Insider information pursuant to Article 17 of the Market Abuse Regulation [MAR]

H&R GmbH & Co. KGaA: Preliminary business results for Q3-2022

• Lower overall economic momentum dampens third quarter of 2022
• EBITDA for nine-month period of EUR 103.3 million down around 7% year-on-year
• Earnings forecast specified at up to EUR 120.0 million

Salzbergen, Germany, November 2, 2022. H&R GmbH & Co. KGaA (abbreviated: H&R KGaA; ISIN DE000A2E4T77) reported a good sales and earnings performance at the end of the third quarter of 2022 in view of the current challenges. According to preliminary calculations, the consolidated operating result (EBITDA*) amounted to EUR 30.5 million in the third quarter (Q3-2021: EUR 36.8 million). Overall, weaker macroeconomic momentum was noticeable. In addition to logistical challenges, for example with regard to transport capacities, a more pessimistic basic attitude of many customer industries in particular caused a slowdown in demand behavior. At the other levels, results thus also fell short of the very strong prior-year quarter: EBIT closed at EUR 17.2 million, compared to last year's EUR 24.1 million. Earnings before taxes (EBT) in Q3-2022 were EUR 15.3 million (Q3-2021: EUR 22.6 million), and the company closed with EUR 10.4 million in consolidated earnings attributable to shareholders (Q3-2021: EUR 16.0 million). Revenues in the third quarter of the current fiscal year increased during the year to EUR 419.6 million (Q3-2021: EUR 319.7 million), mainly due to energy and raw material price factors.

Looking at the entire nine-month period 2022, the Group achieved stable EBITDA of EUR 103.3 million (nine-month period 2021: EUR 111.3 million) and increased sales of EUR 1,225.4 million (nine-month period 2021: EUR 878.2 million) for the reasons mentioned above. Depreciation and amortization had only a slightly higher impact on EBIT compared to the previous year, bringing it to EUR 63.4 million (nine months 2021: EUR 73.2 million). A comparable trend was also seen in earnings before taxes (EBT), which amounted to EUR 58.2 million (nine months 2021: EUR 67.0 million). Consolidated earnings attributable to shareholders closed at EUR 40.1 million (nine months 2021: EUR 47.0 million). H&R KGaA thus generated earnings per share of EUR 1.08; at EUR 0.28, the third quarter of 2022 (nine months 2021: EUR 1.26; Q3-2021: EUR 0.43) contributed the smallest share during the year. 

The ChemPharm REFINING segment once again made the main contribution to earnings. However, with EBITDA of EUR 19.4 million in the third quarter of 2022 (Q3-2021: EUR 30.9 million), it performed significantly weaker than in the same quarter of the previous year. At EUR 74.3 million (Q3-2021: EUR 89.8 million), the segment performance for the nine-month period was at a reduced, but nevertheless stable level as a result of the good half-year figures. Sales in the segment reached EUR 802.7 million for the nine-month period (nine months 2021: EUR 556.2 million). The above-mentioned factors, which mainly impacted the refinery sites, were key to the business performance.

Our international activities of the ChemPharm SALES segment recorded strongly improved overall operating results of EUR 10.9 million in the third quarter and EUR 29.6 million in the nine-month period (Q3-2021: EUR 6.6 million; Nine-months 2021: EUR 21.8 million). Sales in the nine-month period increased significantly year-on-year to EUR 401.8 million, quarterly by EUR 141.9 million  (nine months 2021: EUR 299.2 million; Q3-2021: EUR 108.6 million).

The PLASTICS segment generated an almost identical operating result for the nine-month period compared to the previous year, but improved strongly at quarterly level compared to 2021. It generated EUR 1.1 million and EUR 2.4 million (Q3-2021: EUR 0.5 million; nine months 2021: EUR 2.3 million). At EUR 34.2 million and EUR 13.1 million, sales increased year-on-year (Q9-2021: EUR 32.4 million; Q3-2021: EUR 10.9 million;) despite a still tense situation in the automotive industry.

At EUR -9.0 million, cash flow from operating activities in the first nine months of 2022 was weaker than in the same period of the previous year (first nine months of 2021: EUR 13.1 million). During the year, it was burdened primarily by higher raw material prices and the associated higher net working capital requirement. In total, it amounted to EUR -7.6 million in Q3 2022 (Q3 2021: EUR 12.0 million), while free cash flow was EUR -24.0 million (Q3 2021: EUR -13.1 million). As of September 30, free cash flow amounted to EUR -60.3 million after EUR -25.0 million in the previous year. 

Balance sheet total increased from EUR 874.4 million to EUR 1,003.2 million compared to December 31, 2021. Equity increased from EUR 408.5 million to EUR 482.1 million in the same period. As of September 30, 2022, the equity ratio of the company was 48.1% (December 31, 2021: 46.7%).

Based on current planning, the company expects an operating result for the year in the range of EUR 110.0 million to EUR 120.0 million. The company is thus moving more clearly in the direction of the previous year's result (EBITDA 2021: EUR 132.5 million) than was expected at the beginning of the year. In parallel, uncertainties are increasing for the remainder of the year. In particular, a further escalation of the Ukraine war could impact global trade and supply links overall. For German industry, gas availability in particular and further increases in energy and raw material prices would be an obstacle to consolidating or even expanding the stable results achieved to date. Accordingly, management will closely monitor further developments and make further adjustments to business expectations if necessary.

The final financial figures and further information on business development to date in 2022 will be published as planned in the quarterly statement on November 15, 2022.

*Group result before taxes on income, other financial income and expenses as well as amortization, depreciation and impairment losses and write-ups on intangible assets and property, plant and equipment

Contact:
H&R GmbH & Co. KGaA, Head of Investor Relations / Communication, 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 GmbH & Co. KGaA:
H&R KGaA is a specialty-chemicals company listed on the Frankfurt Stock Exchange's Prime Standard segment. It develops and manufactures crude-oil-based chemical and pharmaceutical specialty products and produces high-precision plastic parts.

Forward-looking statements and forecasts:
This insider information pursuant to Article 17 of the Market Abuse Regulation [MAR] contains forward-looking statements. The statements are based on the current estimates and forecasts by the Management Team and the information available to it at this time. These forward-looking statements do not provide any warranty for the future developments and results contained therein. The future developments and results are dependent on a number of factors; they entail various risks and contingencies and are based on assumptions which could prove to be incorrect. We do not assume any responsibility for updating the forward-looking statements contained in this insider information pursuant to Article 17 of the MAR.