Ringmetall braces itself against broader economic slowdown by optimizing production processes

• Group revenues down 12.7 percent to EUR 100.6 million due to economic environment
• EBITDA of EUR 8.3 million significantly impacted by one-time deconsolidation effects of EUR -4.6 million from sale of HSM
• Outlook reaffirmed against the backdrop of satisfactory overall business performance

Munich, September 15, 2023 - Ringmetall SE (ISIN: DE000A3E5E55), a leading international specialty supplier in the packaging industry, is facing declining demand from an increasing number of customer industries in the first half of the year against the backdrop of an economic slowdown of ever broader proportions. However, by taking timely countermeasures since the beginning of the year, the Company has managed to master the current difficult business environment relatively well.

"We have been noticing the effects of the changed demand situation in the chemical industry since the end of 2022 in the form of declining order intake. For a few months now, there have been signs of a significant decline in demand in other industries - for example, in the automotive and furniture sectors - flanked by a significant cooling of consumer behavior in private households," says Christoph Petri, Spokesman of the Management Board of Ringmetall SE, describing the current environment. "However, we have adapted to this scenario as well as possible at an early stage, shedding temporary staff and optimizing our production capacity utilization as best we can. We continue to stand by our core workforce, especially in today's times of shortage of skilled workers."

At EUR 100.6 million, Group revenues in the first half of the year were 12.7 percent below the previous year (H1 2022: EUR 115.3 million). Growth from the acquisitions of Protective Lining and Liner Factory was offset by declining raw material prices. Organic business development was clearly impacted by a cyclical decline in demand in an increasing number of customer industries. On the other hand, against the backdrop of a broad product mix, the Group benefited at the same time from continued good to rising demand from industries such as the food sector and the food service and tourism sectors.  The Company therefore assesses the overall development of the Group in the first half of the year as correspondingly satisfactory. Earnings before interest, taxes, depreciation and amortization (EBITDA) declined by 52.4 percent to EUR 8.3 million (H1 2022: EUR 17.3 million), mainly due to one-off deconsolidation effects of EUR -4.6 million from the sale of HSM and the associated closure of the Industrial Handling segment. At 8.2 percent, the EBITDA margin in relation to total operating performance was significantly below the well above-average levels of the previous year (H1 2022: 14.8 percent). Adjusted for the effects of the sale of HSM, the EBITDA margin was 12.8 percent.

The key figures for business development in the reporting period are as follows:

IFRS, in TEUR	H1 2023	H1 2022	∆ [abs.]	∆ [%]
Revenues	100,563	115,251	-14,688	-12.7%
Total output (TO)	100,377	117,528	-17,151	-14.6%
Gross profit	48,543	49,548	-1,005	-2.0%
Gross profit margin (on TO)	48.4%	42.2%
EBITDA	8,260	17,341	-9,081	-52.4%
EBITDA margin (on TO)	8.2%	14.8%
EBIT	4,257	13,862	-9,605	-69.3%
EBIT margin (on TO)	4.2%	11.8%

In the Industrial Packaging segment, revenues decreased by 14.1 percent to EUR 92.3 million (H1 2022: EUR 107.4 million), significantly impacted by a cyclical weakening of demand in the customer industries and changes in raw material prices. The decline in revenues was mainly attributable to the Rings product area, but was significantly influenced by double-digit percentage declines in steel prices. Organic business performance was roughly level with the Group as a whole. The picture in the Liner product area was quite mixed. While individual product types also felt the effects of the economic headwind, sales of other product types actually increased further. In particular, the company further strengthened its market-leading position in the beer tank inliner sector and was able to compensate for inflationary effects in the inliner product area overall by means of price increases. In addition, the acquisitions of Protective Lining and Liner Factory successfully contributed to business development in the first half of the year.

In the Industrial Handling Segment, revenues increased by 5.8 percent year-on-year to EUR 8.3 million (H1 2022: EUR 7.8 million). However, segment EBITDA was down 21.8 percent at EUR 0.5 million (H1 2022: EUR 0.7 million). This was due to continuing quality problems in production, mainly triggered by the shortage of skilled workers. Effective June 30, the Group subsidiary HSM was sold and the Industrial Handling Segment was closed. The resulting one-time special effects in connection with the deconsolidation in the amount of EUR -4.6 million were fully recognized at the level of the Group holding company.

In detail, segment performance in the reporting period was as follows:

IFRS, in TEUR	H1 2023	H1 2022	∆ [abs.]	∆ [%]
Industrial Packaging
Revenues	92,293	107,432	-15,139	-14.1%
Total output (TO)	91,942	109,057	-17,115	-15.7%
EBITDA	14,359	17,956	-3,597	-20.0%
EBITDA margin (on TO)	15.6%	16.5%
Industrial Handling
Revenues	8,270	7,819	451	5.8%
Total output (TO)	8,435	8,471	-36	-0.4%
EBITDA	549	702	-153	-21.8%
EBITDA margin (on TO)	6.5%	8.3%

Based on the Company's performance in the first half of the year, which continues to be in line with expectations, the Management Board confirms its outlook for business performance in 2023 as a whole. The Company thus continues to expect consolidated revenues in the range of EUR 175 to 195 million with EBITDA in the range of EUR 13 to 18 million. The outlook is based on unchanged raw material prices and exchange rates compared to June 30, 2023. It does not include effects from acquisitions planned in the further course of the year, including the resulting transaction costs. The Management Board assesses the market environment for further acquisitions as increasingly good and continues to see the Company as well positioned to take advantage of attractive opportunities in the market at any time.

For more information on the Ringmetall Group and its subsidiaries, visit www.ringmetall.de.

Contact:
Ingo Middelmenne
Investor Relations
Ringmetall SE
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 specialty supplier in the packaging industry. The Industrial Packaging division offers highly secure closure systems and inliners for industrial drums, primarily for the chemical, pharmaceutical and food processing industries. In addition to the Group headquarters in Munich, Ringmetall is represented by worldwide production and sales subsidiaries in Germany, France, Great Britain, Italy, the Netherlands, Spain, Turkey, as well as China and the USA. Ringmetall generates annual revenues of around EUR 185 million worldwide.