PCC SE: PCC registers fall in revenue and earnings in Q2 due to cyclical headwinds

PCC Group sales come in at € 548.9 m for the first half of fiscal 2023, with EBITDA at € 67.9 m

Duisburg (pta027/23.08.2023/19:39 UTC+2)

The sales and earnings performance of the PCC Group weakened significantly in the second quarter of 2023 as the economic situation deteriorated. Q2 revenues fell by almost a quarter to € 236.2 million year on year. Consolidated sales as of the first half of fiscal 2023 amounted to € 548.9 million, a decrease of 17.8 % compared to the first six months of 2022.

"One of the main causes was declining demand from many industrial sectors as a result of the weaker economic environment," explained Ulrike Warnecke, member of the Executive Board of PCC SE. "In addition, high inventory levels among many of our customers led to significant purchasing restraint. The situation has been exacerbated by persistently high levels of competition from China, as a result of which selling prices in Europe – our main sales market – have come under increasing pressure." The Silicon & Derivatives segment was particularly affected by this trend in the period under review. Also impacted by the downturn were the three chemicals-producing segments Polyols & Derivatives, Surfactants & Derivatives and Chlorine & Derivatives. "As was European industry as a whole," Warnecke added.

As a result of these developments, there was also a significant drop in earnings. Although the gross margin of 33.2% in the second quarter exceeded expectations, absolute gross profit remained below projections at € 70.4 million due to lower sales volumes. On all other earnings levels, both in the second quarter and in the first half of 2023, the PCC Group was generally unable to match the exceptionally strong comparable figures of the previous year. The second quarter's EBITDA – earnings before interest/financial result, depreciation and amortization – stood at € 14.1 million, accumulating to € 67.9 million as of the end of the first six months of fiscal 2023 compared to € 141.6 million in the first half of 2022. At the operating level (EBIT), the PCC Group registered a loss of € 5.0 million in the second quarter of 2023. However, it closed the first half year in clearly positive territory with operating profit at € 29.6 million. Gratifyingly, operating cash flow improved year on year from € 57.9 million to € 77.1 million at June 30, 2023.

Group segment performance

The Chlorine & Derivatives segment again posted a positive performance in the second quarter of 2023. However, sales and earnings development declined compared to the very strong previous quarter and also remained significantly below prior-year levels. The Surfactants & Derivatives segment likewise ended the quarter in positive territory, while the Polyols & Derivatives segment recorded marginal losses. The Silicon & Derivatives segment remained in deficit. In the Trading & Services segment, on the other hand, PCC Trade & Services GmbH closed the second quarter with earnings clearly positive and above expectations. The dominant logistics company PCC Intermodal SA also generated positive earnings figures despite the generally adverse operating conditions.

Redemption of maturing bond

On July 1, 2023, PCC SE fully repaid the 3.00% bond ISIN DE000A3H2VT6 issued in November 2020. The redemption amount totaled € 14.7 million.

The aforementioned Group financials are unaudited. They are currently undergoing a review by the auditors and will be published in the course of this September.

Quarterly Report 2/2023 is available online at https://www.pcc-financialdata.eu / https://www.pcc-finanzinformationen.eu

About PCC SE

Headquartered in Duisburg, Germany, PCC SE is the parent and investment holding company of the globally active PCC Group with around 3,400 employees. Its Group companies have core competencies in the production of chemical feedstocks and specialty chemicals, silicon and silicon derivatives, and in container logistics. An investor committed to the longer term, PCC SE concentrates on continuously increasing the enterprise value of its portfolio companies through sustainable investments and the ongoing creation of new value. The largest chemical producers of the PCC Group are PCC Rokita SA, a major chlorine manufacturer and Eastern Europe's leading producer of polyols, and PCC Exol SA, one of Europe's most advanced surfactant manufacturers. PCC BakkiSilicon hf. operates in Iceland one of the world's most modern and climate-friendly silicon metal production facilities. PCC was founded in 1993 by Waldemar Preussner, sole shareholder of PCC SE, who today holds the position of Chairman of the Supervisory Board. The PCC Group generated consolidated sales of around € 1.3 billion and earnings before interest/financial result, taxes, depreciation and amortization (EBITDA) of € 292.0 million in fiscal 2022, with capital expenditures in the same year amounting to around € 116 million. For further information on PCC, go to https://www.pcc.eu.

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Emitter:	PCC SE Moerser Straße 149 47198 Duisburg Germany
Contact Person:	Susanne Biskamp, PCC Head of Marketing & PR
Phone:	+49 2066 2019-35
E-Mail:	susanne.biskamp@pcc.eu
Website:	www.pcc.eu
ISIN(s):	DE000A351K90 (Bond)
Stock Exchange(s):	Free Market in Frankfurt