Surteco Group SE

Earnings Release • May 25, 2005

News Details

Ad-hoc | 25 May 2005 07:40

SURTECO AG: Global economic weakness impacts negatively on SURTECO AG

Ad hoc announcement §15 WpHG Period results SURTECO AG: Global economic weakness impacts negatively on SURTECO AG Ad hoc announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. —————————————————————————— Adjusted result down Recovery in demand not in sight Buttenwiesen-Pfaffenhofen, 25 May 2005 – The start of the current fiscal year was not very encouraging for SURTECO AG, leading manufacturer of surface materials based on raw papers for technical applications and plastics. Economic conditions have again deteriorated significantly compared with 2004 – particularly in Germany. Admittedly sales of this key supplier to the international construction and furnishing industries increased by 5 % to 101.7 million euros, but after adjustment for first-time consolidation of the Canadian Canplast Group purchased in October 2004, sales actually fell by 2 %. At EUR 18.7 million, EBITDA during the first quarter of 2005 was down by 8 % on the equivalent year-earlier figure. Amortization and depreciation of intangible assets and property, plant and equipment at EUR 4.5 million remained at the level for the equivalent year-earlier quarter. Elimination of amortization of goodwill for the first time due to the new regulations of IFRS 3 favoured EBIT and consequently earnings before taxes and minority interest (EBT), which came out at EUR 12.1 million. This was higher than in the equivalent year-earlier quarter. Adjustment by the effect arising from elimination of amortization of goodwill, yields an EBT reduced by 14 %. Bausch Dekor GmbH and BauschLinnemann GmbH and their subsidiaries are part of the Strategic Business Unit (SBU) Paper and they too were affected by the downturn in the construction and furniture sector. Sales fell by 5 % to EUR 46.6 million. The downswing impacted on all market segments in Germany with the exception of the caravan industry. A large number of customers already had to register for short-time working at the start of the year. This was a development that only used to happen during the summer months in previous years. Domestic sales of the SBU Paper were EUR 16.8 million in the first quarter of 2005, 4 % below the equivalent year-earlier figure. Foreign sales also fell back. At EUR 29.8 million the difference by comparison with the first quarter amounted to EUR 1.6 or 5 %. European customers of the SBU Paper in industry, trade and interior design were operating well below capacity across the board. However, the level of sales was maintained at the level of the quarter for the previous year. In America, factors such as high inventories led to a reduction in sales at major customers by 24 % to EUR 4.5 million. Moreover, US American furniture manufacturers are experiencing increasing difficulties with cheap imports from Southeast Asia. By contrast, Bausch Dekor GmbH was able to increase sales of printed papers to external customers in Germany and abroad by a total of 43 % to EUR 3.9 million. The first quarter of the current fiscal year was rather more satisfactory for the SBU Plastics in which the activities of the Döllken Group are bundled, even though the result was not within the scope of our expectations. Sales increased by 15 % to EUR 55.1 million. However, the sales of Canplast acquired in October 2004 should be removed in order to obtain an objective comparison with the previous year. The plastics sector achieved growth of nearly 2 % on a comparable level. Sales in Germany at EUR 22.5 million were EUR 1.2 million below sales for the previous year. While the edgings business stagnated at the level of 2004, the DIY market and facade business were significantly down. Foreign business achieved a rather better result. The European market increased by 3 % and achieved EUR 14.3 million. Business in America underwent the most significant increase. The takeover of the Canplast Group almost doubled sales to EUR 13.8 million. In the opinion of the company, the exceptionally weak domestic economy and the evident slackening of demand in our most important foreign markets are unlikely to be reversed during the coming months. A decline in sales for 2005 should therefore be assumed after adjustments have been made for consolidation (2004: EUR 380.4 million). The one-off expenses incurred as a result of the harmonization measures introduced will also impact negatively on earnings. On a comparable level, net income for the year (EBT) will therefore lag behind the result for the previous year. SURTECO AKTIENGESELLSCHAFT Johan-Viktor-Bausch-Str. 2 86647 Buttenwiesen-Pfaffenhofen Deutschland ISIN: DE0005176903 WKN: 517 690 Listed: Amtlicher Markt in Frankfurt (Prime Standard) und München; Freiverkehr in Berlin-Bremen, Düsseldorf und Stuttgart End of ad hoc announcement (c)DGAP 25.05.2005 250740 Mai 05