A leap in earnings for the Interseroh Group after the control and profit transfer agreement with ALBA / INTERSEROH SE presents its financial statements for 2011

- The contract with ALBA has already shown an effect in the first year
- EBT  rose by over 20 percent (approximately EUR 6.8 million) to EUR 39.3 million
- Adjusted sales rose by 22 percent to EUR 2.2 billion

The publicly quoted environmental services provider and raw materials trader INTERSEROH SE finished out fiscal 2011 with a rise in earnings before taxes (EBT) of approximately EUR 6.8 million when adjusted for deconsolidation profits to  EUR 39.3 million (previous year’s figure: EUR 32.5 million).

The Chairman of the Board, Dr. Axel Schweitzer, noted at the press conference in Cologne: “2011 was a year of changes for the Interseroh Group. With the control and profit transfer agreement with ALBA we have set ourselves up from the under corporate law and in terms of structure in such a way that, on the one hand, we control the extremely high volatility of the raw materials markets, while, on the other hand, we are taking part in the shaping of future trends and have increasingly become the raw materials partner of industry. Our business results show, even after a short six-month period, that we have chosen and continue to choose the right path. Moreover, uncertainties regarding the procurement of raw materials have significantly increased interest in recycling in Germany.”

Earnings before interest, taxes and the shares of earnings in associated companies (EBIT), adjusted for deconsolidation profits (profits from the sale of fully consolidated companies), amounted to approximately EUR 54.8 million for fiscal 2011, as the Company announced today on the occasion of the publication of its annual financial statements (adjusted figure for the previous year: EUR 48.6 million).  Only earnings from the segments of steel and metals recycling and services were included in EBIT and EBT.

The companies in the raw materials trading segment were sold at the end of the third quarter to INTERSEROH SE’s holding company, the ALBA Group plc & Co. KG, and consolidated with the ALBA business division. EBIT totalled EUR 56.7 million (2010: EUR 49 million) including the business segment raw materials trading and adjusted for deconsolidation profits, while EBT was EUR 40.8 million (2010: EUR 32.1 million).

Sales from the continuing business segments of steel and metals recycling and services rose from EUR 1.8 billion to EUR 2.2 billion. Sales in the raw materials trading segment as at September 30, 2011, amounted to EUR 127.8 million (previous year: EUR 107.7 million).

Axel Schweitzer: “We have continued to grow profitably in a difficult economic environment due to the EU crisis. Furthermore, we profited from our stronger international orientation.”

The contract with ALBA has already shown an effect in the first year

The Chairman of the Board traced the positive earnings growth to, among other factors, the integration of the Interseroh Group with the ALBA Group. By entering into the control and profit transfer agreement between ALBA and Interseroh, both groups are flexible with respect to formulating agreements with one another and can cooperate in all business segments without bureaucracy. This is also of great significance to the development of completed cycles and innovations in waste treatment.

Schweitzer states: “By entering into the control and profit transfer agreement, Interseroh - under the umbrella of the ALBA Group - is one of the world's ten largest corporate groups for environmental services and raw materials trading. We want to solidify this position. This is a demanding goal against the backdrop of strong global growth in the industry." Schweitzer further emphasized: “We have ensured that our professional sales team is committed to new products and niche markets, where we see considerably better earnings opportunities. One example is the numerous take-back systems for commerce and industry."

Uncertainties in raw materials procurement in Germany resulted in a rise in interest in recycling on the part of industry, according to recent publications of the German Chamber of Commerce and Industry (DIHK). 76 percent of German companies already see the rise in raw materials and energy prices as the top risk to their companies’ futures.

Interseroh has recognised the trend to higher demand for recycling material, has been offering valuable secondary resources for years and is a pioneer in the development of completed cycles and new processes for the treatment of waste and recyclables. For example, Interseroh has produced an innovative plastic out of almost 100 percent recycling material with companies from the plastics industry. The quality of the recycling plastic procyclen is comparable to the parameters of new material.

The average size of the Interseroh Group’s workforce during the year was 1,959 (previous year: 1,774). Due to the acquisition of companies, the number of employees has risen especially in the steel and metals recycling segment.

Developments in individual segments

Sales rose in the steel and metals recycling segment from EUR 1,384.5 million to EUR 1,743.5 million. EBIT in this segment totalling EUR 33.9 million (previous year: EUR 35.5 million) and EBT in the amount of EUR 16.7 million (previous year: EUR 19.5 million) failed to fully keep up with the positive sales trend. This was due in large part to one-time tax effects. These impacted EBIT in the amount of EUR 995,000 and EBT in the amount of EUR 3.7 million.

The services segment generated sales revenues of EUR 478.8 million (previous year: EUR 452.9 million). Despite the difficult market environment, EBIT in this segment amounted to EUR 22.1 million (previous year: EUR 22.7 million) and EBT to EUR 23.8 million (previous year: EUR 22.6 million). Deconsolidation profits of EUR 7.1 million were included in the previous year.

Sales between segments of EUR 11.6 million (previous year: EUR 5.2 million) were consolidated. Inter-segment consolidations equalled EUR 0.1 million (previous year: EUR 0.03 million). Inter-segment consolidations that would tend to impact EBT did not occur, as in the previous year.

Sales in the raw materials trading segment amounted to EUR 127.8 million (9 months of the previous year: EUR 107.7 million). Earnings after taxes  totalled EUR 3.5 million (9 months of the previous year: EUR 7.7 million, 12 months of the previous year: EUR 4.2 million).

Consolidated earnings totalled EUR 37.2 million (previous year: EUR 34.1 million).

Outlook

INTERSEROH SE’s Board of Directors is anticipating a volatile, fragile economic environment and sharply fluctuating raw materials prices, due to the debt of numerous countries in the Euro zone and a global economy that is generally weaker than in 2011.

Axel Schweitzer predicts: “2012 is likely to be a challenging year, since overall economic conditions are anything but rosy. Nevertheless, Interseroh is very well placed in the market. Setting up the Interseroh Group under the umbrella of the ALBA Group creates the conditions for further growth. It is my goal to continue to enhance the Group’s profitability. We do, however, anticipate slight losses in sales and earnings in 2012.”

Schweitzer announced that Interseroh wanted to gain a foothold in additional European countries with its take-back systems. The corporate group perceives opportunities in a concentration on stronger gross margin products, such as non-ferrous metals and alloyed scrap, in the steel and metals recycling segment.

On the other hand Interseroh is expecting a rise in sales and earnings for 2013.


All speeches as well as the presentation regarding the annual financial press conference can be found here: <link http: www.interseroh.com corporate investor-relations finanzberichte geschaeftsberichte _blank external-link-new-window>www.interseroh.com/corporate/investor-relations/finanzberichte/geschaeftsberichte/