SIMONA 2016: Revenue targets met – Earnings targets exceeded
Financial Press Releases
Kirn, 26/04/2017. The SIMONA Group recorded growth in revenue and earnings in the 2016 financial year. On the back of solid sales in the United States and a favourable performance within the area of Semi-Finished Products, revenue expanded by 1.8 per cent to €366.7 million. This lies within the guidance range of €360-370 million. EBIT rose by 12.9 per cent to €30.2 million (prev. year: €26.7 million) and was above the guidance range of €24-27 million. The EBIT margin was 8.2 per cent (prev. year: 7.4 per cent). The plastics processing company also made a solid start to the 2017 financial year. In the first quarter, sales revenue increased by 11.1 per cent year on year to €98.9 million.
"Fiscal 2016 proved to be a good year for the SIMONA Group. Our success was driven by a dynamic performance in the United States and improved profitability within our Semi-Finished Products business in Europe. We also pressed ahead with the task of strategic repositioning. Our efforts were mainly centred around innovation, growth beyond Europe and operational excellence," says Wolfgang Moyses, Chief Executive Officer of SIMONA AG.
Revenue growth was again fuelled primarily by business in the United States, the second-largest individual market for the Group. Here, sales revenue increased by 10.3 per cent to €90.1 million*. The Industrial Products division produced solid growth, while the Aviation division, whose key focus is on aircraft interiors, expanded dynamically in the financial year just ended. The region comprising "Europe" saw sales revenue decline by 1.5 per cent to €257.3 million* in total (prev. year: €261.3 million). This was attributable mainly to weakness within the European pipes and fittings market. Revenue fell slightly in Germany, down by 0.2 per cent. Buoyed in part by strong growth within the Spanish economy and more expansive business in Italy, the Group recorded a slight upturn in sales in Western Europe. The continued decline seen in Russia was almost entirely offset by growth achieved in the other Eastern European markets. After two sluggish quarters, the company managed to make significant ground in Asia. This translated into revenue growth of 11.5 per cent at the end of the financial year, taking the figure to €19.3 million*. In India, the company completed its successful launch of a new subsidiary, which is seen as an important step when it comes to tapping growth within the burgeoning market for polymer applications.
The Semi-Finished and Finished Parts division and the Pipes and Fittings division developed along different lines in the financial year just ended. Semi-Finished Parts recorded growth around the globe and in the majority of product groups. PVC products used in the areas of construction and aviation performed particularly well.
SIMONA also stood its ground in the core market of chemical tank and equipment engineering, where it managed to strengthen its position with the help of a new range of fully fluorinated plastics and a proprietary software application for tank calculation. In total, revenue generated within the area of Semi-Finished Products expanded by 4.7 per cent to €289.8 million.
Business within the Pipes and Fittings division, by contrast, proved unsatisfactory. Sales revenue fell by 7.9 per cent to €76.9 million. This division was adversely affected by anaemic infrastructure business, particularly in the second half of the year. Business was impacted by the absence of suitable projects, especially within the district heating and lignite markets in Europe. Sales relating to industrial piping systems were up slightly.
The SIMONA Group managed to exceed its earnings target. EBIT rose from €26.7 million to €30.2 million; the guidance range had been set at €24-27 million. The EBITDA margin stood at 8.2 per cent, compared to 7.4 per cent for the same period a year ago. "Our solid bottom-line result was attributable mainly to strong earnings in the United States, improved profitability within our Semi-Finished Products business in Europe and satisfactory profit from Pipes and Fittings despite a decline in revenue," says Moyses.
The SIMONA Group's revenue target for 2017 has been set at €370-380 million, while the guidance figure for EBIT is €25-30 million. The United States and Eastern Europe are expected to provide the strongest impetus for growth. In Western Europe, a region that continues to be dominated by highly competitive forces, the Group will be looking to stand its ground in the core market of industrial products and generate growth through new fields of application. The objective for the SIMONA Group in Asia is to use its positive performance of recent quarters as a springboard for further growth.
"We want to keep on doing what we do well, getting a little better at it every year. This mainly means growing in the new market segments of construction, agriculture and mobility as well as further improving our profitability in Europe. We want to continue growing in the US and maintain a healthy level of profitability. As part of an investment offensive, we will be looking to raise our capacity and efficiency levels at the company's US plants. In Asia, our aim is to use the positive trend of the past few months for the purpose of increasing our market share and, above all else, turning a profit. This will also involve expanding and strengthening our organisation as a whole. As from May, Yuen Kwang Wong will oversee the Group's business activities in Asia in his capacity as CEO of the newly established company in Singapore. He is a top executive who studied in Germany and has many years of experience within the Asian plastics industry," says Moyses.
SIMONA has made a solid start to the 2017 financial year. In the first quarter, Group revenue rose by 11.1 per cent to €98.9 million. Growth was particularly strong in the United States and Asia, while business in Germany was stagnant. At €8.4 million, EBIT for the first quarter was up markedly on the prior-year figure (€6.1 million). The EBIT margin increased from 6.8 per cent to 8.5 per cent.
*allocated to place of registered office of revenue-generating business unit