Ringmetall closes 2023 slightly better than expected based on preliminary figures

Ringmetall closes 2023 slightly better than expected based on preliminary figures

• Group revenue down by -15.0 percent to EUR 181.6 million
• EBITDA down by 32.3 percent to EUR 19.2 million, also due to one-off deconsolidation effects of EUR -4.6 million from the sale of HSM
• Operating cash flow increases by 20.0 percent to EUR 22.1 million
• Continued stabilization of business development underpins forecast for 2024

Munich, 29 April 2024 - Ringmetall SE (ISIN: DE000A3E5E55), a leading international specialist supplier in the packaging industry, has performed slightly better in the past year than expected on the basis of the preliminary business figures published at the beginning of February, according to the 2023 Annual Report published today. The noticeable brightening of the environment at the start of 2024 led to a sustained stabilization in business development and thus underpins the outlook for the year as a whole.

At EUR 181.6 million, Group revenue in 2023 was down 15.0 percent on the previous year (2022: EUR 213.5 million). The revenue growth from the acquisitions of Protective Lining in the USA as well as IDF and Liner Factory in Germany was offset by a double-digit percentage decline in revenue due to the steel price development. The weakened economic environment, particularly in the second half of 2023, was also reflected in subdued demand from key customer industries, especially the chemical industry. The sale of the Group subsidiary HSM as at 30 June 2023 was also reflected in a revenue base that was around EUR 8 million lower in the second half of 2023. Adjusted for HSM's revenue share in the 2022 and 2023 financial years, the year-on-year decline in revenue amounted to -12.1 percent.

At EUR 19.2 million, earnings before interest, taxes, depreciation and amortization (EBITDA) were down 32.3 percent on the previous year (2022: EUR 28.3 million), corresponding to an EBITDA margin on total operating output of 10.6 percent (2022: 13.1 percent). Adjusted for the earnings contribution from the Group subsidiary HSM, which was sold on 30 June 2023, and the associated one-off deconsolidation effects of EUR -4.6 million, adjusted EBITDA amounts to EUR 23.3 million, which corresponds to a decline of -10.4 percent (adjusted EBITDA 2022: EUR 26.0 million, adjusted for HSM's earnings contribution and the one-off effect from the bargain purchase of Rhein-Plast GmbH), with an adjusted EBITDA margin on total operating performance of 13.2 percent. From a purely operational perspective, the earnings trend is therefore slightly better than the trend in Group revenue despite a noticeable reduction in production capacity utilization.

Compared to the adjusted forecast for the 2023 financial year from 30 June, Group revenue was therefore in the lower half of the forecast range of EUR 175 to 195 million, while EBITDA was slightly above the forecast range of EUR 13 to 18 million.

"In 2023, we made a conscious decision not to cut our core workforce in order to be able to quickly expand our production again in an improved environment in 2024," explains Christoph Petri, CEO of Ringmetall SE. "As a result, we certainly lost one or two margin points last year. However, we are cautiously optimistic that the current positive trend will continue and that we will be able to benefit from a recovery in the economy. Still, we are certainly a long way from a return to normal mode."

The key figures for the 2023 financial year are as follows: 

The company's operating cash flow developed very positively. At EUR 22.1 million, it increased by 20.0 percent compared to the previous year (2022: EUR 18.4 million), characterized by a reduction in inventories due to an easing of supply chains in the second half of the year. At EUR 6.8 million, cash and cash equivalents at the end of the year were slightly below the previous year (31 December 2022: EUR 8.1 million), while equity increased further to EUR 79.2 million and the equity ratio to 60.0 percent (31 December 2022: EUR 77.5 million; 59.0 percent).

In the Industrial Packaging division, revenue declined by 12.1 percent to EUR 173.3 million (2022: EUR 197.2 million). At -11.6 percent, EBITDA fell at a slightly lower rate to EUR 26.8 million (2022: EUR 30.3 million). Both the Closure Systems and Liners product areas saw a significant decline in raw material prices - and in particular a significant decline in steel prices - which reduced revenue. While a cyclical weakening of demand in the customer industries was reflected in declining sales volumes in the first nine months of the year, a gradual trend reversal in demand took place over the course of the fourth quarter and has continued since then. The integration of the subsidiary Protective Lining, acquired in January, with which Ringmetall successfully completed its market entry in the liner product area in the USA, continues to proceed according to plan. The integration of the German-based companies IDF and Liner Factory, which were acquired in 2023, is also progressing in line with expectations.

In the Industrial Handling business division, revenue remained unchanged at the end of the first half of the year at EUR 8.3 million (2022: EUR 16.3 million) as a result of the sale of the Group subsidiary HSM and the associated closure of the segment as at 30 June 2023. EBITDA was also unchanged compared to 30 June 2023 at EUR 0.5 million (2022: EUR 1.1 million).

In detail, the development of the divisions was as follows:

In view of the increasingly positive business environment, the Management Board confirms its outlook for the year as a whole. However, it still cannot be ruled out that the current recovery trends in parts of the economy are only of a short-term nature. Accordingly, the Management Board's forecast reflects both a pessimistic and an optimistic scenario in the form of the forecast ranges. For the 2024 financial year, the Management Board expects a Group revenue of between EUR 170 million and EUR 195 million with earnings before interest, taxes, depreciation and amortization (EBITDA) of between EUR 20 million and EUR 27 million. The Management Board intends to specify the forecast later in the year. The forecast is based on unchanged raw material prices and exchange rates compared to the end of 2023. It also does not include the effects of acquisitions planned for 2024, including the resulting transaction costs.

The Management Board of Ringmetall SE invites you to the next video conference on 7 May 2024 in view of the short-term publication of the business figures for the first quarter. The complete Annual Report 2023 is available for download on the company's website. Further information on the Ringmetall Group and its affiliated subsidiaries can be found at www.ringmetall.de.

Contact:
Ingo Middelmenne
Investor Relations
Ringmetall SE
Phone: +49 (0 )89 45 220 98 12
Mobile: +49 (0 )174 90 911 90
Email: middelmenne@ringmetall.de

About the Ringmetall Group

Ringmetall is a leading international specialist supplier of industrial packaging. The company produces high-security closure systems and inner liners for industrial drums for the chemical, pharmaceutical and food processing industries. Ringmetall also offers innovative packaging solutions for the beverage industry. With products that are highly recyclable, the company contributes to strengthening the circular economy and the sustainability of its end customers. In addition to its headquarters in Munich, the Group is represented by global production and sales offices in Germany, France, the UK, Spain, Italy, Turkey, the Netherlands, China and the USA. In 2023, Ringmetall generated consolidated sales of EUR 181.6 million with 867 employees.