What is Growth Strategy and Future Prospects of SIMONA Company?

In 2024, the Group's research and development expenditure stood at €6.0 million, with a dedicated team of 26 employees. This R&D effort is strategically divided into three key areas: Formula Development, New Products & Applications, and Process Development.

The company saw an increase in revenue generated from recently developed products, those introduced within the last three years. This growth in newer product lines also contributed to an increased share of these products within the company's total revenue.

Key technological initiatives include the planned rollout of process technology for the new SIMONA® PP-GF30 product. Additionally, new screw extruder technology for SIMORAIL PC-FR is being designed and tested to boost production output.

Technical improvements have been made in film coating for SIMORAIL AG sheets, which are used in the interior fittings of trains and buses. The plant in Ringsheim, Germany, received investments aimed at optimizing its process engineering and overall efficiency.

In 2024, the company completed the global implementation of Microsoft 365 cloud technology and upgraded its network infrastructure. These steps are part of a broader effort to modernize and standardize its IT systems, with further enhancements to IT security planned for 2025.

Sustainability is a core component of the company's strategy, covering sustainable products, production processes, and employee well-being. This commitment is further evidenced by the signing of the Science Based Targets initiative's Commitment Letter in January 2024.

Group revenue decreased by 3.1 percent in 2024 to €581.2 million. The first quarter of 2025 saw a 4.3 percent revenue increase to €152.2 million.

The 2024 EBIT margin was 6.7 percent. Projections for 2025 indicate an EBIT margin of 6-8 percent and an EBITDA margin of 10-12 percent at the Group level.

The ROCE at the Group level is expected to be between 8 and 10 percent in 2025.

Lower sales prices and the absence of fluoropolymer-related business were key reasons for the revenue decline in 2024.

Exceptional items, including unrealized currency losses and higher electricity purchase costs, negatively impacted EBIT in Q1 2025.

A dividend of €1.75 per share is proposed for the 2025 Annual General Meeting, indicating a focus on shareholder value.

A key risk for SIMONA involves potential misjudgments regarding future market trends, which could significantly affect revenue streams. The company actively monitors market dynamics and competitive landscapes to inform its strategic decisions.

SIMONA faces various financial risks including currency fluctuations, market price volatility, and interest rate changes. These are managed through derivative financial instruments and non-derivative hedging strategies.

Significant USD currency risk persists, and the high volatility of the Turkish lira, especially post-acquisition in Türkiye, heightens the risk of negative earnings. Invoicing primarily in euros and US dollars in Türkiye helps to address this.

Supply chain vulnerabilities and geopolitical events pose ongoing challenges. The global economy in 2024 saw moderate growth with policy uncertainty, and while inflation eased, it remained high in many regions.

The eurozone experienced low economic growth of 0.8 percent in 2024, with Germany facing a recession. These economic conditions, coupled with geopolitical developments, are expected to increase supply chain pressures in 2025.

SIMONA's risk management system, overseen by the Supervisory Board, is designed to identify, analyze, and update compliance risks annually. This proactive approach ensures appropriate measures are implemented as needed.