Ringmetall increasingly invests in future growth in successful course of business
- Group sales continue to rise by 9.5 percent to EUR 85.8 million
- Organic growth (ex steel price effects) of 3.9 percent
- Investments in organizational structures and efficiency gains implemented
Munich, 15 November 2018 - Ringmetall AG (ISIN: DE0006001902), an internationally leading specialist supplier in the packaging industry, has continued to grow dynamically in the first nine months of the year. Despite the rather unfavorable business environment characterized by holiday periods, the pace of growth actually increased slightly in the third quarter.
Group sales increased by 9.5 percent to EUR 85.8 million in the first nine months (9M 2017: EUR 78.4 million). Adjusted for steel price effects, organic growth was 3.9 percent and thus higher than in the first half of 2018. The still positive market environment in the third quarter was used, among other things, to set important course for the future growth of the Group. As a result, major investments were made in specialist employees in the company's central functions and additional positions were created in operations and technical development, IT and controlling, resulting in higher quarter-over-quarter personnel costs. In parallel, the company conducts a merger of the production site Sessenhausen with the site in Attendorn. The one-off costs for this amounted to around EUR 0.1 million in the third quarter, leading to further expected costs of EUR 0.4 million in the fourth quarter. Overall, however, this step will lead to future cost savings of around EUR 0.4 million per year.
For the last time, non-recurring charges were incurred in the third quarter in connection with the change in accounting to the International Financial Reporting Standards (IFRS), the preparation of the Company's uplisting to the Regulated Market of the Frankfurt Stock Exchange, the related implementation of a capital increase and the necessary preparation of a prospectus. The costs for this amounted to a total of EUR 0.9 million in the first nine months. For better comparability of the purely operational business performance of the Ringmetall Group, the Company therefore additionally reports 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 9.2 million, it was 4.4 percent down on the previous year (EBITDA 9M 2017: EUR 9.7 million), which also resulted in a 10.8 percent lower aEBITDA margin (EBITDA margin 9M 2017: 12.3 percent).
"In order to come closer to our medium-term margin targets, we implemented important efficiency enhancement measures in the third quarter," explains Christoph Petri, Spokesman of the Management Board of Ringmetall AG. "We introduced new production software, nearly completed the merger of two production sites and filled personnel vacancies at key positions in our Group. All of this, although associated with higher spending in the short term, is also immediately reflected in more sustainable organizational structures and improved future earnings."
The key performance indicators for the first nine months of 2018 are as follows:
|IFRS (in TEUR)
|Gross profit *
|Gross profit margin
|* Gross profit defined as: revenue including inventory changes less expenses for raw materials, consumables and supplies
In the Industrial Packaging division, sales increased by 11.5 percent to EUR 75.4 million (9M 2017: EUR 67.6 million). At EUR 8.9 million, EBITDA was down on the previous year, as in the first half of the year (9M 2017: EUR 9.7 million). This is still mainly due to the general developments in the US Dollar and the Turkish lira. In addition to the aforementioned relocation costs, however, higher crude oil prices also led to a not inconsiderable increase in transport costs in the segment. In general, it can be positively assessed that price negotiations with the most important customers in Turkey have led to an agreement to link pricing to the development of the US dollar in the future and therefore a significant reduction in currency risk.
The Industrial Handling division continued to develop very promisingly after the successful realignment. At EUR 10.4 million, sales were again almost at the previous year's level (9M 2017: EUR 10.8 million). At EUR 1.1 million, EBITDA was up on the previous year (9M 2017: EUR 1.0 million). The comparatively low increase in earnings is mainly attributable to comparatively high maintenance expenses for machinery and one-time expenses in connection with patents.
In its assessment of the development of sales and earnings for the full year 2018, the Management Board of Ringmetall AG fells continuously confirmed in view of the sustained positive business development. Although there are currently no concrete signs of a restrained business development in the coming year, the Executive Board takes note of statements from the industry about a supposed cooling of the economic environment with the given caution. For the coming year, it is therefore assumed that the growth rates of the current fiscal year are unlikely to be exceeded. The Company will publish a concrete assessment of the business development in 2019 with the publication of the preliminary figures for 2018 at the beginning of March 2019.
Further information on the Ringmetall Group and its affiliated subsidiaries can be found at www.ringmetall.de.
Phone: +49 (0)89 45 220 98 12
Mobile: +49 (0) 174 9091190
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.
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