Recylex : 24.05.2017 Recylex 2016 annual results

• Restated1EBITDA2at €19.3 million, up €19 million and Operating cash flow at €11.2 million, a strong increase for the second year in a row
• Operating income before non-recurring items (IFRS) at breakeven point and positive restated1operating income before non-recurring items2of €9.0 million
• Strong reduction in the net loss to €10.1 million including the negative impact of the European Commission's fine (€26.7 million), to be paid in installments
• Start of construction work in early 2017 on the new reduction furnace following the financing raised by the German subsidiaries in December 2016

Suresnes, May 24, 2017: Recylex SA is publishing its consolidated full-year results for the 2016 financial year, which were approved today by its Board of Directors on a going concern basis. The Recylex 2016 Financial Report was filed today with the Autorité des Marchés Financiers (AMF) and may be consulted on the company's website www.recylex.fr (Shareholders/Investors - Regulated Information - Annual Financial Report).

Yves Roche, Chairman and Chief Executive Officer of the Recylex Group, commented:

"There was a strong improvement in our performance between the first and second half of 2016. Recylex reaped the benefit of the 2016 rally in metals prices, especially during the fourth quarter. The measures we took to guide the Group back to profitability, such as our selective purchasing strategy in the Lead segment and our productivity efforts over the past few years, also paid off. As a result, restated operating income, a measure of our overall industrial and business performance, delivered a very healthy increase and became positive at €9 million. This encouraging operating performance also reflects the commitment of all our teams in Germany and France to our goal of returning to profitability. Our net result showed a strong improvement, even though we posted a loss of €10.1 million owing to the impact of the European Commission's fine. On May 18, 2017, we announced an agreement with the European Commission and our main financial partners to a payment plan for the fine. Thanks to this agreement, we can now look to the future again and concentrate on operational execution. Our top priority is to complete the construction of our new reduction furnace in Germany, the only one of its type in Europe."

1 To assess the performance of its Lead segment, the Group uses the LIFO ("Last in first out", not permitted under IFRS) method in its internal reporting to measure inventories for its main lead smelter in Nordenham. To assess the performance of the Zinc segment, the Group also releases restated financial data including the contribution from 50%-owned Recytech SA consolidated proportionately, even though this method is not permitted under IFRS. See note 19 to the 2016 consolidated financial statements.

2 Operating income before non-recurring items and before additions to and reversals from amortization, depreciation, provisions and impairment losses (non-IFRS indicator).

Recylex -6, place de la Madeleine - F-75008 Paris

Administrative office: 79, rue Jean-Jacques Rousseau - F-92158 Suresnes Cedex

P: +33 1 58 47 04 70 - Fax: +33 1 58 47 02 45 - web: www.recylex.fr - twitter:@Recylex

1. Consolidated key figures (audited figures)

   (€ million)	Year to December 31, 2016	Year to December 31, 2015	Change
   Sales (IFRS)	382.1	385.4	-3.3
   EBITDA2(IFRS)	9.3	(9.2)	+18.5
   Restated1EBITDA2	19.3	0.5	+18.8
   Operating income/(loss) before non-recurring items (IFRS)	(0.1)	(19.2)	+19.1
   Restated1operating income/(loss) before non-recurring items	9.0	(10.4)	+19.4
   Net income (IFRS)	(10.1)	(39.4)	+29.3

   (€ million)	At December 31, 2016	At December 31, 2015	Change
   Cash and cash equivalents	6.2	3.8	+2.4
   Net cash3	(7.0)	(5.0)	-2.0
   Equity	(30.5)	(20.1)	-10.4
   Net debt	27.1	29.8	-2.7

   3 Cash net of drawn credit lines.

2. Metals prices in euros and €/ $ exch ang e rates in the year to Decemb er 31, 2016

   Between January 4, 2016 and December 30, 2016, lead prices rose 17%, while zinc prices increased 71%. These gains came at the end of a solid upturn in the second half of 2016, particularly during the fourth quarter.

   After holding relatively firm in the first half of 2016, lead prices recorded a strong rise late on in the year, while zinc prices moved higher throughout the year, with the rise accelerating in the second half of 2016.

   Because of the base of comparison in 2015-with high prices in the first half but sharply lower prices in the second half-the average lead price in 2016 was 5% higher than the 2015 average, while the average zinc price in 2016 was 9% higher than the 2015 average. Average prices in the year to December 31 were thus as follows:

   (€ per tonne)	2016 average	2015 average	Change (%)
   Lead price	1,694	1,608	+5%
   Zinc price	1,896	1,737	+9%

   Between January 4 and December 30, 2016, the euro/dollar exchange rate went from 1.0909 to 1.0541, representing a decrease of around 3% over the period.

   In addition, the average €/$ exchange rate for 2016 remained stable at 1.1066 compared with 1.1097 in 2015, with strong appreciation in late 2016.

