GERMANY - Surteco Group SE, holding company for the leading national and international brands for surface technology, achieved and exceeded respectively the sales and earnings targets adjusted in October 2018 according to preliminary unaudited figures.
The figures reported indicate that consolidated sales at EUR 699 million were not only slightly above the year-earlier figures (EUR 690 million), they were also above the last projected range of EUR 685 to EUR 695 million. On the basis of exchange rates at the year-earlier level, consolidated sales of approximately EUR 714 million would have been reported. Earnings before financial result and income tax (EBIT) were impacted negatively by one-off expenses amounting to a total of EUR 6.1 million in the reporting year for the optimization program announced in October 2018. As a result of this and primarily on account of the significantly increased cost of materials, an EBIT of EUR 32.2 million was achieved in 2018 (2017: EUR 44.7 million). EBIT adjusted by one-off expenses amounted to EUR 38.3 million. This is also situated within the scope of the last forecast at between EUR 37 and EUR 39 million. While the Business Unit Paper suffered under the declining demand from important customer sectors and fell significantly short of the targets defined by the Group itself, the Business Unit Plastics succeeded in achieving the expected increase in sales due to the consolidation of the Probos Group for the full finance year. Since owing to exchange-rate conditions the financial result was significantly better than in the previous year, the drop in pre-tax profit to EUR 27.1 million (2017: EUR 33.5 million) was less than in the case of EBIT.
“2018 was significantly more challenging for Surteco than originally anticipated at the beginning of the year. On account of the significantly declining demand as the year continued and the unexpected higher material costs, we were unable to achieve our original targets. We responded immediately and introduced measures to reduce costs already at the beginning of the second half-year. Following an increasing decline in demand, we launched an optimization program in the third quarter to adjust our structures and personnel costs, which will have an effect on the 2019 financial year. The one-off expenses are included in the result for 2018.” commented Dr. Herbert Müller, Chairman of the Board of Management of Surteco Group SE, on future development.
Surteco is not expecting an upturn in the relevant markets for the business year 2019 and there will consequently be no significant stimuli to generate organic growth. In view of the elimination of one-off expenses, the result is likely to exceed the EBIT adjusted by one-off expenses for the optimization program of about EUR 38 million in spite of increasingly challenging framework conditions.
From 2019 onwards, the management of the company and hence segment reporting will be based on the new Decoratives, Profiles and Technicals Business Units, which will replace the previous Paper and Plastics Business Units.
The publication of the annual financial statements and the Annual Report for 2018 is planned for 30 April 2019.
