Steico SE

Interim / Quarterly Report • Jul 22, 2016

STEICO SE 2016 Half Year Report | Summary

• • Dynamic growth in first six months
• • Record-breaking revenues and earnings

Natural building products for healthier living

The company's strategy of an "integrated timber construction system" is paying off. Increasing demand for ecological woodfiber insulation materials and the pleasing contributions to margins from the new production line for laminated veneer lumber means that the STEICO Group has recorded record-breaking revenues and earnings in H1 2016.

Revenues in the first six months were up 9.5% year-on-year, from € 92.5 million to € 101.3 million. EBITDA improved by 52.2% to € 17.5 million (previous year: € 11.5 million), and EBIT even lifted by 81.5% to € 9.8 million (previous year: € 5.4 million). Net income for the period grew by 57.9% to € 6.0 million (previous year: € 3.8 million).

Looking to the second half of the year, the company's management believes that the positive growth will continue, however the growth rates are expected to be slightly lower than in the first half of the year. Management expects that the consequences of the planned BREXIT will dampen future growth on this market. The further pace of growth also depends on the extent to which STEICO is able to penetrate new markets with laminated veneer lumber and to substitute wood for conventional building products.

The company's management is forecasting revenue growth in the upper single-digit percentage range for the year as a whole. In terms of EBIT, above average growth in the upper double-digit percentage range is forecast.

Dynamic growth in first six months

| Additional KPIs

H1 2016 H1 2015

1. Total operating revenue in € millions	€ 106.1 m	€ 91.3 m
2. EBITDA margin as a percentage of total operating revenue	16.5 %	12.6 %
3. EBIT margin as a percentage of total operating revenue	9.2 %	5.9 %
4. Equity ratio (June 30 2016 / *December 31 2015)	47.5%	49.7%*

EBITDA growth in € millions

EBT growth in € millions

EBIT growth in € millions

Consolidated net income growth in € millions

Percentage increases calculated based on rounded figures.

Company profile

STEICO develops, produces and markets ecological construction products made of renewable raw materials. STEICO is the global market leader for wood fiber insulation materials.

STEICO is positioned as a system provider for ecological residential construction and is the only manufacturer in the industry to offer an integrated wooden construction system in which insulation material and construction components supplement each other. These include flexible and stable wood fiber insulation panels, composite thermal insulation systems, insulation panels with a reinforcing effect, as well as cavity wall insulation made of wood fibers and cellulose.

The construction elements comprise I-joists and laminated veneer lumber. In addition, the STEICO group also produces fiberboard and operates in the wood trade. The Munich-based company's products are used in new construction and when renovating roofs, walls, ceilings, floors and facades. STEICO's products allow the construction of future-proof, healthy buildings with a particularly high quality of living and a healthy

atmosphere.

STEICO's products offer reliable protection against cold, heat and also noise, and they permanently improve the building's energy efficiency.

Diclaimer

This document is an abbreviated version of the German original document. The translation has been prepared with utmost care. However, only the German original document is binding.

	H1 2016	H1 2015
	€	€
1. Revenues	101,331,008.84	92,543,654.89
2. Increase (previous year: decrease) in inventories of finished goods an work in progress	4,739,570.06	-1,312,648.85
3. Other own work capitalized	19,445.37	36,643.96
	106,090,024.27	91,267,650.00
4. Other operating income	2,277,045.82	2,443,219.34
	108,367,070.09	93,710,869.34
5. Cost of materials
a) Cost of raw materials. consumables
and supplies and marchandise	-61,030,415.34	-54,504,626.06
b) Cost of purchased services	-889,787.92	-963,615.03
6. Gross profit	46,446,866.83	38,242,628.25
7. Personnel expenses
a) Wages and salaries	-13,352,302.61	-10,997,693.75
b) Social security. pension and other benefit costs	-3,158,951.41	-2,912,939.50
8. Amortization of intagible assets and depreciation of tangible assets	-7,744,483.46	-6,091,970.45
9. Other operating expenses	-12,440,715.44	-12,823,839.56
	-36,696,452.92	-32,826,443.26
10. Other interest and similar income	274,240.68	280,641.82
11. Interest and similar expenses	-788,018.88	-251,859.95
12. Net financial result	-513,778.20	28,781.87
13. Result before taxes	9,236,635.71	5,444,966,86
14. Income taxes	-2,428,706.62	-929,143.86
15. Result after taxes	6,887,929.09	4,515,823.54
16. Other taxes	-771,744.73	-759,952.47
17. Consolidated net income for the period	6,036,184.36	3,755,870.53
18. Profit carried forwards	13,954,213.73	7,799,931.23
19. Consolidated net profits	19,990,398.09	11,555,801.76

