Ringmetall achieves annual targets with strong year-end business

DGAP-News: Ringmetall Aktiengesellschaft / Key word(s): Annual Results/Preliminary Results
05.03.2020 / 07:00
The issuer is solely responsible for the content of this announcement.

Ringmetall achieves annual targets with strong year-end business

- Preliminary revenues increase by 9.3 percent to EUR 120.8 million
- Preliminary EBITDA of EUR 9.9 million 5.0 percent below previous year
- Guidance 2020 reflects stable to slightly expansionary business outlook

Munich, 5 March 2020 - The business development of Ringmetall AG (ISIN: DE0006001902), a leading international specialist in the packaging industry, continued to stabilize in the fourth quarter of the past financial year 2019. In the core business, the still restrained economic development and the significantly lower steel prices had a negative impact on the sales dynamics. However, the positive development of acquisitions in the market for inliners, Nittel and Tesseraux, led to reduced economic sensitivity and a continuously brightening business development over the course of the year.

Based on preliminary business figures, consolidated revenues rose by 9.3 percent to EUR 120.8 million (2018: EUR 110.6 million). Earnings before interest, taxes, depreciation and amortization (EBITDA) were 5.0 percent below the previous year at EUR 9.9 million due to the volatile business development in the first half of the year and the resulting increase in personnel expenses (2018: EUR 10.4 million). Compared to the full-year outlook, consolidated revenues and EBITDA are in the middle of the published ranges of EUR 115.0 to 125.0 million and EUR 8.5 to 11.0 million.

"The economic environment brightened slightly again in the second half of the year and our increasing diversification in the product mix has a stabilizing effect on the Group's development. In addition, we tended to have a tailwind from earnings on the back of falling steel prices. However, these effects were not sufficient to make up for the negative developments in the first half of the year", explains Christoph Petri, Spokesman of the Management Board of Ringmetall AG. "At the same time, the development in the area of ​​industrial handling continues to affect us, as we continue to suffer from weak sales and project postponements at one of our largest customers."

A separate analysis of the effects of steel price developments, inorganic and organic growth showed the following effects on segment sales in 2019:

Industrial Packaging
- Effect of steel price development on segment revenues: -0.8 percent
- Effect of company acquisitions on segment revenues: +12.6 percent
- Effect of organic business development on segment revenues: -3.8 percent

Industrial Handling
- Effect of organic business development on segment revenues: -14.9 percent

The key preliminary key figures on business development in the 2019 business year are as follows:

IFRS, in EUR m 2019e 2018 ∆ [abs.] ∆ [%]
Consolidated revenues 120.8 110.6 10.3 9.3%
Gross profit* 55.2 49.3 5.9 11.9%
Gross margin 45.7% 44.4%    
EBITDA** 9.9 10.4 -0.5 -5.0%
EBITDA margin 8.2% 9.4%    

* Gross profit defined as: revenues including changes in inventories less expenses for raw materials, consumables and supplies as well as purchased services; Expenses for agency workers are shown in personnel expenses both in 2019e and retrospectively for 2018;

** The first-time application of IFRS 16 resulted in an effect of EUR 1.7 million

Revenue in the Industrial Packaging segment was shaped by the acquisitions of Nittel as of 1 January 2019 and Tesseraux as of 1 July 2019 and rose by 12.6 percent to EUR 109.6 million. Sales declined organically as a result of an economic decline in demand on the part of the chemical industry. The general decline in steel prices also had an impact. At EUR 12.2 million, the segment EBITDA was 12.5 percent above the previous year.

In the Industrial Handling division, the postponement of a new generation of industrial trucks for a customer caused a significant decline in segment sales by 14.9 percent to EUR 11.2 million (2018: EUR 13.2 million) and segment EBITDA by 65.2 percent to EUR 0.4 million (2018: EUR 1.3 million).

Outlook 2020

Based on a conservative assessment of the market environment, the Management Board of Ringmetall AG expects consolidated revenues of EUR 125 to 135 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of EUR 11 to 13 million for the 2020 financial year.

Furthermore, the assumptions are based on an unchanged steel price and unchanged exchange rates of the Euro to the US dollar, the Turkish lira and the British pound compared to the end of 2019. Effects from acquisitions in 2020, including the resulting transaction costs, are not included. The Management Board currently assesses the market environment for company acquisitions as good and is currently in discussions with several acquisition targets.

The Management Board takes due note of the spread of the COVID-19 virus ("Corona virus"), although there are currently no direct effects on the company's business development. In the event of a broader economic downturn due to the virus, the Management Board also anticipates negative effects on the operational development of the Ringmetall Group. Such scenarios are not included in the outlook for business development 2020 published today.

The Management Board will discuss details of the preliminary business figures for 2019 at 4:30 PM CET today as part of a conference call for analysts, institutional investors and journalists. Registration is done via email to Ms. Anja Brabec (brabec@ringmetall.de).

The company will publish its full 2019 annual report as planned on 30 April 2020. Further information on the Ringmetall Group and its affiliates can be found at www.ringmetall.de.

Ingo Middelmenne
Investor Relations
Ringmetall AG
Phone: +49 (0 )89 45 220 98 12
Mobile: +49 (0 )174 90 911 90
Email: middelmenne@ringmetall.de

About Ringmetall Group

Ringmetall is a leading international specialist in the packaging industry. The Industrial Packaging business offers highly secure closures and inliners for industrial drums for the chemical, petrochemical, pharmaceutical and food processing industries. The Industrial Handling business unit develops application-optimized vehicle components for the handling and transport of packaging units. In addition to the Group headquarters in Munich, Ringmetall has worldwide production and sales offices in Germany, France, Great Britain, Spain, Italy, Turkey, the Netherlands, China and the USA. Worldwide Ringmetall generates more than EUR 120 million in revenues.

05.03.2020 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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