INDUS increases revenues by 4.3% in FY 2018

- Revenues climb from EUR 1.64 billion to EUR 1.71 billion

- EBIT impacted by repositioning exercises in Automotive Technology and impairments

- Positive outlook for 2019: PARKOUR strategy program will strengthen the portfolio companies

Bergisch Gladbach, 27 March 2019 - The INDUS Group increased sales revenues to EUR 1.71 billion in the fiscal year 2018, slightly exceeding its forecast of EUR 1.65 to 1.70 billion. The 45 portfolio companies increased their total revenues by 4.3% compared to the previous year (EUR 1.64 billion). Purely organically, the Group grew by 3.2%.

Four of the five segments are well positioned. The Construction/Infrastructure segment again recorded strong revenue growth and high earnings. By contrast, the well-known weakness among series production suppliers in the automotive industry persisted. The Group's earnings before interest and taxes (EBIT) before impairments thus amounted to EUR 150.8 million (previous year EUR 152.9 million), which was slightly below the forecast of EUR 154 to 160 million.

In view of the current prospects of some portfolio companies in the Automotive Technology and Metals Technology segments, the INDUS Group recognized non-cash impairment losses, mostly on goodwill, of approx. EUR 16.1 million in the fourth quarter of 2018. Operating EBIT after impairments amounted to EUR 134.7 million. The Group achieved an EBIT margin of 8.8% before impairments (previous year 9.3%) and of 7.9% after impairments. Earnings per share stood at EUR 2.90 (previous year EUR 3.37). The Board of Management and the Supervisory Board will propose to the Annual Shareholders' Meeting on 29 May 2019 to pay out a dividend of EUR 1.50, i.e. the same amount as in the previous year.

Construction/Infrastructure and Engineering post high margins
The INDUS Group currently comprises 45 portfolio companies operating in five segments. The highly profitable Construction/Infrastructure and Engineering segments again generated very good results. The Automotive Technology segment, by contrast, saw the weak margins of series production suppliers deteriorate even further in the face of declining sales figures and high overall pressure in the sector. The companies in the Medical Engineering/Life Science segment continue to feel the effects of increasing competition and the provisions of the EU Medical Devices Regulation, while their earnings remain good. The Metals Technology segment showed a positive performance: even after impairments, the EBIT margin increased year-on-year.

Balanced net assets and financial position
The INDUS Group's total assets amounted to EUR 1.72 billion as of the reporting date and were thus 4.0% higher than in the previous year, mainly due to increased working capital. In anticipation of higher materials prices, several INDUS portfolio companies built up their inventories, mainly of raw materials. As of December 31, 2018, net liabilities amounted to EUR 482.8 million (previous year EUR 398.9 million). Equity increased by 5.3% to EUR 709.8 million (previous year EUR 673.8 million). At 41.3 %, the equity ratio (previous year 40.8%) was well above the defined lower target ratio of 40%. At 2.2 years, the debt repayment period (net liabilities/EBITDA) was within the target range of 2 to 2.5 years. Gearing (net-debt-to-equity ratio) stood at 68% (previous year 59%).

Cash flow from operating activities fell to EUR 74.7 million in 2018 (previous year EUR 124.0 million), mainly due to net cash used in building up inventories. Cash and cash equivalents amounted to EUR 109.6 million on the reporting date (previous year EUR 135.9 million).

Investments amounted to EUR 102.4 million in the past fiscal year (previous year EUR 111.4 million). Of this amount, EUR 78.9 million was invested in property, plant and equipment (previous year EUR 71.3 million) and EUR 12.0 million in intangible assets (previous yea: EUR 7.7 million) to strengthen the portfolio companies. Investments in acquisitions totaled EUR 11.5% (previous year EUR 32.4 million). Depreciation and amortization rose to minus EUR 83.7 million (previous year minus EUR 62.4 million), in particular due to the write-downs for impairments.

INDUS plans to invest around EUR 89 million in the portfolio companies in 2019, with the main focus on promoting operational excellence. In addition, up to 3% p.a. of the Group's EBIT will be invested in the successfully established development bank model to strengthen companies' innovation capacity. Another EUR 50 million is earmarked for acquisitions in the defined growth industries.

Launch of the new PARKOUR strategy program
Although economic momentum in Germany's industrial sector is slowing, INDUS is optimistic about the current fiscal year. "We expect our portfolio companies to continue growing in 2019," said Dr. Johannes Schmidt, Chairman of the INDUS Board of Management. "By launching the PARKOUR strategy program, we have set the right course. We will increase the competitiveness of our Group by actively strengthening the portfolio structure, driving innovation and improving the performance. We make the portfolio companies fit for the 'PARKOUR' that lies ahead of them until 2025."

After a successful start to the year, the Board of Management expects sales to climb to between EUR 1.72 and 1.77 billion and earnings before interest and taxes (EBIT) to rise to between EUR 156 and 162 million. It is difficult to predict developments in the Automotive Technology segment, which will depend to a large extent on the strategic orientations and the sales trends of the major car makers expected for this year. The forecast does not take into account the targeted new acquisitions at the first and second tier. A sustainable development of the portfolio is to be achieved primarily through acquisitions in industries of the future, i.e. automation and measuring technology and control engineering, construction technology, safety technology, medical engineering/life science, technology for infrastructure/ logistics as well as energy and environmental technology. "The intensive talks held in the year to date indicate a positive trend for INDUS in the M&A market," said Johannes Schmidt.

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Contact:
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Corporate Communications & Investor Relations

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