Masterflex continues course for growth in the first half of 2023 - forecast for the full year confirmed

Gelsenkirchen, August 09, 2023 - Masterflex SE (ISIN: DE0005492938) continued its growth course in the first half of 2023, closing with an increase in revenue of 7.3% to EUR 52.7 million (previous year: EUR 49.1 million). This development was driven by positive volume effects, particularly in medical technology and aviation, as well as price effects. In terms of customer industries, demand was particularly dynamic in the aviation business, in the life science sector and in medical technology. By contrast, business in the traditional cyclical sectors was characterized by normalization of demand and recessionary trends in view of the generally weaker economic situation. The sales growth achieved despite the declining economic momentum reflects the broad industry expertise as a major strength of the Masterflex Group, thanks to which cyclical fluctuations in individual customer industries could be compensated.
Earnings before interest and taxes (operating EBIT) amounted to EUR 6.8 million in the first half of 2023, compared with EUR 6.7 million in the prior-year period. This corresponds to an operating EBIT margin in relation to sales of 12.9% (previous year: 13.6%). Earnings in the first half of the year were impacted by several one-off effects occurring simultaneously at the subsidiary APT Advanced Polymer Tubing GmbH, which reduced EBIT by 0.9 million. These one-off effects related to the ERP conversion, the relocation from Neuss to Düsseldorf and the associated higher rental costs, as well as upcoming raw material price increases that could not yet be taken into account in the sales prices. No further cost-burdening special effects are expected from this in the second half of 2023. Adjusted for these special items, earnings would have increased at a faster rate than sales, resulting in a significant margin expansion with an adjusted EBIT margin of around 14.6%. The decline in consolidated net profit for the first half of 2023 to EUR 4.3 million (previous year: EUR 4.7 million) and thus also in earnings per share to EUR 0.44 (previous year: EUR 0.49) must also be seen in the context of the aforementioned non-recurring effects.
The successful business performance despite everything is also reflected in the balance sheet as of June 30, 2023. Equity increased from EUR 52.0 million at the end of fiscal year 2022 to EUR 54.1 million. This results in an increased equity ratio of 58.9% compared to 57.6% as of December 31, 2022.
Overall, the financial year 2023 continues to be characterized by various challenges. The supply chains have still not been fully restored. In addition, persistently high input prices are impacting the cost side. In combination with the existing geopolitical uncertainties, the economy as a whole is experiencing a downturn. Nevertheless, the Management Board is optimistic about the further course of the year. Irrespective of the braking effects in the cyclical traditional industries, demand in the medical technology, life science, aerospace and semiconductor sectors remains solid. Order intake in the first weeks of the second half of the year is generally at a good level, currently just under 7% above the weekly average for the first half of 2023. In addition, no cost-burdening special effects are expected in the further course of the year, but rather positive price effects as a result of subsequent price adjustments at individual subsidiaries with corresponding positive effects on sales and earnings. In addition, the efficiency measures successfully implemented as part of the B2DD optimization program will be continued in all subsidiaries in order to realize further margin increases, so that the Management Board continues to look to the remainder of the year with optimism, but also with an appropriate degree of caution.
Business development is in line with the forecast formulated in the publication of the Annual Report 2022, so the Management Board confirms the forecast for the full year. Provided there is no deterioration in the situation as a result of the war in Ukraine or an increase in recessionary developments in the economy or in the supply of raw materials, and provided there is no substantial adverse increase in material and personnel costs due to inflation, sales are expected to rise to between EUR 103 million and EUR 110 million in fiscal 2023 and operating EBIT is expected to be between EUR 11.0 million and EUR 14.0 million. 
Dr. Andreas Bastin, CEO of the Masterflex Group: "In view of the heterogeneous development in the customer industries in the first half of the year, we are satisfied with the operating performance to date. We are able to more than compensate for braking effects in individual cyclical sectors thanks to the focus on growth markets and less cyclical areas such as medical technology that we have pushed in recent years, and we are also able to cushion the high input prices well. On the earnings side, we are working continuously to become even more efficient and increase our margins. Our order situation remains solid and we are seeing increased ordering activity again, particularly from customers who reduced inventory levels in the first half of the year. We are on target and heading for another very successful fiscal year."
 

Selected key figures

*) unaudited

The half-year report as of June 30, 2023 is available on the Internet at www.masterflexgroup.com.