Announcements

ElringKlinger records positive free cash flow in the 2nd quarter of 2019

- Revenue up by 0.8% to EUR 434.1 million in second quarter of 2019 and by 1.6% to EUR 875.2 million in first half of 2019

- EBIT before purchase price allocation at EUR 10.7 million in period from April to June and EUR 17.6 million after six months

- Group-wide program aimed at optimizing cash flow takes effect: operating free cash flow totals EUR 79.3 million in first six months of 2019

- No tangible market recovery expected in second half: ElringKlinger anticipates decline in global automobile production of 2 to 4% year on year in 2019

- Outlook for fiscal 2019 confirmed

Dettingen/Erms (Germany), August 7, 2019 +++ ElringKlinger AG saw another slight increase in revenue over the course of the first half of 2019. Operating within a contracting market, the Group recorded revenue growth of 0.8% in the second quarter of 2019, taking the figure to EUR 434.1 million. Adjusted for currency effects and M&A activities, organic revenue growth stood at -0.3% in the period from April to June. During the same period, ElringKlinger thus managed to outperform - by five percentage points - the global vehicle industry as a whole, which saw aggregate automobile production fall by -5.3%.

More pronounced downturn in market activity
Contrary to market performance in general, ElringKlinger recorded further growth in Group revenues during the second quarter of 2019 in North America, which saw an expansion of 31.1%. The other key sales regions, by contrast, felt the impact of market slowdown. The Rest of Europe, which is ElringKlinger's largest sales market, saw revenue decline by 5.9% year on year in the second quarter. In the region encompassing Asia-Pacific, meanwhile, revenue was down by 7.4%. ElringKlinger also recorded a decline in its home market of Germany, which saw revenues fall by 9.6%.

Earnings affected by high cost base
At EUR 39.0 million, earnings before interest, taxes, depreciation, and amortization (EBITDA) in the second quarter fell short of the figure posted for the same period a year ago (Q2 2018: EUR 49.3 million). This was attributable to the comparatively high cost base, driven primarily by the market downturn in Europe and China, the persistently strong demand in North America as well as commodity prices. Earnings before interest and taxes (EBIT), before write-downs relating to purchase price allocation, amounted to EUR 10.7 million in the second quarter of 2019 (Q2 2018: EUR 26.3 million). Therefore, the EBIT margin before purchase price allocation was 2.5% (Q2 2018: 6.1%). As a result of tax-related effects, the Group recorded earnings per share of EUR -0.14 in the second quarter.

Group-wide program to optimize cash flow takes effect
The program implemented by the ElringKlinger Group with a view to optimizing its cash flow situation resulted in a visible improvement in liquidity levels during the first six months of 2019. Thanks to a number of different measures - above all the continuous optimization of net working capital and a disciplined approach to investing activities - operating free cash flow increased to EUR 98.6 million in the second quarter of 2019 alone (Q2 2018: EUR -19.0 million). At the end of the first half of 2019, therefore, the figure was up at EUR 79.3 million in total (H1 2018: EUR -42.2 million).

"As figures for the first half indicate, we are on track with measures initiated for the purpose of improving our cash flow," says Dr. Stefan Wolf, CEO of ElringKlinger AG. "We have moved forward considerably with regard to investments and working capital - and we intend to pursue this action plan in a determined manner. Having said that, we are currently operating within a market environment that is proving difficult as a whole."

No palpable recovery of global automobile production in second half
Based on the most recent market projections, the recovery of global vehicle production is likely to be less dynamic in the second half of 2019 than originally expected at the beginning of the year. ElringKlinger now anticipates a global market downturn of between 2% and 4% year on year for 2019 as a whole, rather than the modest growth rate of between 0% and 1% predicted at the beginning of the financial year. Nevertheless, the ElringKlinger Group continues to maintain its fiscal 2019 revenue target of growing organically by 2 to 4 percentage points above the rate of growth in the global market.

