Ring Metal Remains Strong in Recessionary Environment – November 6, 2023, 1:02 a.m. ET

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EQS-News: Ringmetall SE / Keywords: 9-month numbers/acquisitions

Ring metals continue to perform well even in an environment where the recession is deepening

June 11, 2023 / 07:00 CET/CEST
The publisher is solely responsible for the content of this announcement.

Ring metals continue to perform well even in an environment where the recession is deepening

  • Group revenue fell by 15.6% to €143.7 million in a difficult environment
  • EBITDA of 13.5 million euros remains significantly affected by the temporary deconsolidation effect of the sale of HSM in the second quarter of -4.6 million euros

  • A small acquisition in the inliner product area took place at the end of October.Prediction confirmed

Munich, November 6, 2023 – Ringmetall SE (ISIN: DE000A3E5E55), a specialist international supplier to the packaging industry, was able to maintain a strong performance in the third quarter despite a still-recessive economic environment. Although the economic downturn has become increasingly pronounced, the company still managed to limit the decline in sales in the third quarter, which has traditionally been weak compared to previous quarters.

“Due to the early cyclical nature of our clamping ring business, we have been preparing for a broader economic downturn since the beginning of the year, so overall we have been able to cope well with the new environment. After adjusting for the impact of developments in raw material prices, Christoph Petri, spokesperson for the Management Board of Ringmetal SE, emphasizes: “The stability of earnings in the third quarter means that most of the economic downturn has already passed.” At the same time, there are still no signs of improvement, so the tough economic environment is likely to continue.”We are in good spirits for some time yet. ”

Group revenue for the first nine months of 2023 was €143.7 million, down 15.6% year-on-year (9 months 2022: €170.3 million). The increase from acquisitions could not fully offset the impact of lower raw material prices. Adjusting for the impact of the HSM sale, the revenue decline was 13.7%. Organic results were clearly affected by a cyclical decline in demand in an increasing number of customer industries, particularly in the chemical industry. Although the situation in the ring product sector is becoming increasingly stable, signs of a broader economic downturn are also beginning to be seen in orders for the inliner product sector. At the same time, cost reduction measures were implemented in many areas of the Group and synergies were achieved through integration steps of acquired subsidiaries.

Earnings before interest, taxes, depreciation and amortization (EBITDA) were 13.5 million euros, 44.1% lower than the previous year (September 2022: 24.2 million euros). Adjusting for the one-time deconsolidation effect of 4.6 million euros from the sale of HSM and the company’s revenue contribution in the third quarter of the previous year (0.5 million euros), the decline amounts to 23.7%. The EBITDA margin on total operating performance was 9.5%, significantly above the average level of the previous year (September 2022: 14.0%). His EBITDA margin, adjusted for the impact of the HSM disposal, was 12.7%.

The main figures for business development during the reporting period are as follows.

IFRS (TEUR) September 2023 September 2022 Δ [abs.] Δ [%]
revenue

143.694

170.262

-26.568

-15.6%

Gross production (GL)

142.857

172.909

-30.053

-17.4%

gross profit

70.175

73.661

-3.486

-4.7%

Gross profit margin (GL basis) 49.1% 42.6%
EBITDA

13.532

24.203

-10.671

-44.1%

EBITDA margin (GL basis) 9.5% 14.0%
EBIT

7.566

18.717

-11.151

-59.6%

EBIT margin (GL basis) 5.3% 10.8%

Revenues for the Industrial Packaging division were down 14.5% to €135.4 million (September 2022: €158.3 million). Weakening customer industry demand due to economic conditions has already been observed in the ring product sector in the first half of this year, and fluctuations in raw material prices may also be observed in the third quarter. . But at the same time, revenue has remained somewhat stable compared to the second quarter, which is a positive development. On the other hand, in the inliner products field, following relatively strong performance in the first half of the year, the impact of the economic slowdown was felt in orders for the first time in the third quarter. However, as a result of the Protective Cutting and Liner Factory acquisitions, overall revenues in this product area increased significantly. The division’s EBITDA decreased by 18.4% to €20.7 million (September 2022: €25.4 million) and was only slightly higher than the division’s sales. As a result, the EBITDA margin was 15.4%, almost unchanged from the previous year (September 2022: 15.8%).

Revenues for the Industrial Handling division remained unchanged at EUR 8.3 million (H1 2022: EUR 11.9 million) as a result of the sale of Group subsidiary HSM and the subsequent closure of the division as of June 30, 2023. Segment EBITDA also remained unchanged. Compared to €500,000 as of June 30, 2023 (September 2022: €1.2 million).

Details of the segment performance during the reporting period are as follows:

IFRS (TEUR) September 2023 September 2022 Δ [abs.] Δ [%]
industrial packaging
revenue

135.424

158.314

-22.890

-14.5%

Gross production (GL)

134.422

160.199

-25.777

-16.1%

EBITDA

20.700

25.381

-4.681

-18.4%

EBITDA margin (GL basis)

15.4%

15.8%

industrial handling
revenue

8.270

11.948

-3.678

-30.8%

Gross production (GL)

8.435

12.711

-4.276

-33.6%

EBITDA

548

1.155

-607

-52.5%

EBITDA margin (GL basis)

6.5%

9.1%

As the Company’s results for the first nine months of 2023 remain in line with expectations, the Board confirms its outlook for the full year. The company therefore continues to expect group revenues of between 175 and 195 million euros and EBITDA of between 13 and 18 million euros. This outlook is based on unchanged raw material prices and exchange rates compared to September 30, 2023. This does not include the impact of acquisitions occurring later in the year, including transaction costs.

At the beginning of the fourth quarter, the Board took advantage of the current attractive market conditions to make further smaller acquisitions. Effective October 31, 2023, the business operations of IDF GmbH & Co. KG, based in Ennepetal, Germany, were acquired as part of an asset transaction. The company is a leading supplier of containment solutions, namely continuous film systems for filling lines. With this acquisition, Ringmetall Group gains certification for deliveries to the chemical and pharmaceutical industries and also expands its cleanroom capabilities. The company’s sales are in the low single digits of his million euros, generating his EBITDA margin above the group comparison average. The acquisition will be financed from the company’s free cash flow.

Due to its continued strong financial starting position, Ringmetal Group continues to be well placed to take advantage of attractive acquisition opportunities in the market at any time.

Details of the business development for the first nine months of 2023 will be discussed by the Board of Directors today at 11:00 am CET in a conference call for analysts, institutional investors and the press. This registration can be done by email via Anja Brabec (brabec@ringmetall.de). For more information about the Ringmetall Group and its subsidiaries, please visit www.ringmetall.de.

contact:
Ingo Middelmenne
PR for investors
ring metal SE
Phone: +49 (0)89 45 220 98 12
Mobile: +49 (0 )174 90 911 90
Email: middelmenne@ringmetall.de

About Ring Metal Group
Ringmetall is a professional international supplier in the packaging industry. The Industrial Packaging segment provides high security closure systems and inner sleeves for industrial drums, primarily for the chemical, pharmaceutical and food processing industries. In addition to its group headquarters in Munich, Ringmetal has production and sales subsidiaries worldwide in Germany, France, the United Kingdom, Italy, the Netherlands, Spain, Turkey, as well as China and the United States. Ringmetall has annual revenues of approximately 185 million euros worldwide.

06.11.2023 CET/CEST Distribution of company news sent by EQS News, a service of EQS Group AG.
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