Semperit sales fall on poor hose volumes

ERJ staff report (DS)

Vienna, Austria - Sales at the Semperit group in the nine months to September 2012 declined by 1.7 percent to euro 615.5 million. The company said this was due to the European downturn and specifically volume effects in the Semperflex segment for industrial hoses and elastomer sheeting. Earnings fell by 5 percent in the period.

In the Sempermed segment, volumes for examination and surgical gloves increased. Semperflex's Hydraulic Hoses business unit was able to maintain the volume it achieved in the economically strong previous year period. The shift in Sempertrans portfolio away from textile conveyor belts towards increased production of higher-value metal conveyor belts enabled the positive effect on prices to continue.

Earnings before interest, tax, depreciation and amortisation (EBITDA) in the first nine months of 2012 decreased by 5.0% from EUR 86.6 million to EUR 82.3 million. EBIT (earnings before interest and tax, i.e., operating profit) decreased by 11.1% from EUR 64.9 million to EUR 57.7 million.

The Group said its earnings were primarily impacted by the lower contribution of the Sempermed segment. Intense competition and below-average capacity utilisation at the start of 2012 were responsible for the decline. This trend was reinforced in the first quarter by higher energy costs due to heavy rainfall in Thailand and incremental costs in connection with the start-up phase at the new factory in Surat Thani, Thailand. Capacity utilisation improved significantly in the second and third quarter of 2012, helping to considerably increase Sempermed's contribution to earnings.

Sempermed and Semperflex focused on increasing sales volumes and gaining market share, following an increase in capacity. Following the successful turnaround in 2011 at Sempertrans, a further improvement in the quality of earnings was achieved. The goal in the Semperform segment was to protect its margin quality.

Investments in the first three quarters of 2012 were down year-on-year from EUR 36.1 million to EUR 29.6 million. Investment activities were focused on the further expansion of the new factory in Thailand and on replacement and expansion investments for Semperflex at the locations in the Czech Republic, Thailand and China.

Looking forward, Semperit said in its results statement, “The current difficult environment does not allow to expect a rapid recovery in demand. Instead, the present level of order intake will continue in the fourth quarter of 2012 and in the first quarter of 2013. We expect that any positive momentum could start from the second quarter of 2013

onwards. “

Despite the current difficult economic circumstances, Semperit Group reconfirms its multi-year growth targets, aiming for double-digit revenue growth on average in the period from 2010 through 2015 and simultaneously an EBIT margin of around 10%.

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Press release from Semperit