Announcements

• Revenue up by 1.6% to EUR 1,727 million in 2019 contrary to market trend
• EBIT before purchase price allocation at EUR 63.2 million; steady improvement over course of the year
• Measures aimed at raising efficiency levels lead to marked improvement in operating free cash flow; net debt scaled back
• Dividend suspended to strengthen internal financing
• Group refrains from giving outlook at present for the current year due to the strong dynamics of the coronavirus pandemic 

Dettingen/Erms (Germany), March 30, 2020  +++ Market conditions within the automotive industry were far from favorable even before the coronavirus pandemic. Global automobile production contracted by 5.6% in the 2019 financial year. Operating against this challenging backdrop, the ElringKlinger Group managed to expand its revenue by 1.6% to EUR 1,727 million in total (2018: EUR 1,699 million). Without the effects of currencies and acquisitions, revenue was up by 0.5%. Thus, the Group clear-ly achieved its goal of outperforming the market by 2 to 4 percentage points in terms of organic growth. This was driven primarily by the region comprising North America, which saw revenue expand by 25.1%. Revenue generated from sales in the Asia-Pacific region, by contrast, was down just slightly year on year at -1.4%. However, this market as a whole was significantly weaker at -8.2%. In Germany and the Rest of Eu-rope revenue was also lower at -7.8% and -4.2% respectively. 

As Dr. Stefan Wolf, CEO of ElringKlinger AG, points out, "Market conditions as a whole were not favorable in 2019, but we continued to grow with the help of our innovative products. At the same time, we implemented a package of measures to raise efficiency levels, which led to a noticeable improvement in our key financial indicators. Thanks in particular to the substantial increase in cash flow, we were able to significantly reduce net financial debt and strengthen the Group for the future.

Implementation of measures to raise efficiency levels
In addition to a disciplined approach to capital expenditure, the package of measures primarily included improvements in net working capital. Receivables were scaled back, payment terms for liabilities extended, and inventories optimized. The Group made targeted investments in property, plant, and equipment and investment property, as a result of which the ratio of 5.3% of revenue was significantly lower than the prior-year figure of 9.6%  Investments included the new technology center for battery and fuel cell technology in Dettingen/Erms and the establishment of series production for com-plete battery systems at the site in Thale, Saxony-Anhalt. The success of these compre-hensive measures was illustrated by the particularly favorable direction taken by operating free cash flow in 2019, which improved by EUR 262 million to EUR 176 million (2018: EUR -86 million).

The program aimed at delivering efficiency gains also began to show its first positive effects with regard to earnings. Additional charges attributable to elevated commodity prices, US anti-dumping and countervailing duties, and higher staff costs were coun-teracted by the Group with the help of cost savings made from the beginning of 2019 onward. In addition to reductions in non-personnel costs, management focused on optimization at the sites in North America, which had recorded particularly high levels of capacity utilization. As a result, earnings margins were gradually increased over the course of the year from 1.6% in the first quarter to 5.9% in the fourth quarter of 2019. This includes the sale of an industrial park in Hungary, which resulted in other operating income of EUR 8.6 million in the fourth quarter. 

In total, EBIT before purchase price allocation amounted to EUR 63.2 million (2018: EUR 100.2 million), while the margin stood at 3.7% (2018: 5.9%), which was at the lower end of the target range of around 4 to 5%. In this context, however, the prior-year figure had included proceeds from the sale of two subsidiaries. Due to the reduc-tion in the net finance result by EUR 5 million, earnings before taxes fell to EUR 41.7 million (2018: EUR 81.4 million). In conjunction with slightly higher taxes on income, net income declined to EUR 5.0 million (2018: EUR 47.9 million). Net income attribut-able to shareholders amounted to EUR 4.1 million in total (2018: EUR 43.8 million). Correspondingly, earnings per share were down sharply year on year at EUR 0.06 (2018: EUR 0.69).

Suspension of dividend
Against the background of the Group's earnings performance in 2019 and the econom-ic impact of the coronavirus crisis, the dividend has been suspended for the 2019 financial year. In taking this approach, the Group is also looking to strengthen its inter-nal financing for the ongoing transformation process.

Robust financial position
The optimization measures aimed at improving operating free cash flow had a positive impact on the financial position as a whole. In the fourth quarter, the Group was able to reduce net debt for the third time in succession to EUR 595 million (2018: EUR 724 million). At the end of the first quarter, net debt had stood at EUR 796 million. The equity ratio of 42% (2018: 43%) also reflects the robust condition of the balance sheet and is within the long-term target range of 40 to 50%.

Outlook for 2020
Even without current developments relating to the coronavirus pandemic, 2020 had been expected to be a challenging year due to the general slowdown in the economy. The situation has deteriorated as a result of the far-reaching measures taken by gov-ernments around the world to contain and slow down the spread of the virus, and the pandemic will have a significant economic impact, particularly in the automotive indus-try.

