Ad-hoc | 31 May 2006 07:37

Surteco AG: SURTECO AG CONTINUES POSITIVE

Ad hoc announcement transmitted by DGAP – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. —————————————————————————— Despite difficult market conditions the surface specialist reports rising sales and income Although market conditions for SURTECO AG continued to be difficult and competition has grown more intensive, the specialist for surface technologies again increased sales and income during the first quarter of this year. This process confirms that the world’s leading global supplier to the construction and furnishing industry is increasingly having to adjust to global competition. During the first three months of this fiscal year, SURTECO AG generated 63 percent (1st quarter of 2005: 61 percent) of total sales abroad, amounting to 106.2 million euros (1st quarter 2005: 101.7 million euros). While foreign sales increased by 7 percent to 66.8 million euros, sales in Germany settled at the level of the previous year at 39.4 million euros. SURTECO AG organizes its activities in the Strategic Business Units (SBU) “Paper” and “Plastics”, with the companies in the SBU Plastics continuing to develop particularly positively. During the past fiscal year, this development was driven not least by first-time full consolidation of the Canadian Canplast Group, which posted high growth of 12 percent. Segment sales during the first quarter of 2006 underwent renewed growth of 10 percent to 60.4 million euros. Foreign business with plastic edging tapes and technical extrusions – the focus of the SBU Plastics portfolio – rose disproportionately by 17 percent to 38.0 million euros. The SBU Paper (including flat foils) is currently unable to keep pace with this development, not least on account of the ongoing tense market situation in the area of interior design and furniture. Sales of 45.8 million euros during the first quarter fell short of the year-earlier value by two percent. SURTECO AG has countered the pressure on prices in European markets with a company-based collective agreement that came into force on 1 January 2006. This will lead to a saving of 15 percent per year in personnel costs for Germany by 2007. Meanwhile, the Group will be continuing to invest in quality. Bausch Decor GmbH, part of the SBU Paper, recently benefited from this investment, expanding business in decorative printing by 27 percent during the first quarter of 2006. In mid-April, the Supervisory Board resolved to invest in two additional four-colour printing machines (13 million euros), which will significantly increase the capacities of this Group subsidiary from October 2007. Positive development in profit At the same time as increasing sales, SURTECO AG was able to improve EBIT to 15.0 million euros during the first quarter. This result meant that the company exceeded the comparable quarter for the previous year by five percent. The EBIT margin at 14.1 percent was slightly above the level for the previous year. At 19.5 million euros, SURTECO AG succeeded in increasing its operating result (EBITDA) by four percent during the first quarter of 2006. With reference to sales, the EBITDA margin amounted to 18.4 percent. This corresponds to the value for the first quarter of the previous year, and it is above the value for the entire fiscal year 2005 (17.4 percent). Outlook 2006 SURTECO AG concluded the year 2005 with consolidated sales amounting to 396.4 euros (plus four percent) and an EBT of 37.6 million euros (plus eight percent), and is assuming a disproportionate increase in earnings with moderate growth in sales for the current fiscal year. The Group is again focusing on positive development in foreign markets, because a tangible upswing in growth is not anticipated in Germany and no “mini-boom” is expected from the impending increase in value added tax. (c)DGAP 31.05.2006 ————————————————————————— 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 email: g.schneller@surteco.com WWW: www.surteco.com ISIN: DE0005176903 WKN: 517 690 indices: Listed: Amtlicher Markt in Frankfurt (Prime Standard), München; Freiverkehr in Berlin-Bremen, Düsseldorf, Stuttgart End of News DGAP News-Service —————————————————————————