Insider information pursuant to Article 17 of the Market Abuse Regulation [MAR]

H&R GmbH & Co. KGaA: Preliminary business results 2019

- Positive contributions from the Chemical Pharmaceuticals division, Plastics with a loss: preliminary operating income of EUR 52.9 million within last forecast

- Net income of EUR -1.4 million

Salzbergen, Germany, 26. February 2020. According to preliminary calculations, H&R GmbH & Co. KGaA (abbrev.: H&R KGaA; DE000A2E4T77) achieved a lower operating income (EBITDA - consolidated income before tax, other financial income and expenses and depreciation/amortization, impairment and appreciation of fixed assets and property, plant and equipment) of EUR 52.9 million in the financial year 2019 than in the same period of the previous year (2018: EUR 74.7 million). At the same time, it was within the range of the expectations of up to EUR 55.0 million last refined in November 2019 and includes one-time effects of EUR -3.2 million from personnel restructuring measures at the Coburg site. Based on the lower EBITDA, the higher depreciation of EUR -45.5 million (2018: -34.2 million) had a particularly strong impact on the other earnings levels: EBIT amounted to EUR 7.4 million (2018: EUR 40.6 million), earnings before taxes (EBT) EUR -1.2 million (2018: EUR 33.7 million). All in all, net result attributable to shareholders amounted to EUR -1.4 million (2018: EUR 21.6 million). This figure was achieved with sales of EUR 1,075.3 million. Due to pricing and volume factors, this was around 3.5 % less than in the previous year (2018: EUR 1,114.1 million).

Global politics and market volatility have a severe impact on course of business in 2019

In our client industries, the market participants felt high pressure and acted more cautiously. H&R could only partially enforce price adjustments that would have been necessary in view of the high price pressure from Eastern European base oils, expansion of refinery capacities in Western Europe and Chinese wax and paraffin exports to the European and German markets. Particularly the tight situation in the automotive industry placed a burden on our Plastics segment. While moderate growth in new car registrations was still achieved in the euro zone, the important markets of the USA and China declined significantly, slowing down the entire value chain from the automotive groups to their suppliers down to the manufacturers of components.

The final quarter saw no turning point. Q4/2019 contributed a preliminary operating income of EUR 8.0 million to the full-year EBITDA (Q4/2018: EUR 15.0 million). The other earnings levels also remained weak at the end of the year: EBIT in the fourth quarter amounted to EUR -4.0 million (Q4/2018: EUR 6.1 million). Earnings before taxes (EBT; Q4/2019: EUR -6.8 million; Q4/2018: EUR 5.2 million) and net result attributable to shareholders (Q4/2019: EUR -5.4 million; Q4/2018: EUR 1.4 Mio.) also decreased sharply.

On a quarterly perspective, the company generated sales of EUR 250.6 million (Q4/2018: EUR 280.5 million), 10.7 % lower than in the same period of the previous year.

Operating cash flow positive again in 2019

Despite a significantly lower consolidated income, operating cash flow increased from EUR 14.0 million in the previous year to EUR 24.7 million in the fourth quarter of 2019. This was mainly due to changes in net working capital requirements. Free cash flow, amounting EUR -3.8 million, also recovered significantly despite slightly higher investment activities (Q4/2018): EUR -11.7 million).

Over the year, operating cash flow improved from EUR 23.3 million in the previous year to EUR 95.9 million, based on a likewise lower consolidated income. This was also due to a significantly lower net working capital requirement over the year. Higher cash outflows for investments had a negative impact on free cash flow, which nonetheless increased from EUR -46.4 million to EUR 20.8 million.

Balance sheet total was EUR 838.6 million at the end of the financial year 2019 (Dec. 31, 2018: EUR 730.4 million). Equity at the balance sheet date stood at EUR 363.4 million (Dec. 31, 2018: EUR 357.4 million). Equity ratio amounts to 43.3 % (Dec. 31, 2018: 48.9 %).

For a complete presentation of business performance including segment reporting - and the annual financial statements, H&R KGaA refers to the 2019 Annual Report to be published on 8 April 2020.

Contact:
H&R GmbH & Co. KGaA, Head of Investor Relations / Communication, Ties Kaiser
Neuenkirchener Straße 8, 48499 Salzbergen
Phone.: +49 40 43218-321, Fax: +49 40 43218-390
Mail: [email protected]
www.hur.com

H&R GmbH & Co. KGaA:
H&R KGaA is a specialty-chemicals company listed on the Frankfurt Stock Exchange's Prime Standard segment. It develops and manufactures crude-oil-based chemical and pharmaceutical specialty products and produces high-precision plastic parts.

Forward-looking statements and forecasts:
This insider information pursuant to Article 17 of the Market Abuse Regulation [MAR] contains forward-looking statements. The statements are based on the current estimates and forecasts by the Management Team and the information available to it at this time. These forward-looking statements do not provide any warranty for the future developments and results contained therein. The future developments and results are dependent on a number of factors; they entail various risks and contingencies and are based on assumptions which could prove to be incorrect. We do not assume any responsibility for updating the forward-looking statements contained in this insider information pursuant to Article 17 of the MAR.