Sto SE & Co. KGaA, Stühlingen Interim financial report in ...€¦ · 256.3 million – because the procurement situation turned out to be more favourable than expected in the reporting

Sto SE & Co. KGaA, Stühlingen

Interim financial report in accordance with Section 37w of the

German Securities Trading Act (WpHG)

For the period from 1 January to 30 June 2015

Overview of the first half of 2015

‚ Consolidated turnover is EUR 561.6 million, slightly below previous year's level

‚ Comparative value of previous year is high due to very favourable weather conditions in first quarter of 2014

‚ Domestic sales down 3.5 % to EUR 244.5 million; foreign turnover up 2.4 % to EUR 317.1 million, mainly due to the exchange rate

‚ Consolidated EBIT decreases from EUR 29.2 million to EUR 17.4 million in a comparison of the half-year figures

‚ Workforce increased from 5,001 to 5,081 employees worldwide

‚ Unchanged forecast for entire fiscal year of 2015: increase in turnover of 5 % to approx. EUR 1,270 million and EBIT ranging between EUR 92 million and EUR 102 million

1

Sto SE & Co. KGaA, Stühlingen

Consolidated interim management report for the first half of

2015

Business and general conditions

The company

The Sto Group is a major international manufacturer of products and systems for

building coatings. Its core business focuses first and foremost on external wall

insulation systems (EWIS), a segment in which our company occupies a leading

position, and also on rainscreen cladding systems (RSC). Both of these are pooled in

the Facade Systems product group, which, in the 2014 fiscal year, accounted for a

total of 50.4 % of Group turnover. The Facade Coatings product group, which

includes render and paint systems for external applications, made up 23.2 % of the

turnover. The Sto product range also includes products for interiors, such as

plaster and paint systems optimised for home and office interiors, decorative coatings,

and acoustic systems for regulating room noise (share of turnover: 12.8 %).

Furthermore, we produce and distribute high-quality floor coatings and products for

concrete repair, for example.

There have been no changes to Sto's Group structure, management system, or strategy

in the first half of 2015. They are described in detail in the Annual Report for 2014,

which is available for download at www.sto.de in the section �Investor Relations�

under �Unternehmen� (company). Alternatively, it can be requested from Sto SE & Co.

KGaA.

Overview of business development in the first half of 2015 and

general statement by the Executive Board

The business development of Sto SE & Co. KGaA remained below the original

projections in the second quarter of 2015 as well. The favourable weather conditions

2

in the first quarter of 2014 mean that the comparative value from last year is very

high, and because the expected catch-up effects could not yet be realised to the

expected extent, consolidated turnover for the first six months is at EUR 561.6

million, slightly below (-0.3 %) the previous year's value. Domestic turnover dropped

by 3.5 % to EUR 244.5 million, due in part to the continuing uncertainty of investors

on the German market with regard to external wall insulation systems. Foreign

turnover, meanwhile, was up 2.4 % in total, reaching EUR 317.1 million. In this case,

a primarily weather-related decline in sales on the one hand � mainly in countries in

Western Europe � was offset by markedly positive currency translation effects on the

other.

Earnings before interest and taxes (EBIT) for the Sto Group in the first six months of

2015 came to EUR 17.4 million, and hence fell below both the projected value and the

previous year's value (EUR 29.2 million). Net earnings fell from EUR 19.9 million to

EUR 12.1 million in a comparison of the six-month figures.

From the present perspective, we expect the sales figures to recover in the second half

of the year, if the weather conditions are favourable and the positive currency

translation effects continue as before. The forecasts for 2015 as a whole therefore

remain unchanged.

Economic conditions

Performance in the international construction industry has so far varied considerably

from region to region in 2015. Growth in the US construction industry had already

slowed over the course of 2014, and information from the GTAI (Germany Trade and

Invest) organisation, which promotes foreign trade and investment, indicates that a

harsh winter caused it to slow down even further. Particularly in commercial

construction, which was still a strong field in 2014, as well as in residential

construction, demand remained subdued up to the middle of the year. Meanwhile, the

overall economy grew by 2.3 % in the second quarter, largely thanks to increasing

3

consumption, indicating the prospect of improvement. There were also hopes of

increased expenditure on construction in the public sector at the mid-year point.

