Preliminary results of Ergis Group in 2017: Highest sales in history, results influenced by a growth of labour costs and prices of raw materials

ERGIS Group, the leader of plastics processing in Central and Eastern Europe, has published preliminary financial results for 2017. The Group recorded a record high revenue of PLN 750.6 million (increase of 7.8%), EBITDA level reached PLN 56.6 million (decrease of 5.4%), operating resultsamounting to PLN 32.9 million (decrease of 6.6%) and net profit of PLN 20.5 million (decrease of 13.9%).

The values of EBITDA and profit in 2017 are burdened with an increase in remuneration costs in the Group - by PLN 7.2 million (compared to 2016). The situation on raw materials market also adversely affected the level of realized margins. The results of sales of hard foil and laminates for food packaging had a negative impact on the presented results - in Q4 the realized EBITDA was PLN 2.5 million lower than in the fourth quarter of 2016. The EBITDA realized on the sale of soft PVC foil was also lower by PLN 1.7 million. The company has fully implemented its plans for the amount of EBITDA achieved on the sale of stretch film.

PRELIMINARY FINANCIAL RESULTS - DETAILS

Preliminary financial results of the ERGIS Group in 2017 are presented in the table below:

In 2017, we recorded a highest sales in history. Since the market introduction of nanoERGIS® film, the share of stretch film in the Group's EBITDA has been growing significantly. These positive developments, however, did not translate into an improvement of financial results due to the increase of remuneration costs and inability to transfer, in the short term, increased pricess of raw materials to the prices of finished products - particularly soft PVC films, rigid films, laminates for food packaging and flexible packaging. Currently, our priority is launching a new PET film and laminate production line planned for the first half of 2018 in our Berlin factory and investment in another production line of multi-layer stretch film in our plant in Oława, as well as further diversification of sources of supply - said Tadeusz Nowicki, President of ERGIS S.A. Management Board.

ADDITIONAL INFORMATION

The ERGIS Group, listed at the Warsaw Stock Exchange, holds the leading position in the plastics processing sector in Central and Eastern Europe. Out of its five manufacturing plants, four are situated in Poland and one in Germany. The Group`s profile includes manufacturing of packaging for food (printed multilayer laminates, and PVC and PET - based barrier films and laminates) and industrial packaging (LLDPE stretch films and PET binding tapes). Moreover, ERGIS is a manufacturer of films for packaging pharmaceuticals, hydro - insulating films and PVC compounds. In 2017 the Group`s revenue exceeded PLN 750 million.

Additional information is also available at www.ergis.eu