Current order backlog remains solid but outlook for new orders less promising
The Group's order book has proven resilient despite the challenging economic situation. With a volume of EUR 1,063.0 million at the end of the second quarter of 2019, its order backlog was up 2.4% year on year (Q2 2018: EUR 1,038.2 million); adjusted for currency effects, it expanded by 1.5%. The downturn in markets, however, was reflected in order intake. Totaling EUR 419.8 million, it was down by 8.5% year on year in the second quarter (Q2 2018: EUR 458.6 million). After adjusting for currency effects, the decrease was 7.8%.

Outlook for fiscal 2019 confirmed
Conditions are likely to remain challenging for the automotive industry, with key markets in China, North America, and Europe set to contract over the full year. Therefore, it would appear likely that market downturn will impact on ElringKlinger's earnings performance. At the same time, the Group is looking to counteract these developments with the help of several measures. In the first half of the year, for example, ElringKlinger launched an extensive internal cost-cutting program that will continue to deliver benefits as the Group moves forward. Additionally, the first exemption refunds are expected with regard to US tariffs. ElringKlinger also anticipates that it will generate income in the high single-digit million-euro range from a real estate sale to be executed by the end of the financial year. Furthermore, cost structures are to be further optimized at the Swiss plant and the North American sites. Overall, as a result of these various factors, the Group will still be looking to achieve an EBIT margin of around 4% to 5% before purchase price allocation despite the more difficult conditions it currently faces. This assumes that no further significant externalities emerge as a drag on earnings and that markets do not weaken any further than already anticipated.

Key Financials for Q2 and H1 of 2019

* Incl. gain from sale of Hug subgroup (EUR 21.1 million before taxes)

For further information, please contact:
ElringKlinger AG
Dr. Jens Winter
Strategic Communications
Max-Eyth-Straße 2
72581 Dettingen/Erms (Germany)
Phone: +49 7123 724-88335
Fax: +49 7123 724-85 8335
E-mail: jens.winter[at]elringklinger.com

About ElringKlinger AG
As an independent and globally positioned supplier, ElringKlinger is a powerful and reliable partner to the automotive industry. Be it passenger car or commercial vehicle, equipped with an optimized combustion engine, with hybrid technology, or with an all-electric motor - we offer innovative solutions for all types of drive system. In doing so, we are making a committed contribution to sustainable mobility. Our lightweighting concepts help to reduce the overall weight of vehicles. As a result, vehicles powered by combustion engines consume less fuel and emit less CO₂, while those equipped with alternative propulsion systems benefit from an extended range. Developing cutting-edge battery and fuel cell technology as well as electric drive units, we were among the frontrunners when it came to positioning ourselves as a specialist in the field of e-mobility. At the same time, we are committed to evolving our sealing technology for a wide range of applications. Our shielding systems are designed to ensure high-end temperature and acoustics management throughout the vehicle. Dynamic precision parts developed by ElringKlinger can be used in all types of drive system. Additionally, the Group's portfolio includes engineering services, tooling technology, and products made of high-performance plastics, which are also marketed to industries beyond the automotive sector. These efforts are supported by a dedicated workforce of more than 10,000 people at 44 ElringKlinger Group locations around the globe.
www.elringklinger.com

Disclaimer
This release contains forward-looking statements. These statements are based on expectations, market evaluations and forecasts by the Management Board and on information currently available to them. In particular, the forward-looking statements shall not be interpreted as a guarantee that the future events and results to which they refer will actually materialize. Whilst the Management Board is confident that the statements as well as the opinions and expectations on which they are based are realistic, the aforementioned statements rely on assumptions that may conceivably prove to be incorrect. Future results and circumstances depend on a multitude of factors, risks and imponderables that can alter the expectations and judgments that have been expressed. These factors include, for example, changes to the general economic and business situation, variations of exchange rates and interest rates, poor acceptance of new products and services, and changes to business strategy.

ElringKlinger AGM with big response again in 2019

- High attendance thanks to around 800 shareholders and guests

- Dividend payment for fiscal 2018 suspended; internal financing for corporate transformation process thus further strengthened

- CEO Dr. Stefan Wolf: "Financial year just ended was characterized by challenging business conditions - market environment is expected to remain difficult in 2019. ElringKlinger is well positioned at a strategic level to successfully drive industry change."

