Ringmetall further expands margins in the first half of 2024 with slight organic growth

Ringmetall further expands margins in the first half of 2024 with slight organic growth

• Group revenue down 1.6 percent on a comparable basis to EUR 90.8 million due to raw material price development
• EBITDA increases by 3.9 percent on a comparable basis to EUR 13.4 million
• EBITDA margin of 14.8 percent further increased, also compared to directly preceding quarter Q1 2024

Munich, 30 August 2024 - Ringmetall SE (ISIN: DE000A3E5E55), a leading international specialist supplier in the packaging industry, returned to organic growth in the first half of 2024 in a business environment remaining challenging. The overall revenue trend was largely characterized by declining steel prices.  However, rising sales volumes underpinned the increasingly positive trend in the core business area of drum closure systems.

At EUR 90.8 million, Group revenue was 1.6 percent below the adjusted prior-year figure (H1 2023, adjusted for HSM's contribution to revenue: EUR 92.3 million*). Slight organic revenue growth paired with inorganic revenue growth from the acquisitions of Protective Lining, Liner Factory and IDF made during the course of 2023 was offset by a disproportionately high revenue effect from falling raw material prices and, in particular, falling steel prices. “Even though our organic growth is still in the low single-digit percentage range, this operational turnaround is an important signal for us,” emphasizes Christoph Petri, Spokesman of the Management Board of Ringmetall SE. “At the same time, we are coping well with the declining raw material prices, as we are generally able to fully pass on changes in raw material prices to our customers.”

At EUR 13.4 million, earnings before interest, taxes, depreciation and amortization (EBITDA) were 3.9 percent above the adjusted prior-year level (H1 2023, adjusted for the one-off effect from the sale of HSM: EUR 12.9 million**). The EBITDA margin in relation to total output increased to 14.8 percent (H1 2023, adjusted for the one-off effect from the sale of HSM: 14.0 percent), mainly due to lower steel prices. The margin also increased further compared to the previous quarter Q1 2024. In addition to efficiency improvements in production, savings in the area of administration were the main reason for the margin increase.

The key figures for business development in the reporting period are as follows:

IFRS, in EUR ´000 H1 2024 H1 2023 ∆ [abs.] ∆ [%] Group revenue* 90,804 100,563 -9,759 -9.7% Total output (TO) 90,273 100,377 -10,104 -10.1% Gross profit 48,155 48,543 -388 -0.8% Gross profit margin (on TO) 53.3% 48.4% 4.9%   EBITDA** 13,355 8,260 5,095 61.7% EBITDA margin (on TO) 14.8% 8.2% 6.6%   EBIT 9,330 4,257 5,073 119.2% EBIT margin (on TO) 10.3% 4.2% 6.1%  

*The tabular presentation of Group revenue in H1 2023 includes EUR 8.3 million in revenue from former subsidiary HSM, which was sold as at 30 June 2023.

** The tabular presentation of EBITDA in H1 2023 includes one-off deconsolidation effects of EUR -4.6 million from the sale of former subsidiary HSM as at 30 June 2023.

In the Closure Systems product area, in which the Company produces clamping rings, drum lids and other accessories for industrial drums, volumes increased slightly year-on-year from a purely organic perspective. The positive trend of the first quarter thus continued in the second quarter. This was again offset by a noticeable decline in steel prices in the mid to upper single-digit percentage range, resulting in an overall decline in revenue in the product area. The product division's most important markets, Germany and the USA, proved to be consistently robust in their development. Southern European markets such as Italy and Spain also performed well overall despite the persistently challenging environment. In contrast, the British market and China lagged behind the overall development of the product area.

In the Liners product area, in which Ringmetall produces liners for industrial drums and other packaging units as well as packaging solutions for the beverage industry (e.g. bag-in-box systems), revenue declined organically compared to the previous year - as was already the case in the first quarter of 2024. Raw material prices for plastic granules had a slightly negative effect on revenue development.  From an inorganic perspective, however, the acquisitions of Protective Lining, Liner Factory and IDF in 2023 resulted in revenue growth, meaning that the product division's revenue increased slightly overall. While demand for traditional liners - i.e. special liners and chemical-technical liners - was average to weaker, demand for liquid liners for the food and beverage industry continued to grow. In the bag-in-box systems segment, the company was not yet able to benefit as planned from the expansion of production lines in the second quarter due to personnel shortages. However, the Management Board expects to be able to overcome such bottlenecks in the coming months and then adjust production to the increased demand as planned. The Management Board also believes that the extensive installation measures are still on schedule for the further expansion of the production lines in the current financial year.

Based on the preliminary half-year figures and the foreseeable business development in July, the Management Board specified the outlook for revenue and earnings development for the full year 2024 in the publication dated 12 August 2024. Accordingly, the Management Board now expects Group revenue in the range of EUR 170 to 185 million (previous outlook: EUR 170 to 195 million) and EBITDA in the range of EUR 22 to 27 million (previous outlook: EUR 20 to 27 million). The outlook is based on unchanged raw material prices and exchange rates compared to 30 June 2024. It does not include the effects of acquisitions intended in the further course of the year, including related transaction costs.

The Management Board will discuss details of business development in the first half of 2024 in a video conference for analysts, institutional investors and journalists next Monday, 2 September at 9:30 a.m. CET. Registration for this is by e-mail via Ms. Angela Weiß (weiss@ringmetall.de).

Further information on the Ringmetall Group 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 Group revenue of EUR 181.6 million with 867 employees.