FY 2015 below own expectations – but for FY 2016 increase of margin planned

•    Preliminary figures for 2015 confirmed: Turnover of € 64.1 million
•    Operating result of € 4.9 million, EBIT margin of 7.6%
•    Net income for the year of € 1.9 million - earnings per share at € 0.22
•    Increase of EBIT-margin planned for 2016

Gelsenkirchen, 30 March 2016 – Masterflex SE grew productively once more in the 2015 financial year, although fell below its own expectations in terms of results. Turnover of the specialist supplier of high-tech hoses and connection systems, which operates almost everywhere in the world, increased by 2.6 percent to € 64.1 million. At € 4.9 million, the operating result (EBIT) was 22.9 percent down on the previous year (€ 6.3 million). The company thereby confirmed the preliminary figures for the 2015 financial year which had been announced in February.

Dr. Andreas Bastin, CEO of the Masterflex Group, said, “Unfortunately we weren’t able to achieve all the targets we set ourselves for the 2015 financial year. Nevertheless we were successful in certain areas: within the realms of our various brands, we have been able to raise turnover significantly. We achieved notable growth in China again. Our internationalisation strategy, which started about five years ago continues to work, which can be seen by the portion of sales attributable to foreign countries (52.1 percent versus 50.3 percent respectively). In addition, we were able to successfully close off some important projects, among others the change in Russia away from our own joint venture and over to an exclusive trade agreement with our former joint venture partner. Due to the conditions in Russia having become very difficult over that period of time, we are pleased that we were able to secure the opportunity there yet at the same time eliminate the risks of our former shareholding position. Further, being ranked as one of the 50 most innovative German SMEs was gratifying as it provides clear evidence of our proven strength in innovation”.

The financial result of the Masterflex Group has improved again, compared to the previous year, by 11.1 percent to minus € 1.0 million. These figures also reflect the effect of falling interest rates on lower financial liabilities. Operating cash flow was below the previous year’s level (€ 6.8 million) at € 2.8 million due to increases in inventories and customer receivables.

The Masterflex Group net income for the year amounted to € 1.9 million. This corresponds to earnings per share of € 0.22 (previous year € 0.34). The Group’s equity ratio, despite the increasing size of the company's balance sheet, has risen further to 47.7 percent.

For the future, the Masterflex Group is targeting better results once more. In particular, with regard to the operating result (EBIT), the connections specialist is looking to get closer to its traditional strength  of a two-digit EBIT margin again. Bastin: “The improvement in efficiency thanks to cost reductions in the order of € 1.2 million and the clear improvement of our operating margin associated with that is right at the top of our agenda. In addition, after the reorganisation of our Research and Development, more official market launches of product innovations are being planned for 2016.”

Several important complementary milestones are planned for 2016, one of which is the investment at the Gelsenkirchen site. Here, at the most important site for spiral hoses, the storage and manufacturing capacities will be notably expanded. Construction of a total of 7,700 square meters of new floor area began in February. In total, around € 7 million will be invested in buildings and machinery, among which will be up-to-date, Industry-4.0-capable machinery, resulting in much more efficient internal processes. The Executive Board is committed to several key points in this regard: alongside the increase in delivery capabilities, logistical processes will also be improved. On top of this, the Masterflex Group is investing massively in Industry-4.0-capable manufacturing.

The Masterflex Group remains confident that above-average growth opportunities will continue for the future. Special attention will be given to expanding the business at an international level, particularly in North America as indeed also in China. Bastin: “We are becoming increasingly pleased with the China business, since we can build on top of our solid foundations from now on. In North America we’ve successfully completed the necessary personnel changes and put the business is on a new basis. Now we just want to build on our position”. In addition, the refinancing of the Group, which will run until 2018, should be put on a new longer-term basis to again benefit from the currently favourable financing environment.

The key financial data for 2015 is shown in the following table.