Announcements

• Operating free cash flow in positive territory at EUR 25.8 million despite COVID-19 economic crisis; net debt scaled back by EUR 120.0 million or 17.1% within twelve months
• Revenue down by 41.9% to EUR 252.2 million in second quarter, organically by 40.5% - Global automobile production slumps by 44.5%
• EBIT at EUR -32.4 million in second quarter of 2020 and EUR -16.4 million in first half
• CEO Dr. Stefan Wolf: "Even against the backdrop of the corona crisis, we were able to continue on our chosen path: we achieved positive operating cash flow and further reduced net debt."

Dettingen/Erms (Germany), August 7, 2020 +++ The second quarter of 2020 was dominated by the coronavirus pandemic, particularly in Europe and in North and South America. Social-distancing measures were introduced as early as March, factories had to interrupt production, schools and kindergartens were forced to close - public life came to a standstill. This also precipitated a slump in demand within the automotive industry. While vehicle production in Europe was gradually ramped up again from the end of April, North America had to wait until May before it saw a resumption in manufacturing. Nevertheless, the recovery there proved more dynamic compared to that seen in Europe. China, the largest automotive market, was only marginally affected by the pandemic in the second quarter of 2020 and only in certain regions.

Organic decline in revenue less pronounced than market downturn
ElringKlinger AG's key financials for the second quarter are to be judged within this context. Overall, the Group generated sales revenue of EUR 252.2 million, which constitutes a year-on-year decline of EUR 181.9 million or 41.9%. Taking into account changes in the scope of consolidation and assuming constant exchange rates, the decline amounted to EUR 175.9 million or 40.5%. Therefore, the Group's organic change in revenue in the second quarter was again better than the performance of the global automobile industry, which saw production output fall by 44.5% in the same period. Even when reviewing the first half of the year as a whole, the organic decline in revenue of 25.0% was less pronounced than the change recorded within the global market, which declined by 33.2%.

The spread of the coronavirus was also reflected in Group revenue in the individual regions during the second quarter: while the region covering Asia/Pacific, at EUR 62.7 million, saw a comparatively small decline of 13.3% compared with the same quarter of the previous year, revenue from sales in Germany and the Rest of Europe declined significantly, by -34.8% and -49.2% respectively. Stoppages of several weeks also caused revenues in the region encompassing North America to fall by 54.3%. Here, the market slumped by almost 70%.

Order situation against the backdrop of the corona crisis
The corona-related decline in demand in the second quarter can be seen to a similar extent in the order situation: adjusted for currency effects, order intake decreased by EUR 216.5 million or 15.2% to EUR 192.6 million. At EUR 929.4 million, order backlog was down by EUR 133.6 million or 12.6% compared to the same quarter of the previous year.

Earnings visibly influenced by corona crisis
The reduction in revenue was also reflected in earnings before interest and taxes (EBIT). At EUR -32.4 million, EBIT was EUR 42.6 million lower in the second quarter than in the same quarter of the previous year. As a result, the EBIT margin stood at -12.8%. In the first half of the year, EBIT was EUR -16.4 million, while the margin amounted to -2.5%. After taxes, the result for the period was EUR -35.5 million, which corresponds to earnings per share of EUR -0.53.

Dr. Stefan Wolf, CEO of ElringKlinger AG, commented as follows: "Despite the effects of the coronavirus pandemic, our figures for the first half of the year are to be seen as relatively robust. This is due in part to the measures swiftly taken by us in response to the coronavirus pandemic as well as our solid performance in the first quarter." Here, the Group had been able to achieve EBIT of EUR 16.0 million despite the COVID-19 effects in Asia and the slowing economy in Europe. "Overall, we are well on track when it comes to our program aimed at raising efficiency levels, despite the fact that the benefits are not being seen at all levels due to the corona crisis," said Dr. Wolf. "What is important, however, is that we were able to continue on our chosen path: we achieved positive operating cash flow and further reduced net debt."

Operating free cash flow in positive territory
The program aimed at raising efficiency levels was implemented back in 2019. The disciplined investment approach initiated by ElringKlinger was again pursued over the course of the first half of 2020. A total of EUR 22.7 million was invested in property, plant, and equipment and investment property during the first half of the year, EUR 10.4 million of which was invested in the course of the second quarter. This represents a ratio of 4.1% in relation to Group revenue in the second quarter and 3.5% in the first half of the year. Overall, the Group now expects a ratio below 5% (previously: below 7%) for the year as a whole.

