EQS-News

STS Group AG with noticeable market recovery in Europe in the nine-month period - Significant improvement of EBITDA in the third quarter 2022 - Seite 2

Earnings development

Due to the absence of the earnings contribution from China, the Group’s operating result before interest, taxes, depreciation and amortization (EBITDA) fell to 7.0 mEUR in the nine-month period, compared to 13.5 mEUR in the same period of the previous year.

In Europe the increased cost of materials in the first half of 2022 continued to persist in the third quarter and still had a negative impact on the result. Nevertheless, the first material price increases were achieved with customers, which was particularly noticeable in the third quarter in the rising profitability of the Plastics segment which contributed positively to the overall Group result. This led to an increased Group EBITDA of 4.2 mEUR in the third quarter 2022, compared to an EBITDA of 2.9 mEUR for the complete first half of the year 2022. Further negotiations with the customers on material price and energy costs compensations are in the process of finalisation.

The well-developing location in Mexico also had a positive effect on the earnings situation, as the structural measures taken there last year are continuing. Several restructuring actions have been implemented in China to counteract the current market related local sales decline, these actions will show full effect in the first Quarter of 2023 and related restructuring costs will be fully absorbed in 2022. This already contributed to an improved profitability in China in the third quarter of the reporting year despite the COVID-19-related decrease in sales.

Adjusted for restructuring-related special effects, adjusted EBITDA fell to 7.3 mEUR in the reporting period (9M/2021: 13.8 mEUR). For the nine-month period, STS Group AG reported a consolidated result of -6.4 mEUR (9M/2021: 0.8 mEUR).

Forecast 2022 confirmed

The STS Group's business development in the nine-month period is in line with expectations with regard to the targets for 2022 communicated in the annual report. The forecast therefore remains unchanged. In this context, the Executive Board assumes that there will be no dramatic intensification and expansion of the war in Ukraine and no discontinuation of raw material deliveries, and that sales revenue for the full year 2022 will be slightly lower than in the previous year. The development of sales revenue will have the same effect on adjusted EBITDA. Minor special charges are expected for fiscal 2022, so adjusted EBITDA will be roughly in line with EBITDA.