In China, the downswing in the construction industry continued during the reporting

period. According to GTAI, the number of new building projects that have been started

� which had already fallen by 10.7 % in 2014 � remained in decline.

According to experts from the EUROCONSTRUCT network, demand for construction

gained momentum in Europe. The economic recovery in various countries had a

particularly positive effect. In addition, the construction industry benefited from

accumulated demand, as investments had been scaled back considerably in many

places over the last few years. However, due to the unresolved euro crisis in a number

of countries, it is not clear how long the upward trend will last.

Turnover in the German construction industry remained below the previous

year's values in the first few months of 2015, largely because of the unusually mild

temperatures in the corresponding period of 2014. According to the German Federal

Office of Statistics, total turnover in the main construction sector fell by 2.9 % by the

end of May. The number of orders received rose slightly by 0.4 % in a comparison of

the five-month figures. In the market for external wall insulation systems, the

conflicting and, in some cases, highly exaggerated media reports continued to lead to

feelings of uncertainty, particularly among private building owners. Reluctance was

further increased by the unresolved question of tax incentives for energy efficiency

refurbishment measures.

Earnings, finance and asset situation of the Sto Group

Consolidated turnover slightly below previous year's level

Consolidated turnover for Sto SE & Co. KGaA for the first six months of 2015 was

at EUR 561.6 million, 0.3 % below the previous year's value of EUR 563.1 million.

This was mainly down to the weather-related base effect, as the very mild weather in

the first months of 2014 resulted in an unusually high comparison value. In addition,

4

the propensity to invest in energy efficiency refurbishment measures remained

subdued, which led to declines in the Facade Systems product group in Germany in

particular.

Sto SE & Co. KGaA therefore recorded a Group-wide fall of 3.5 % to EUR 244.5 million

for domestic turnover. Foreign turnover, however, increased by 2.4 % to EUR 317.1

million. As a result, the share of Group turnover generated abroad increased from

55.0 % to 56.5 % in a comparison of the half-year figures. Here the declines in several

western European countries, mainly caused by the weather and difficult economic

situations, were offset by growth in America and Asia, where very positive currency

translation effects in 2015 had an impact.

In total, the Sto Group turnover in the first half of the year revealed positive currency

translation and consolidation effects to the tune of EUR 17.1 million, the

majority of which was down to currency translations. In particular, the price trend of

the US dollar, the Swiss franc, and the Chinese renminbi in comparison to the euro

made a significant difference. Excluding these factors, the Group recorded a decline in

turnover of 3.3 % by the end of June 2015 compared to the same period of the previous

year.

Business development in July 2015 was slightly up on the previous year, but still fell

below our expectations.

Turnover trend across the segments

Turnover in the Western Europe segment � including Germany � fell by 3.0 % in

total to EUR 432.6 million in the first half of 2015. The decline was particularly

noticeable in France, where difficult economic conditions meant that turnover fell

below both the expected values and the figures for the previous year. Sales also fell

short of our projections in the German-speaking countries. In Switzerland, turnover

was adversely affected by the massive increase in the value of the franc compared to

the euro. Among other things, this led to significant adjustment of the sales prices on

the market.

5

In Northern/Eastern Europe, on the other hand, we achieved an increase of 5.5 %,

mainly due to the positive development in Eastern Europe. In the first half of 2015,

consolidated turnover in this segment came to EUR 57.2 million, compared to EUR

54.2 million in the comparison period.

The America/Asia segment recorded an increase of 13.8 % to EUR 71.8 million in a

comparison of the half-year figures, although this was largely due to positive currency

translation effects.

Consolidated earnings below previous year

The earnings situation in the first half of 2015 was affected by the lower turnover

volume. Higher personnel costs also had an impact, rising by 3.2 % to EUR 158.5

million despite the slight drop in consolidated turnover. The main reasons for this were

pay increases and a rise in employee numbers in regions where we expect an increase

in turnover in the medium term.

