DGAP-News: SURTECO SE

SURTECO SE with good third quarter

- Sales for the first nine months reach EUR 516.4 million (+5 %)

- Growth in the third quarter at 19 %

- Acquisitions exert positive impact

- EBIT improvement by 10 % to EUR 33.7 million;
Q3 plus 59 %

Buttenwiesen-Pfaffenhofen, 14 November 2017 - SURTECO SE - leading global manufacturer of surfaces for the furniture and wood-based materials industry and producer of technical extrusions (profiles) - succeeded in achieving significant growth in the third quarter. The recent takeovers of the Portuguese Probos Group and the British Nenplas Group contributed to the increases in sales and profit. However, robust organic growth was also generated. The Group posted a 19 % increase in quarterly sales to EUR 182.3 million (Q3-2016: EUR 153.2 million) and an improvement of 5 % to EUR 516.4 million (9M-2016: EUR 490.9 million) after nine months. The high level of profitability for the acquired companies and positive effects derived from measures directed towards efficiency enhancements meant that earnings before financial result and income tax (EBIT) increased by 59 % to EUR 14.4 million (Q3-2016: EUR 9.0 million) during the quarter under review and went up to EUR 33.7 million (9M-2016: EUR 30.6 million) after three quarters.

"The first-time consolidation of the Probos Group taken over in July led to an increase in margin for the Group and highlights the high level of profitability of our new Group subsidiary companies. This profitability combined with robust organic growth means that we are confident of achieving our goals for the year," commented Dr. Herbert Müller, Chairman of the Board of Management of SURTECO SE.

Balance sheet and free cash flow strongly influenced by the Probos takeover

The balance sheet of the SURTECO Group as at 30 September 2017 was influenced by the takeover of Probos and the repayment of a tranche from the private placement in the USA (USPP). As a result, the balance sheet total of the SURTECO Group rose by 9 % to EUR 736.2 million (31 December 2016: EUR 673.9 million). Since the equity capital at EUR 345.1 million hardly changed at all, the equity ratio fell from 51.4 % to a nonetheless equally respectable level of 46.9 %. The strength of operations is highlighted by the improvement of cash flow from current business operations amounting to EUR 44.2 million compared with the year-earlier value (EUR 37.0 million). Deducting the acquisition-related higher cash flow from investment activity amounting to EUR -102.2 million (2016: EUR -23.5 million) yields a free cash flow after nine months of EUR
-58.0 million following EUR 13.5 million in the previous year. Since Probos was financed by means of bridging finance, which was fully funded with an assignable loan in October 2017 under favourable conditions, net financial debt increased to EUR 210.2 million (31 December 2016: EUR 135.6 million) and correspondingly the level of debt (gearing) increased likewise from 39 % to
61 %.

Outlook for 2017 confirmed: EBIT should continue to be in the projected range of EUR 42 to 46 million

In view of the positive development after nine months, the management of SURTECO is continuing to assume a substantial increase in Group sales for the year as a whole by comparison with the previous year (EUR 639.8 million). Against this background, the previous forecasts for earnings can be confirmed. EBIT of the Strategic Business Unit Paper should therefore be above the value for the previous year and EBIT for the Strategic Business Unit Plastics is in fact likely to be substantially higher than projected. EBIT of the SURTECO Group should consequently continue to be in the projected range of EUR 42 to 46 million.

You will find the report on the first nine months of the business year 2017 and other information about SURTECO SE on the Internet at www.ir.surteco.com.

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Profile of SURTECO
SURTECO SE, Buttenwiesen-Pfaffenhofen, is a leading international specialist for surface technologies. The product portfolio includes papers printed with decorative designs, impregnated products, release papers, decorative flat foils and edgebandings based on specialist papers for technical applications and plastics. The extensive product portfolio is completed by skirtings made of plastic, technical extrusions for industry and do-it-yourself ranges and shutter systems.
The Group currently has a workforce of appr. 3,300 and manufactures at 25 sites on four continents, currently generating approximately 27 % of sales in Germany, 45 % in European countries outside Germany and the remainder in America, Asia and Australia. Customers of SURTECO generally come from the wood based materials, flooring and furnishing industry and the interior industry.
The shares of SURTECO SE are listed on the official market (Prime Standard) of the Frankfurt and Munich Stock Exchanges under the ticker symbol SUR and ISIN DE0005176903. They are also traded on the stock markets in Berlin, Düsseldorf, Stuttgart Hamburg and Hannover.

Cautionary note regarding forward-looking statements

This press release contains statements of future forecasts or expectations and other forward-looking statements and involves known and unknown risks and uncertainties. There is therefore no guarantee for the statements and expectations expressed herein. The actual results and developments may differ substantially. The company does not intend to - and assumes no obligation - to update any forward looking statements contained herein or to adapt such information to future results or developments.

Important indicators of SURTECO SE
(in EUR million)

¹ Difference to balance of segment earnings due to internal clearing
² Based on a number of shares amounting to 15,505,731
³ Net debt / Equity