INTERSEROH SE: Above-average earnings growth in / Mid-year financial report 2010

EBT growth continues to accelerate / New business fields are developing positively / Management Board is anticipating significant earnings growth for the year as a whole

Developments during the first half of the current fiscal year were most successful for the Cologne-based INTERSEROH SE. The publicly quoted environmental services provider and raw materials trader achieved earnings before taxes (EBT) of EUR 29.3 million in the months from January to June as compared with EUR -4.6 million in the same period of the previous year. In the first six months of 2010 alone the Interseroh Group’s earnings are thus significantly above those of the entire crisis year 2009 (EUR 3.8 million). EBIT rose from EUR 6.5 million in the same period of the previous year to EUR 36.7 million. During the same time period the Group’s consolidated sales were up from EUR 577.8 million to EUR 967.7 million. Sales between segments in the amount of EUR 14.9 million were consolidated (prior year: EUR 9.8 million).

“The considerable leap in earnings shows that we have been doing our homework in the shape of a comprehensive package of measures to increase earnings and reduce costs and are as a result benefiting today as the leading trader of secondary resources, as well as a full-range provider of environmental services," declared Dr. Axel Schweitzer, Chairman of the Board of INTERSEROH SE. “At the same time these results reflect the success of the Interseroh Group’s strategic development,” Schweitzer added.

In the case of the steel and metals recycling segment it has been possible to continue to better mesh domestic activities and to expand export competency. In the services segment the promotion of non-regulatory business fields increasingly paid off and in the raw materials segment international structures for the collection and marketing of raw materials continued to improve.

Working capital rose by EUR 69.8 million in the first half of the year compared to the December 31, 2009, cut-off date. During the same period, however, the Interseroh Group’s total assets rose by only EUR 13.9 million to EUR 673.4 million. The Group’s financial liabilities remained at roughly the same level. The Group’s equity ratio rose by 2.9 percentage points vis-à-vis December 31, 2009, to 27.0 percent.

Developments in the segments

Sales revenues rose in all three segments in the period under review, benefiting from good economic developments world-wide:

Elevated demand for steel scrap and non-ferrous metals in conjunction with prices above the level of the same period in the previous year resulted in a strong sales hike in the steel and metals recycling segment. Sales rose compared to the same period in the previous year from EUR 371.0 million to EUR 698.2 million in the first half of 2010.

All business areas in the services segment contributed to sales growth. Sales rose from EUR 146.2 million in the same period of the previous year to EUR 209.5 million. Another major customer was won for the Interseroh Dual System. Second place in the dual system ranking was solidified and the distance to the former monopolist again reduced. In the division recycled-resource, initial material orders were successfully obtained and serviced.

In the raw materials trading segment Interseroh focussed increasingly on high-quality materials that permit higher value creation. Price rises in recovered paper and high-quality secondary plastics brought about higher sales figures. Sales rose from EUR 70.4 million to EUR 74.9 million in the raw materials trading segment.

Outlook

Based on this healthy operating business, the Management Board anticipates a considerable rise in earnings for the entire year compared to the previous year.

“We expect the markets to continue to be demanding in 2010, however. The forecast rise in raw materials demand, particularly from Asia, will usher in positive, albeit volatile, market developments. The specific degree of improvement in earnings is, therefore, principally dependent on the development of global economic conditions," Schweitzer indicates.

Interseroh perceives additional opportunities for growth in the steel and metals areas in terms of greater depth in value creation and in increasing supply to the structurally under-supplied regions such as Southern Europe and Asia. In the services segment Interseroh is focusing on the continued successful development of established services and the expansion of the range of waste disposal services in Eastern Europe. In raw materials trading Interseroh is promoting trading activities with recovered paper and plastics in Europe and will continue to reinforce its marketing position with international customers.