Material costs fell disproportionately to the decline in turnover � by 2.1 % to EUR

256.3 million � because the procurement situation turned out to be more favourable

than expected in the reporting period. There was, however, increasing pricing pressure

in the case of certain special chemicals as well as for polystyrene, and we expect this to

have more of an effect on figures in the coming months. The balance of other

operating income and other operating expenses for the first two quarters stood

at EUR -116.5 million after EUR -109.5 million in the comparison period, and was also

adversely affected by currency translation effects. Depreciation and amortisation

of intangible assets as well as property, plant, and equipment increased by 14.5 % to

EUR 15.8 million in a comparison of the half-year figures.

In total, consolidated earnings before interest and taxes (EBIT) fell by 40.4 %

from EUR 29.2 million to EUR 17.4 million. The net financial income/expense,

which improved from EUR -0.3 million to around EUR 0.4 million, was positively

affected by the income from the sale of WT Gebäudemanagement GmbH. After six

6

months, this resulted in earnings before tax (EBT) of EUR 17.8 million. Compared

to the comparative value for 2014 of EUR 28.9 million, this corresponds to a drop of

38.4 %. The tax rate rose to 32.2 %, which caused net earnings to drop by 39.2 % to

EUR 12.1 million. At the mid-point of 2015, the profit per limited preference share

stood at EUR 1.98 (previous year: EUR 3.17) and at EUR 1.92 per limited ordinary

share (previous year: EUR 3.11).

Earnings trend across the segments

The earnings situation for the three segments was heavily influenced by the varying

turnover trends in the different regions. In Western Europe, for example, the EBIT

dropped by 28.1 % to EUR 20.5 million in a comparison of the six-month figures. In

Northern/Eastern Europe, meanwhile, earnings improved from EUR -1.8 million to

EUR -1.6 million, and the America/Asia segment recorded an EBIT of EUR -0.6

million for the first six months, compared to EUR 2.5 million in the first half of 2014.

Liquidity movements

Cash flow from operating activities in the Sto Group, which is generally negative

in the first half of the year due to the seasonal business development, amounted to

EUR -37.1 million at the end of June 2015, compared to EUR -26.2 million in the

corresponding period of the previous year. The main reasons for the increased outflow

were the lower earnings before income taxes (EUR 17.8 million compared to EUR 28.9

million in the previous year) and the increased need for the seasonal accumulation of

net working capital of EUR 57.9 million (previous year: EUR -52.7 million). This was

largely offset by higher provisions as well as depreciation/amortisation of assets and

lower income tax payments.

Cash flow from investment activities adjusted by deposits and disbursements

for financial investments improved from EUR -14.4 million to EUR -8.9 million in a

comparison of the six-month figures. Around EUR 10.6 million was spent on

investments in property, plant, and equipment as well as intangible assets (previous

year: EUR 11.1 million). Payments received from the disposal of intangible assets and

7

property, plant, and equipment came to around EUR 1.1 million (previous year: EUR

0.2 million). Disbursements for the acquisition of consolidated companies and other

business units fell from EUR -4.5 million to EUR -0.05 million.

We received almost EUR 103.9 million (previous year: EUR 102.2 million) by

releasing financial investments during the reporting period. Only EUR 5.2 million

(previous year: EUR 87.3 million) of this was reinvested. This results in net cash

flow from investment activities of EUR 89.8 million for the first half of 2015,

compared to EUR 0.5 million in the same period of the previous year.

The disbursements for financing activities came to a total of EUR 134.7 million

(previous year: EUR 31.9 million), with dividend distribution to our shareholders

accounting for EUR 163.3 million (previous year: 31.1 million). Limited preference

shareholders received an ordinary dividend of EUR 0.31 and a one-off bonus of EUR

25.14 per limited preference share, and limited ordinary shareholders received an

ordinary dividend of EUR 0.25 and a one-off bonus of EUR 25.14 per limited ordinary

share. Disbursements for non-current borrowings dropped to EUR 0.1 million

(previous year: EUR -2.0 million), while around EUR 2.5 million was paid out for

current borrowings (previous year: EUR 0.0 million). Payments received for current

borrowings came to EUR 31.5 million, compared to EUR 1.4 million in the same period

of the previous year.