Net working capital was also optimized: while the effects of trade receivables and trade payables almost balanced each other out, inventories were actively managed, resulting in a supporting effect for operating free cash flow. Despite negative earnings, operating free cash flow was thus in positive territory at EUR 23.6 million. As a result, net debt, which amounted to EUR 595.3 million at the end of 2019, was scaled back by EUR 15.4 million to EUR 579.9 million.

Major uncertainties for the year as a whole - Outlook confirmed
The economic impact of the coronavirus pandemic still cannot be accurately assessed, as the uncertainties are simply too pronounced at present. It is impossible to predict how quickly the demand-side situation in Europe will improve, nor is it possible to assess whether the economy in North America will develop at a sustainable level. In view of the rising number of COVID-19 cases in numerous countries, it is also difficult to predict whether there will be a further wave of infection necessitating protective measures. Due to these major uncertainties, providing a sufficiently reliable and accurate outlook for the year continues to be a challenge. Based on the information and estimates available at the time of reporting, ElringKlinger can confirm its annual guidance and anticipates that the change in revenue will be slightly better than the figure relating to global automobile production for the financial year as a whole. The latter is currently being estimated at -22% compared with the previous year. In terms of earnings, the Group is again anticipating an EBIT margin (earnings before interest and taxes relative to Group revenue) that is visibly lower than in the previous year.

Key financials for the second quarter and first half of 2020

Dettingen/Erms, Illmensee (Germany) +++ ElringKlinger AG has nominated Langer GmbH & Co. KG as Supplier of the Year 2019 within the components segment. Following a win in the previous year, Langer was thus able to secure the award for the second time in succession. The award ceremony took place at Langer's headquarters in Illmensee.

Langer has been supplying plastic injection molded parts to ElringKlinger since 2012, which are used in the production of lightweight components at the automotive supplier based in Dettingen/Erms. Over the past few years, ElringKlinger has developed into one of the most important customers of the Illmensee based company. In the meantime, ten sites of the ElringKlinger Group worldwide are supplied with components made by Langer.

ElringKlinger works with a total of over 2,000 suppliers. In order to ensure a systematic evaluation of its suppliers, the Group defined various criteria and weighted them appropriately in a scoring model. "Outstanding characteristics with regard to quality, adherence to deadlines, technology and service are among the most important requirements we place on our suppliers. And, of course, price always plays a role," said Bernd Weckenmann, Vice President Purchasing at ElringKlinger AG.

First-class performance
The performance of the overall winner was once again convincing: Overall, Langer was able to achieve a supplier rating of 90 %. "We took a close look at our suppliers, their reliability and quality. We came to the conclusion that Langer deserved to take first place again," added Weckenmann at the presentation of the award. He also drew the attention of those present to the fact that this was the first time that ElringKlinger had presented one of its supplier awards to the same company for two consecutive years.

Ralf Doll, Managing Director of Langer GmbH & Co. KG, was all the more pleased and thanked the staff for their work: "This award demonstrates the commitment of each individual and the entire team. At the same time, he also thanked ElringKlinger for the confidence placed in the company. "We take this prize as an incentive to strive for a third time in a row," continued Doll.

Dettingen/Erms (Deutschland) +++ ElringKlinger AG has named Samsung C&T Deutschland GmbH its Supplier of the Year 2019 within the area of raw materials. The supplier, based in Schwalbach/Taunus, received the award in conjunction with its Chinese sister company Samsung Precision Stainless Steel (Pinghu) Co., Ltd. The award ceremony took place at ElringKlinger's headquarters in Dettingen/Erms.

ElringKlinger was first supplied with stainless steel by Samsung in 2002. At ElringKlinger, stainless steel is used primarily in the production of cylinder-head and specialty gaskets. Over the years, the business relationship between the two companies has steadily intensified. Samsung now supplies ten sites of the ElringKlinger Group worldwide with raw materials from its production plants in Romania and China.

ElringKlinger works with a total of over 2,000 suppliers. In order to ensure a systematic evaluation of its suppliers, the Group defined various criteria and weighted them appropriately in a scoring model. "Outstanding characteristics with regard to quality, adherence to deadlines, technology and service are among the most important requirements we place on our suppliers. And, of course, price always plays a role," says Bernd Weckenmann, Vice President Purchasing at ElringKlinger AG.

First-class performance
The performance of the overall winner was convincing: as a combined achievement of Samsung C&T Deutschland GmbH and Samsung Precision Stainless Steel (Pinghu) Co., Ltd., a supplier rating of 98% was achieved. "Samsung has achieved an excellent result, which should also serve as motivation for the future. Our express thanks go to all the employees who were involved in making this rating possible," added Weckenmann at the award ceremony.

