO GROUP SE at € 162.2 million in the third quarter were only 3 % below the year-earlier period. Sales up to 30 September 2020 therefore totalled € 459.3 million by comparison with € 519.3 million in the previous year. Adjusted by exchange rate effects and by the impregnating business in North America sold in July 2019, the comparable drop was 7 %. The high level of cost flexibility and the success of the efficiency improvements achieved in the recent past are reflected by the increase in EBITDA to € 24.6 million (Q3 2019: € 22.4 million) in the third quarter. The EBITDA margin therefore rose to 15.2 %. During the first three quarters, EBITDA of € 59.9 million was achieved after € 64.6 million in 2019. The operating result (earnings before financial result and income tax, EBIT) climbed by 26 % to € 14.4 million (Q3 2019: € 11.4 million) during the third quarter. In the first three quarters of 2020, the Group generated EBIT of € 28.8 million after € 31.6 million in the previous year. Since the financial result was also significantly improved, the pretax profit at € 27.1 million on 30 September was only slightly below the year-earlier value in 2019 (€ 28.0 million). After tax, SURTECO reported a nine-month profit of € 18.6 million following on from € 19.5 million or earnings per share of € 1.20 (9M 2019: € 1.26).

"In line with expectations, our business underwent a significant recovery in the third quarter after the weak previous quarter owing to the coronavirus. Thanks to our high level of cost efficiency, we even succeeded in substantially improving the result in the quarter under review. Subject to the reservation that the situation does not seriously deteriorate again owing to the pandemic, we are therefore also cautiously confident for the situation in the final quarter," commented Wolfgang Moyses, Chairman of the Management Board of SURTECO GROUP SE.

Varying development in the segments

During the first three quarters, the segments of SURTECO were impacted by the coronavirus pandemic to differing degrees. While Profiles with sales at € 77.9 million recorded an increase in sales of 10 % and a rise in EBIT to € 8.1 million (2019: € 7.9 million) thanks to high demand from construction and renovation, the Segment Decoratives suffered setbacks especially in the United Kingdom, Italy and France owing to the consequences of the pandemic. Segment sales therefore fell by 7 % to € 331.0 million and the nine-month result came down to € 21.6 million (2019: € 26.9 million). In the Segment Technicals, sales stabilized in the third quarter. However, after nine months sales at € 50.4 million were 28 % down year on year mainly as a result of the disposal of the American impregnating business. Conversely, the operating result increased significantly to € 3.3 million (2019: € 1.7 million).

Free cash flow significantly positive at € 27.4 million in spite of the COVID-19 pandemic

SURTECO continues to have a very robust financial position and balance sheet. A slightly increased balance sheet total at € 801.1 million and equity at € 358.2 million yields an equity ratio of € 44.7 % (31/12/2019: 45.4 %). Compared with year-end 2019, net financial debt came down by € 25.4 million to € 154.5 million, as a result of which the level of debt (gearing) was reduced from 51 % to 43 %. In spite of the crisis, the development of earnings remained robust and focused investment activities permitted free cash flow of € 27.4 million (9M 2019: € 31.1 million).

Outlook for 2020 depends largely on the course of the pandemic

The third quarter went better than expected. However, the business losses suffered in the second quarter as a result of the Covid 19 pandemic can no longer be offset by the end of the year. The further course of business depends largely on the course of the pandemic.

Further information about SURTECO GROUP SE and the Report for the first here quarters can be found on the Internet at www.surteco-group.com.

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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. With more than 3,100 employees at 22 production sites worldwide, the Group generates annual sales of around EUR 675 million in 2019. 25 % of these sales are generated in Germany, 47 % in European countries outside Germany and a further 28 % 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.

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 € million)

(1) Since July 2019 without Sales from sold impregnation business

(2) Difference to balance of segment earnings due to internal clearing

(3) Based on a number of shares amounting to 15,505,731

(4) Net financial debt to Equity