Ad-hoc | 30 November 2005 07:41

SURTECO AG: SURTECO AG with good quarterly figures

Ad hoc announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. —————————————————————————— The specialist for surface technologies increases sales and earnings in difficult environment Growth not driven by economic cycle Strategic Business Unit Plastics primarily advances abroad Buttenwiesen-Pfaffenhofen, 30 November 2005 – SURTECO AG specializes in surface technologies and is one of the leading suppliers worldwide for the construction and furnishing industry. Performance was better than expected in the 3rd quarter, and sales revenues for the first nine months of the year increased to 296.1 million euros, outperforming the equivalent year-earlier level by five percent. Net of consolidation effects, this represents a reduction of one percent (after minus three percent in the first half of the year). Business at SURTECO AG grew organically during the third quarter for the first time in this fiscal year, with sales increasing overall by nine percent to 97.2 million euros (+ three percent). However, this essentially gratifying development is not due to an economic upswing. It is related to the fact that a large number of customers operated a restrained purchasing policy during the first half of the year, leading to heavily reduced inventories. These have now been restocked – primarily in companies based abroad. This is an effect that has resulted in higher utilization of capacities at SURTECO AG and does not permit any direct conclusions regarding business performance during the last quarter. The two Strategic Business Units ‘Paper’ and ‘Plastics’ at SURTECO AG are currently experiencing their main positive business development abroad. While sales in export markets increased disproportionately during the third quarter with a jump in sales of 18 %, domestic business again remained four percent behind the level for the previous year during the third quarter. This corresponds with the domestic decline in sales to 108.6 million euros over the first nine months, whereas foreign sales underwent growth of 11 percent to 187.5 million euros in the same period. The proportion of foreign sales in the Group amounted to 63 percent. The SBU Paper at SURTECO AG primarily manufactures decorative prints, flat foils and edging strips based on paper for the furnishing industry and interior design. This business unit has had to contend with sustained weakness in demand – particularly in Germany – and increasingly aggressive competition. This situation is reflected in the eight-percent decrease in sales to 129.0 euros during the first three quarters. By contrast, the SBU Plastics continued its positive performance. Sales of plastic edging tapes and technical extrusions (profiles) were up by 19 percent over the previous year during the third quarter. Total sales increased by 18 percent to 167.1 million euros after nine months. However, the Canadian Canplast Group acquired in October 2004 contributed significantly to this increase. Net of acquisition effects this still yields an increase in sales of six percent for this business unit. Foreign sales played a disproportionate role in performance, with growth of 36 percent during the first nine months. The SURTECO companies in North America increased their sales volume by 69 percent compared with the equivalent year-earlier period in 2004, while business in European markets outside Germany and in Australia expanded by 22 percent and 23 percent respectively. In line with expectations, EBITDA at 51.9 million euros for the first nine months was unable to equal the record value for the previous year (54.5 million euros). Favoured by the elimination of amortization on goodwill, EBIT increased to 38.7 million euros after the third quarter. Restructuring expenses, amounting to 4.3 million euros, came to an end in the second quarter and relate to the personnel reduction announced in spring which is intended to enhance the long-term competitiveness of SURTECO AG. These expenses naturally impact negatively on the pre-tax result of 26.9 million euros (2004: 26.2 million euros). Since the good performance during the third quarter is not based on the economic cycle and the general economic framework conditions are not likely to change in the short term, SURTECO AG is not expecting any fundamental impulses for its business during the last quarter. The sales forecast for this fiscal year already announced in March 2005 therefore remains unchanged. Sales are projected in the region of approximately 390 million euros and earnings before restructuring expenses of 38.0 million euros or 33.7 million euros after the costs of restructuring (EBT). 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 30.11.2005