Surteco reports “uneven business development” for first six months 2017

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Surteco SE, a German manufacturer of decorative surface materials and extrusion profiles today announced its 2017 first six month financial results. The company reported sales of EUR 334m, slightly below the previous year’s figure of EUR 337.7m

The first half of the year showed an uneven development in the company’s two businesses: while the plastics business performed well, the paper segment lagged well behind last’s year’s sales level.

Surteco said sales in the plastics division were up 13%, spurred by the acquisition in 2016 of 85% of the shares of Nenplas, a supplier of bespoke plastic extrusions and fabricated plastic profiles in the UK, and organic growth. By contrast, due to the discontinuation of activities with weak margins and advance orders in the previous year, sales fell 10% during this same period in the paper segment.

According to the report, ‘massive’ price increases for raw materials for plastics exerted a negative impact on a rise in productivity in the paper sector. Personnel costs also climbed as a result of the Nenplas acquisition, wage and salary increases under collective bargaining agreements in the second quarter and because of a slight growth in number of employees due to good capacity utilization in the plastics division.

This, together with high depreciation and amortization charges, led EBIT to fall to EUR 19.3m versus EUR 21.6m for the same period in 2016. Net profit fell back to EUR 10m (1st half year 2016: EUR 12.0 million).

According to Dr. Herbert Müller, chairman of the Surteco board of management, the company is still on track to achieve its EBIT target of between EUR 42 and EUR 46 million for 2017, “thanks to the improvements in efficiency already achieved and the Probos takeover.”

Surteco acquired Portugal-based plastic edgebandings manufacturer Probos for Euro 99 million in June 2017.

The company stated that sales and EBIT in the plastics segment, including consolidation of the Probos Group from July, are likely to be substantially above the year-earlier values. At Group level, sales revenues will also show a significant increase compared with 2016.

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