Pankl Racing Systems AG: 2016 Q1

Kapfenberg (pta006/09.05.2016/07:45 UTC+2) 9 May 2016

- Revenues increased by 5% versus last year
- Stable motor racing business
- Ongoing over-proportionate growth in the high performance business
- Persistently adverse environment in the helicopter business
- Strong cash generation in Q1

EURk		Q1 2016	Q1 2015	VDG
Revenues		48.829	46.719	5%
EBITDA		8.174	8.174	0%
EBIT		4.940	4.839	2%
Earnings after tax		3.619	3.977	-9%
EBITDA margin		17%	17%
EBIT margin		10%	10%

In 2016Q1, Pankl Group achieved revenues of Eur48.8m, which was an increase of 5% versus the same period last year (2015Q1: Eur46.7m). The Racing/High Performance Segment experienced growth, the Aerospace Segment continued to suffer from a difficult market environment.

In the first 3 months of the fiscal year 2016, operating earnings (EBIT) increased by 2% from Eur4.8m or 10% of revenues to Eur4.9m or 10% of revenues. The net financial results declined considerably from Eur+0.3m to Eur-1.0m. This was due to the strengthening of the Euro versus the USD and the GBP. This negative impact was partly offset by lower corporation tax expenses. In 2016Q1, earnings after taxes amounted to Eur3.6m versus Eur4.0m in the same period last year. Net earnings attributable to the shareholders of Pankl Group amounted to Eur3.7m or Eur1.19 per share (2015Q1: Eur3.7m or Eur1.18 per share).

Cash flow developed very favourably. While the previous year was characterised by an increase in working capital resulting from the high performance division growth, we were able to implement targeted optimisation measures leading to a 10% decrease (year on year) in working capital as of 31/3/2016. Taking into account capital expenditure of Eur1.9m (2015Q1: Eur3.3m) resulted in operating free cash flow of Eur8.1m (2015Q1: Eur-1.7m).

Racing/High Performance Segment
In 2016Q1, Racing/High Performance Segment revenues increased by 7% from Eur40.4m to Eur43.2m. Within the segment, growth in the high performance division was significantly higher than in the racing division. Operating earnings (EBIT) improved by Eur0.6m to Eur4.5m or 10% of revenues (2015Q1: Eur3.9m or 10% of revenues).

Aerospace Segment
In 2016Q1, Aerospace Segment revenues amounted to Eur5.7m after Eur6.3m in the same period last year. This revenues decline of 9% was due to the ongoing difficult market environment. Demand for helicopters in the offshore oil exploration and production sector continued to be depressed due to low oil prices. Operating earnings amounted to Eur0.2m or 4% of revenues versus Eur0.4m or 6% of revenues in the same period last year.

Outlook
CEO Wolfgang Plasser: "We are satisfied with the quarterly results which were slightly above our expectations. In the coming quarters we expect a slightly improving motor racing business compared to last year, but a still challenging helicopter business. In the high performance division we expect increasing volatility but also improving efficiency and productivity. In total, we anticipate satisfactory results for the fiscal year 2016. Preparations to build our new Kapfenberg high performance drivetrain facility are running on full speed."

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