Taking into account changes to the tune of EUR 3.3 million (previous year: EUR 0.05

million) due to the exchange rate, financial resources came to EUR 34.3 million on

30 June 2015 (previous year: EUR 46.4 million). Cash and cash equivalents dropped

by around EUR 78.8 million compared to year end 2014 (previous year: EUR 57.5

million).

Investments

8

Investments in property, plant, and equipment as well as intangible assets in the first

six months of 2015 amounted to EUR 10.6 million across the Group and were

therefore close to the previous year's level (previous year: EUR 10.7 million). In

addition to the usual investments in replacement and renovation, another main focus

was the construction of the new reception and office building at the headquarters in

Stühlingen, which should be ready for occupation by mid-2016. The complex uses

low-emission building products and a highly innovative energy concept involving

renewable sources. As a result, the new building qualifies as a �zero-energy building�

and was awarded the gold pre-certificate by the German Sustainable Building Council

(DGNB) at the start of 2015. A topping-out ceremony was held in the middle of July

2015 to celebrate the completion of the building shell.

Asset situation

In the first two quarters of 2015, the consolidated balance of Sto SE & Co. KGaA fell

by 11.2 % to EUR 667.5 million compared to year end 2014. On the assets side, the

total non-current assets fell by EUR 3.8 million to EUR 292.8 million (31 December

2014: EUR 296.6 million), while the current assets dropped from EUR 454.8 million

to EUR 374.7 million between January and the end of June. The sharp decline in

current financial assets and in cash and cash equivalents was the significant factor

here. The current financial assets, which dropped by EUR 103.4 million to EUR 37.8

million, include financial investments due for settlement in three months' to a year's

time. In contrast, the inventories rose by around EUR 15.7 million to EUR 85.5 million

compared to 31 December 2014 due to the increase in operating activities in the

summer months. Current receivables from deliveries and services rose by EUR 84.2

million to EUR 199.9 million. Cash and cash equivalents fell in the first six months

from EUR 113.0 million to EUR 34.3 million as a result of financing operating

activities.

On the liabilities side, equity in the Group came to EUR 360.2 million on 30 June

2015, and was therefore EUR 146.3 million below the year-end value for 2014. This was

9

mainly due to the dividend distribution which amounted to EUR 163.3 million. On the

reference date of 30 June 2015, the equity ratio was still at a healthy 54.0 %,

compared to 67.4 % on 31 December 2014.

The total non-current provisions and liabilities rose by EUR 0.2 million to EUR

94.8 million compared to year end 2014. Current provisions and liabilities rose

by EUR 62.4 million to EUR 212.6 million, partly for seasonal reasons and also due to

temporary financing. In conjunction with the business volume, which was higher than

on the reference date of year end 2014 for seasonal reasons, liabilities from deliveries

and services and other current liabilities experienced particular growth. In contrast,

current financial liabilities dropped by EUR 13.1 million to EUR 14.7 million.

Total borrowings for the Sto Group at the mid-point of 2015 amounted to EUR 37.2

million. Taking into account cash and cash equivalents, net financial debt totalled

EUR 2.9 million (31 December 2014: EUR +104.7 million; 30 June 2014: EUR +37.8

million). As a result of the seasonal variability affecting the business model, the

demand for liquidity to finance current business is subject to significant fluctuations,

which means that there is a great need for cash in the first few months of a calendar

year in particular.

Employees

Slight increase in workforce

At the end of June 2015, the Sto Group had 5,081 employees worldwide as compared to

5,001 on 30 June 2014 (+1.6 %). We primarily reinforced personnel numbers in

companies based in countries with medium-term growth prospects, while targeted

restructuring measures were carried out in regions battling difficult economic

conditions. The workforce abroad increased by 36 to 2,454 employees, while staff

numbers in Germany rose by 44 to 2,627. The percentage of the Group's workforce

employed abroad as at 30 June 2015 totalled 48.3 %, almost up to the previous year's

level (previous year: 48.4 %).