As Dr. Wolf explains: "The coronavirus has Germany, Europe, and the world fully in its grip and continues to spread dramatically. The protection of our employees and their families is our top priority. We drew up comprehensive preventive measures at an early stage. Employee protection also includes job security. With customers closing many of their plants around the globe, we have been forced to take the same approach and adapt our production in line with demand. Our goal remains to cushion the eco-nomic impact as far as possible."

The duration of plant closures by automobile manufacturers cannot be predicted at present. The same applies to potentially more extensive measures in the ensuing weeks – also from a political perspective. In view of these considerable uncertainties and significant dynamics, the economic effects on ElringKlinger cannot currently be determined with sufficient reliability and accuracy. Therefore, the Group is temporarily refraining from issuing specific revenue and earnings guidance for the 2020 financial year. 

Unlocking potential for the future
Regardless of the current crisis surrounding the coronavirus, ElringKlinger is continu-ing to drive forward its development efforts within the area of new drive technologies in order to help shape the process of transformation with innovative products and ideas. Given the results of ElringKlinger's development work and the orders already received in the areas of battery and fuel cell technology and the electric drivetrain, there is an opportunity for the Group to exploit the tremendous potential of new drive technologies.

The annual report for 2019 is available online at:
https://www.elringklinger.de/investor/2019-gb-de.pdf

Dettingen/Erms (Germany), March 23, 2020  +++ As a result of the coronavirus pandemic, a large number of automobile manufacturers have suspended production at many of their sites or have announced such stoppages. In response, the Management Board of ElringKlinger AG, Dettingen/Erms (ISIN DE 0007856023/ WKN 785602), acting in consultation with the Group works council of ElringKlinger AG, has decided to adjust Group production in Germany in line with requirements directly as of today (March 23). Among the sites primarily affected are those in Europe and North America, but also the plant in India and that in Brazil. Production will either be scaled down – in Germany, for example, all necessary preparations for short-time work are now being made – or halted temporarily. This package of measures does not include the Chinese plants, which have resumed operations following the temporary closures. At present, the sites in other regions of the world, such as South Africa, will also continue production without being affected by these measures.

It is impossible to predict the duration of plant closures by manufacturers. The same applies to potentially more extensive measures in the coming weeks – also from a political perspective. In view of these considerable uncertainties and significant dynamics, the economic effects on the Group cannot currently be determined with sufficient reliability and accuracy.

The impact caused by the global spread of the coronavirus has prompted ElringKlinger to postpone its Annual General Meeting (AGM) originally scheduled for May 19, 2020, to the later date of July 7, 2020. This decision was made with a view to protecting the health of all concerned.

Dettingen/Erms (Germany), March 13, 2020 +++ The coronavirus is spreading around the globe. News headlines are changing daily and protective measures for the respective populations are becoming increasingly comprehensive in the affected countries. Sports events are being canceled, and in some states day-care centers and schools are facing closure. In the German state of Baden-Württemberg, the Ministry of Health this week decreed that events with more than 1,000 participants are to be canceled. It is impossible to rule out that this ban may be extended to events with fewer than 1,000 participants.

Against this background, the Management Board of ElringKlinger AG, in consultation with Chairman of the Supervisory Board Klaus Eberhardt, has decided to postpone the company's AGM, originally scheduled for May 19, 2020, to the later date of July 7, 2020.

"For us at ElringKlinger, commitment to health and responsible action are of paramount importance. With this in mind, we have decided to postpone the event until a date when, based on current knowledge, the period of heightened risk of infection has ended," says CEO of ElringKlinger AG, Dr. Stefan Wolf. "This was a difficult decision for us, but it serves to protect all parties involved. We came to the decision at an early stage in order to provide greater planning certainty for our shareholders as well as service providers and the media."

The International Congress Center Stuttgart in proximity to the airport will also be the venue for the AGM on July 7.

Dettingen/Erms, March 3, 2020 +++ 

The Ski World Cup in Hinterstoder, Austria, provided the perfect setting for the presentation of a hydrogen-based product innovation for winter tourism. The "Lynx HySnow" of the engine manufacturer Rotax was presented. This is the first emission-free snow vehicle powered by an electric drive with fuel cell. ElringKlinger was one of the partner companies in this project and equipped the snowmobile with a fuel cell stack on the NM5 platform.

After several years of intensive research and development, the motorized sled was presented to the public for the first time as a concept vehicle. The basis was a conventional snow vehicle, as it has been used for years in various ski areas. The vehicle was completely modified and equipped with an electric drive including fuel cell.