- Proposed resolutions approved by large majority in each case

Stuttgart, Dettingen/Erms (Germany), May 16, 2019 +++ The 114th Annual General Meeting (AGM) of ElringKlinger AG, which took place on Thursday, May 16, 2019, at the Cultural and Congress Center Liederhalle in Stuttgart, was attended by around 800 shareholders and guests. In his speech, Dr. Stefan Wolf, CEO of ElringKlinger AG, presented his review of the 2018 financial year.

"The financial year just ended was characterized by challenging business conditions. What is more, the market environment is expected to remain difficult in 2019," said Dr. Stefan Wolf. However, the Group will benefit in the medium term from the strategic direction it has taken: "ElringKlinger is well positioned in its strategic fields of the future: serial production of the first battery order is about to commence; we have seen a keen interest in fuel cell technology; our electric drive units will soon be going into series production and we will also be ramping up operations for further orders centered around lightweight structural components," Dr. Wolf explained. At the same time, the Group will be looking to build on its strong market position and technological know-how in the long-standing fields of business for the purpose of successfully driving the process of change within the industry.

Despite difficult conditions, the ElringKlinger Group managed to lift revenue by 2.1% to EUR 1,699.0 million in fiscal 2018. At EUR 100.2 million, however, earnings before interest and taxes (EBIT) before purchase price allocation were well down on the prior-year figure (EUR 141.8 million). The EBIT margin before purchase price allocation for 2018 was 5.9% (prev. year: 8.5%). In view of the Group's earnings performance in fiscal 2018, the Management Board and the Supervisory Board jointly decided to suspend the dividend for the 2018 financial year. This is aimed at further strengthening internal financing in support of the company's transformation process.

The resolutions submitted to shareholders of ElringKlinger AG for voting were each passed by large majorities. As regards fiscal 2018, the AGM approved the actions of the Management Board members with 86.7% and the actions of the Supervisory Board members with 86.7% of the votes, too. Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, Stuttgart, was appointed as the auditor for the financial year 2019. In total, 68% of the company's share capital was represented at the meeting.

For further information, please contact:
ElringKlinger AG
Dr. Jens Winter
Strategic Communications
Max-Eyth-Straße 2
72581 Dettingen/Erms (Germany)
Phone: +49 7123 724-88335
Fax: +49 7123 724-85 8335
E-mail: jens.winter[at]elringklinger.com

About ElringKlinger AG
As an independent and globally positioned supplier, ElringKlinger is a powerful and reliable partner to the automotive industry. Be it passenger car or commercial vehicle, equipped with an optimized combustion engine, with hybrid technology, or with an all-electric motor - we offer innovative solutions for all types of drive system. In doing so, we are making a committed contribution to sustainable mobility. Our lightweighting concepts help to reduce the overall weight of vehicles. As a result, vehicles powered by combustion engines consume less fuel and emit less CO₂, while those equipped with alternative propulsion systems benefit from an extended range. Developing cutting-edge battery and fuel cell technology as well as electric drive units, we were among the frontrunners when it came to positioning ourselves as a specialist in the field of e-mobility. At the same time, we are committed to evolving our sealing technology for a wide range of applications. Our shielding systems are designed to ensure high-end temperature and acoustics management throughout the vehicle. Dynamic precision parts developed by ElringKlinger can be used in all types of drive system. Additionally, the Group's portfolio includes engineering services, tooling technology, and products made of high-performance plastics, which are also marketed to industries beyond the automotive sector. These efforts are supported by a dedicated workforce of more than 10,000 people at 44 ElringKlinger Group locations around the globe.

