Masterflex SE: Package of Measures to Increase Profitability

Gelsenkirchen (pta017/03.11.2015/10:50 UTC+1) The Executive Board of Masterflex SE has resolved an extensive package of measures today to improve profitability sustainably. The main idea is to increase revenue per employee (staff cost ratio) by reducing complexity and enhancing the efficiency of processes within the company. Taking into account normal yearly cost increases (inflation), this should lead to additional long-term savings of at least Eur 1.2 million. The aim is to achieve a double-digit operating EBIT margin again in 2016 and a staff cost ratio of less than 35% from 2017 onwards.

NOTES
The key measures are:
* Personnel changes. In addition to changes already implemented in management or project management - for instance, in the USA, France, Scandinavia and at the Novoplast Schlauchtechnik subsidiary - further streamlining will also be implemented in management structures and at a number of downstream levels. Most of the resulting non-recurring charges will be accounted for this year.
* Optimising the distribution model. The Executive Board is aiming at a more efficient use of current distribution channels - direct sales and cooperation with OEMs and technical dealers. The company's technical distribution will focus more on the advice and support of OEMs, partners and global customers. Cooperation with selected technical dealers will be developed in order to take pressure off the Masterflex Group when processing administrative orders and to increase process efficiency with a rise in revenue per order.
* Streamlining the product portfolio. The Masterflex Group has an extremely large portfolio of high-tech hoses and connection systems with over 10,000 items. The product range, which has mainly developed over time, will be increasingly controlled from a holistic return perspective. For example, it will focus more on products with strong revenue and margins.
* Structure costs: the historically established structure of the Group and processes within the company are to be designed more efficiently in the future and must entail fewer risks. An example of this is the structural adjustment already implemented in Russia, where the consolidated joint venture of the Masterflex Group was turned into an exclusive trade partnership (see press release of 2 October 2015).

With these measures, the Executive Board once again anticipates a significant double-digit EBIT margin for 2016. CEO Dr Andreas Bastin: "At the moment, we are slightly overwhelmed by the complexity of the business and particularly the wide range of products and individual solutions. This has recently had a negative impact on our efficiency. We need to remove complexity to increase this potential. Figuratively speaking, we have to make room (in the heads of employees, in the warehouse, machinery and equipment) to master the next step towards growth. We reported considerably strong growth with an average of approximately 8% in recent years. Now it is essential that we prioritise our profitability again. In the meantime, we are also considering initial steps for potential acquisitions in the hose business. This is because the market for special connections is highly fragmented and it gives us the opportunity to achieve rapid growth with good margins as a leading technological company. Our long-term goal to become market leaders on all the international markets we serve is once again reinforced as a result."

The Masterflex Group is the listed specialist in the development and manufacture of sophisticated hose and connection systems. With 12 operational units in Europe, America and Asia, the Group is represented almost everywhere in the world. Internationalisation and innovation are the drivers for growth.

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Emitter:	Masterflex SE Willy-Brandt-Allee 300 45891 Gelsenkirchen Germany
Contact Person:	Dr. Annette Littmann
Phone:	+49 209 97077-0
E-Mail:	a.littmann@masterflexgroup.com
Website:	www.MasterflexGroup.com
ISIN(s):	DE0005492938 (Share)
Stock Exchange(s):	Regulated Market in Frankfurt; Free Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart