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

H&R GmbH & Co. KGaA: Preliminary results for Q1-2023 published

- Momentum of the previous year significantly dampened in Q1-2023

- EBITDA of EUR 14.0 million (Q1-2022: EUR 25.2 million) below prior-year level

- Strong improvements in cash flow

- Adjustment of expectation for the full year 2023

Salzbergen, Germany, April 26, 2023. H&R GmbH & Co. KGaA (H&R KGaA for short; DE000A2E4T77) achieved an operating result (EBITDA - consolidated earnings before income taxes, other financing income and expenses, and amortization, depreciation, and impairment losses and reversals of impairment losses on intangible assets and property, plant, and equipment) of EUR 14.3 million (Q1/2022: EUR 25.2 million) in the first quarter of 2023, according to preliminary calculations. This was significantly below the level of the very good same quarter of the previous year and the company's own expectations. At the same time, depreciation, amortization and interest charges remained at a high level, so that the company was unable to carry the momentum of the previous year into the opening quarter of 2023. EBIT amounted to EUR 0.5 million (Q1/2022: EUR 12.0 million), earnings before taxes (EBT) to EUR -2.2 million (Q1/2022: EUR 10.3 million). Below the line, the Group achieved lower earnings attributable to shareholders of EUR -0.9 million compared to the same quarter of the previous year (Q1/2022: EUR 8.1 million). This was achieved on sales of EUR 349.0 million, around 3.5% less than last year (Q1/2022: EUR 361.8 million). The main reason for this was lower raw material costs and product prices. In the previous year, the effects of the Ukraine war had led to higher material costs and ultimately to higher product prices and sales.

Refinery business remains biggest earnings leverage

High gas and electricity prices in particular continue to weigh on German industry and thus also on H&R at the start of the year. However, the so-called "energy price brake" should improve the situation during the year. The energy-intensive production sites of the ChemPharm REFINING segment sold lower volumes overall in the first quarter of 2023, also due to rather subdued prospects in numerous customer industries. Sales also decreased to EUR 219.5 million (Q1/2022: EUR 235.9 million) due to raw material prices. Product prices remained highly competitive in the opening quarter, with volumes from Southern European refineries in particular making our negotiations with some customers, and thus the passing on of the above-mentioned costs, considerably more difficult. In view of forecasted lower availabilities at some competitors, this situation should recover during the year. However, it can be assumed that the countries in the southeast of the European Community in particular will benefit from their special role in the ongoing purchase of Russian raw materials and sell their own end products "as oils produced in Europe" at low prices. The segment's EBITDA came under significant pressure at EUR 5.7 million (Q1/2022: EUR 19.0 million).

The international sites of our ChemPharm SALES segment, on the other hand, showed a generally stable to slightly positive development and increased sales to EUR 123.1 million (Q1/2022: EUR 119.8 million). The good prior-year result with EBITDA of EUR 6.6 million was almost matched again in the first quarter of 2023 with EUR 6.4 million. 

A look at the PLASTICS segment is also encouraging: despite the rather mixed outlook for the international automotive industry in terms of drive-train and future technologies, the subsidiary GAUDLITZ GmbH achieved an increased positive EBITDA of EUR 1.2 million (Q1/2022: EUR 0.7 million). Sales also increased from EUR 10.6 million in the previous year to EUR 13.2 million in Q1/2023.

Cash flow recovers strongly in Q1/2023

Despite a narrowly negative net result of EUR -0.8 million (Q1/2022: EUR 7.8 million), operating cash flow improved to EUR 48.5 million in Q1/2023 (Q1/2022: EUR -4.8 million). This was mainly due to the development of the raw material price, which led to a significantly lower net working capital requirement. Free cash flow also closed significantly improved at EUR 31.8 million (Q1/2022: EUR -18.4 million).

Equity position remains solid

Total assets decreased to EUR 939.2 million at the end of Q1/2023 (Dec. 31/2022: EUR 962.1 million). On the assets side, the demand situation and lower input material costs led to a reduction in inventories, while on the liabilities side, liabilities to banks decreased in particular. As of the balance sheet date, the company's equity amounted to EUR 465.5 million (December 31, 2022: EUR 471.2 million). The equity ratio was 49.6% (Dec. 31, 2022: 49.0%).

Expectation for 2023 is adjusted for the time being

Based on Q1-2023, the original full-year expectation for 2023 in a range of EUR 95.0 million to EUR 110.0 million appears too ambitious. The company therefore adjusts its guidance to a new range and considers an operating result (EBITDA) between EUR 70.0 million and EUR 90.0 million achievable.

For a complete presentation of the business development including the segment reporting and the quarterly financial statements, H&R KGaA refers to the Quarterly Statement 1/2023 to be published on May 12, 2023

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.