Economic situation pushes sales down slightly
Surteco Group SE reports solid figures after six months despite the persistently difficult economic environment. As expected, Group sales from January to June amounted to EUR 352.7 million, around three percent below the previous year's level of EUR 365.2 million. EBIT was influenced by higher depreciation and amortization due to investments, but remained within the expected range at EUR 20.2 million (H1-2018: EUR 23.5 million).
Consolidated net profit for the first six months amounted to EUR 12.7 million (H1-2018: EUR 15.1 million). Surteco is therefore adhering to its full-year guidance for 2019 of stable sales of Euro 655 million and Euro 685 million (excluding prorated sales of Euro 15 million from the divested US impregnation business) and a significantly higher Group EBIT of between Euro 38 million and Euro 40 million. "We confirm our annual targets for 2019 with relatively stable Group sales. The cost efficiency measures are having an impact and we are therefore sticking to our EBIT forecast," commented Surteco CEO Dr. Herbert Müller.
The Group's three segments continued to develop differently. While Profiles benefited from its broad industry differentiation and achieved sales growth from EUR 44.1 million to EUR 47.2 million, the Decoratives segment with EUR 253.7 million (H1-2018: EUR 262.6 million) and the Technicals segment with EUR 51.8 million (H1-2018: EUR 58.5 million) suffered from the economic slowdown and falling demand in the laminate and furniture industry. Segment EBIT developed similarly to sales: Profiles recorded an increase to EUR 5.0 million after EUR 4.7 million in the previous year, while Decoratives (EUR 17.3 million after EUR 19.2 million) and Technicals (EUR 1.1 million after EUR 3.1 million) did not reach the previous year's level. The US impregnation business allocated to the Technicals segment was sold effective July 19, 2019. The activities had an expected annual sales volume for 2019 of around EUR 33 million.
Total assets rose from EUR 844.5 million to EUR 869.6 million in the first half of 2019. In view of a slight increase in equity, the equity ratio remained at a solid level of 41.1 percent. Net financial debt increased slightly to 204.6 million euros (December 31, 2018: 197.5 million euros) and the gearing ratio increased from 56 to 57 percent.
The development of cash flow was encouraging: Cash flow from operating activities rose from EUR 14.7 million to EUR 33.9 million and free cash flow to EUR 16.4 million as of June 30, 2019.