Significant earnings improvement in the third quarter of 2020
In the third quarter of 2020, the business situation recovered significantly as planned after the sharp slump in the second quarter. Surteco Group SE’s consolidated sales of 162.2 million euros in Q3 were only 3 percent below the previous year’s sales. This brings total revenues to EUR 459.3 million as of September 30, 2020 compared to EUR 519.3 million in the previous year. Adjusted for currency effects and the North American impregnation business, which was sold in July 2019, the comparable decline was 7 percent. The high degree of cost flexibility and the success of the efficiency improvements realized in the recent past are reflected in the increase in EBITDA in the third quarter to EUR 24.6 million (Q3-2019: EUR 22.4 million). The EBITDA margin thus rose to 15.2 percent. EBITDA for the first three quarters was EUR 59.9 million, compared to EUR 64.6 million in 2019. The operating result (EBIT) in the third quarter climbed by 26 percent to EUR 14.4 million (Q3-2019: EUR 11.4 million). In the first three quarters of 2020, the Group generated an EBIT of EUR 28.8 million compared to EUR 31.6 million in the previous year. As the financial result also improved significantly, earnings before taxes at September 30, at EUR 27.1 million, were only slightly below the 2019 figure (EUR 28.0 million). After taxes, Surteco reported a nine-month profit of EUR 18.6 million after EUR 19.5 million and earnings per share of EUR 1.20 (9M-2019: EUR 1.26).
“Our business has picked up significantly in Q3, as announced, after the previous quarter was weak due to corona. Thanks to our high cost efficiency, we were even able to improve earnings substantially in the quarter under review. We are therefore also cautiously optimistic for the final quarter, provided that the situation does not deteriorate significantly due to the pandemic,” comments Wolfgang Moyses, CEO of Surteco Group SE, on the situation.
Surteco’s segments were affected by the corona pandemic to varying degrees in the first three quarters. While Profiles, at EUR 77.9 million, achieved a 10 percent increase in sales and EBIT to EUR 8.1 million (previous year: EUR 7.9 million) thanks to strong demand from the construction and renovation sector, the Decoratives segment suffered from the effects of the pandemic, particularly in the UK, Italy and France. As a result, segment sales fell by 7 percent to EUR 331.0 million and the nine-month result to EUR 21.6 million (previous year: EUR 26.9 million). Sales in the Technicals segment stabilized in the third quarter. After nine months, however, at EUR 50.4 million, they were 28 percent below the previous year’s level, mainly due to the disposal of the American impregnation business. By contrast, the operating result rose significantly to EUR 3.3 million (previous year: EUR 1.7 million).