PRESS RELEASE

Annual Results

Deufol SE: Annual Results 2019

- Sales € 247.1 m (Prior Year € 265.1 m)

- EBITDA € 28.2 m € (Prior Year € 18.8 m)

- EBIT(A) € 6.2 m (Prior Year € 9.8 m)

- EAT € 3.1 m (Prior Year € 3.8 m)

- Operating Cashflow € 23.6 m (Prior Year € 16.9 m)

- Net Financial Liabilities € 68.5 m (Prior Year € 34.1 m)

- Retained earnings will be carried forward

 

Hofheim / Taunus, April 30 2020

Decreasing Sales Trend
2019 was affected by a significant global slowdown in the industrial and exporting sector. Due to this difficult and disappointing economic environment Deufol's sales have decreased by 6.8 % from 265.1 m to 247.1 m. On this level, sales for 2019 are below our original budget which was included in our annual financial report for 2018. This budget included sales in a range of € 270 m to € 290 m. The sales reduction covered all regions and services, however German sales were not as much affected as other areas and sales in consumer goods packing dropped considerably more than sales in industrial goods packing. This is the area where Deufol continuously puts its strategic focus on for years.

Operating Result (EBITA) on solid level despite weak environment
The operating result before amortization (EBITA), which is comparable to prior years, amounted to € 6.2 m in 2019. Prior Year was € 9.8 m. The EBITA-Margin reached 2.5 % (prior year 3.7 %) and is in line with expectations considering the economic environment. New accounting standards for leasing (IFRS 16) make it difficult to directly compare the operating result before depreciation and amortization (EBITDA) and the amount of depreciation to prior years. EBITDA was at € 28.2 m (prior year € 18.8 m) This led to an EBITDA-Margin of 11,4 % in 2019 and 7.1 % in 2018. Depreciation amounted to € 22.0 m after € 9.0 m in 2018.

Higher investments - Operating Cashflow considerably higher than 2018
During 2019 Deufol focused on growing its business operations into Southeast-Europe and invested therefore in that area. This led to increased investments into tangible assets (€ 9.6 m after € 7.9 m in 2018) of which € 7.5 m relate to our new facility in Hungary. Due to this our financial liabilities prior to IFRS 16 adjustments rose from € 63.8 m to € 71.6 m. Adjustments due to new standards for leasing (IFRS 16) led to a further increase of financial liabilities of € 29.0 m, so that the total financial liabilities at the end of 2019 amounted to € 100.6 m. Net financial liabilities, defined as the total of financial liabilities less financial receivables and cash, have also increased. They went up from € 34.1 m at December 31 2018 to € 39.5 m (prior to IFRS 16 adjustments) and € 68.5 m (including IFRS 16 adjustments) at the end of 2019. The total of liabilities due to banks less cash adds up to € 36.1 m (prior year € 30.5 m).

The operating cashflow amounts to € 23.6 m in 2018 and is therefore considerably higher than prior year's operating cashflow (€ 16.9 m).

Proposed appropriation of earnings

The Managing Directors and the Board of Directors propose that the full retained earnings in an amount of € 13.8 m will be carried forward. Furthermore, due to potential challenges in connection with the Corona-pandemic, it is also proposed not to pay out any dividends.

Key Data of 2019

Figures in € million	2019	2018	Change (%)
Sales	247.1	265.1	-6.8
EBITDA	28.2	18.8	50.0
EBIT(A)	6.2	9.8	-36.7
EBT	4.0	8.1	-51.2
EAT	3.1	3.8	-18.4
Thereof Non-Controlling Interests	0.1	(0.3)	133.3
Thereof Shareholders Deufol SE	3.0	4.1	-26.8
Earnings per share (€)	0.070	0.094	-25.5
Operating Cashflow	23.6	16.9	39.4
Investments in tangible assets	9.6	7.9	21.5
Net Financial Liabilities	68.5	34.1	100.9
Equity Ratio (%)	42.5	48.7	-12.7
Employees (Average)	2,185	2,347	-6.9

 

Outlook
Due to the current Corona-pandemic, Deufol will encounter extremely challenging and uncertain economic circumstances in 2020. Under these conditions, Deufol is unable to deliver an adequate financial forecast for sales and operational results. We expect shrinking markets on a global level. Deufol's goal for 2020 is to increase its market shares in most of the market areas we serve. Through this, Deufol should be able to compensate some of the expected sales decline.

Even though Deufol has already implemented cost reduction programs as a response to the Corona-pandemic, we expect the operating result (EBITDA) to be lower than 2019. However, all the productivity increasing measures implemented in the last years should be beneficial for Deufol if the economic environment starts to get stable after the Corona-pandemic slows down.

From today's viewpoint, the operating business of the Deufol Group does not need new additional financing resources. The syndicated loan, which is central for all financing in Europe, was newly negotiated in 2019 and fixed till May 2024. However, if the current Corona-pandemic will continue, additional financing might be necessary. Our future growth in Southeast Europe will also be accompanied by custom-made external financing.

The Annual Financial Report in German is available on the internet at http://www.deufol.com. The English version will be available within the next 2 weeks.
 

Contact:
Deufol SE
Claudia Ludwig
Johannes-Gutenberg-Strasse 3-5
65719 Hofheim (Wallau)
Tel.: +49 (6122) 50 1228
E-mail: [email protected]