3. Consolidated statement of income for the year to December 31, 2016

   Recylex's 2016 sales came to €382.1 million, down just 1% on their 2015 level. The Group's fourth-quarter sales recorded a strong increase of 28% versus the same period of 2015 to reach €117.0 million.

   2016 IFRS operating income before non-recurring items was practically at breakeven point. It showed a very small loss of €0.1 million. This represented an improvement of over €19 million on the previous year's figure. Restated operating income before non-recurring items came to

   €9.0 million, compared to the 2015 loss of €10.4 million, an improvement of the same order as the IFRS figure.

   Thanks to a favorable base of comparison (given the absence of the major maintenance shutdowns in 2016 in the Lead and Zinc segments) and also higher metals prices, the significant improvement in the Group's financial performance was chiefly attributable to:

   • the Lead segment's improved profitability, with a return to positive territory in 2016, with a contribution of €3.7 million

   • an improvement in the Zinc segment's contribution to €6.9 million in 2016.

     Recylex's 2016 net loss came to €10.1 million, a major improvement of €29.3 million on the loss of €39.4 million recorded in 20154. The 2016 net loss was attributable to:

   • an operating loss before non-recurring items of €0.1 million,

   • €20.2 million in net other operating expenses, reflecting:

     • a €26.7 million provision for the fine handed down to the Recylex Group by the European Commission on February 8, 20175,

     • a €5.0 million net reversal of provisions for impairment of assets,

     • a €2.2 million reversal of a provision for Recylex SA following the rulings handed down by the Douai Appeal Court on January 31, 2017,

   • the €6.0 million share in income from equity affiliates,

   • net financial expense of €0.9 million,

   • a tax benefit of €5.0 million owing to the recognition of deferred taxes from the businesses in Germany.

     4 See press release dated July 12, 2016.

     5 See press releases dated February 8, 2017 and May 18, 2017.

4. Results by segment in the year to December 31, 2016 (excluding holding company)

• Lead segment (73% of 2016 sales)

  (€ million)	Year to December 31, 2016	Year to December 31, 2015	Change
  Sales	278.3	281.8	-3.5
  Operating income/(loss) before non-recurring items	3.7	(13.5)	+17.2
  Restated1operating income/(loss) before non-recurring items	3.2	(11.2)	+14.4

  Recylex's recycling plants processed 111,000 tonnes of scrap batteries in 2016, down 7% on the 2015 volume of 120,000 tonnes.

  Weser-Metall GmbH's smelter produced 117,014 tonnes of lead in 2016, also down 7% from 125,506 tonnes in 2015.

  In spite of a favorable base of comparison owing to the maintenance shutdown in the first half of 2015 (no maintenance shutdowns took place in 2016) and the uptrend in lead prices, particularly in the second half of 2016, this decline was chiefly attributable to the slower pace of production in 2016 owing to the evolution of the feeding mix and the Group's selective purchasing policy.

  Despite these factors, the Lead segment recorded an IFRS operating income before non- recurring items of €3.7 million in 2016, compared with a loss of €13.5 million in 2015. The Lead segment's restated12016 operating income before non-recurring items came to

  €3.2 million, compared with a loss of €11.2 million in 2015.

  This strong improvement in the segment's financial performance largely reflected (in descending order of importance):

  • the non-cash effects arising from differences between the value of the lead sold (indexed to the lead price at the time of the sale) and its carrying amount in the inventories (indexed to the average lead price since the beginning of the year)

  • the positive impact arising from the absence of maintenance shutdown at Weser- Metall GmbH in 2016 (no shutdown in 2016 compared with one shutdown in 2015),

  • improvement in the segment's margins.

    Overall, the earnings improvement in the second half of 2016-especially during the fourth quarter-more than offset the operating loss recorded in the first half of 2016.

    Given the segment's performance and brighter outlook, the Group reversed €4.9 million in provisions for the impairment of assets.

    The Recylex Group finalized in December 2016 a €67 million financing6for its German subsidiaries from a consortium of banks. The purpose of these funds is to cover the identified requirements of the Group's operations in Germany, including construction of the new reduction furnace at Nordenham (Germany). This large-scale production project aims to generate sustained profitability in the Lead segment by significantly increasing the extent to which materials' metal content can be recovered internally. It is scheduled to be commissioned in the second quarter of 2018.

    6 See the press release dated December 29, 2016.

• Zinc segment (19% of 2016 sales)

With 173,700 tonnes of electric arc furnace dust processed, Waelz oxide production at the Group's two facilities (Harz-Metall GmbH in Germany and 50%-owned Recytech SA in France) totaled 72,600 tonnes in 2016, compared with the 65,900 tonnes of Waelz oxide produced in 2015 from a dust processing volume of 164,300 tonnes. Production volumes rose by 10% from their 2015 levels owing to a favorable base of comparison linked to the maintenance shutdown at Harz-Metall GmbH's smelter in 2015 (no such shutdown in 2016).

Zinc oxide production by the Norzinco GmbH subsidiary totaled 23,780 tonnes in 2016, up 4% from 22,940 tonnes in 2015.