Despite corona-related revenue weakness Masterflex Group remains significantly profitable in H1 2020

Gelsenkirchen, 12 August 2020 - With a decline in revenues of 10.9% to EUR 37.4 million in the first half of 2020, the growth course of the Masterflex Group, which had lasted ten years, was temporarily interrupted due to Corona. Continued positive development in the Masterflex Group's future markets such as medical and laboratory technology, life sciences and the food industry was unable to offset the fact that the effects of the COVID 19 pandemic and the challenging developments in the aviation, automotive and mechanical engineering industries led to an overall decline in revenues of 19.0% in Q2 2020. 

Dr. Andreas Bastin, CEO of Masterflex Group: "In our opinion, we saw the low point of revenue development in Q2, even though we expect the third quarter to remain challenging. Thanks to the optimisation programme we have already started in 2019 and additional cost-cutting measures in 2020, we were able to continue to operate profitably in such a difficult second quarter and to show a satisfying level of profitability for the entire first half of the year". Masterflex generated consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) of EUR 4.7 million (previous year: EUR 5.6 million). Operating EBIT in the first half of the year amounted to EUR 2.5 million, compared with EUR 3.6 million in the prior-year period. The bundled purchasing of materials, for example, had a stabilizing effect on earnings, as a result of which the cost of materials ratio was reduced from 33.2% to 30.8%. Various measures were also consequently implemented in the personnel area starting with the B2DD optimisation programme, which were then significantly intensified again in 2020 in the course of the pandemic. The personnel reductions carried out and the effects from the partially implemented short-time work led to a decrease in personnel expenses by 5.5% from EUR 16.3 million to EUR 15.4 million. The earnings per share are calculated at EUR 0.13 (previous year: EUR 0.22). At the same time, we succeeded in further reducing net debt and increasing liquidity in the first half of the year.

Mark Becks, CFO of the Masterflex Group: "The mostly achieved stabilization of our earnings despite this difficult revenue trend is already an indication of what should be possible when revenue picks up again. We remain very cautious in our forecast for 2020, but at the same time we are sticking to our goal of achieving a double-digit EBIT margin again by 2022. In our revenue performance, too, I see 2020 as only a temporary "slip-up" due to the COVID 19 pandemic. Our stable growth over the past ten years shows that our market drivers are intact, that we are benefiting from the increasing focus on medical and laboratory technology, life sciences and the food industry, and that we can return to the growth path with corresponding speed. For 2020, the company expects a decline in revenues of 10% to 15% and a decline in EBIT to EUR 1.0 to 2.5 million. A double-digit EBIT margin is the target for 2022, and the revenues mark of EUR 100 million should be exceeded in 2023/2024.

Note: The half-year report as of 30 June 2020 is available on the Internet at

www.masterflexgroup.com/investor-relations/financial-reports-of-masterflex-se/