Somero Regulatory News (SOM)

19 July 2022

Somero Enterprises, Inc.

("Somero" or "the Company")

Trading Update

Somero® is pleased to provide an update on trading ahead of its interim results announcement scheduled to be released on Wednesday, 7 September 2022.

Driven by positive momentum from a highly active US non-residential construction market, healthy market conditions and elevated activity levels in the European and Australian markets, Group trading in H1 2022 ended higher than the comparable H1 2021 period. 

As expected, H1 2022 trading in North America remained strong, increasing from H1 2021, reflective of customers with sizable workloads and project backlogs that extend well into 2023. The breadth and variety of project activity in the US translated to healthy take rates across the Somero product portfolio including continued, strong performance in the boomed screed category.

The European market was active during H1 2022, reflective of positive non-residential construction market conditions and a busy customer base with healthy, extended project backlogs. While H1 2022 trading in Europe was down compared to H1 2021, due largely to logistics challenges that delayed machine shipments, based on the H1 2022 momentum and activity levels alongside anticipated catch-up on shipment delays to start H2 2022, second half 2022 trading is anticipated to accelerate, and Europe is anticipated to contribute to full-year 2022 growth. 

H1 2022 trading in Australia was also strong, improving from H1 2021, reflecting similar positive market conditions as the US and Europe, in line with the expectation that the region will contribute meaningfully to 2022 growth. Trading in all other regions also fell in line with expectations, including in China where revenues were down compared to H1 2021 due to the previously announced reduced Company focus on the region and the severe impact of COVID restrictions. 

New products, including the SkyScreed®, the S-PS50 Laser Screed® and the Somero Broom+CureTM, contributed meaningfully to H1 2022 sales while the Company continues to make good progress in identifying opportunities to penetrate untapped market segments and with development of new solutions for customers.

During the first six months of 2022, the also Company made substantial progress with the Houghton, Michigan building expansion project anticipated to be completed by the end of Q3 2022 and with adding new personnel necessary to support future growth of the business, particularly in our primary US, Europe and Australian markets. 

While cognizant of the uncertain macro economic environment, the Board continues to anticipate healthy trading to continue in H2 2022, a view underpinned by direct feedback from customers in the US, Europe & Australian indicating high workloads and extended project backlogs. As such, the Board is pleased to confirm 2022 results are anticipated to fall in line with market expectations for revenues of approximately US$ 138.8m, EBITDA of approximately US$ 47.7m, and year-end cash of approximately US$ 39.9m.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 as retained as part of UK law by virtue of the European Union (Withdrawal) Act 2018 as amended. Upon the publication of this Announcement, this inside information is now considered to be in the public domain.