ElringKlinger expands revenue amid global market downturn

- Revenue in first quarter of 2019 increases by 2.4% year on year to EUR 441.1 million; organic revenue growth stands at 2.6%

- Global automobile production contracts by 3.7% in first quarter, particularly due to market weakness in China

- EBIT before purchase price allocation totals EUR 6.9 million - earnings affected mainly by high commodity prices, US duties and follow-on costs at highly utilized NAFTA plants

- Guidance for fiscal 2019 confirmed

Dettingen/Erms (Germany), May 7, 2019 +++ ElringKlinger AG succeeded in further expanding its revenue in the first quarter of 2019 amid an increasingly challenging business environment. Driven in particular by sustained buoyancy in demand within North America, sales revenue increased by 2.4% to EUR 441.1 million compared to the same quarter a year ago (EUR 430.7 million). In this context, currency effects - primarily from the translation of the US dollar into the euro as the Group currency - contributed 1.3 percentage points to growth. By contrast, revenue was diluted by 1.4 percentage points as a result of the sale of the Hug subgroup and new enerday GmbH in the preceding year. Organic revenue growth, i.e., the figure adjusted for currency effects and M&A activities, thus stood at 2.6%.

Global market contraction - North America as growth driver for ElringKlinger
While ElringKlinger maintained its forward momentum, the market as a whole trended considerably lower. In the first three months of 2019, global automobile production fell by 3.7% compared with the same period a year ago. On this basis, ElringKlinger managed to exceed the change in global vehicle production by 6.3 percentage points in organic terms in the first quarter of 2019.

Revenue growth developed along very different lines in the respective regions covered by ElringKlinger. The market downturn in Europe and Asia-Pacific was reflected in the Group's revenue figures. Revenue from sales in Europe fell by 2.5% adjusted for currency effects, while business in Asia-Pacific declined by 5.8%. The lethargic state of the world's largest vehicle market, China (-5.1%), was a key factor in this context. By contrast, the Group continued to record strong demand in North America. Revenue generated by ElringKlinger from sales in the North American market, whose vehicle production output fell by 2.4% in the first quarter of 2019, expanded by 26.5% to EUR 101.6 million during the same period; adjusted for currency effects, growth stood at 19.9%.

"The downturn in global vehicle production continued at the beginning of the year, as anticipated, and the second quarter is only likely to see a slight improvement compared to the first three months. Markets aren't expected to pick up more rapidly before the second half of the year," explains Dr. Stefan Wolf, CEO of ElringKlinger AG, in outlining market expectations for the year as a whole.

Group earnings impacted by external and internal factors
ElringKlinger's earnings were again impacted by external and internal factors in the first quarter of 2019. Tariffs imposed by the US administration on certain raw materials, so-called antidumping and countervailing duties on aluminum imports from China, had an adverse effect on earnings. At the same time, higher commodity prices, particularly for plastic granules but also with regard to steel and aluminum, had an impact on the bottom line. In addition, the Group still had to contend with follow-on costs attributable to persistently high capacity utilization at its North American plants.

As a result of these factors, earnings before interest, taxes, depreciation, and amortization (EBITDA) fell to EUR 34.8 million in the first quarter of 2019, down from EUR 61.1 million in the same period a year ago. Depreciation and amortization were up by 19.9% year on year at EUR 28.3 million following the first-time application of the new International Financial Reporting Standard 16. Consequently, earnings before interest and taxes (EBIT) stood at EUR 6.9 million before purchase price allocation, which corresponds to a margin of 1.6%. The comparative prior-year figure for the first quarter was EUR 38.4 million (margin: 8.9%). However, it included the gain on disposal of EUR 21.1 million from the sale of the Hug subgroup.

Net finance costs down, income taxes up, net income in negative territory
The Group's net finance costs fell to EUR -1.0 million in the first quarter of 2019 (Q1 2018: EUR -5.3 million) due to a substantial year-on-year increase in the net result from currency translation. At EUR 6.5 million, income tax expenses were slightly above prior-year's figure (Q1 2018: EUR 5.7 million). This is attributable to losses incurred by subsidiaries for which no deferred tax assets were recognizable.

