GERMANY - Surteco Group SE, holding company for leading brands in decorative surface technology, succeeded in increasing adjusted sales and earnings in the third quarter.

In spite of sustained difficult market conditions, Group sales adjusted by the US impregnating business divested in July 2019 rose by 2 percent. After nine months, sales of EUR 519.3 million (9M-2018: EUR 534.2 million) were reported, although they were slightly below the previous year on an adjusted comparison. In view of falling cost of materials, and lower personnel expenses, the quarterly EBIT (earnings before financial result and income tax) improved by 36 percent to EUR 11.4 million compared with year-earlier quarter (3Q-2018: EUR 8.4 million).

Thanks to an improved financial result and income taxes, consolidated net profit at EUR 19.5 million (9M-2018: EUR 19.3 million) was slightly above the year-earlier value after nine months.

The sales forecast for 2019 of between EUR 655 million and EUR 685 million appears attainable at the upper end. The same applies to the operating result of between EUR 38 million and EUR 40 million. However, owing to the sustained difficult economic environment, additional measures from the “Alpha” optimization program may become necessary to safeguard earnings for the coming year and in order to significantly improve earnings over the medium term.

Decoratives - the biggest of the three Surteco segments - with sales of EUR 378.7 million after nine months was just in negative territory (9M 2018: EUR 384.4 million).

Owing to repayment of the final tranche of a US Private Placement amounting to EUR 60 million in August 2019, the total debt as at 30 September 2019 came down significantly from EUR 844.5 million at the close of 2018 to EUR 799.6 million.

Net financial debt fell to EUR 190.5 million and the level of debt dropped from 56 percent to 52 percent.