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STS Group AG publishes half-year report 2022 - Positive development in Europe overshadowed by corona-related decline in China - Seite 2

Revenue development

STS Group AG generated sales revenue of 117.4 mEUR in the period from 1 January to 30 June 2022, down from 134.8 mEUR in the same period of the previous year. The decrease of 12.9% is mainly due to the drastic stop in demand in China in the first half of the year due to the ongoing zero-COVID policy and the associated lockdowns. The decline in sales revenue in the China segment amounted to 70.6% in the reporting period. However, sales revenue growth in the Plastics and Materials segments could not fully compensate for this decline.  Nevertheless, the activities in Europe and at the site in Mexico were able to gain new demand momentum after the COVID-related slumps in the 2020 financial year. In addition, sales revenue of the European business activities were back at the pre-crisis level of 2019 for the first time.

Earnings development

Due to the omission of the earnings contribution from China, the Group's earnings before interest, taxes, depreciation and amortisation (EBITDA) fell to 2.9 mEUR in the first half-year, compared to 13.8 mEUR in the same period of the previous year. In addition, the improved margins in the Plastic and Materials segments were offset by rising material costs, which could not yet be fully compensated for and thus burdened profitability in the reporting period. Adjusted for restructuring-related special effects, adjusted EBITDA fell to 3.1 mEUR in the first half of the year (H1/2021: 13.9 mEUR). STS Group AG reported a consolidated result of -6.3 mEUR in the first half 2022 (H1/2021: 3.8 mEUR).

Balance sheet

Due to the negative consolidated result, equity decreased to 53.7 mEUR as of 30 June 2022, compared to 58.3 mEUR as of the 2021 balance sheet date. This corresponds to an equity ratio of 24.0% (31 December 2021: 29.2%). Cash and cash equivalents increased to 30.5 mEUR as at 30 June 2022 (31 December 2021: 28.3 mEUR). In the half year under review, STS Group generated a positive net cash flow from operating activities of 7.4 mEUR compared to 17.1 mEUR in the previous year. The decline in the development of the operating cash flow compared to the same period of the previous year is mainly characterised by the negative consolidated result and the change in net working capital. The change in net working capital is due to the build-up of inventories to secure price quality and delivery dates on the procurement side. The Group's net financial debt increased slightly by 3.0 mEUR to 15.2 mEUR as at 30 June 2022 (31 December 2021: 12.2 mEUR). The increase in this item is mainly due to new bank borrowings in China. On the other hand, the increase in cash and cash equivalents as of 30 June 2022 had a positive effect.