Overall, 2018 proved to be another successful year for SIMONA. Group revenue exceeded the €400 million mark for the very first time. We also managed to expand earnings before taxes (EBT) by more than 31 per cent to €32.3 million – the highest level ever recorded in our corporate history.
On an organic basis, we saw strong growth of +€10 million in the United States, while Europe edged up by a solid +€4 million. The acquisition of PMC, a US extrusion company, contributed approx. €9.0 million to revenue growth.
We are satisfied with our earnings performance. EBIT amounted to €33.2 million, which corresponds to an EBIT margin of 8.0 per cent. This puts us well within our guidance range of 7 to 9 per cent. We would like to submit to you, as our valued shareholders, a dividend proposal of €14.0 per share. This is the fourth time over a period of five years that we have increased our dividend, i.e. we continue to take a long-term approach when it comes to your participation in our company’s success. This is also reflected in earnings per share, which rose from €29.08 in the previous year to €40.24 in the annual period under review.
Performance by region
As regards our regional performance, the Americas again acted as a key growth driver. This was attributable not just to the acquisition of PMC. Benefiting from continued buoyancy in the aviation industry, our subsidiary SIMONA boltaron succeeded in further extending its market position relating to plastic sheet products for aircraft interiors. At the same time, business in the field of classic industrial products developed well in the period under review. Against the backdrop of economic slowdown in China, business in Asia remained stable and matched the high level recorded in the previous financial year. In Europe, meanwhile, business developed along different lines. While the region encompassing Germany, Austria and Switzerland achieved solid growth, Western Europe, led primarily by France and Italy, performed poorly in the period under review. In Eastern Europe, by contrast, we saw a slight increase in revenue.
Performance by product group
Both product groups managed to generate growth over the course of the 2018 financial year. The product area encompassing Semi-Finished Products and Finished Parts recorded revenue growth of 6.3 per cent. In terms of sales performance, we recorded strong business relating to sheet products for aviation applications and saw stability within the core market centred around the chemical process industry, which contrasted with sluggish business in the area of construction and advertising applications. Building on a strong fourth quarter, we succeeded in meeting our growth targets in the Pipes and Fittings division and recorded revenue growth of 4.9 per cent. This was driven by a solid global performance in the industrial sector. Pipes and fittings used in infrastructure projects also contributed to growth in Germany and Eastern Europe.
Strategic achievements in 2018
Approved in 2017, measures aimed at repositioning our Pipes and Fittings division are now being implemented and are beginning to bear fruit. Investments are being directed at manufacturing and new products. We are also planning to create additional marketfacing jobs. The aim is to achieve revenue in excess of €100 million in this area by 2022, while – at the very least – matching current profitability levels. As regards the product group encompassing Semi-Finished Products, the recent acquisition of PMC validates our decision to raise our profile further in the United States. PMC complements our core competencies in the field of extrusion and offers us access to new materials and markets. Additionally, the focus is on diversifying our product portfolio and strengthening our market position in the United States. As part of the acquisition of PMC, we also reorganised the legal structure of our operations in the United States. As from 2019, the newly established SIMONA AMERICA Group will bring together our three operational units.
New leadership structure
We have geared our leadership structure to the future. In Dr. Jochen Hauck, the company appointed an experienced plastics industry professional as COO effective from 1 January 2019. Dirk Möller, who held the position of COO for almost 25 years, will remain with the company until mid-2019 in order to ensure a smooth transition. Within the area of Finance & Administration this transition was made as early as mid-2018, with Michael Schmitz becoming the new CFO of the SIMONA Group. Appointed from within the company, he replaced recent retiree Fredy Hiltmann. I have decided not to extend my contract that is scheduled to end in October 2019. This was influenced solely by personal considerations. Having informed the company well in advance, SIMONA will now have ample time to select a suitable successor.
Goals and outlook 2019
We have defined three key strategic goals for 2019. In this context, our focus will be on assessing our strategy for Semi-Finished Products in Europe, raising our competitive profile in Asia and establishing a global business model for the growing semiconductor market.
We will again be looking to generate growth during the current financial year and are targeting Group revenue of €435 – 450 million together with an EBIT margin of 6 – 8 per cent. Faced with the prospect of a more sluggish global economy and mounting risks, this will require a tremendous effort on our part. We are well prepared and are determined to turn fiscal 2019 into a successful year for the Group.
What makes SIMONA valuable – what is our company’s DNA?
We approached our stakeholders in a quest to find answers to these questions and wanted to find out what they would like from SIMONA in the future. The result: interesting profiles with compelling insights into what our customers, shareholders, suppliers and employees think of SIMONA. Enjoy!