Annual Press Conference: tesa SE once again achieves dynamic growth

26 Mar 2014

Ongoing success in Asia – focus on electronics and automotive industriesSales up 8.5%, EBIT margin at 16.9% Growth driven by products for tablets and smartphones Consumer business: stronger position in Europe First sales generated with pharmaceutical patches

In 2013, tesa SE once again continued its positive development from previous years. Sales rose 8.5% in organic terms (nominal figure: +3.8%), to € 1,038.5 million (previous year: € 1,000.2 million), with tesa once again outperforming the market by a significant margin. The operating result (EBIT) without special factors reached € 175.8 million, resulting in an EBIT margin of 16.9% without special factors (previous year: 12.9%). Adjusted sales growth continued to be driven by the business in products for the still booming electronics and automotive industries in Asia and the United States.

“This good development means that we have brought another fiscal year to a highly positive close,” said Thomas Schlegel, CEO of tesa SE, at today’s press conference in Frankfurt. “We are successfully concentrating on developing new products and technologies, building new and attractive fields of business, and expanding our structures in growth regions on a consistent basis.”

Progress in new fields of business
tesa is making good progress in various new fields. In the newly created Building Supply business unit, the company succeeded in enlarging its customer base and tapping into new fields of application in the building and construction industry. Current application fields include mounting decorative and glass elements in the production of exterior doors as well as installing mirrors and panels in the furniture industry. Initial projects centering on bonding outdoor façade elements got under way in the United States and South America. All of these areas of application focus on highly durable, weather-resistant tapes produced on the basis of tesa’s proprietary, patented ACX technology. The emerging Pharma business unit posted its first sales of medicated patches for the pharmaceuticals industry in the second half of the year.

In 2013, as in past years, tesa continued the expansion of its structures in Asia and the United States. These activities include expanding the R&D department at the plant in Suzhou, China. The same plant also ramped up production capacity by installing an additional coating unit. At the U.S. tesa plant, a new converting system was installed to allow the company to supply local automotive industry customers with customized solutions even more quickly.

In December, construction contractors, planning teams, and tesa employees gathered for the official topping-out ceremony in the project to build the new tesa headquarters with integrated research and technology center, near the Hamburg airport. “The biggest investment project at tesa to date is still proceeding on schedule and on budget. The new building will secure our long-term growth. Merging these divisions will enhance our efficiency and flexibility in developing new products and help ensure that we can meet our markets’ changing requirements even better,” Schlegel said. Plans call for the new buildings to be ready for occupancy in 2015.

Consumer business: brand campaign charts new course
The business in products for consumers, which is focused on Europe and Latin America, saw positive development in 2013. Sales grew by 1.0% in organic terms, despite the tough market environment. tesa strengthened its position in both Western and Eastern Europe with new marketing concepts geared toward regional and local requirements. The successful range of ecofriendly adhesive products was expanded. In the construction and home improvement store segment, the range of hooks and storage systems based on the new waterproof Powerstrips and innovative Powerbutton technology developed positively on an international basis. In Germany, the launch of a new, broad-based campaign encompassing TV commercials and systematic use of digital channels provided significant momentum for the tesa brand.

Industrial business: new applications for tablets and smartphones
The Industry division posted significant growth once again, with sales rising 11.0% in organic terms. This effect was spurred by both our direct business and our retail business in all regions. Strong impetus for growth came once again from Asia and the United States, where the business with the automotive and electronics industries continued to develop dynamically. New applications for the installation of smart technology contributed to this, including optically clear tapes, which are used to assemble the various layers utilized in displays, and electrically conductive adhesive tapes, which can be used to discharge the electrical energy generated inside the devices. In the automotive sector, the company’s successful products included new security labels to reliably identify individual vehicles. The new system is predominantly tailored to the stringent legal requirements that apply in China, where it generated an excellent response.

Asia: share of sales rises to 28.2%
The Africa / Asia / Australia business region once again showed the strongest growth. Adjusted for exchange rate effects, sales rose 23.8%, to € 293.1 million. That advanced the region’s share of total sales to 28.2% (previous year: 24.5%), with China and South Korea continuing to be the main growth markets.

Outlook for 2014
The current fiscal year will be dominated by highly differentiated developments across different regions and markets. In tesa’s business with the electronics industry, which is focused on Asia, ongoing dynamic development means that the company expects growth rates to remain in the double digits. Because this business is heavily project-oriented, however, the risks associated with it are greater as well. As things currently stand, North America is expected to see positive impetus from the automotive industry again. From a global perspective, the automotive sector will be able to assert itself as a second growth environment. The emerging pharmaceuticals business is also expected to achieve further positive growth. In the building supply segment, in which tesa works with the building and construction industry, the customer base will grow steadily.

This dynamic development stands in contrast to high stability on the European markets. There are signs of economic recovery in Southern Europe, which will have a positive effect on the development of the business with private consumers and the distribution business. The innovations and marketing activities mentioned above are also expected to provide positive momentum, so the overall development should be positive. Ongoing investments in research and development, and thus in innovative products, will strengthen tesa’s market position on a sustained basis. As a result, tesa expects its growth to slightly outperform the market in both customer segments during the current fiscal year. Nonetheless, earnings performance is not expected to pick up where the unusual events of 2013 left off, so the operating EBIT margin is expected to fall below the previous year’s figure.

Current business figures and further information are available in the 2013 business development overview, which is included in this press kit and is also available online at

http://www.tesa.com/company/investor_relations