Ringmetall SE raises forecast significantly after dynamic first half-year

Ringmetall SE raises forecast significantly after dynamic first half-year

Munich, 16 August 2021 - Based on first preliminary figures, Ringmetall SE (ISIN: DE000A3E5E55) has developed significantly better in the first half of 2021 than in the previous year. Accordingly, the company is significantly increasing its forecast for the expected business development in the full year.

Group revenues increased by 25.6 percent to EUR 78.3 million in the first half of the year (H1 2020: EUR 62.3 million). In addition to a significant increase in steel prices, which the company was able to pass on to its customers to a large extent, an increase in sales volumes in the clamping ring business also played a key role in the revenues growth. At the same time, the company benefited from the development of the US dollar against the euro and a significant revival in demand in the Industrial Handling business. Earnings before interest, taxes, depreciation and amortization (EBITDA) showed an increase of around three times. It increased by 74.0 percent to EUR 11.3 million (H1 2020: EUR 6.5 million). The EBITDA margin rose accordingly from 10.3 percent in the previous year to 14.3 percent, marking a new historic high in the company's development to date. The significant increase in profitability is mainly attributable to a further increase in production efficiency and personnel utilization, as well as a further reduction in production scrap and the generation of Group-wide purchasing and production synergies.

The key performance indicators for the reporting period are as follows:

Separate analysis of the effects of raw material price developments (mainly steel), inorganic and organic growth showed the following effects on segment revenues:

Industrial Packaging
- Effect of raw material price development on segment revenue: + 15.3 percent
- Effect of corporate acquisitions on segment revenue: + 1.8 percent
- Effect of organic business development on segment revenue: + 9.9 percent

Industrial Handling
- Effect of organic business development on segment revenue: + 11.9 percent

In Industrial Packaging, demand in the drum closure systems product area remained at a high level, as in the first quarter. In particular, demand for drum lids increased at a significantly above-average rate. At the same time, further significant increases in steel prices led to a sharp rise in prices and thus revenues in the segment. The rising US dollar also had a revenue-increasing effect. By contrast, the recovery in the inliner product area was still rather sluggish and only became more apparent towards the end of the second quarter. Sales of beer tank liners in particular continued to decline. Segment revenues rose accordingly by 26.9 percent to EUR 72.3 million (H1 2020: EUR 56.9 million), while segment EBITDA increased by a significantly disproportionate 73.1 percent to EUR 12.8 million (H1 2020: EUR 7.4 million) as a result of the aforementioned efficiency improvements. The integration of the HOSTO acquisition, which was consolidated for the first time as of 31 May 2021, is proceeding according to plan in terms of both operations and costs.

In the Industrial Handling Segment, the second quarter saw a clearly noticeable turnaround in the demand situation for the company's products, which had been subdued for a long time, and has remained at a high level in the third quarter to date. Demand increased here both in the area of product solutions for forklift trucks, but above all also in the area of product solutions for the agricultural machinery sector. Accordingly, segment revenue increased by 11.9 percent to EUR 6.0 million (H1 2020: EUR 5.4 million) while segment EBITDA multiplied to EUR 0.8 million (H1 2020: EUR 0.2 million).

In view of the unchanged high momentum in business development, the Management Board of Ringmetall SE is increasing its forecast for the expected course of business in the full year 2021. Group revenues of between EUR 150 and 160 million (previously: EUR 135 to 145 million) and EBITDA of between EUR 17 and 19 million (previously: EUR 13 to 15 million) are now expected. The adjusted forecast includes the effects expected for the first nine months of 2021 from changes in raw material prices and in the exchange rates of the euro to the US dollar, the Turkish lira and the British pound compared with the end of the year. Also included are effects expected to date from the acquisition of HOSTO. For the fourth quarter of 2021, possible effects from changes in raw material prices, the aforementioned exchange rates and possible further acquisitions are explicitly not included in the adjusted forecast.