DGAP-Adhoc: H&R AG: Preliminary operating income slightly

H&R AG / Key word(s): Preliminary Results/Final Results 13.02.2015 19:01 Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Ad-hoc announcement pursuant to Article 15 of the German Securities Trading Act (WpHG) 2014 Preliminary Figures H&R AG: Preliminary operating income slightly below previous year, lower sales revenues - Sales revenues of EUR 1,058.6 million significantly lower than in previous year - EBITDA of EUR 31.5 million is within most recently forecast earnings range - Drop in price of crude oil negatively affects earnings in fourth quarter of 2014 Salzbergen, 13 February 2015. According to preliminary figures, H&R Aktiengesellschaft (ISIN DE0007757007) generated EUR 1,058.6 million of sales revenues in financial year 2014, a decline of around 13% compared to the previous year (2013: EUR 1,214.4 million). The main factor behind the decline is the crude oil price, which was averagely lower than in the previous year and shows a high correlation of sales. Because production and sold quantities were comparable, revenues decreased. The preliminary operating result (EBITDA) for the year under review totaled EUR 31.5 million (2013: EUR 32.6 million), meaning that it was within the projected range published in December 2014. The change in EBIT was quite positive; compared to the previous year it rose by EUR 9.9 million to EUR 5.8 million (2013: EUR -4.1 million). The trend was similar for earnings before taxes (EBT), which increased by EUR 9.0 million from EUR -16.8 million in 2013 to EUR -7.8 million in 2014. Consolidated income after minorities totaled EUR -15.4 million (2013: EUR -14.0 million), below the level of financial year 2013 due to the impact of deferred taxes. Four quarter was below expectations, primarily because of the drop in the price of crude oil Although business performance was satisfactory from an operating standpoint during the first nine months of 2014, the final quarter with its sharp decline of crude oil prices prevented an improvement in performance for the year as a whole. During the fourth quarter of 2014, the Company's sales revenues stood at EUR 252.3 million, or 7.7% lower than in the prior-year period (Q4 2013: EUR 273.3 million). Due to the rapid and sharp fall in the price of crude oil at the end of 2014, and as a result of the several weeks' long production run, there was a substantial increase in the relative material expenses ratio. The reason for this was that the market price for raw materials stored at the Hamburg refinery (OWS) at the date of their acquisition was significantly above the market price at the time the products made from these materials were sold. This market price difference was recognized as expenses. At the same time, the lower price of crude oil affected main products and by-products that had already been produced: their manufacturing and replacement costs are also largely raw material-driven and consequently had to be stated at amounts that were lower than on the production date, also because of the length of the production run. Even the overall adequate profit margins were not able to offset these effects. All in all, the negative impact amounted to around EUR -13.4 million for the fourth quarter of 2014 alone (full year: EUR -16.1 million). H&R AG's EBITDA therefore dropped 32.3%, from EUR 9.3 million in the fourth quarter of 2013 to EUR 6.3 million in the fourth quarter of 2014. The EBIT trend was similar: it totaled EUR -2.3 million in the fourth quarter (Q4 2013: EUR 3.3 million). During the final quarter of 2014, earnings before taxes (EBT) fell to EUR -5.4 million (Q4 2013: EUR -0.8 million). Consolidated income after taxes decreased significantly by EUR 11.1 million in the fourth quarter of 2014, from EUR -2.4 million in the fourth quarter of 2013 to EUR -13.5 million in the fourth quarter of 2014. Cash flow increases significantly in the fourth quarter Operating cash flow tripled in the fourth quarter of 2014 to EUR 18.0 million (Q4 2013: EUR 5.8 million). Free cash flow also increased substantially, from EUR 2.3 million in the fourth quarter of 2013 to EUR 10.8 million in the fourth quarter of 2014. For the year as a whole, though, operating cash flow dropped from EUR 88.9 million to EUR -0.4 million and free cash flow fell from EUR 72.8 million to EUR -10.5 million. The high prior-year figure is primarily attributable to positive non-recurring effects of the transfer of inventories as a result of the transition of the refinery at Salzbergen to contract manufacturing and the further net working capital optimization. Solid capital base As of the end of financial year 2014, total assets had increased to EUR 706.6 million (31/12/2013: EUR 594.7 million). The Company's shareholders' equity stood at EUR 248.9 million as of the balance-sheet date (31/12/2013: EUR 189.2 million). The changes are directly related to the increase in capital through a contribution-in-kind implemented in September 2014 and the contribution of the majority (51% of the voting rights) of the Hansen & Rosenthal Group's Chinese businesses to H&R AG. The complete and audited Annual Report of the H&R Group will be published on 17 March 2015. Contact: H&R AG, Investor Relations / Kommunikation, Ties Kaiser Neuenkirchener Straße 8, 48499 Salzbergen Phone.: +49 40 43218-321, Fax: +49 40 43218-390 Mail: Ties.Kaiser@hur.com www.hur.com H&R AG is a Prime Standard listed specialist chemicals company. It develops and manufactures crude oil-based chemical and pharmaceutical products and high-precision plastic parts. Forward-looking statements and forecasts: This ad hoc notification contains forward-looking statements. These statements are based on current estimates and forecasts made by the Executive Board and the information available to the Board at this time. Forward-looking statements should not be interpreted as guarantees that the projected future developments and results will materialise. Future developments and results are dependent on a range of factors. They comprise various risks and imponderables and rest on assumptions which may prove incorrect. We do not accept any obligation to update the forward-looking statements made in this ad-hoc communication. 13.02.2015 The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: H&R AG Neuenkirchener Str. 8 48499 Salzbergen Germany Phone: +49 (0)40 43 218 321 Fax: +49 (0)40 43 218 390 E-mail: investor.relations@hur.com Internet: www.hur.com ISIN: DE0007757007 WKN: 775700 Listed: Regulated Market in Dusseldorf, Frankfurt (Prime Standard), Hamburg; Regulated Unofficial Market in Berlin, Hanover, Munich, Stuttgart End of Announcement DGAP News-Service ---------------------------------------------------------------------------