A leaner Semperit A.G. puts industrial rubber products first

VIENNA, Austria—The transformation toward industrial rubber products continues for Semperit A.G. Holding.

With the $122.1 million sale of its Sempermed business unit (closing expected July 31), and the $216.4 million acquisition of LSR parts manufacturer Rico Group GmbH (closing expected Aug. 31), Semperit continues a journey to streamline its operations that began in 2020.

As such, Semperit will reorganize with new divisions, with changes in the C-suite for the global company as well.

Semperflex Managing Director Gerfried Eder has been promoted to the executive board, and longtime COO Kristian Brok will leave the company.

"With Kristian Brok, Semperit is losing a manager with international experience in the polymer and elastomer sector, whom I would like to thank for his services over the past years," said Thomas Cord Prinzhorn, chairman of the executive board at Semperit A.G.

The company announced the changes at a June 30 meeting of the supervisory board.

The industrial brands of Semperit include Semperflex, Sempertrans, Semperform and Semperseal. The overall segment registered $698 million in net sales in 2022, a 32-percent increase over 2021's $528.9 million in net sales.

EBITDA for the industrial sector in 2022 jumped nearly 53 percent, coming in at $119.1 million against $78.1 million in 2021.

The main product groups in the industrial sector are hydraulic and industrial hoses, conveyor belts, escalator handrails, window and door profiles, cable car rings, ski foils and products for railway superstructures.

In addition to the planned sale of Sempermed to the Singapore-based Harps Global Pte. Ltd. and the planned acquisition of Rico, cornerstones of Semperit's lean strategy include strengthening hose production by expanding the Czech manufacturing site; and a focus on customer proximity.

Semperit A.G. will move forward with two main business divisions, Industrial Applications (hydraulic and industrial hoses, as well as profiles) and Engineered Applications, which include handrails for escalators, conveyor belts, cable car rings and other engineered elastomer products.

Rico will continue to focus on customized technical solutions, with LSR products and LSR mold manufacturing.

"Each of the two divisions will target different customer groups and their specific technical requirements," Semperit said. "By focusing on two business areas and a resulting leaner organization, the executive board expects cost savings that go significantly beyond the overhead cost reduction measures already being implemented."

As chief industrial officer, Eder will lead the Industrial Applications segment. He previously served as managing director and director of sales for the Semperflex segment (hydraulic and industrial hoses) and "was responsible for more than 30 percent of group revenue in 2022," according to Semperit.

He started with Semperit in 2000.

"I welcome Gerfried Eder to the executive board and am pleased that we were able to attract such an experienced Semperit manager for this new position," Prinzhorn said. "He has positioned the Semperflex segment in an excellent strategic way and has achieved high profitability over many years. It is now a matter of implementing this in the other production areas as well."

Semperit CEO Karl Haider will lead Engineered Applications. CFO Helmut Sorger's responsibilities remain unchanged, according to the company.

Semperflex maintains a "hose-only" strategy for its products, choosing to sell both hydraulic and industrial hoses. As such, Semperflex saw net sales of $312.7 million in 2022, a 36.7-percent increase over net sales of $228.7 million in 2021.

Semperflex hoses are used in construction, mining, energy transmission and agriculture, as well as in high-pressure cleaning. Manufacturing locations are in Wimpassing, Austria; Odry, Czech Republic; Shanghai, China; and Hat Yei, Thailand.

Sempertrans, a global conveyor belt producer, sees its production take place in Poland and India. The division makes conveyor belts that are used in mining, the steel and cement industry, and other aggregate and bulk-handling terminals.

Semperit's conveyor belt division saw net sales of $144.5 million in 2022, a 45.5-percent increase over $99.4 million in 2021.

Semperform, which produces molded and extruded products comprised of polymers and plastics, makes its hand rails (for escalators, specifically), cable car rings and ski foils at production sites in Austria, Hungary and China. The unit, which supplies its products mainly to Europe, saw net sales of $105.7 million, a 22.7-percent increase over the $86.2 million in net sales recorded in 2021.

Semperseal, which makes sealing profiles and elastomer sheeting, saw net sales of $135.1 million in 2022, an 18-percent increase over the $114.6 million in net sales recorded in 2021.

The unit has manufacturing locations in the U.S., Germany and Austria.

Overall, Semperit Group recorded just more than $1 billion in net sales in 2022, a 10.5-percent decline against 2021's $1.12 billion in net sales.

EBITDA in 2022 registered at $86.1 million, an 8.6-percent margin. Semperit recorded EBITDA of $344.1 million in 2021, a margin of 30.6 percent.

The higher net sales and margins last year are a direct result of higher sales within the Sempermed business unit in 2021, according to Semperit officials.