Thrace Plastics S A : Announcement of H1 2017 Financial Results

September 08, 2017

Announcement of H1 2017 Financial Results

Friday, 8 September 2017

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The purpose of the current release is to present the Group's financial results for the first half of the current financial year 2017 and to highlight the basic factors that contributed to such.

The basic characteristics of the period are presented in synopsis below:

§ Increase in consolidated sales volume by 10.5% compared to the corresponding period of 2016 as result of the investments made for new production lines during the period 2015 - 2016. The sales volume increase was implemented in both business units of the Group (Technical Fabrics +10.7% and Packaging +9.6%).§ Increase in the value of the consolidated sales by 6.9% - the sales volume growth was not fully reflected in the value of consolidated sales as the efforts for immediate distribution of the higher production volumes, mainly in new markets, led to a more elastic pricing policy. Furthermore, there was a negative impact on turnover from the foreign exchange differences deriving from the decline of US dollar against the Euro as well as from the drop of British Pound, although to a lesser extent.§ Decrease of conversion cost as result of operation of the new machinery equipment and the outcome of actions towards further cost contraction (fixed production expenses).§ The gradual increase of raw material prices, mainly during the first quarter of the current year, impeded the Group's efforts to transfer the higher cost into the final sale price.§ As result of the latter trend, there was a pressure on the Group's Gross Profit margin by 2.1 percentage points. The particular decrease mainly derived from the Technical Fabrics Unit (contraction of margin by 2.3 percentage points) as well as from the Packaging Unit (contraction of margin by 1.1 percentage points).§ Increase in the Distribution expenses in both business units of the Group during the first half of 2017 mainly due to the aggressive expansion of the distribution activities in order to allocate the higher production volumes following the implementation of new investments.§ Increase in Administrative Expenses by 15.1% due to the significant increase in the Research & Development Expenses (R&D) which accounted for € 938 thousand during the first half of 2017 compared to € 442 thousand in the corresponding period of 2016.

More specifically, the basic financial figures of the Group during the first half of 2017 compared to the corresponding period of 2016, settled as follows:

The total Equity on 30.06.2017 amounted to € 126.3 million compared to € 122.8 million on 31.12.2016 with the Net Bank Debt standing at € 60.4 million compared to € 54.7 million on 31.12.2016. The ratio Net Bank Debt / Total Equity settled at 0.48x compared to 0.45x on 31.12.2016.

In the context of the Group's investment plan for the period 2017 - 2018, amounting to € 28.8 million, new investments of € 12.1 million were implemented in the first half of 2017.

With regard to the course in the first half of 2017, the Group's Management underlines that sales volume posted a double-digit growth compared to the corresponding period of fiscal year 2016. Despite the above, the sales volume growth has not been yet reflected into the earnings level, mainly due to the actions taken for the distribution of the higher production volumes and also due to the negative impact from the gradual increase of raw material prices as well as the delays seen in the transferring of the higher cost into the final sale price. This trend is expected to continue in the second half of the year and affect the results, however to a lower degree.

Furthermore, the prospects for the current fiscal year 2017 are directly dependent on the broader climate of uncertainty in the external environment and specifically on the impact of BREXIT as well as on foreign exchange rates. However the Group's strong capital structure in conjunction with the healthy operating and organizational structures which the Group possesses, provide the Management with the ability to effectively manage any difficulties arising and to continue the implementation of its strategic plan without any interruption.

For further clarifications or information regarding the present release you may refer to Ms Ioanna Karathanasi, Head of Investor Relations, tel.: + 30 210-9875081.

* Note

Alternative Performance Measures:During the description of the developments and the performance of the Group, ratios such as the EBIT and the EBITDA are utilized.

EBIT (The indicator of earnings before the financial and investment activities as well as the taxes): The EBIT serves the better analysis of the Group's operating results and is calculated as follows: Turnover plus other operating income minus the total operating expenses, before the financial and investment activities. The EBIT margin (%) is calculated by dividing the EBIT by the turnover.

EBITDA (The indicator of operating earnings before the financial and investment activities as well as the depreciation, amortization, impairment and taxes): The EBITDA serves the better analysis of the Group's operating results and is calculated as follows: Turnover plus other operating income minus the total operating expenses before the depreciation of fixed assets, the amortization of grants and the impairments, as well as before the financial and investment activities. The EBITDA margin (%) is calculated by dividing the EBITDA by the turnover.