After deducting income taxes, net income for the first quarter of 2019 stood at EUR -1.1 million (Q1 2018: EUR 26.4 million), while net income attributable to the shareholders of ElringKlinger AG amounted to EUR -1.5 million (Q1 2018: EUR 25.7 million). Earnings per share stood at EUR -0.02 (Q1 2018: EUR 0.41).

As Dr. Wolf explains, "Against the backdrop of weak markets and difficult business conditions, we were anticipating a sluggish start to the year, although obviously we are not happy with our bottom-line results. We will continue to press ahead with our optimization measures in order to implement the improvements we set out to achieve and have further intensified internal cost streamlining. However, one of the key prerequisites for our earnings performance in 2019 is that markets recover as predicted over the course of the year."

Guidance for fiscal 2019 confirmed
Despite the expected sluggish start to the year with regard to revenues in Europe and Asia as well as earnings, the order situation at the ElringKlinger Group remained robust in the first three months of 2019. Adjusted for currency effects, order intake rose by 0.5% to EUR 476.7 million (Q1 2018: EUR 474.2 million), while order backlog as of March 31, 2019, increased by 2.6% to EUR 1,054.1 million (Q1 2018: EUR 1,027.2 million). Against this background, the Group remains confident that it can outpace the expansion in global automobile production by 2 to 4 percentage points in terms of organic revenue growth. The coming quarters are expected to see an improvement in earnings performance, as planned, meaning that the EBIT margin range of around 4 to 5% before purchase price allocation, as targeted by the Group, will be achieved. Among the elements expected to support this are Group-wide cost streamlining, the stabilization of commodity prices, including tariffs, and positive effects from optimization measures. However, if these earnings projections are to be achieved, it is essential that no other external effects occur in the form of significant downside factors and that global markets recover noticeably in the second half of the year as expected.

Key financials for Q1 2019

* Incl. gain from sale of Hug subgroup (EUR 21.1 million before taxes)

For further information, please contact:
ElringKlinger AG
Dr. Jens Winter
Strategic Communications
Max-Eyth-Straße 2
72581 Dettingen/Erms (Germany)
Phone: +49 7123 724-88335
Fax: +49 7123 724-85 8335
E-mail: jens.winter[at]elringklinger.com

About ElringKlinger AG
As an independent and globally positioned supplier, ElringKlinger is a powerful and reliable partner to the automotive industry. Be it passenger car or commercial vehicle, equipped with an optimized combustion engine, with hybrid technology, or with an all-electric motor - we offer innovative solutions for all types of drive system. In doing so, we are making a committed contribution to sustainable mobility. Our lightweighting concepts help to reduce the overall weight of vehicles. As a result, vehicles powered by combustion engines consume less fuel and emit less CO₂, while those equipped with alternative propulsion systems benefit from an extended range. Developing cutting-edge battery and fuel cell technology as well as electric drive units, we were among the frontrunners when it came to positioning ourselves as a specialist in the field of e-mobility. At the same time, we are committed to evolving our sealing technology for a wide range of applications. Our shielding systems are designed to ensure high-end temperature and acoustics management throughout the vehicle. Dynamic precision parts developed by ElringKlinger can be used in all types of drive system. Additionally, the Group's portfolio includes engineering services, tooling technology, and products made of high-performance plastics, which are also marketed to industries beyond the automotive sector. These efforts are supported by a dedicated workforce of more than 10,000 people at 44 ElringKlinger Group locations around the globe.

Disclaimer
This release contains forward-looking statements. These statements are based on expectations, market evaluations and forecasts by the Management Board and on information currently available to them. In particular, the forward-looking statements shall not be interpreted as a guarantee that the future events and results to which they refer will actually materialize. Whilst the Management Board is confident that the statements as well as the opinions and expectations on which they are based are realistic, the aforementioned statements rely on assumptions that may conceivably prove to be incorrect. Future results and circumstances depend on a multitude of factors, risks and imponderables that can alter the expectations and judgments that have been expressed. These factors include, for example, changes to the general economic and business situation, variations of exchange rates and interest rates, poor acceptance of new products and services, and changes to business strategy.