"The award for Supplier of the Year is a real highlight that confirms our work," said Frank Geile, General Sales Manager of Samsung C&T Deutschland GmbH. "At the same time, it also represents an obligation for the future. ElringKlinger is one of our top key customers, with whom we intend to achieve a great deal in the coming years," Geile continues.

• Around 60 % of voting share capital was represented at first virtual AGM
• CEO Dr. Stefan Wolf: "We took important steps in 2019 - in a very challenging environment."
• All proposed resolutions approved by significant majority
• Helmut P. Merch new member of the Supervisory Board

Dettingen/Erms (Germany), July 7, 2020 +++ A total of 60.4 % of the company's voting share capital was represented at the first virtual Annual General Meeting (AGM) hosted by ElringKlinger AG. Against the backdrop of the coronavirus pandemic and as a consequence of associated regulations, ElringKlinger had decided against a physical meeting. Instead, the 115th AGM was to be convened as a virtual meeting.

2019 financial year
In his speech, which, as in previous years, could be followed on the Internet by all interested parties, CEO Dr. Stefan Wolf outlined key developments relating to the financial year just ended: "2019 was not an easy year, but we took important steps - and in a very challenging environment. As regards sales revenue, ElringKlinger managed to grow by 1.6% to EUR 1.727 billion despite a global market downturn of 5.6%. In the trendsetting areas of E-Mobility and Lightweighting/Elastomer Technology, we increased our revenues by more than 9% in each case. This clearly illustrates the demand for our products."

In terms of earnings performance in 2019, Dr. Wolf went on to explain that the Management Board's program to raise efficiency levels within the Group had been successful. The Group's EBIT margin had gradually improved over the course of the year. In addition, significant progress had been made in optimizing net working capital and operating free cash flow, so that financial liabilities had been scaled back by a significant margin.

Looking ahead to the current year, Dr. Wolf highlighted the inconsistent performance due to the coronavirus pandemic: while demand in Europe was still sluggish at present, production in China had returned to pre-crisis levels several weeks ago. Nevertheless, the market slump would also have an impact on ElringKlinger's revenues and earnings, particularly in the second quarter. However, the Group was in a sufficiently robust financial position to overcome the COVID-19 crisis.

The CEO also emphasized how well positioned ElringKlinger was in fundamental terms: "With its strong market position, its extensive product and process expertise, and its promising portfolio within the field of battery and fuel cell technology, ElringKlinger is one of those companies that is capable of seizing opportunities despite all - even significant - challenges.

In each case, the proposals for resolutions put to the vote were accepted by the shareholders with a large majority. The AGM approved the actions of the Management Board and Supervisory Board with 97% of the votes. Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, Stuttgart, was appointed as auditor. The Group had already announced in March that the dividend for the 2019 financial year would be suspended in view of the earnings situation and the COVID-19 crisis.

Elections to the Supervisory Board
The AGM also included the scheduled election of new Supervisory Board members appointed by the shareholders. In this context, Helmut P. Merch succeeds Prof. Hans Ulrich Sachs, who left the Supervisory Board. Mr. Merch has been a member of Rheinmetall AG's Management Board since 2013. All other shareholder representatives were re-elected by a clear majority.

The company's shareholders also approved the Supervisory Board's new remuneration system, which conforms to the recommendations of the German Corporate Governance Code. All other proposed resolutions on amendments to the Articles of Association and the renewed authorization to repurchase treasury shares were also approved by a clear majority.

A detailed overview of the individual voting results as well as the speech by the CEO for viewing and reading can be found on the homepage of ElringKlinger AG (www.elringklinger.com) - in the Investor Relations section under the heading "Annual General Meeting."

The contract of Management Board member Reiner Drews has been extended earlier than scheduled by the Supervisory Board by five years until the end of March 2026. Reiner Drews has been part of the Management Board of ElringKlinger AG since April 1, 2018, and has overall responsibility for the area of production.

Dettingen/Erms (Germany), June 15, 2020 +++ At its meeting in May 2020, the Supervisory Board of ElringKlinger AG extended the contract of Management Board member Reiner Drews earlier than originally scheduled - by five years to March 31, 2026. His current mandate runs until March 31, 2021.

"We look forward to continuing our excellent and successful cooperation with Reiner Drews," commented Supervisory Board Chairman Klaus Eberhardt on the board's decision. "His entrepreneurial expertise and many years of experience in the field of production are of great benefit to ElringKlinger and help to strengthen trust and confidence in the Group among employees, suppliers, and customers."

Reiner Drews has been a member of the Management Board of ElringKlinger AG since April 1, 2018. In this role, he is responsible for manufacturing operations, the German plants, and the area of quality assurance. Prior to this, he worked for the Group for 12 years in a senior position as a business unit manager.