EANS-News: Semperit AG Holding Semperit impacted by weak market environment
and one-off effects in 2016
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Financial Figures/Balance Sheet
- Revenue at EUR 852.4 million (-6,8%) below prior-year's level
- Earnings development in 2016 impacted by one-off effects
- Largely stable sales development and significantly positive one-off effects
through joint venture transaction expected for 2017
- Operational earnings development without one-off effects impacted by increase
in raw material prices and elimination of earnings contribution of Siam
Sempermed in 2017
In 2016, the business development of the publicly listed Semperit Group was
characterised by a persistently difficult market environment in the Industrial
and Medical Sectors. While the Industrial Sector performed well contrary to the
market trend, one-off effects relating to the planned termination of the joint
ventures with the Thai Sri Trang-Agro Industry Public Co Ltd Group ("joint
venture transaction") and high margin pressure burdened the earnings
development. In 2017, high positive one-off effects from this transaction are
expected in return.
In the financial year 2016, the group's revenue of EUR 852.4 million was 6.8%
below the previous year's value of EUR 914.7 million. The adjusted EBITDA
(without one-off effects) declined by 14.1% to EUR 82.6 million (after EUR 96.2
million). The adjusted EBIT at EUR 49.0 million also showed a downward trend
compared to the previous year at EUR 66.7 million. The adjusted EBITDA margin
was 9.7% (after 10.5%) and the adjusted EBIT margin was 5.7% (after 7.3%). The
adjusted earnings after tax declined from EUR 46.4 million to EUR 23.1 million
due to negative foreign currency effects and higher interest expenses. The
adjusted earnings per share fell accordingly to EUR 1.12 (after EUR 2.26).
The non-cash one-off effects relating to the joint venture transaction totalled
EUR -31.9 million. Considering these one-off effects, EBITDA was EUR 77.9
million and EBIT EUR 27.3 million. Earnings after tax amounted to EUR -8.8
million and earnings per share to EUR -0.43.
In 2016, Semperit invested a total of EUR 65.1 million (after EUR 71.8 million)
to expand and modernise its production plants. With an equity ratio of 31.8% (31
December 2015: 38.7%), Semperit continued to have a solid capital structure at
the reporting date. Despite high investments, cash and cash equivalents
increased to EUR 190.2 million at the end of 2016 after EUR 126.4 million at the
end of 2015.
The Management Board will propose a dividend of EUR 0.70 per share (2015: EUR
1.20 per share) for 2016 to the Annual General Meeting. This dividend proposal
is based on the assumption that there will be a closing of the joint venture
transaction. If the transaction fails to be closed, the Management Board
reserves the right to propose a resolution to the Annual General Meeting that
deviates from this dividend proposal.
Industrial Sector: solid development in difficult markets
The Industrial Sector (Semperflex, Sempertrans and Semperform segments)
developed better than the market despite a weak economic environment. Volume
growth and market share gains were achieved in almost all product areas. All
production sites were well utilised. Revenue of the Industrial Sector declined
only slightly in 2016 from EUR 521.0 million to EUR 506.4 million (-2.8%)
despite partially significantly declining sales markets. EBITDA fell by 4.2% to
EUR 89.5 million.
Medical Sector burdened by margin pressure and one-off effects
The Medical Sector (Sempermed segment) was burdened by increased margin pressure
and one-off effects of the joint venture transaction. In addition, start-up
costs relating to the ongoing capacity expansion in Malaysia had a negative
effect on earnings. Semperit counteracted with comprehensive efficiency and cost
optimisation programmes as well as a focused marketing and sales strategy.With
the planned joint venture transaction an overall realignment of the Sector was
introduced. Revenue of the Medical Sector decreased in 2016 by 12.1% to EUR
346.0 million. EBITDA declined to EUR 6.6. million (after EUR 29.4 million).
Outlook 2017
After having reached the lowest point in 2016 in the sales markets that are
relevant for Semperit, the company expects a moderate improvement of market
conditions in the course of 2017. Due to the rising trend of raw material prices
as well as better economic forecasts, the generally low demand in the industrial
field is likely to recover slowly. Demand in the medical field, which is largely
independent of economic cycles, is expected to continue to increase in 2017. On
the supply side, the glove market continues to face overcapacities, which leads
to further price and margin pressures.
For 2017, Semperit expects a largely stable sales development with good capacity
utilisation and positive one-off effects on earnings in connection with the
joint venture transaction. The expected closing of the joint venture transaction
- taking into account a non-cash reduction of goodwill - will have positive
one-off effects amounting to EUR 85-95 million on the EBITDA and EBIT bases as
well as around EUR 65-75 million of earnings after tax.
Semperit continues to expect a cash inflow from the joint venture transaction of
around USD 200 million (around EUR 187 million) before taxes, of which a major
part has been hedged against currency fluctuations. Semperit thus strengthens
its capital base and promotes investments for further growth. From today's
perspective, the adjusted EBIT (without one-off effects from the joint venture
transaction) for the financial year 2017 will be below the adjusted EBIT of 2016
(EUR 49 million). The main reason for this are increasing raw material prices,
which in both Sectors can probably only be passed on to the customers with a
delay, and the elimination of the earnings contribution of Siam Sempermed
Corporation Ltd. caused by the joint venture transaction. Furthermore, the
currently high utilisation of production capacities reduces the positive effects
of the expected market recovery on the sales development in the Industrial
Sector.
The strategic orientation will remain unchanged in 2017. Semperit will continue
to focus on organic growth as well as operational earnings improvements in the
Medical Sector. Investments in the expansion of capacities will be continued. In
the Industrial Sector, the production capacities for hoses in Odry, Czech
Republic, for conveyor belts in Be?chatów, Poland, as well as for window and
door profiles in Germany will be expanded. In the Medical Sector, the focus is
on the expansion of the factory in Malaysia as well as cost savings and
efficiency enhancements. Total capital expenditures (CAPEX) of around EUR 80-90
million (2016: EUR 65 million) have been planned for 2017.
The Annual report 2016 will be available at www.semperitgroup.com/ir.
Photo download: https://semperitgroup.picturepark.com/Go/wPXX3GzO
About Semperit
The publicly listed company Semperit AG Holding is an internationally-oriented
group that develops, produces, and sells highly specialised rubber and plastic
products in more than 100 countries for the medical and industrial sectors:
examination and surgical gloves, hydraulic and industrial hoses, conveyor belts,
escalator handrails, construction profiles, cable car rings, and products for
railway superstructures. The headquarters of this traditional Austrian company,
which was founded in 1824, are located in Vienna. The Semperit Group employs
around 7,000 people worldwide, including close to 3,900 in Asia and more than
800 in Austria (Vienna and production site in Wimpassing, Lower Austria). The
group has 22 manufacturing facilities worldwide and numerous sales offices in
Europe, Asia, Australia and America. In 2016, the group generated sales of EUR
852 million and EBITDA of EUR 78 million.
Further inquiry note:
Martina Büchele
Group Communications Manager
Tel.: +43 676 8715 8621
martina.buechele@semperitgroup.comwww.semperitgroup.com
Stefan Marin
Head of Investor Relations
Tel.: +43 676 8715 8210
stefan.marin@semperitgroup.com
end of announcement euro adhoc
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company: Semperit AG Holding
Modecenterstrasse 22
A-1030 Wien
phone: +43 1 79 777-210
FAX: +43 1 79 777-602
WWW: www.semperitgroup.com
sector: Synthetics & Plastics
ISIN: AT0000785555
indexes: WBI, ATX Prime, ViDX, Prime Market, ATX GP
stockmarkets: official market: Wien
language: English