Recticel : FIRST HALF-YEAR 2016 RESULTS

Regulated information

Brussels, 26 August 2016 - 07:00 CET

• Strong organic growth enables combinedasales growth of +2.8%, despite negative currency effects (-1.5%)
• Combined REBITDA increases by +27.9% supported by strong volumes and efficiency gains
• Result of the period (share of the Group): from EUR 5.0 million to EUR 15.5 million

Olivier Chapelle (CEO): "Recticel has delivered solid results during 1H2016. Sales have increased thanks to strong volumes, more than off-setting the adverse currency effects and price erosion in some business segments. In addition, high focus on operational performance combined with positive product-mix, have allowed the gross margin to increase by 1.5 percentage point. All business lines have grown sales and REBITDA and are well positioned to capture further market opportunities."

OUTLOOK

For the full year 2016, the Group expects its combined sales to increase thanks to a combination of volume growth and positive product-mix. Taking into account the volatility in current market conditions, the Group expects its combined REBITDA to increase by at least 15% in 2016.

All comparisons are made with the comparable period of 2015, unless mentioned otherwise. The figures mentioned have been subject to a limited auditor's review.

a For the definition of other used terminology, see lexicon at the end of this press release.

1. KEY FIGURES

2. CONSOLIDATED DATA

   • Sales: from EUR 519.1 million to EUR 534.5 million (+3.0%), including currency effects (-1.4%)
   • EBITDA: from EUR 31.7 million to EUR 41.0 million (+29.2%)
   • EBIT: from EUR 16.9 million to EUR 24.6 million (+45.3%)
   • Result of the period (share of the Group): from EUR 5.0 million to EUR 15.5 million
   • Net financial debt1: EUR 109.5 million (30 June 2016) (30 June 2015: EUR 112.2 million; 31 December 2015: EUR 98.5 million)

     in million EUR	1H2015 (a)	1H2016 (b)	 (b)/(a)-1
     Sales	519,1	534,5	3,0%
     Gross profit	100,0	108,8	8,8%
     as % of sales	19,3%	20,4%
     EBITDA	31,7	41,0	29,2%
     as % of sales	6,1%	7,7%
     EBIT	16,9	24,6	45,3%
     as % of sales	3,3%	4,6%
     Result of the period (share of the Group)	5,0	15,5	209,0%
     Result of the period (share of the Group) -
     base (per share, in EUR)	0,14	0,29	106,3%

     31 Dec 15 30 Jun 16
     Total Equity 249,0 Net financial debt 198,5 Gearing ratio 39,6%	245,6 109,5 44,6%	-1,4% 11,2%

     1 Excluding the drawn amounts under off-balance non-recourse factoring/forfeiting programs: EUR 65.4 million per 30 June 2016 versus EUR 70.4 million per 30 June 2015 and EUR 53.7 million per 31 December 2015.

3. COMBINED DATA

   • Sales: from EUR 667.5 million to EUR 686.0 million (+2.8%), including currency effects (-1.5%)
   • REBITDA: from EUR 42.9 million to EUR 54.8 million (+27.9%)
   • EBIT: from EUR 20.0 million to EUR 27.6 million (+38.5%)
   • Result of the period (share of the Group): from EUR 5.0 million to EUR 15.5 million
   • Net financial debt1: EUR 132.9 million (30 June 2016) (30 June 2015: EUR 137.5 million; 31 December 2015: EUR 123.0 million)

   in million EUR	1H2015 (a)	1H2016 (b)	 (b)/(a)-1
   Sales	667,5	686,0	2,8%
   Gross profit	119,8	133,4	11,4%
   as % of sales	17,9%	19,4%
   REBITDA	42,9	54,8	27,9%
   as % of sales	6,4%	8,0%
   EBITDA	38,8	47,9	23,4%
   as % of sales	5,8%	7,0%
   REBIT	24,8	35,6	43,5%
   as % of sales	3,7%	5,2%
   EBIT	20,0	27,6	38,5%
   as % of sales	3,0%	4,0%

   31 Dec 15 30 Jun 16
   Total Equity 249,0 Net financial debt 1123,0 Gearing ratio 49,4%	245,6 132,9 54,1%	-1,4% 8,0%

   1 Excluding the drawn amounts under off-balance non-recourse factoring/forfeiting programs: EUR 71.4 million per 30 June 2016 versus EUR 78.3 million per 30 June 2015 and EUR 60.4 million per 31 December 2015.

4. COMMENTS ON THE GROUP RESULTS

5. Detailed comments on sales and results of the different segments are given in chapter 4 on the basis of the combined figures (joint ventures integrated following the proportionate consolidation method).

   There were no changes in the scope of consolidation in 1H2016.

   Combined Sales: from EUR 667.5 million toEUR 686.0 million.

   Combined sales increased by +2.8%, including a negative currency impact of EUR -9.9 million (-1.5%). All business lines contributed to the growth.

   After a modest +0.6% growth in 1Q2016 (including a negative currency effect of -0.8%), combined sales growth accelerated to +5.1% in 2Q2016 (including a negative currency effect of -2.0%). All segments have grown significantly during the second quarter, with a particular mention of Bedding (+7.3%) and Insulation (+5.7%).

   Breakdown of the combined sales by segment

   in million EUR	1Q2015 2Q2015 1H2015 1Q2016 2Q2016 1H2016						 1Q	 2Q	 1H
   Flexible Foams Bedding Insulation Automotive Eliminations	158,5 79,1 54,0 72,7 ( 20,9)	147,4 64,4 59,3 70,1 ( 17,1)	305,9 143,5 113,3 142,9 ( 38,0)	156,1 79,0 55,5 73,9 ( 18,9)	154,2 69,1 62,7 73,0 ( 18,4)	310,3 148,1 118,1 146,9 ( 37,3)	-1,5% -0,1% 2,8% 1,6% -9,6%	4,6% 7,3% 5,7% 4,1% 7,8%	1,4% 3,2% 4,3% 2,8% -1,8%
   TOTAL COMBINED SALES	343,4	324,1	667,5	345,5	340,5	686,0	0,6%	5,1%	2,8%
   Adjustment for joint ventures by application of IFRS 11	( 75,0)	( 73,4)	( 148,4)	( 75,9)	( 75,6)	( 151,5)	1,2%	3,0%	2,1%
   TOTAL CONSOLIDATED SALES	268,4	250,7	519,1	269,6	264,9	534,5	0,4%	5,7%	3,0%

   The overall volume growth has over-compensated the negative currency effects and lower average selling prices in some markets.

   Combined REBITDA: from EUR 42.9 million toEUR 54.8 million (+27.9%) REBITDA margin increased from 6.4% to 8.0%.

   Recurrent profitability strongly increased due to the combination of (i) higher volumes, (ii) positive product-mix, and (iii) operational efficiency and fixed costs control. All segments contributed to the profitability improvement, with a specific mention for the Flexible Foams segment which delivered the strongest improvement, in relative and absolute terms.

   Raw materials prices, which progressively decreased during 1Q2016, have significantly increased month after month as from April 2016, as a consequence of increasing oil price and some supply tension on isocyanates (TDI and MDI).