Sto SE & Co. KGaA, Stühlingen/Germany

Transcription

1 Sto SE & Co. KGaA, Stühlingen/Germany Consolidated interim report from the Management Board within the first half of 2018 At a glance: Extremely different weather conditions compared to the previous year determine the development of business in the first three months of 2018 Sto consolidated turnover decreases by 8.5 % to EUR million in comparison to the same quarter of the previous year Normal Q1 deficit increases significantly compared to the same time period last year The Group s workforce grows by 29 to 5,328 employees Outlook for 2018 as a whole unchanged: increase in turnover of 4.4 % to around EUR 1,333 million and EBIT of between EUR 80 million and EUR 90 million expected Industry environment The robust upturn in the global economy continued at the beginning of 2018, although the mood deteriorated somewhat. According to the International Monetary Fund (IMF), the current trade conflicts, geopolitical tensions, interest rate hikes in the USA and the continued high level of debt, as well as unresolved structural problems in many countries are among the greatest risks that threaten global growth in the long term. Despite these uncertainties, the IMF is maintaining its forecast for 2018 and 2019 and expects the global economy to grow by 3.9 % each of these years. In Germany, the pace of economic expansion has also slowed down slightly since the beginning of the year. Due to very good capacity utilisation, the continuing high demand for labour, and stable consumer prices, the German government's latest forecast for 2018 nevertheless assumes an increase in gross domestic product of 2.3 %. Sto Group: Interim report within the first half of

2 According to the Hauptverband der Deutschen Bauindustrie (German Construction Industry Association), turnover in the German construction industry rose by 15.7 % in the first two months of 2018 compared with the same period last year. In particular, this was due to the warm weather in January and the large order backlog. In March, construction activity in Germany was significantly affected by another onset of winter. The association therefore expects a weaker turnover development for that month. Sto consolidated turnover below the high level of the previous year In the first three months of 2018, the Sto Group's business development remained below expectations. This was mainly due to the weather conditions. Compared to the same period in 2017, consolidated turnover decreased by 8.5 % to EUR million (previous year: EUR million) with the onset of winter causing a sharp decline, especially in March. In the same month of the previous year, however, Sto had benefited considerably from unusually favourable weather conditions. Furthermore, markedly negative currency translation effects, amounting to EUR -5.6 million in total, were recorded in the first quarter of They mainly resulted from the exchange rate development of the US dollar and the Swiss franc. Adjusted for these effects, turnover in the Sto Group was down 6.2 % on the same period in In the first two months of the 2018 fiscal year, however, the Sto Group's cumulative turnover growth adjusted for currency translation effects had still been up 6.6 % on the previous year. In Germany, Group-wide business volume fell by 9.9 % to EUR 91.7 million (previous year: EUR million). Outside of Germany, Sto recorded a decrease in turnover of 7.4 % to EUR million (previous year: EUR million) by the end of March In particular, the sale of facade-related products, which is influenced heavily by weather conditions, showed a declining development in Europe. In comparison to the same period of the previous year, the share of Group turnover generated abroad increased from 58.0 % to 58.6 %. In contrast to the month of March, weather conditions were again favourable in most regions in April The business development of Sto SE & Co. KGaA was above expectations and above the previous year's value across the entire Sto Group: Interim report within the first half of

3 Group. Nevertheless, according to preliminary figures, cumulative turnover as of April was still slightly below the previous year s level. Earnings significantly impacted Due to the distinct seasonal nature of the facade business, Sto does not usually generate positive consolidated earnings in the opening months of any given fiscal year. A deficit was also recorded in the period under review which was significantly higher than that in the same quarter of the previous year. In addition to the volume-related effects, the continuing cost increases in procurement also had a noticeable impact. It has not yet been possible to compensate for these increases by adjusting the sales prices accordingly. This means that the gross profit margin decreased significantly in the Sto Group. Increase in investments In the first three months of 2018, Group-wide investments in property, plant, and equipment as well as intangible assets increased considerably from EUR 3.5 million in the same period of the previous year to EUR 6.8 million. The majority of these investments was attributable to the acquisition of a sales location in Austria, which means that the expansion of the distribution network in Germany and Austria planned for 2018 has already been started. Asset situation remains sound The asset situation of the Sto Group remains sound as at the end of March Changes in individual balance sheet items compared to year end 2017 fell within normal expectations and largely reflected the typical course of business in the first quarter. Inventories were increased in anticipation of further hikes in procurement costs. Slight rise in number of employees On 31 March 2018, the Sto Group had 5,328 employees worldwide as compared to 5,299 on the same day of the previous year and 5,308 at the 2017 year end. As on the same day of the previous year, 2,861 people were employed at locations in Germany while the number of employees abroad increased by 29 to Sto Group: Interim report within the first half of

4 2,467 as compared to the end of March 2017 (31 March 2017: 2,438). New appointments in countries with short- and medium-term growth prospects were contrasted with targeted restructuring measures in regions battling difficult economic conditions. On the reference date, the percentage of the Group's workforce employed abroad stood at 46.3 % (previous year: 46.0 %). Outlook for 2018 as a whole unchanged For 2018 as a whole, Sto continues to expect a 4.4 % growth in consolidated turnover to around EUR 1,333 million (2017: EUR 1,277.4 million). As things stand, consolidated earnings before interest and taxes (EBIT) are likely to amount to between EUR 80 million and EUR 90 million (2017: EUR 84.0 million). Extension of Rolf Wöhrle's Executive Board contract At its meeting in April 2018, the Supervisory Board of the personally liable partner STO Management SE extended the Executive Board contract of Rolf Wöhrle, responsible for Finance, Controlling, IT, Legal, and Internal Audit. Rolf Wöhrle has been on the Executive Board since By continuing the successful cooperation until 31 August 2022, the company is pursuing continuity in personnel. Stühlingen/Germany, May 2018 The Executive Board Key figures (in EUR million) Sto Group (IFRS) Q Q Difference Turnover % - of which in Germany % - of which outside of Germany % Investments (not including financial assets) % Employees as at 31 March 5,328 5, % Sto Group: Interim report within the first half of

5 Sto Group (IFRS) Q Q Difference - of which in Germany 2,861 2,861 +/- 0 % - of which outside of Germany 2,467 2, % Sto Group: Interim report within the first half of