EQS-News: Semperit strengthened for further growth after transformation year – earnings 2023 still burdened by sold medical business

Semperit strengthened for further growth after transformation year – earnings 2023 still burdened by sold medical business

• Continued operations with revenue of EUR 721.1 million (–7.5%), EBITDA of EUR 71.8 million 
  (–28.5%) and positive earnings after tax of EUR 24.9 million (–35.2%)
• Cost reductions with a run rate of more than EUR 10 million p.a. are being implemented, with an effect on earnings of EUR 5.8 million already in 2023
• EBITDA to increase to around EUR 80 million in the 2024 financial year
• Dividend of EUR 0.5 per share to be proposed to the Annual General Meeting

Vienna, March 19, 2024 – The Semperit Group performed solidly in a challenging market environment characterized by high Inflation and a weak economy in the 2023 financial year. Revenue of EUR 721.1 million was generated, which was 7.5% below the previous year’s figure. Cost-cutting programs introduced at an early stage already had an impact of
EUR 5.8 million on earnings. Continued operations generated EBITDA adjusted for one-off expenses of EUR 81.7 million (–14.7%) and unadjusted EBITDA of EUR 71.8 million (–28.5%). Earnings after tax from continued operations were positive at EUR 24.9 million, while the loss from the medical business, which has been sold, had a significant negative impact as expected. Earnings after tax therefore amounted to EUR –17.1 million.

“The 2023 financial year was eventful and at the same time formative for Semperit, as it marks our repositioning as an elastomer specialist purely for the industrial sector. The most important milestones were the sale of the medical business and the acquisition of the liquid silicone specialist Rico, which complements our product range ideally and in attractive markets,” says Semperit CEO Karl Haider. “The Semperit Group is thus in a strong position to further expand its position as a leading provider of advanced and sustainable elastomer products and solutions.”

 "The economic environment was challenging in 2023, but our cost-cutting measures are taking effect. In addition, we invested in our organic growth projects including the construction of a highly automated, additional hydraulic hose production at our site in Odry in the Czech Republic, already Europe’s largest hose factory. With this focus we are setting a new benchmark in cost leadership and strengthening our competitiveness as a top global player. In the liquid silicone sector, we are investing in additional capacities in Thalheim and thus also in our technological lead in injection molding tools and automation."

Robust financial base and outlook

The Semperit Group has a robust balance sheet and financial base with an equity ratio of 45.3%, net financial debt of EUR 115.2 million and cash and cash equivalents of EUR 112.7 million.

Semperit expects the market environment to remain challenging in the coming months. No significant recovery in demand is expected for the Semperit Industrial Applications division in the short term, as the reduction of increased customer inventories is expected to extend into the first half of 2024. In addition, demand from relevant customer industries (including construction machinery and agricultural machinery) continues to decline or does not yet show any signs of recovery. For the Semperit Engineered Applications division, however, the good demand from the mining, healthcare, food and railroad industries should continue.

Against this background and the initiated cost measures, EBITDA is expected to be around EUR 80 million in 2024. The Executive Board will propose the distribution of a dividend of EUR 0.5 per share at the Annual General Meeting on April 23, 2024.

Earnings development 2023 in detail:

The continued operations of the Semperit Group recorded revenue of EUR 721.1 million (–7.5%) in the 2023 financial year. The two divisions, in which the former Industrial Sector has been reorganized, developed differently. While the difficult economic market environment in the Semperit Industrial Applications division (SIA, comprising Hoses and Profiles) led to a decline in sales volumes and thus revenue by –26.5% to EUR 330.8 million in the 2023 financial year, the Semperit Engineered Applications division (SEA, comprising Form, Belting and Rico) benefited primarily from the ongoing strong demand for mining products and the associated demand for conveyor belts as well as the demand for special products for formed parts. Revenue in the SEA division thus increased by 23.7% to EUR 351.0 million, of which EUR 37.2 million was attributable to Rico (for the months of August to December 2023). In Surgical Operations (contract manufacturing of surgical gloves in Wimpassing including packaging in Sopron for HARPS), revenue fell as expected by 23.3% to EUR 42.1 million.

Cost reductions take effect

Total expenses fell by 7.7% to EUR 649.2 million. Savings in cost of materials (–19.4%), primarily as a result of lower production volumes, were partly offset by higher personnel expenses (+11.7%) and other operating expenses (+2.8%), which resulted from one-off effects (in particular the transaction costs of the Rico acquisition and higher IT-related expenses in connection with the sale of the medical business), among other things. The cost-cutting programs introduced have already cut down expenses by a total of EUR 5.8 million, of which around 85% was attributable to personnel expenses and the remainder to other operating expenses.

EBITDA in continued operations amounted to EUR 71.8 million (previous year: EUR 100.5 million) and the EBITDA margin to 10.0% (previous year: 12.9%). The Rico Group’s operating contribution to EBITDA totaled around EUR 7.6 million. However, the profits recognized in advance of EUR 3.0 million as part of the purchase price allocation and transaction costs of EUR 3.3 million initially reduced this contribution to around EUR 1.2 million.

Adjusted for special effects amounting to around EUR 9.9 million, EBITDA totaled EUR 81.7 million (previous year: EUR 95.8 million). These are transaction costs for the acquisition of the Rico Group, profits recognized in advance in the purchase price allocation, one-off severance payments for changes to the Executive Board and for reductions in headcount, as well as one-off expenses (IT) for the sale of the medical business. The adjusted EBITDA margin 2023 amounted to 11.3% (previous year: 12.3%).

EBIT from continued operations amounted to EUR 34.6 million (previous year: EUR 62.1 million), earnings after tax to EUR 24.9 million (previous year: EUR 38.4 million) and earnings after tax from discontinued operations to 
EUR –41.9 million (previous year: EUR –44.0 million). The latter included a reclassification of historical currency translation differences of EUR –23.5 million due to the deconsolidation.

Overall, earnings after tax (from continued and discontinued operations) were negative at EUR –17.1 million (previous year: EUR –5.6 million). Earnings per share attributable to the shareholders of Semperit AG Holding thus amounted to EUR –0.82 in the 2023 financial year (previous year: EUR –0.27).

Free cash flow is the net cash flow adjusted for interest payments that is available for strategic growth investments, dividends and the repayment of debt. It amounted to EUR 26.3 million in the 2023 financial year (previous year: 
EUR –2.8 million). Also considering the proceeds from the sale of Examination Operations (medical business), results in EUR 111.5 million (previous year: EUR –2.8 million).

Overview of the main financial figures of the financial year 2023:

For further details please see the Semperit Group’s annual report 2023: https://www.semperitgroup.com/en/investor-relations/

Contact:

www.semperitgroup.com

www.linkedin.com/company/semperit-ag

About Semperit
 

The publicly listed Semperit AG Holding is an internationally oriented group of companies that develops, produces and sells high-quality elastomer products and applications for industrial customers in over 100 countries worldwide through its two divisions Semperit Industrial Applications and Semperit Engineered Applications. With its highly efficient production and cost leadership, the Semperit Industrial Applications division focusses on industrial applications in connection with large-scale production, including hydraulic and industrial hoses as well as profiles. The Semperit Engineered Applications division comprises the production of escalator handrails, conveyor belts, cable car rings, other engineered elastomer products, as well as the Rico Group, and focuses on customized technical solutions. The traditional Austrian company was founded in 1824 and is headquartered in Vienna. The Semperit Group employs around 4,600 people worldwide and has 16 production sites and numerous sales offices in Europe, Asia, Australia and America. In the 2023 financial year, the Group generated revenue of EUR 721.1 million and EBITDA of EUR 71.8 million.