10

Dividing these figures into segments, the mid-year situation is as follows: Sto has a

total of 3,808 employees in Western Europe (including Germany), 637 in

Northern/Eastern Europe, and 636 in America/Asia.

Changes to the Executive Board and Supervisory Board

Following the Annual General Meeting on 16 June 2015, former Chief Executive Officer

(CEO) Jochen Stotmeister moved to the Supervisory Board of STO Management SE, as

previously announced, where he was elected Chairman. He also joined the Supervisory

Board of Sto SE & Co. KGaA.

Within the Executive Board of STO Management SE, which manages the business of

Sto SE & Co. KGaA as the personally liable partner, the following changes were effected

on 1 July 2015: Rainer Hüttenberger, who is responsible for Marketing and

International Brand Sales of Sto, became spokesperson for the Executive Board team,

which will have equally distributed powers in the future. At the same time, Michael

Keller joined the board. He manages Brand Sales for Sto in Germany, Distribution, and

Central Services. Meanwhile, Rolf Wöhrle will continue to be responsible for Finances

and Gerd Stotmeister for the area of Technology.

Events following the conclusion of the reporting period

In August, we were able to adjust the syndicated loan agreement, which had been in

force since 2012, ahead of time due to the favourable market conditions by means of an

amendment agreement, and agreed a further term of five years with the existing

banking syndicate. This provides the Sto Group with continued financial flexibility for

the years to come.

Between the end of the reporting period and the point at which this report was signed

off, there were no other events of particular note or with a significant impact on the

earningsn situation, the financial position, or the asset situation of the Sto Group.

Risk report

11

The structure of the risk management and internal control system (ICS) and the risks

to which the Sto Group is exposed � which remain unchanged � are described in

detail in the 2014 Group management report. At present, no appreciable risks are

apparent that could have a permanent and significant adverse effect on the earnings

situation, the financial position, or the asset situation of the Sto Group.

Outlook report

International construction industry

The prospects for the construction industry in the USA have taken a slight turn for

the worse, particularly in the field of residential construction. However, according to

GTAI, many economists are confident that the economic trend of the previous year

will be repeated and that, following a weak first quarter, the economy will pick up

over the course of the year. Based on current forecasts, US investments in

construction in 2015 could rise by around 5 % to 7 % (2014: +5.4 %). An increase of

10.4 % is forecast for residential construction. There is also a strong chance that, with

an improving overall economy, demand in commercial construction and public-sector

construction will gain momentum in the coming months. Energy-efficient

construction is particularly popular in the USA at the moment: in the non-residential

sector, almost every other new building is constructed in accordance with

environmental and energy-related sustainability criteria. �Green building� projects

are given strong support through the �Clean Power Plan�, which was announced by

President Obama with the aim of reducing carbon dioxide emissions in the long term.

In China, the construction industry�s period of weakness is likely to continue in 2015.

GTAI expects the year as a whole to see a decline both in property investments and in

the construction industry, despite expected support measures from the government.

There are positive signs for the construction sector in the form of continuing

urbanisation: in 2014 alone, around 18 million people in China are said to have moved

from the country into towns and cities.

12

According to EUROCONSTRUCT, the European construction industry is also

expected to pick up some speed in 2015; specifically, it is working on the basis of an

expansion in construction activities amounting to around 2 %. The improving general

economic conditions in Europe are having a positive influence on the construction

sector, although many economic experts feel that the euro crisis has not yet been

resolved � irrespective of the problems in Greece � and are predicting only a slight

increase in the volume of construction.

According to estimates from Germany�s two central construction industry associations

� the Hauptverband der Deutschen Bauindustrie and Zentralverband des Deutschen

Baugewerbes � overall turnover in the German building industry is set to rise by 2

% in 2015. In the residential construction sector, the investment climate is favourable,

particularly as a result of the low level of mortgages and the low returns on alternative

capital investments. An increase of around 3 % is expected here. Where commercial

construction is concerned, an increase in turnover of 1.5 % is considered achievable,

while growth of just 1.0 % is expected in public-sector construction.