Due to its emission-free drive, the Lynx HySnow is not only a showcase project in terms of sustainability – the required hydrogen is produced on site from solar power by means of electrolysis – but also has other convincing advantages: Thanks to the innovative drive system, the vehicle runs almost noiselessly and offers considerable advantages over purely electrically powered vehicles, especially at very low temperatures. In addition, it achieves longer ranges and better acceleration values than a conventional electric drive. The potential applications of the Lynx HySnow are primarily seen in winter tourism.

The NM5 PEM fuel cell stack developed and produced by ElringKlinger is one of three standardized stack platforms currently available with different performance ranges. The NM5 has an electrical output of 6 to a maximum of 70 kWel. It is therefore ideally suited for use in light commercial vehicles and comparable applications. The stack is operated with hydrogen and air; it is cooled by a commercial glycol-based coolant for fuel cells.

• Revenue up by 1.6% to EUR 1,727 million, organically by 0.5%
• EBIT before purchase price allocation (PPA) at EUR 63.2 million, EBIT margin before PPA at 3.7%
• Operating free cash flow at EUR 175.8 million, net debt down substantially at EUR 595.3 million
• Q4 2019: revenue down by 2.8% to EUR 419.9 million, organically -4.0%; EBIT before PPA at EUR 24.8 million, resulting in EBIT margin of 5.9%
• 2020 outlook to be presented with publication of annual report at end of March

Dettingen/Erms (Germany), February 19, 2020 +++ The preliminary, unaudited results of the ElringKlinger Group for the 2019 financial year point to the positive impact of the efficiency program launched at the beginning of 2019: the Group's operating free cash flow totaled EUR 175.8 million, which represents a year-on-year improvement of EUR 262.0 million. At the heart of this is a disciplined approach to capital expenditure on property, plant, and equipment as well as investment property. As planned, at EUR 92.2 million, this figure was markedly lower than in the previous year (EUR 163.5 million). At the same time, inventory management was consistently optimized and payment terms for trade payables were extended. The partial use of financial instruments also made it possible to reduce trade receivables, with the result that net working capital was scaled back significantly to EUR 423.5 million or 24.5% of revenue. In the previous year this ratio had stood at 33.4%.

As a consequence of the Group's strong operating free cash flow, net financial liabilities were driven back for the third consecutive quarter to EUR 595.3 million. Without the effect of the first-time application of IFRS 16 in 2019, this figure would have been down by a further EUR 46.7 million as of December 31. At 3.3, the Group thus also has a significantly better net debt/EBITDA ratio. At the end of the first quarter of 2019, this ratio had stood at 4.7.

As Dr. Stefan Wolf, CEO of ElringKlinger AG, explains: "In implementing our efficiency program, we have set the right levers to make the Group sustainably fit for the future. Operating free cash flow is well within positive territory, net debt has been noticeably reduced, and earnings have stabilized over the course of the year. We will continue to pursue this path consistently in the future."

In terms of earnings, the Group further improved on the previous year's quarter with a solid fourth quarter in 2019. With EBIT before purchase price allocation (PPA) totaling EUR 24.8 million, the figure is EUR 13.0 million higher than in Q4 2018. This performance was supported to some extent by the sale of an industrial park in Hungary, which resulted in other operating income of EUR 8.6 million and a cash inflow of EUR 21.6 million. After a difficult start, ElringKlinger showed signs of gradual improvement in earnings over the course of the year. In total, the Group recorded EBIT before PPA of EUR 63.2 million, which corresponds to a margin of 3.7%. The Group had anticipated a figure of around 4 to 5%.

In response Dr. Wolf explains: "Overall, our earnings performance was not satisfactory, but the host of measures aimed at cost streamlining did prove effective. Among other things, we managed to reduce the follow-up costs resulting from persistently strong demand in North America. We expect to see discernible earnings potential here in the current year. However, it remains to be seen to what extent external effects, such as the economic consequences of the coronavirus in China, will impact on business.

At EUR 1,727.0 million, Group revenue grew by EUR 28.0 million or 1.6% year on year in 2019 despite challenging market conditions. The effects of currency translation - primarily relating to the US dollar, but also the Mexican peso and the Swiss franc - made a significant contribution of EUR 25.1 million or 1.5%. Additionally, the Group was faced with changes to the scope of consolidation as a result of M&A transactions (from the sale of Hug in 2018) totaling EUR -6.2 million or -0.4%. Eliminating the effects of foreign exchange rates and consolidation, the Group saw revenue expand by EUR 9.1 million or 0.5% organically. Calculated on the basis of global automobile production, which declined by close to 6% in 2019, the Group saw its revenue outpace the market as a whole by more than 6 percentage points. Thus, the company exceeded its target of outperforming market growth by 2 to 4 percentage points in terms of organic sales.

ElringKlinger will publish its full and definitive results for the 2019 financial year as well as its outlook for the current financial year on March 30, 2020.

Preliminary, unaudited figures for FY 2019 and Q4 2019