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Semperit Increases Revenue and Result in Q1-3 2013
- Revenue up 11.2% to EUR 684.4 million despite weak economy
- Significant rise in EBITDA (+23.9%) and EBIT (+19.6%)
- Medical Sector: Integration of Latexx Partners drives revenue and earnings increase
- Industrial Sector: Rise in revenue and earnings in spite of negative cyclical effects
- Stable development expected in the upcoming months
The publicly listed Semperit Group successfully maintained the corporate development recorded in the first half of 2013 during the third quarter. In spite of challenging economic conditions, revenue and earnings improved to new record nine-month figures. In the first three quarters of 2013, Semperit increased its revenue by 11.2% to EUR 684.4 million. In the Medical Sector, the successful integration of the glove producer Latexx Partners acquired in 2012 provided the basis for double-digit revenue and earnings growth. Although the Industrial Sector has been impacted again by a difficult market situation, Semperit managed to successfully implement countermeasures and thus generate revenue and earnings increases.
The Group's consolidated EBITDA increased by 23.9% to EUR 102.0 million from EUR 82.3 million in the previous year. Despite the growth investment related increase in depreciation, EBIT rose by 19.6% to EUR 69.0 million, up from the prior-year level of EUR 57.7 million. In addition to the strong operating performance of the company, the active raw material management and continued exploitation of low raw material prices played a significant role in earnings improvements. Profitability improved accordingly. The EBITDA margin rose from 13.4% to 14.9% year-on-year, whereas the EBIT margin climbed to 10.1% from 9.4% in the previous year. Semperit achieved a net result (earnings after tax) of EUR 44.5 million, constituting a 25.7% rise from the comparable level of EUR 35.4 million in the first three quarters of 2012.
"In a challenging market environment, Semperit developed very well in the first nine months of 2013. We were successful because we resolutely implemented our growth projects and optimally took advantage of the low raw material prices during the reporting period", explained Semperit CEO Thomas Fahnemann. "With respect to our glove business we successfully integrated Latexx Partners within one year, which had clearly positive effects on revenue, earnings and profitability. Our efforts also paid off in the Industrial Sector. We are successively gaining market shares with new products accompanied by sales successes in existing as well as in new markets. Our production capacities continue to be well utilised, so that we can expect a stable development in the coming months without major macroeconomic impulses", CEO Fahnemann added.
For the quarter revenue rose 13.2% year-on-year to EUR 233.0 million, and was at about the same level as the second quarter of 2013 despite the seasonally weaker summer months. EBITDA improved by 27.6% from the prior-year period to EUR 36.3 million, whereas EBIT was up 25.2% to EUR 25.3 million. Semperit also generated double-digit EBITDA and EBIT margins at 15.6% and 10.8% respectively.
The equity ratio at 49.5% remained at the high level of the 2012 year end (49.3%). Cash and cash equivalents rose from EUR 133.3 million to EUR 169.5 million due to the strong operating cash flow generation; the cash inflow from the corporate Schuldschein loan also contributed to the positive cash position.
"While we are financing our business growth we still have a positive net liquidity of EUR 31.1 million after deducting the financing liabilities. We are well prepared and financially strong for further growth", said Semperit CFO Johannes Schmidt-Schultes, pointing to the company's extremely sound financial position.
Medical Sector: Increase in revenue and earnings
In the Medical Sector (the Sempermed segment), the integration of Latexx Partners and an improved sales performance resulted in higher sales volumes. Double-digit sales growth was recorded in Europe and Asia. Therefore, the ongoing negative price effects caused by the lower raw material prices compared to 2012 were more than offset. The absence of negative one-time effects like in Q1 2012 also had an additional positive impact on earnings development.
Revenue of the Medical Sector rose 18.7% in the first three quarters to EUR 331.0 million. EBITDA was up more than 40% to EUR 44.1 million, providing an EBITDA margin of 13.3% compared to 11.2% in the prior-year period.
Industrial Sector: Revenue and earnings rise despite negative cyclical effects
The Industrial Sector (the Semperflex, Sempertrans and Semperform segments) showed a positive business development in spite of the challenging economic environment. New customers were attracted and market shares gained thanks to new products and a good sales performance.
The development of the Semperflex segment was characterised by a very strong order book in Europe. Demand developed positively in the USA. Semperflex increased its market share for both hydraulic and industrial hoses. The production plants operated at almost full capacity. The Sempertrans segment showed a very good development. A substantial rise in revenue was achieved on the basis of strong volume growth at relatively low raw material prices. Capacity utilization will remain good and solid for Q1 2014. The Semperform segment also generated revenue growth. Almost all business units contributed to this development with higher sales volumes, which compensated for the negative price effects.
Revenue of the Industrial Sector was up 5.0% in the first three quarters of 2013 totalling EUR 353.4 million. EBITDA rose by 18.1% to EUR 70.7 million. This resulted in a very good EBITDA margin of 20.0%, up from 17.8% in the previous year. Moreover, double-digit EBIT margins were generated in all segments.
The Semperit Group expects that the current level of incoming orders will continue beyond 2013. However, a sustained recovery of the global macroeconomic environment is not expected in the foreseeable future.
In the Medical Sector the completion of the integration of Latexx Partners, a business acquired in November 2012, is imminent; a further increase of capacity utilisation is expected. The global market environment for examination gloves is expected to remain unchanged in 2014.
From today's perspective, it is expected that demand will remain largely stable in the Industrial Sector. Capacity utilisation in the Sempertrans segment in particular remains good. The Semperflex segment expects positive demand momentum, especially from Europe. However, over the next several months demand might react in some cases to changes in the economy.
The Group reaffirms its previous growth targets: to achieve double-digit revenue growth on average in the years from 2010 to 2015 inclusive. The Semperit Group still aims to achieve an EBITDA margin of between 12% and 15% and an EBIT margin of between 8% and 11%.
The report on the first three quarters of 2013 is available for download at: http://www.semperitgroup.com/en/ir/
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