Sto: outlook unchanged for 2015 as a whole

For 2015 as a whole, Sto SE & Co. KGaA continues to expect an increase in turnover

of 5 % to around EUR 1,270 million within the Group. The Executive Board expects

business development in the second half of the year to be supported by similarly

favourable weather conditions as in the previous year and the continuation of the

positive currency translation effects, and it will therefore be possible to make up the

shortfall which was still in evidence at the mid-year point. It is, however, difficult to

predict the effects of the weather, which have a huge impact on the company's

turnover and earnings trends. Consolidated earnings before interest and taxes (EBIT)

are likely to amount to between EUR 92 million and EUR 102 million (2014: EUR

97.0 million).

We have planned a budget of around EUR 45 million for investments in property,

plant, and equipment and intangible assets in 2015. Our main focuses include the

13

construction of the new office building in Stühlingen as well as investments in

replacement and rationalisation.

Stühlingen, August 2015

Sto SE & Co. KGaA

represented by STO Management SE

The Executive Board

14

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Sto SE & Co. KGaA, StühlingenNotes to the condensed consolidated interim financial statement for the period from 1 January to 30 June 2015

1. Basis of preparation Sto SE & Co. KGaA prepared its consolidated financial statement for the 2014 fiscal year in accordance with the International Financial Reporting Standards (IFRS) as applicable in the European Union and the interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC). Accordingly, this interim financial statement as at 30 June 2015 has similarly been prepared in accordance with the International Accounting Standard 34 'Interim Financial Reporting' as a condensed interim report.

The condensed consolidated interim financial statement does not encompass all of the information and details required for consolidated financial statements and should therefore be read in conjunction with the consolidated financial statement as at 31 December 2014.

The consolidated interim financial statement has not been subjected to audit.

The condensed consolidated interim financial statement for the first half of 2015 was approved for publication by the personally liable STO Management SE on 24 August 2015.

2. Accounting and measurement principlesIn order to draw up the condensed consolidated interim financial statement, the accounting methods applicable until 31 December 2014 for the consolidated annual financial statement, with the exception of the standards and interpretations that became applicable on 1 January 2015, were adopted unchanged. A detailed description of these accounting policies was published in the notes to the 2014 consolidated financial statement.

The accounting regulations that became applicable for the first time in the fiscal year of 2015 have no appreciable impact on the presentation of the asset situation, financial position or earnings situation in the consolidated interim financial statement.

In the present consolidated interim financial statement, discount rates for post-employment benefit provisions of 2.15 % (31 December 2014 2.15 %) are used for associates with the Euro as their functional currency. For associates with a different functional currency, the discount rate is set at 1.0 % (31 December 2014 1.0 %).

Income tax expense was calculated in accordance with IAS 34 'Interim Financial Reporting' on the basis of the effective anticipated tax rate for the entire fiscal year.

3. Companies consolidatedThe consolidated financial statement includes Sto SE & Co. KGaA as well as the domestic and non-domestic subsidiaries on which Sto SE & Co. KGaA is able to exercise a controllinginfluence as defined in

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IFRS 10. Control as defined in IFRS 10 exists when an investor has exposure or rights to variable returns from its involvement with the investee and has the ability to use its power over the investee to affect the amount of the investee's returns.

When evaluating the companies consolidated, the joint control, or the type of joint control, no significant evaluations or assumptions were necessary, because the allocation was clear in the Sto Group without them.

The property and buildings of WT Gebäudemanagement GmbH, Stühlingen, which does not perform any other business activities other than real estate management, were sold by selling the company shares on 1 January 2015. The purchasing price is EUR 3,124 K and had already been paid in full by the balance sheet date of 31 December 2014.

4. Seasonal influences on business activitiesOwing to the seasonal fluctuations in the building industry, a higher volume of sales and operating result than that achieved in the first half of the year is normally expected in the second half of the year. The generally higher turnover from May to October is essentially as a result of the weather.

5. Earnings per share / distributed dividendsBasic earnings per limited ordinary or limited preference share are calculated by dividing the proportion of earnings attributable to STO SE & Co. KGaA's limited ordinary or limited preference shareholders by the weighted average number of limited ordinary and limited preference shares in circulation during the fiscal year.

