EQS-News: Semperit AG Holding: Strong first-half result in Industrial Sector despite difficult market conditions

EQS-News: Semperit AG Holding / Key word(s): Half Year Results
Semperit AG Holding: Strong first-half result in Industrial Sector despite
difficult market conditions
17.08.2022 / 07:29 CET/CEST
The issuer is solely responsible for the content of this announcement.
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Press release
Semperit: Strong first-half result in Industrial Sector despite difficult
market conditions
 
• Group-wide revenue decreased by –13.6% to EUR 570.6 million due to the
expected slump in the medical business
• Extraordinarily strong sales growth in the Industrial Sector by 38.9%
to EUR 372.3 million; halving in the Medical Sector by –49.5% to EUR
198.3 million
• EBITDA decreased by –69.6% to EUR 75.2 million, EBITDA margin fell by
–24.3 percentage points to 13.2% (H1 2021: 37.5%)
• EBIT decreased by –78.5% to EUR 48.4 million; EBIT margin fell by
–25.5 percentage points to 8.5% (H1 2021: 34.0%)
• Free cash flow reduced to EUR –4.6 million (H1 2021: EUR 117.0
million)
• Organic growth due to investment of a three-digit million sum in the
sustainable expansion of the world’s largest production facility for
industrial and hydraulic hoses (Odry)
Vienna/Austria, 17 August 2022 – In the first half of 2022 – under
ongoing, difficult market conditions – the listed Semperit Group recorded
a decline in revenue and earnings compared to record results of the same
period of the previous year. “As the Executive Board of the Semperit
Group, we are of course especially pleased with the excellent performance
of our Industrial Sector, which we are focussing on and where we continue
to clearly see the future of Semperit”, said CEO Karl Haider. “In the
Medical Sector, on the other hand, we saw the expected return to normality
after the pandemic-related special cycle of 2020 and 2021. In sum, we
achieved very strong earnings in an environment characterised by difficult
framework conditions; however, due to the given uncertainties, we have to
remain cautious with regard to the 2022 annual result and confirm the
profit warning from March. The separation from the medical business, which
was decided two and a half years ago, is now also coming back into our
focus.”
Excellent sales growth once again in the Industrial Sector
In the midst of continuing difficult market conditions marked by high
inflation, rising costs for raw materials, energy, wages, and transport as
well as by escalating geopolitical tensions, the Semperit Group recorded a
comparatively small decline in consolidated turnover of –13.6% to EUR
570.6 million compared to the first half of 2021: The record results in
the same period of the previous year had been extraordinarily high thanks
to the pandemic-related special cycle in medical protective gloves.
The Industrial Sector again achieved strong sales growth of 38.9% to EUR
372.3 million in the first half of 2022. This is primarily due to the
increase in average sales prices in all segments, which meant that raw
material and energy price increases could for the most part be quickly
passed on. In contrast, revenue in the Medical Sector declined by 49.5% to
EUR 198.3 million, which was mainly due to the sharp fall in price levels
following the end of the boom in medical protective gloves. Average sales
prices  in the first half of the year were still above the pre-coronavirus
level are, however still declining.
Operating result burdened by significant cost increases
Both the decline in turnover compared to the same period of the previous
year and rising costs for material expenses (including energy and
purchased services) of +12.7%, personnel expenses of +10.3%, and other
operating expenses (especially outgoing freight) of +25.8% burdened the
operating result. EBITDA, which rose to extraordinary levels in the past
two years as a result of the pandemic-related special cycle, fell
significantly by –69.6% to EUR 75.2 million (Industrial Sector +64.4%;
Medical Sector –92.9%) from EUR 247.5 million in H1 2021. The EBITDA
margin was 13.2% (H1 2021: 37.5%). The EBIT decreased to EUR 48.4 million
in H1 2022 from EUR 224.6 million in the previous year. The Semperit
Group’s EBIT margin decreased 34.0% in H1 2021 to a current 8.5%.
Cash investments in intangible assets and property, plant and equipment in
the first half of 2022, at EUR 28.4 million, were above the level of the
comparison period of the previous year of EUR 18.8 million and will
continue in the future to be concentrated increasingly in growth-oriented
investments.
Free cash flow totalled EUR –4.6 million in the first half of 2022
burdened by tax payments in line with the rules in connection with the
coronavirus-related special cycle in 2021, compared to EUR 117.0 million
in the same period of the previous year.
