Deufol SE announced uncertainty about the COVID 19 pandemic continues to persist in the current year. However, with the outbreak of the Ukraine war and its far-reaching consequences, the pandemic has receded to some extent into the background; as the course of case numbers this summer shows, however, it continues to harbor substantial risks that cannot be assessed due to its ever-new variants. Of considerable importance in this context is the situation in China.

In the event of a lockdown, the strict no-COVID policy can lead to considerable restrictions on transport capacities in international sea transport and, as a result, to extreme disruptions in supply chains. Supply chain disruptions have also been exacerbated by the Ukraine war. Although the Deufol Group is not directly affected by the Ukraine war, its impact is increasingly noticeable with the accompanying energy crisis, rising prices in various sectors and manifesting inflation.

According to management estimates, the sharp rise in inflation will be reflected in higher wages and salaries, among other things, and will also indirectly lead to higher remuneration for temporary workers, subcontractors and service providers. The company therefore expected a significant increase in personnel expense as early as the 2nd half of 2022. Due to government intervention in the gas price in Germany, the effects in terms of increased energy costs are likely to intensify further and significantly increase other operating expenses in the future.

Deufol has already developed an effective instrument to counteract these developments by dynamizing customer prices, not only with regard to raw material prices, and is confident that it will be able to offset the rising cost blocks with rising revenues in the near future. In addition, substantial efforts are being made to reduce energy consumption, cut costs and provide services more efficiently in order to limit cost increases - also in terms of improved sustainability. In connection with the interest rate increases that have already occurred and are expected to continue due to the change in money market policy, Deufol has made provisions for various long-term loans by concluding hedging transactions in the form of interest rate derivatives or by changing variable interest rate agreements into fixed interest rate agreements to hedge the interest rate level.

The Management is convinced that the ranges for sales (EUR 220 - EUR 250 million) and EBIT (EUR 7 - EUR 11 million) stated in the annual report can still be regarded as achievable despite the current political and economic environment. Provided the dynamics of the events arising from the COVID 19 pandemic, the Ukraine war, inflation, interest rate rises, the energy crisis and any supply bottlenecks for gas or certain raw materials do not lead to extreme developments, sales and earnings are expected to be at the upper end of the above ranges or even exceed them.