Nanotechnology Now - Press Release: Nanogate: First Half of 2019 Marked by Market Development and Future-Oriented NXI Program

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Abstract:
· Sales increased to EUR 122.2 million (previous year: EUR 119.4 million), EBITDA reaches EUR 8.0 million (previous year: EUR 12.7 million), consolidated net income at EUR -2.7 million (previous year: EUR 1.8 million)

· Equity ratio of 31.9 percent with substantially increased balance sheet total

Nanogate: First Half of 2019 Marked by Market Development and Future-Oriented NXI Program

Göttelborn, Germany | Posted on September 26th, 2019

Nanogate SE, a leading global technology company for design-oriented, multifunctional components and surfaces, recorded business and profit development in the first half of 2019 that was marked by measures from the future-oriented NXI program, preparation for the start-up of a series of new orders and uncertainties regarding the market environment and increased costs.

Ralf Zastrau, CEO of Nanogate SE: “We look back on the first half of 2019 with mixed feelings. In an increasingly challenging market environment, we have launched a number of measures and projects under our future-oriented Nanogate Excellence International (NXI) program. The level of incoming orders for the coming years is gratifying and confirms our positioning in the market, though our sites are benefiting from this to varying degrees. Our performance has admittedly been burdened by delayed production start-ups for new projects, the increasing uncertainty of our customers in light of weak economic development and the short-term costs and earnings effects from NXI. Against this backdrop, we have decided to intensify our future-oriented NXI program. This also includes an intensified review of the structure of our sites. We are consciously taking on the associated expenses in this transitional year as well as the coming fiscal year in order to make the Group more efficient and more profitable.”

Development in the first half of 2019

Group sales slightly increased in the first half of 2019 to EUR 122.2 million (previous year: EUR 119.4 million). The operating result (EBITDA) was characterized by factors including delayed production start-ups, reduced drawdowns from customers, the expiration of high-margin projects, the NXI implementation with costs of roughly EUR 1.6 million and expenses in connection with the production start-up for new projects. Nanogate thus recorded a decrease in EBITDA to EUR 8.0 million (previous year: EUR 12.7 million). In light of our course of expansion with significant investments in sites, capacities and technologies, EBIT is burdened by the planned increase in depreciation, and stood at EUR -3.9 million in the first half of the year (previous year: EUR 4.6 million). The consolidated net income was EUR -2.7 million (previous year: EUR 1.8 million), corresponding to earnings of EUR -0.55 per share (previous year: EUR 0.38).

The operational performance is simultaneously reflected in the financial position of the Group. Due to the earnings effects as well as project-related payment delays for production equipment and tools resulting from delayed production start-ups, the operating cash flow amounted to EUR -2.7 million (previous year: EUR 1.9 million). As of the reporting date of June 30, 2019, cash and cash equivalents totaled EUR 33.0 million (12/31/2018: EUR 38.2 million) and the equity ratio stood at 31.9 percent (12/31/2018: 33.2 percent). Net bank liabilities increased to EUR 97.0 million (12/31/2018: EUR 91.6 million). Consequently, the net debt ratio (net bank liabilities/EBITDA) at the end of the first half of the year amounted to 5.0 (12/31/2018: 3.8). The covenant agreements were thus complied with.

Outlook

In view of the intensifying framework conditions, the changing market and the operating performance in the first half of 2019, Nanogate will intensify its ongoing future-oriented NXI program in the second half of the year and review the site structure in particular even more intensively. The company will also continue to analyze the order mix on an ongoing basis and allow low-margin projects to expire. With higher start-up costs for new major orders, these additional restructuring measures will also affect the earnings development in the 2019 fiscal year.

As a result, Nanogate anticipates an operating result (EBITDA) of between EUR 14 and 17 million for the 2019 fiscal year (2018: EUR 24.2 million) in accordance with the adjusted forecast. This encompasses expenses for the future-oriented NXI program and consulting costs in connection with structuring measures in an anticipated amount of over EUR 3 million. Accordingly, a consolidated net loss in the high single-digit million range (2018: EUR +1.4 million) is expected. An increase in sales to between EUR 245 and 250 million (2018: EUR 239.2 million) is anticipated. In view of the current market development and the associated uncertainty of customers, the forecast for the 2020 fiscal year will be reviewed.

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About Nanogate AG
Nanogate (ISIN DE000A0JKHC9) is a leading global technology company for design-oriented, multifunctional components and surfaces. The Group employs around 1,800 people. Nanogate develops and produces design-oriented surfaces and components and enhances them with additional properties (e.g. nonstick, scratchproof, anticorrosive). The Group has first-class references (e.g. Airbus, Audi, August Brötje, BMW, BSH Hausgeräte, Daimler, FILA, Ford, Fresenius, GM, Jaguar, Junghans, Porsche and Volkswagen). Several hundred mass production projects for customers have already been implemented successfully. The Nanogate Group is represented on both sides of the Atlantic and in India.

True to its slogan “Reinventing the Possible”, Nanogate is a long-standing innovation partner who opens up the diverse possibilities offered by new materials to companies in a wide range of industries. It aims to improve customers’ products and processes and to provide environmental benefits by using multifunctional surfaces, such as those made of plastic or metal, and innovative plastic components. The Group focuses on attractive applications, primarily for the mobility, aviation, home appliances, interior, leisure, and medical sectors – its target industries. As a systems provider, Nanogate broadly covers the value chain: design and engineering, materials development for surface systems, series coating of various different substrates as well as the production and enhancement of complete plastic components. The main value drivers are the opening up of international markets and the development of new applications, particularly for the three strategic areas Intelligent Surfaces, New Mobility and Artificial Metals.

Disclaimer

This publication constitutes neither an offer to sell nor an invitation to buy securities. The shares in Nanogate SE (the „Shares“) may not be offered or sold in the United States or to or for the account or benefit of „U.S. persons“ (as such term is defined in Regulation S under the U.S. Securities Act of 1933, as amended (the „Securities Act“)). No offer or sale of transferable securities is being made to the public.

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Contacts:
Christian Dose, Financial Press and Investors, WMP Finanzkommunikation GmbH, Tel. +49 69 57 70 300 21,

Nanogate SE, Zum Schacht 3, 66287 Göttelborn | Germany

www.nanogate.com | twitter.com/nanogate_se

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