DGAP-News: Ringmetall defies commodity and currency fluctuations with significantly higher sales volumes

Ringmetall defies commodity and currency fluctuations with significantly higher sales volumes

- Group sales increase significantly by 9.2 percent to EUR 57.7 million
- Organic growth (ex steel price effects) of 3.7 percent
- aEBITDA at the previous year's level at EUR 7.1 million

Munich, 20 September, 2018 - Ringmetall AG (ISIN: DE0006001902), an internationally leading specialist supplier in the packaging industry, once again grew significantly in the first half of the year despite the macroeconomic headwind. A fundamentally robust demand from the most important customer industries led to a significant increase in sales volumes, accompanied by sharply higher steel prices.

Accordingly, Group sales increased by 9.2 percent to EUR 57.7 million (H1 2017: EUR 52.9 million). In the same period, purely organic sales adjusted for steel price effects stood at about 3.7 percent. The non-recurring extraordinary expenses for the transition of the accounting to the international accounting standard IFRS, the preparation of the company's switch into the Regulated Market of the Frankfurt Stock Exchange and the conduction of a capital increase as well as the necessary preparation of a prospectus totaled EUR 0.7 million. For better comparability of the purely operational business performance of the Ringmetall Group, the Company therefore also publishes an adjusted earnings before interest, taxes, depreciation and amortization as well as non-recurring expenses due to the conversion to IFRS, the segment change on the stock exchange and the capital increase (aEBITDA). At EUR 7.1 million, it was at the level of the previous year (EBITDA H1 2017: EUR 7.1 million). As a result of the relatively higher cost share for steel, the aEBITDA margin of 12.1 percent was below the previous year's level (EBITDA margin H1 2017: 13.2 percent).

"As the costs for the change of the stock market segment and related measures have finally risen to a not insignificant extent, this year we will uniquely also publish an aEBITDA ", explains Christoph Petri, Spokesman of the Management Board of Ringmetall AG. "When comparing the purely operational business performance with the previous year, this shows particularly clearly that we continue to grow very successfully. At the same time, however, steel price and currency fluctuations make the daily business far from easier. "

The key performance indicators for the first half year of 2018 are as follows:

In terms of operations, the two divisions of the Ringmetall Group once again developed very successfully in the first half year. Sales volumes in the Industrial Packaging division continued to increase year-on-year and demand for the company's products increased steadily. Sales in the Industrial Handling business unit continued to develop positively with products developed in-house.

Sales of the Industrial Packaging division increased in the first half of the year by 11.9 percent to 50.7 million euros (H1 2017: 45.3 million EUR). At EUR 6.3 million, EBITDA was 5.6 percent down on the previous year (H1 2017: EUR 6.7 million). The decline is mainly due to the much weaker US Dollar and the sharp decline in the Turkish lira. The EBITDA margin was significantly lower than in the previous year (H1 2017: 14.8 percent) at 12.4 percent, mainly due to steel prices.

As expected, sales in the Industrial Handling business unit were still below the previous year's level despite a positive development of in-house developments. Overall, the division's revenues declined by 7.2 percent to 7.0 million EUR (H1 2017: 7.6 million EUR). Despite this development, EBITDA increased by 12.2 percent to EUR 0.9 million (H1 2017: EUR 0.8 million). The segment's EBITDA margin also increased significantly to 12.1 percent (H1 2017: 10.0 percent).

Overall strong macroeconomic effects caused margins to deteriorate, which the company was unable to fully offset. On the raw material side, the prices for the steel grades needed for production continued to rise. Ringmetall Group has agreed with its customers extensive price escalation clauses, which generally allow fluctuations in the prices of raw materials to be passed on to their customers. However, as the prices for unprocessed steel in some markets deviated significantly in some cases from the prices of the steel intermediates required for production, it was sometimes not possible to fully pass on the price increases. In addition, currency effects in the first half of the year had a negative impact on the company's sales and earnings. On the one hand, the exchange rate of the US dollar against the euro fell significantly year-on-year. On the other hand, the persistent decline in the Turkish lira exchange rate relative to the euro due to the political instability in Turkey meant that the local subsidiary was currently unable to operate profitably. Since the subsidiary, as is customary in the region, must purchase its steel needed for production in US dollars, but the sales prices are invoiced in Turkish Lira, the company regularly fails to pass on price increases quickly enough to its customers, in the context of rapid exchange rate decline. However, the Management Board of Ringmetall AG currently sees the negative earnings effect of around EUR 0.1 million in the first half of the year as fundamentally sustainable in relation to the general opportunities arising from its presence in the Turkish market for the Group.

For the full year 2018, the company's Management Board continues to expect consolidated sales of EUR 108.0 to 112.0 million. With the steel price remaining high, consolidated sales are very likely to be at the upper end of the communicated bandwidth. The Executive Board expects earnings before interest, taxes, depreciation and amortization (aEBITDA), adjusted for one-time special effects, to be between EUR 12.5 million and EUR 13.5 million for the full year.

Further details of the business development in the first half of 2018 will be discussed by the Management Board today at 10:30 CET in a conference call for analysts, institutional investors and journalists. The registration is done by e-mail via Ms. Anja Brabec (brabec@ringmetall.de).

Further information on the Ringmetall Group and its affiliated subsidiaries can be found at www.ringmetall.de.

Contact:

Ingo Middelmenne
Investor Relations
Ringmetall AG
Phone: +49 (0)89 45 220 98 12
Mobile: +49 (0) 174 9091190
Email: middelmenne@ringmetall.de

About Ringmetall Group

Ringmetall is an internationally leading specialist in the packaging industry. The Industrial Packaging business segment offers highly secure gasket and locking systems for the chemical, the petrochemical and the pharmaceutical industry as well as the food industry. The Industrial Handling business segment develops application-optimized vehicle accessory parts for the handling and transport of packaging units. Besides its headquarters in Munich, Ringmetall has worldwide production and sales subsidiaries in Germany, Great Britain, Spain, Italy, Turkey, the Netherlands, as well as in China and the USA. On a global scale, Ringmetall generates revenues of more than EUR 100 million per year.