Financial strength provides stability

• Sales revenues and EBIT as expected
• Construction/Infrastructure reports record result, Automotive Technology remains negative
• Strong operating cash flow
• Forecast for 2020 highly uncertain despite consideration of the coronavirus pandemic
• Annual Shareholders' Meeting postponed

Bergisch Gladbach, 30 March 2020 - INDUS Holding AG reached its revenue targets in the fiscal year 2019: the portfolio companies of the leading specialist for long-term investment in, and sustainable development of, German mid-sized companies increased their sales revenues to EUR 1.74 billion (previous year EUR 1.71 billion). In spite of the significant decline in sales revenues in the Automotive Technology segment, consolidated revenues are within the projected range of EUR 1.72 to 1.77 billion.

At EUR 135.2 million, the operating result (EBIT) before impairment losses came in slightly above the adjusted forecast of EUR 129 to 135 million. This was due in particular to the record result in the Construction/Infrastructure segment and good results in the Engineering and Medical Engineering/Life Science segments. Due to the well-known decline in sales revenues in the automotive industry, however, the result fell short of the previous year's EUR 150.5 million. The INDUS Group achieved an EBIT margin before impairment losses of 7.8% (previous year 8.8%).

For the year as a whole, non-cash impairment losses on goodwill and property, plant and equipment in the total amount of EUR 17.3 million were recognized in the Automotive Technology segment. At EUR 117.9 million, the operating result (EBIT) after impairment losses is within the projected range of EUR 116 to 122 million. The EBIT margin after impairment losses was 6.8% (previous year 7.9%).

Earnings per share stood at EUR 2.43 (previous year EUR 2.90). The Board of Management and the Supervisory Board will propose a dividend of EUR 0.80 per share to the Annual Shareholders' Meeting, which will probably be postponed from 20 May 2020 to August of this year. This is equivalent to a payout ratio of 24.6% of the distributable profit. "For understandable reasons, our proposal remains below the previous year's EUR 1.50 because we want to strengthen our reserves in this difficult global situation," says Dr. Johannes Schmidt, Chairman of the Board of Management of the INDUS Group. "The Board of Management will continue to critically assess the further development of the coronavirus crisis and its consequences for the INDUS Group on an ongoing basis and reserves the right to make any necessary adjustments to this dividend proposal until publication of the invitation to the Annual Shareholders' Meeting."

Record result in the Construction/Infrastructure segment
The INDUS Group currently has 47 portfolio companies. Three of the five segments of the INDUS portfolio again performed well. The Construction/Infrastructure and Engineering segments increased their revenues to new record levels and generated strong earnings before interest and taxes. In the Construction/Infrastructure segment, the EBIT margin reached a record level of 16.2%. The Medical Engineering/Life Science segment also improved its sales revenues and EBIT margin compared to the previous year. In the Metals Technology segment, the plastic electroplating activities will be discontinued in the course of 2020 due to European regulations. This led to considerable one-time charges already in 2019. In the Automotive Technology segment, declining sales revenues due to the persistently weak economic environment, high repositioning expenses and non-cash impairment losses resulted in negative earnings.

Strong operating cash flow ensures stable balance sheet ratios
Total assets of the INDUS Group amounted to EUR 1.81 billion as at the reporting date, compared to EUR 1.72 billion in the previous year. The increase of EUR 75.7 million is due to the mandatory application of IFRS 16 "Leases" since 1 January 2019. The newly acquired portfolio companies MESUTRONIC and DSG were included for the first time. The measures taken to manage working capital had a clearly positive effect. Inventories were reduced by 6.7% despite the increase in sales revenues.

Net liabilities amounted to EUR 546.2 million (previous year EUR 482.8 million). The 13.1% increase is due to the first-time application of IFRS 16 "Leases", which resulted in the recognition of lease liabilities in the amount of EUR 77.8 million. Equity increased by 2.5% to EUR 727.7 million (previous year EUR 709.8 million). At 40.2% (previous year 41.3%), the equity ratio was above the defined lower target ratio of 40%. At 2.4 years (previous year 2.2 years), the debt repayment period (net liabilities/EBITDA) was within the target range of 2 to 2.5 years. Gearing (net liabilities/equity ratio) stood at 75% (previous year 68%).

Operating cash flow developed very positively. It rose by EUR 71.7 million to EUR 167.7 million (previous year EUR 96.0 million). Thanks to the improved working capital management in the context of promoting operational excellence, a significant cash inflow was achieved in the area of inventories and receivables.

Investments amounted to EUR 107.5 million in the past fiscal year (previous year EUR 102.4 million). Of this amount, EUR 67.3 million was invested in property, plant and equipment (previous year EUR 78.9 million) and EUR 11.0 million in intangible assets (previous year EUR 12.0 million) to strengthen the portfolio companies. Investments in acquisitions totaled EUR 29.2 million (previous year EUR 11.5 million). Depreciation and amortization rose to EUR 107.8 million (previous year EUR 83.7 million). Depreciation and amortization due to the new lease accounting in accordance with IFRS 16 contributed EUR 16.3 million to this figure, and impairment losses on goodwill EUR 17.3 million.

2020 will be marked by the coronavirus crisis
Dr. Johannes Schmidt: "We are working intensively to limit the impact of the coronavirus crisis on the INDUS Group. Our financial strength provides stability. In these difficult times, our PARKOUR strategy program continues to show us the way: we will actively strengthen our portfolio, promote innovation and enhance our performance through operational excellence. The market situation offers opportunities through new options and again more attractive prices in the M&A market for the acquisition of companies in the industries of the future, but also through numerous innovations and the technological strength of our portfolio companies. Major risks lie in the impact of the coronavirus pandemic on the global economy."

Although the forecast for the fiscal year 2020 takes into account the currently foreseeable consequences of the coronavirus pandemic, it is subject to a high degree of uncertainty: after a solid start to the year in January and February, the Board of Management expects sales revenues of EUR 1.5 to 1.65 billion and an operating result (EBIT) of EUR 85 to 95 million for the full year 2020, considering the current challenges posed by the coronavirus pandemic. This forecast does not take into account the targeted new acquisitions at the first and second tier. The focus will be on acquisitions in the industries of the future, i.e. automation, measurement and control technology, construction and security technology, medical engineering and life science, infrastructure and logistics technology as well as energy and environmental engineering.

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