Surteco Group SE

Earnings Release • Nov 9, 2007

News Details

Ad-hoc | 9 November 2007 07:37

SURTECO AG focuses on ambitious targets

SURTECO AKTIENGESELLSCHAFT / Quarter Results

Release of an Ad hoc announcement according to § 15 WpHG, transmitted by
DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

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Despite difficult market conditions, the surface specialist is again
anticipating another record for sales and earnings in 2007 - A wide range
of different measures directed towards expanding the competitive position
is being implemented during the third quarter

Buttenwiesen-Pfaffenhofen, 9 November 2007. – The turbulence in the
international financial markets triggered by the real estate crisis in the
USA also impacted negatively on SURTECO AG during the third quarter of the
current business year. The specialist for surface technologies based on
paper and plastic is one of the leading suppliers worldwide to the
construction and furnishing industries. The Group was confronted by a
drastic cutback in new-build activities, particularly in the case of its
subsidiaries in the USA and Canada. SURTECO AG also faced a similar
scenario in Germany where planning approvals for private residential
construction have witnessed a collapse of approximately 50% since the end
of 2006. Although this background is far from favourable, SURTECO AG has
not had to adjust its ambitious goals for the year and continues to assume
a slight rise in sales and an associated improvement in results. This is
due to a series of measures designed to consolidate and expand its strong
market position and these have already begun to produce results in the
third quarter.

For example, the Group established SURTECO DEKOR A. Ş. in September to
create a dedicated sales and finishing company in Turkey and support its
presence in this region. Over the medium term, the company is also planning
to serve this future market with a dedicated production facility in Turkey.

Since 1 September SURTECO AG has controlled – and consolidated – 100 % of
Gislaved Folie AB, a leading manufacturer of decorative plastic foils for
marine construction and the furniture industry in Sweden. This acquisition
for the first time places SURTECO AG in the position to offer foils based
on plastics, a product segment which belongs to the future and turns the
Group into a true full-line supplier of high-quality surface foils.

SURTECO AG also generated new initiatives at Bausch Decor GmbH which permit
additional expansion of its market position in coating products based on
technical papers. Within the Group, this company within the Strategic
Business Unit Paper has specialized in the production of decorative prints
based on specialist technical papers. Based on a € 13 million investment
focused on the core of two additional printing machines, the production
capacities of this operation have been significantly expanded.

The fact that the efforts of SURTECO AG to achieve stability and growth are
also the focus of the international financial world and have been given a
very positive reception there has been demonstrated by a privately floated
loan in the form of a private placement amounting to approximately € 150
million in the USA and Germany: The transaction volume had to be increased
on account of multiple oversubscription. The enthusiastic response of
investors to this new form of finance for SURTECO allowed the company to
continue its strategy of profit-oriented growth.

Sales revenues and income grow to record level

Over the past nine months, SURTECO AG generated consolidated sales
amounting to € 312.3 million and this put the Group 3 % ahead of the
comparative figures for the year-earlier period, despite the
currency-related decline in North American business (minus € 3.3 million)
and rationalization of the product portfolio in do-it-yourself goods held
for resale (minus €1.7 million). The SBU Plastics has the biggest
proportion (59 %) of sales with an increase of 6 % to € 185.3 million in
2007 after three quarters. Despite the familiar difficulties on foreign
markets, export business increased by 8 % to € 120.1 million.
The SBU Paper has to contend with a market that is weak overall where sales
at € 127 million for the first nine months are lagging by 2 % behind the
comparative figures for 2006. While sales for this segment in Germany have
remained virtually constant at € 46.5 million, export sales fell back by 4
% compared with the year-earlier figures. SURTECO AG is optimistic about
this division on the basis of the decor printing business line. During the
first three quarters of 2007, this segment generated sales growth of 18 %
and the start-up of the new printing units places this segment in an ideal
position.

After nine months, the slight increase in sales at the SURTECO Group
contrasts with a significant improvement in earnings. EBT improved by 9 %
to € 36.7million in the reporting period compared to the previous year.
Consolidated net income increased by 12 % to € 23.2 million. SURTECO is
again anticipating another record for sales and earnings in the business
year 2007. Group sales amounting to € 403.2 million (+2 %) and a profit of
€ 28.8 million (+32 %) means that SURTECO AG had the best year throughout
the company’s history in 2006.
09.11.2007 Financial News transmitted by DGAP

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Language: English
Issuer: SURTECO AKTIENGESELLSCHAFT
Johan-Viktor-Bausch-Str. 2
86647 Buttenwiesen-Pfaffenhofen
Deutschland
Phone: +49 (0)8274 99 88-0
Fax: +49 (0)8274 99 88-5 05
E-mail: g.schneller@surteco.com
Internet: www.surteco.com
ISIN: DE0005176903
WKN: 517 690
Listed: Regulierter Markt in Frankfurt (Prime Standard), München;
Freiverkehr in Berlin, Düsseldorf, Stuttgart

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