In addition to shares outstanding, diluted earnings per share also include potential shares (e. g. from options). Both at 30 June 2015 and 30 June 2014, there were no potential shares. Accordingly, basic and diluted earnings per share are identical in both years.

In the first half of 2015, a dividend of EUR 0.25 as well as an extra dividend of EUR 25.14 per limited ordinary share, and a dividend of EUR 0.31 as well as an extra dividend of EUR 25.14 per limited preference share, were distributed for the 2014 fiscal year. This corresponds to a total dividend payout amount of EUR 163,308 K. The distribution of dividends occurred on the day after the Annual General Meeting held on 16 June 2015.

6. Intangible assets and property, plant and equipmentIn the period from 1 January to 30 June 2015, the Sto Group acquired assets at acquisition costs of EUR 10,613 K (first half of 2014: EUR 10,727 K). In the same period, the Group sold assets with a carrying value of EUR 659 K (first half of 2014: EUR 175 K).

An impairment of EUR 1,200 K was placed on intangible assets.7. Information on fair valueThe principles and methods for fair value valuation remain unchanged in principle from the previous year.

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The financial assets and liabilities accounted for at fair value are structured according to the following valuation categories:

Level 1Financial instruments traded in active markets, the listed prices of which were adopted unchanged for measurement purposes.

Level 2The measurement is made on the basis of valuation methods in which the influential factors are derived either directly or indirectly from observable market data. The derivative are currency hedges only. They are measured based on the observable exchange rates, the interest structure curves of the respective currencies as well as the currency related basic spreads between the respective currencies.

Level 3The measurement is effected using valuation methods where the influential factors are not based exclusively on observable market data.

The assets and liabilities accounted for at fair value with an impact on profit and loss comprise derivative financial instruments, which are not included in hedge accounting. These are essentially currency futures.

23

The following table shows carrying amounts and fair values of financial instruments as at 30 June 2015:

The carrying amounts of cash and cash equivalents, receivables and liabilities from deliveries and services correspond mainly to the fair values due to the short terms. Interest rates have virtually remained unchanged during the last half year.

The following table contains an overview of the balance sheet items accounted for at fair value:

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In the period from 1 January to 30 June 2015, there were no reclassifications between levels 1 and 2, and no reclassifications as or from level 3.

8. Contigencies and contingent liabilitiesAs at 30 June 2015, liabilities for the acquisition of property, plant and equipment stood at EUR 10,035 K (31 December 2014: EUR 10,324 K). Other contingencies and contingent liabilities stated in the 2014 consolidated financial statement showed no appreciable changes as at 30 June 2015.

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9. Related party disclosuresThe volume of deliveries and services in the first half year between associates of the Sto Group and related parties are set out in the following table:

Payables to Stotmeister Beteiligungs GmbH were taken on with a running period of 2 months at an interest rate of 0.85 % and without provision of collateral.

10. Events following the conclusion of the reporting periodIn August, we were able to prematurely adjust the syndicated loan existing since 2012 through an amending agreement due to favourable market conditions and agree on a renewed running period of five years with the existing banking syndicate. This provides the Sto Group with financial flexibility also in the years to come.

Between the end of the reporting period and the point at which this report was signed off, there were no other events of particular note and with a significant impact on the earnings, financial and asset situation of the Sto Group.

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Responsibility statement by the legal representativesWe confirm, to the best of our knowledge and in accordance with the applicable accounting principles for interim reporting, that the interim consolidated financial statement provides a true and fair view of the asset situation, financial position and earnings situation of the Group in compliance with generally accepted accounting principles, and that the consolidated interim management report presents a true and fair view of business development, including the operating results and position of the Group, together with a description of the principal opportunities and risks associated with the anticipated development of the Group throughout the remainder of the fiscal year.

Stühlingen, 24 August 2015

Sto SE & Co. KGaArepresented by STO Management SEExecutive Board

Rainer Hüttenberger Michael Keller Gerd Stotmeister Rolf Wöhrle (Spokesperson)

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Documents

Sto SE & Co. KGaA, Stühlingen Interim financial report in ...€¦ · 256.3 million – because the procurement situation turned out to be more favourable than expected in the reporting