PRESS RELEASE NO. 5/2004

SEMPERIT CONFIRMS GROWTH TREND IN THIRD QUARTER EARNINGS GROWTH EXCEEDS EXPECTATIONS NEW RECORD BUSINESS RESULTS EXPECTED FOR 2004 AS A WHOLE

The overall business trend in the industrial group of Semperit AG Holding was quite encouraging in the first three quarters of 2004. The group recorded a steadily expanding sales volume and was pleased to post higher than expected growth in profits.

Group sales for the first three quarters in 2004 rose by about 4% as compared with last year, increasing to EUR 364.8 million. Profit before tax (PBT) saw above-average growth of about 20% and likewise rose to a record level of EUR 40.1 million.

Management was also pleased to see the dynamic growth continue in the third quarter in the Semperit Group as a whole. Third quarter sales rose by about 4% against 2003 to EUR 120.1 million while profit before tax increased by some 25% to EUR 13.0 million.

Semperit at a Glance (in € million)

1-9/00 1-9/01 1-9/02 1-9/03 1-9/04 Diff. 04/03
Sales 273.5 301.0 335.1 350.7 364.8 + 4.0 %
Profit before tax 28.2 30.2 31.9 33.5 40.1 +19.7 %
Total employees (Sept. 30) 5,351 5,044 5,821 5,997 5,604 -6.6 %

All group companies showed fundamental strength in withstanding the heavy strains caused by external influences. In some cases, they even managed to transform these adverse conditions into competitive advantages.

The effects of skyrocketing oil prices extended beyond energy prices to push up the prices of many of our base materials. Purchase prices for natural and synthetic rubber and many other raw materials remained at high levels. The weakness of the US dollar on global markets further exacerbated the situation, creating distortions in competition felt all too keenly at several Semperit companies.

With excess capacities persisting in the industry, fierce price competition continued to rage. This prevented the group from fully passing these increased costs on to customers.

The Semperit Group rose to the extraordinary challenge created by this situation. All operating units in the group consistently improved production processes, raised productivity and reduced the input of materials. These efforts increased the competitiveness of many Semperit products.

 

STRONGER EMPHASIS ON EARNINGS AT SEMPERMED

The production operations for medical gloves at Sempermed operated largely at the very limits of their capacity. The segment therefore adopted a sales policy of selectively selling products to maximize profits, quite intentionally accepting certain declines in sales volume. The policy applied especially to products from the Thai factories for the United States, the world's largest selling market.

The two Thai factories of Siam Sempermed posted satisfactory results in business in rubber examination gloves while the group's Chinese subsidiary Shanghai Foremost fell short of expectations in the vinyl gloves segment.

Sales on the European market stagnated at last year's levels owing to competitive distortions triggered by the weak dollar.

 

SEMPERFLEX HIT THE LIMITS OF ITS PRODUCTION CAPACITY

Within Semperflex, the hydraulic hose production units put in an especially impressive performance, posting double-digit growth. As a result, the Czech hose factory Semperflex Optimit had to tap all production reserves to fill the new orders that had come in. This all-out effort was reflected in the record amount of hydraulic hose Semperflex Optimit sent to the market in the first three quarters of 2004: over 10 million meters.

Business in industrial hose slowed only slightly, allowing the production units at the Austrian parent plant in Wimpassing to make maximum use of capacity in both hose segments. The elastomer sheeting unit prevailed against aggressive pricing by competitors from low-wage countries to maintain its market position in Europe as a whole and even improve it in Germany, its biggest market.

Bolstered by lively demand from Europe and the US, the Thai group company Semperflex Asia made full use of capacity. Roiter, the group's Italian hose factory, continued its sustained turnaround towards profitability on its domestic market.

 

SEMPERFORM CONTINUES TO EXPAND

Semperform lived up to the optimistic growth forecasts experts had issued for it.

Sales growth at the parent plant in Wimpassing was highly satisfactory in terms of volume and value. This was assured by the following segments in particular: railway superstructure, aerial ropeway rings, pipe clamp profiles, filter membranes and the spare parts market for handrails.

After much-improved first-semester figures, Semperit Gummiwerk Deggendorf recorded a slowdown in growth in the period under review. The decline was mostly due to the re-emergence of contractive trends in the German construction sector. Semperform Hungary developed as planned.

Shanghai Semperit Rubber & Plastic continued its brisk expansion of business in escalator handrails in the third quarter and made full use of the additional production capacity it had installed.

 

BUSINESS IN TEXTILE BELTS BOOSTED GROWTH AT SEMPERTANS

Business at Sempertrans continued to shift to factories in Poland and India. Order books were quite full but the sharp rise in raw material prices put a damper on earnings in conveyor belt production because material costs account for such a high percentage of total costs.

The Polish conveyor belt manufacturer Sempertrans Belchatow recorded above-average sales growth in textile belt business. The French company SFBT, for its part, registered declines especially in its metal belt segment.

Sempertrans Nirlon, a company acquired in India in 2000, is now operating profitably after having largely completed its reorganization. It emerges from this process as a successful and highly competitive company.

 

RECORD RESULTS IN SIGHT FOR 2004

Although business conditions continue to be tough, the group shows every indication of staying on course for growth for 2004 as a whole. The Managing Board is therefore pleased to announce to shareholders that group sales and profits are expected to reach new record levels for the fourteenth consecutive year.

 

Vienna, 26 November 2004

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Monika Riedel
Director Group Communications and Sustainability
T +43 1 79777-620