Strong profitability – Marked decline in sales volume and revenue

EBIT close to prior-year record – Group revenue down 16% on the back of sluggish global economy – Muted start to 2024

Kirn, 24 April 2024. In what proved to be a dynamic year, the SIMONA Group recorded solid earnings against the backdrop of difficult global economic conditions. Group revenue fell by 15.7 per cent to €600.0 million amid weak demand. However, at €52.9 million, earnings before interest and taxes (EBIT) were only just below the record level posted in the previous year (€54.1 million). The EBIT margin rose to 8.8 per cent (previous year: 7.6 per cent). SIMONA’s endeavours in the first three months of 2024 fell short of the strong performance seen in the same quarter of the previous year. Despite this, the Group’s outlook for 2024 as a whole remains positive.

Revenue by region
At €600.0 million, SIMONA fell just short of its revenue guidance of €610-630 million presented in the first-half report. An anaemic global economy left its mark on sales volumes and revenues in all regions served by the Group. In the EMEA region, the economic downturn affected the majority of markets, prompting an above-average decline in revenue of 19.2 per cent to €369.3 million (previous year: €456.9 million). In the Americas, SIMONA was able to exploit the global surge in travel to boost its aircraft interiors business, while sales in the industrial, construction and leisure sectors suffered. Overall, revenue in the Americas fell by 13.4 per cent to €179.3 million (previous year: €207.1 million). The Asia-Pacific region recorded growth in revenue driven by a strong performance in China and India. Revenue from sales in this region rose by 6.9 per cent from €48.1 million to €51.4 million.

Revenue by business line
Almost all business lines saw a downturn in revenue in 2023, with the exception of the Mobility business line. It grew by 10.3 per cent to €77.9 million (previous year: €70.6 million) thanks to greater buoyancy within the aviation business and the first large-scale orders relating to train interiors and battery enclosures for electric buses, which are new markets for SIMONA. The Industry business line was impacted by a sluggish performance of the global chemicals business, with growth limited to the Semicon market segment. In total, the Industry business line generated revenue of € 227.5 million (previous year: €266.0 million), which corresponds to a year-on-year decline in revenue of 14.5 per cent. The Infrastructure business line, whose core market is pipeline rehabilitation and cable protection in the EMEA region, experienced a lack of project business due to restrained public-sector spending. Revenue in the Infrastructure business line fell by 15.8 per cent to €103.0 million (previous year: €122.3 million). The downturn within the Advertising & Building business line was attributable to waning activity in the construction sector, with revenue totalling €87.8 million (previous year: €111.3 million). This corresponds to a decline of 21.2 per cent. "Others" encompasses SIMONA's trading and aquaculture business, among other things. Having lost momentum in the months leading up to the end of 2023 due to the proposal of a special tax to be levied in Norway, the market for equipment used in fish farms is now picking up speed again. Overall, revenue generated in "Others totalled €103.9 million (previous year: €141.8 million).

Sustainability
SIMONA took a determined approach to implementing its sustainability strategy. This included the launch of a sustainable product line featuring bio-based, biocircular or recycled raw materials under the "EcoPlastIQ" brand. SIMONA's "Commitment" status relating to the Science-Based Targets initiative underpins the Group’s ambitions for reducing CO2 emissions. By sourcing wind power, the plastics processing company will be able to cover up to 50 per cent of its electricity requirements at its German sites as from 2025.

The SIMONA Group is very satisfied with its earnings performance in the financial year just ended. In nominal terms, EBIT fell just slightly by 2.1 per cent from €54.1 million to €52.9 million. The EBIT margin stood at 8.8 per cent, which is above the previous year's figure (7.6 per cent) and above the Group's guidance (6-8 per cent). Against the backdrop of a significant decline in revenue, the Group’s solid earnings performance was driven by an improved cost-of-materials ratio and lower variable expenses. Thus, the dividend proposal to be submitted to the Annual General Meeting remains unchanged year on year at €1.85 per share.

The headcount totalled 1,757 at the end of the year (previous year: 1,734). Staffing levels were up slightly in the Asia-Pacific region due to the expansion of production, while they trended downwards in EMEA.

SIMONA anticipates that Group revenue for the 2024 financial year will be between €620 and 640 million, while the EBIT margin is expected to be between 6 and 8 per cent and the EBITDA margin between 10 and 12 per cent. The revenue forecast takes into account projected growth in sales volumes in conjunction with price declines due to persistently weak demand, particularly in Europe’s industrial sector.

Despite a recovery in order intake – particularly in EMEA – the SIMONA Group had to contend with a further decline in revenue and earnings in the first quarter of 2024. This was attributable to a change in the product mix, lower sales prices and pressure on margins. Revenue declined by 11.6 per cent to €145.9 million (previous year: €165.0 million). EBIT fell by 28.6 per cent to €9.4 million (previous year: €13.2 million). The EBIT margin stood at 6.4 per cent, compared to 8.0 per cent in the same period of the previous year.

"Overall, 2023 proved to be another particularly dynamic year in which, encouragingly, we were able to build on the successes of previous annual periods. We managed to keep sales prices stable over the course of the year. While this contributed to healthy profitability, it had an adverse effect on overall volume and therefore also on revenue. We succeeded in achieving our strategic goals. When it comes to sustainability, we have established ourselves as a global thought leader within our industry. By expanding our plant in China, we have almost doubled our production capacity and extended our portfolio as a system provider for customers within the industrial sector. Our strategic approach centred around diversification and a clear focus on applications is underscored by the solid performance displayed by our most recent acquirees, SIMONA PEAK Pipe System in the UK and SIMONA PLASTECH in Türkiye," said Matthias Schönberg, CEO of SIMONA.