ElringKlinger AG: Non-cash impairment losses relating to the sale of two Group companies and adjustment to the annual guidance

Dettingen/Erms (Germany), October 7, 2024 +++ ElringKlinger AG (ISIN DE0007856023 / WKN 785602) today signed an agreement with the Certina Group covering the sale of its two Group companies located in Sevelen (CH) and Buford, GA (USA). This transaction is to be seen against the backdrop of far-reaching changes in the automotive industry and the Group's efforts to hone its profile in this environment of transition. The process of transformation calls for significant investment in specific areas in order to remain competitive. In the case of ElringKlinger, this is particularly evident in the field of thermal and acoustic shielding, first and foremost in Europe and North America. It is for this reason that the Group has decided to divest itself of the two companies. The acquirer, the Certina Group, can draw on extensive expertise in the automotive supply industry gained through its subsidiaries.

The closing of the transaction is expected to take place before the end of 2024, subject in particular to antitrust approval. Both parties have agreed not to disclose any further details of the contract.

ElringKlinger's plants in Sevelen and Buford manufacture shielding technology products for thermal and acoustic management in vehicles. In total, ElringKlinger generated revenue of approximately EUR 175 million at the two sites in 2023. At the end of 2023, the overall headcount at these sites stood at around 650.

As part of this transaction, ElringKlinger AG will recognize non-cash impairment losses in the mid to high double-digit million euro range as of the end of the third quarter of 2024. These relate primarily to reclassification in accordance with IFRS 5. The figures are provisional and unaudited.

In addition, the Management Board has reassessed its annual guidance for 2024 in the context of the transaction. ElringKlinger has maintained its projection of an adjusted EBIT margin of around 5% of Group revenue for the current financial year. The Group expects ROCE for 2024 to be significantly below the previous year's level of 5.6%. The Group had previously forecast a figure of around 6% for 2024. The Group now anticipates revenue to be at a level slightly below the previous year's figure in organic terms (previously: slight organic growth) and expects operating free cash flow to be slightly positive (previously: around 2% of Group revenue).

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This release contains forward-looking statements. These statements are based on the expectations, market assessments, and forecasts of the Management Board and the information currently available to it. These forward-looking statements shall, in particular, not be construed as guarantees of future developments and results referred to therein. Although the Management Board is of the firm opinion that the statements made and their underlying beliefs and expectations are realistic, they are based on assumptions that may prove to be incorrect. Future results and developments depend on a variety of factors, risks, and uncertainties that may lead to changes in the expectations and judgments that have been expressed. These factors include, for example, changes in general economic and business conditions, fluctuations in exchange rates and interest rates, lack of acceptance of new products and services, and changes in business strategy.