Outlook
Following a successful H1 2022 that was characterised by exceptionally
good results in the Industrial Sector, while at the same time the
corona-induced special economic conditions of medical protective gloves
have come to an end, the Semperit Group expects a significantly weaker
result for H2 2022 and therefore confirms the outlook published in March.
This is based on the following assumptions: The second half of the year is
generally the weaker half for the Semperit Group due to seasonal
cyclicality. Regularly planned maintenance and plant closures in summer
and Christmas reinforce this effect. Following the end of the
coronavirus-induced special cycle, a significantly weaker contribution
from the Medical Sector is expected, which will put a strain on the
Group’s result. This can be attributed to the normalisation of price
levels as well as to reduced demand due to high customer inventories,
which can only be reduced gradually, and to the faster-than-expected
return to a buyer’s market. The additional production capacities created
worldwide during the coronavirus pandemic are widening the current demand
gap. Added to this is the overall economic slowdown expected by the end of
2022 at the latest, which will likely have a negative impact on the
results of the Industrial Sector, too.
The annual result of the Semperit Group may of course also be considerably
influenced by developments such as the Russia-Ukraine war. Immediately
after the outbreak of the war, the Semperit Group stopped all deliveries
to Russia and Belarus in line with the sanctions imposed by the European
Union. The development of the energy crisis in Europe (energy prices and
availability), which is closely linked to the Russian-Ukraine conflict,
also plays a significant role in this context: A possible interruption or
discontinuation of the gas supply from Russia represents a risk that the
Semperit Group is mitigating with countermeasures (see below). Other
significant influencing factors in connection with the war and in
particular with the sanctions are the risks that special raw materials and
consumables which are necessary for the production of vulcanised rubber
products and further companies along the supply chain could be included on
the sanctions list. This would lead to further shifts in procurement flows
and to price increases. In addition to the general issue of global
availability and price increases for necessary raw materials and
consumables, there is also the risk that products whose production
processes are energy-intensive will become more expensive depending on the
price of oil and natural gas. In connection with functioning supply
chains, there is also uncertainty regarding sufficient container
availability to deliver the products and the availability of qualified
staff. A possible further shortage and increase in the price of European
road freight capacity would further exacerbate this problem.
Furthermore, it is still difficult to forecast the effects in connection
with the further development of the coronavirus pandemic and its influence
on the international production sites. This is evident, for example, in
the recent developments in China.
To counteract material shortages, management has made the conscious
decision to build up safety stocks of critical materials. This is
reflected in a temporary increase in working capital, among other things.
To be prepared for a possible stoppage of Russian natural gas supplies,
the management of the Semperit Group has decided to use energy sources and
technologies in the future which, unlike the steam boiler burners
currently used, do not have to be fired with natural gas. This applies in
particular to the sites in Wimpassing, Austria and in Odry, Czech
Republic, as well as to the German sites. These alternatives should be
operational in the course of H2 2022.
There is a high degree of uncertainty regarding sales volumes, since both
in the Medical Sector and to some extent in the Industrial Sector,
inventory optimisation programmes of customers can lead to an ordering
behaviour of customers that deviate from the usual. This is also due to
the cost increases, as price pass-through opportunities will depend on the
price sensitivity of the respective customers and the dynamics in the
segment-specific product markets.
Unclear and therefore also uncertain are the still unforeseeable further
developments of further geopolitical trouble spots, such as the current
situation in Taiwan. Added to this are the negative effects of inflation
and foreign currency developments.
The management of the Semperit Group is acting prudently and has initiated
the evaluation of appropriate proactive measures to mitigate these
developments at an early stage; packages of measures, particularly in the
area of materials management, are being successfully implemented. Current
geopolitical and market developments are being closely monitored, as are
their effects on capital goods markets and the market for business
acquisitions.
Although the 2022 financial year will be marked by special challenges, the
management will continue to focus on the strategic realignment: Although
the transformation into an industrial rubber specialist was delayed by the
coronavirus pandemic, this path will still be consistently pursued. This
includes consideration of the next possible steps to achieve the
separation from the Medical Sector. Strategic corporate development
projects have the clear objective of inorganic and organic growth.
