How is the medical business

Semperit terminates medical business and continues to expand rubber business

As part of its strategic realignment, the Semperit Group will in future concentrate on the recognizable potential in the industrial sector and carry out the transformation into an industrial rubber specialist. As a consequence, the Management Board and the Supervisory Board have decided to part with the medical business: “We made the biggest strategic decision of the last few decades very consciously: It is intended to ensure the future viability and higher profitability of the Semperit Group. The future of Semperit clearly lies in the Industry Sector, "says Martin Füllenbach, Chairman of the Semperit Executive Board, and continues:" Although we were able to clearly improve the operational key figures at Sempermed from the second quarter of 2019, we see ourselves drastically in the Medical Sector The gap to the market leaders in terms of capacity is getting bigger and bigger. We are therefore firmly convinced that our medical business can be better continued and developed by other owners. " The decision was preceded by the examination of various alternatives; this also included the now resolved separation from the medical business in whole or in part. The continuation of the medical business would require high investments in view of the extremely dynamic competitive environment: Individual competitors invest up to 20 percent of their annual turnover in capacity expansion and automation. As of September 30, 2019, the competitive environment led to the identification of a need for impairment of EUR 46.8 million. Based on a stronger focus on the industrial sector, the Semperit Management Board sees higher earnings and profitability potential compared to continuing the two sectors with increased investment needs : The industrial sector is characterized by significantly higher profitability, more successful performance and the possibility of technological differentiation in regional and application-related niches. "A complete sale of the medical division has clear priority, which we will evaluate in detail", says Füllenbach. "In accordance with the well-established culture in Semperit's almost 200-year history, we will start talks with employee representatives in good time. The goal in the coming months must be to create the best possible framework conditions in order to give Sempermed employees future prospects. " Possible restructuring costs will only be derived from the specific transaction structure and are therefore not yet quantifiable.

The separation from the medical business affects all Sempermed locations and thus also the production of surgical gloves, which is part of the Lower Austrian Semperit headquarters in Wimpassing. Wimpassing is primarily the location of the Semperform and Semperflex industrial segments and also controls group-wide key areas such as research & development or mixing. "Our main plant in Wimpassing will undoubtedly remain as part of the Semperit Group," said Füllenbach, who would like to further upgrade the domestic production site. "Against the background of the deterioration in the economic environment, we are currently working on a new location concept." In the future, Wimpassing is to become even more important across the Group, not only because of its historical significance, but also in the light of the technological differentiation of Semperit products, which is to be emphasized even more.

After the Executive Board has largely successfully completed the restructuring of the industrial sector and significantly increased its profitability, the Semperit Group is to be transformed into an industrial rubber specialist with full force and focus as part of its strategic realignment: The potential in the industrial sector is to be transformed in the future through a significant increase in the Customer proximity, a more market-oriented alignment of the overall organization and increased application focus can be better used. The aim is to be able to serve existing and future markets faster and more effectively. The organization of the Industry Sector into four instead of three segments (Semperflex, Semperform, Semperseal, Sempertrans) and the first step towards regional development of non-European core markets through a production expansion and regional sales organization in North America created important structural changes. With the aim of identifying and developing new growth regions, industries and application possibilities and, in particular, taking advantage of cross-segment sales opportunities, the new organizational unit Customer Excellence Center (CEC) began operations in the fourth quarter of 2019. Based on its strong material and process knowledge, the Semperit Group will in future also concentrate more on its application knowledge. The chemical and process-oriented basic knowledge that has existed for many decades is to be used more significantly in the future for the development of new products. A clear focus of the new industry strategy is the topic of innovation and digitization: "Our material rubber must meet the requirements of Industry 4.0 and provide digital functionality," says Füllenbach. By the end of 2024 - the 200th year in the company's history - Semperit organic growth steps and a clear M&A strategy to increase sales volume again. The strategic realignment is accompanied by the modernization of the corporate identity, which is intended to better convey and visualize the ongoing change of the Semperit Group. In connection with the focus on the industrial sector Semperit has redefined the target defined at the beginning of the restructuring process (previously: EBITDA margin of around 10 percent from the end of 2020) and is aiming for an EBITDA margin of around 13 percent by the end of 2024. (OTS)