In line with this strategy, the Semperit Group has set the course for
further organic growth at its giant hose plant in Odry, Czech Republic: A
total of EUR 110 million will be invested in the coming years in the
further expansion of one of the world’s largest production facilities for
industrial and hydraulic hoses, with special attention being paid to
sustainability criteria and a high degree of automation. Operations are
set to start up in the new production hall in 2025, where an extra 32
million metres of hydraulic hose will be added to the current production
capacity.
Overview of key financial figures in H1 2022 
Key figures of the Semperit Group,   H1 2022  Change H1 2021
in EUR million
Revenue   570.6  –13.6% 660.8
EBITDA   75.2  –69.6% 247.5
EBITDA margin   13.2% –24.3PP 37.5%
EBIT   48.4  –78.5% 224.6
EBIT margin   8.5% –25.5PP 34.0%
Earnings after tax   34.7  –80.0% 173.9
Earnings per share (EPS), in EUR   1.68  –80.0% 8.42
Gross cash flow   47  –79.6% 230.5
Free cash flow   –4.6 n.a. 117
         
Balance sheet key figures, in EUR   30.06.2022 Change 31.12.2021
million
Total assets   969.9 +1.2% 958.6
Equity   556.4 +3.0% 540.1
Net debt (+) / Net cash (–)   –105.8 –26.6% –144.2
Net debt to EBITDA   n.a. n.a. n.a.
Additions to tangible and intangible   20.3  –64.0% 56.4
assets
ESG   H1 2022 Change H1 2021
Employees (at balance sheet date)   6,936  –0.3% 6,956
Sector and segment key figures, in   H1 2022 Change H1 2021
EUR million
Industrial Sector Revenue 372.3 +38.9% 268.1
  EBITDA 68 +64.4% 41.3
  EBIT 54.5 +88.0% 29.0
Semperflex Revenue 173.7 +51.8% 114.4
  EBITDA 46.8 +78.5% 26.2
  EBIT 40.9 +98.1% 20.6
Sempertrans Revenue 69.8 +36.5% 51.1
  EBITDA 6.6 >100% 1.8
  EBIT 4.7 >100% 0.1
Semperform Revenue 53.7 +23.7% 43.4
  EBITDA 8.3 +24.2% 6.6
  EBIT 6.1 +27.9% 4.8
Semperseal Revenue 75.1 +27.1% 59.0
  EBITDA 6.3  –5.4% 6.6
  EBIT 2.8  –18.9% 3.4
Medical Sector (Sempermed) Revenue 198.3  –49.5% 392.7
  EBITDA 15.6  –92.9% 220.5
  EBIT 2.9  –98.6% 210.6
You can find further information in the Semperit Group’s half-year report
of 2022.
For queries, please contact
Monika Riedel                 
Director Group Brand Management,    
Corporate Spokesperson    
+43 676 8715 8620        
[1][email protected]
Judit Helenyi
Director Investor Relations
+43 676 8715 8310
j[2][email protected]
[3] www.semperitgroup.com
[4] www.linkedin.com/company/semperit-ag
About Semperit
The publicly listed company Semperit AG Holding is an internationally
oriented group that develops and produces highly specialised polymer
products for the industrial and medical sectors, selling them in over 100
countries around the world: hydraulic and industrial hoses, conveyor
belts, escalator handrails, construction profiles, cable car rings,
products for railway superstructures, and examination and surgical gloves.
Founded in 1824, this long-standing Austrian company has its headquarters
in Vienna, Austria. The Semperit Group employs around 7,000 people
worldwide, including some 3,800 in Asia and approximately 900 in Austria
(Vienna and production site Wimpassing, Lower Austria). The Group has
16 manufacturing facilities worldwide and numerous sales offices in
Europe, Asia, Australia, and America. In the 2021 financial year, the
Group generated revenue of EUR 1,182.2 million and an EBITDA of EUR 361.8
million.
17.08.2022 CET/CEST This Corporate News was distributed by EQS Group AG.
www.eqs.com
Language: English
Company: Semperit AG Holding
Am Belvedere 10
1100 Wien
Austria
Phone: +43 1 79 777-310
Fax: +43 1 79 777-602
E-mail: [email protected]
Internet: www.semperitgroup.com
ISIN: AT0000785555
Listed: Vienna Stock Exchange (Official Market)
EQS News ID: 1421941
End of News EQS News Service
1421941  17.08.2022 CET/CEST
References
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