STEICO Consolidated Income Statement 01.01.- 30.06.2016

			01.01.-30.06.2016 01.01.-31.12.2015
		€	€
	I. CASH FLOW FROM OPERATING ACTIVITIES
1.	Earnings for the period (consolidated net income/loss) including earnings due to
	other shareholders	6,036,184.36	8,074,755.00
	2. +/- Amortization/depreciation of non-current assets	7,744,483.46	12,477,164.24
	3. +/- Increase/decrease in provisions	732,697.01	2,614,966.02
	4. +/- Other non-cash expense/income	-19,445.37	-58,291.68
	5. -/+ Increase/decrease in inventories. trade receivables and other assets that are not allocated to investing or financing activities	-15,293,311.58	5,062,498.35
	6. +/- Increase/decrease in trade payables and other liabilities that are not allocated to investing or financing activities	6,815,314.31	-8,391,884.12
	7. -/+ Gains/losses from the disposal of non-current assets	-76,458.70	57,508.12
	8. +/- Interest income/expense	513,778.20	79,668.19
	9. - Other income from participating interests	0.00	0.00
	10. +/- Expenses/income from extraordinary items	0.00	0.00
	11. +/- Income tax expense/income	2,528,706.62	2,598,582.14
	12. + Proceeds received from extraordinary items	0.00	0.00
	13. - Payments made from extraordinary items	0.00	0.00
	14. -/+ Income tax payments	-939,175.04	-2,089,061.52
	15. = Cash flow from operating activities	7,942,773.26	20,425,904.74
	II. CASH FLOW FROM INVESTING ACTIVITIES
1.	Proceeds received from the disposal of intangible non-current assets	0.00	0.00
	2. - Payments made for investments in intangible non-current assets	-1,512,998.95	-1,495,017.07
	3. + Proceeds received from disposals of items of property. plant and equipment	307,495.64	1,105,467.12
	4. - Payments made for investments in property. plant and equipment		-7,573,373.80 -50,202,882.63
	5. + Proceeds received from disposals of financial assets	44,394.05	61,003.60
	6. - Payments made for investments in financial assets	-4,567.80	-60,979.69
	7. + Proceeds received from disposals from the group of consolidated companies	0.00	0.00
	8. - Payments made for additions to the group of consolidated companies	0.00	0.00
	9. + Proceeds received as a result of the investment of financial assets as part of current cash management	0.00	0.00
	10. - Payments made as a result of the investment of financial assets as part of current cash management	0.00	0.00
	11. + Proceeds received from extraordinary items	0.00	0.00
	12. - Payments made from extraordinary items	0.00	0.00
	13. + Interest received	274,240.68	643,985.96
	14 + Dividends	0.00	0.00
	15. = Cash flow from investing activities		-8,464,810.18 -49,948,422.71
	III. CASH FLOW FROM FINANCING ACTIVITIES

		I. CASH FLOW FROM OPERATING ACTIVITIES
	1.	Earnings for the period (consolidated net income/loss) including earnings due to
		5. -/+ Increase/decrease in inventories. trade receivables and other assets that are not allocated to
		6. +/- Increase/decrease in trade payables and other liabilities that are not allocated to investing or
		II. CASH FLOW FROM INVESTING ACTIVITIES
		III. CASH FLOW FROM FINANCING ACTIVITIES
		nd cash e quivalents
IV. Cash a
		2. +/- Changes to cash and cash equivalents from exchange rates and the group of

	13. = Cash flow from financing activities	-2,987,529.12	29,699,477.47
	12. + Dividends paid to other shareholders	0.00	0.00
	11. + Dividends paid to shareholders of the parent company	-1,920,472.50	-1,536,378.00
	10. - Interest paid	-631,763.88	-579,414.15
	9. - Payments made from extraordinary items	0.00	0.00
	8. + Proceeds received from extraordinary items	0.00	0.00
	7. + Proceeds received from subsidies/grants received	0.00	0.00
	6. - Payments made from redeeming bonds and (financial) loans	0.00	0.00
	5. + Proceeds received from issuing bonds and taking out (financial) loans	-435,292.74	31,815,269.62
	4. - Payments made from additions to equity by other shareholders	0.00	0.00
	3. - Payments made from additions to equity by shareholders of the parent company	0.00	0.00
	2. + Proceeds received from additions to equity by other shareholders	0.00	0.00
1.	Proceeds received from additions to equity by shareholders of the parent company	0.00	0.00

	4. = Cash and cash equivalents - end of period	6,266,931.39	10,367,429.52
	3. + Cash and cash equivalents - start of period	10,367,429.52	10,091,607.97
	2. +/- Changes to cash and cash equivalents from exchange rates and the group of consolidated companies	-590,932.09	98,862.05
1.	Net change in cash and cash equivalents	-3,509,566.04	176,959.50

STEICO Consolidated cash flow statement for H1 2016

Half Year Report 2016 | Summary

STEICO Consolidated Balance Sheet as of 30.06.2016

| Assets

		30.06.2016	31.12.2015
		€	€
	A. NON-CURRENT ASSETS
	I. Intangible assets
	1. Internally generated concessions. trademarks and similar rights and assets	0.00	0.00
	2. Concessions. industrial and similar rights and assets and licenses in such rights and assets	1,343,100.66	86,733.88
	3. Advance payments	0.00	939,646.23
		1,343,100.66	1,026,380.11
	II. Property. plant and equipment
	1. Land. buildings and immovable property rights.
	including buildings on third-party land	42,000,223.86	42,654,691.68
	2. Plant and machinery	82,081,717.58	86,922,084.16
	3. Other equipment. operating and office equipment	1,695,624.99	1,623,967.82
	4. Payments on account and assets under construction	23,611,029.32	22,288,062.46
		149,388,595.75	153,488,806.12
	III. Financial assets
	1. Investments in subsidiaries and affiliated companies	502,914.66	523,236.95
	2. Loans to affiliated companies	30,447.22	71,547.19
	3. Other loans	211,700.00	212,700.00
		745,061.88	807,484.14
		151,476,758.29	155,322,670.37
	B. CURRENT ASSETS I. Inventories
	1. Raw materials. consumables and supplies	13,804,552.76	13,648,497.22
	2. Work in progress. unfinished products 3. Finished goods and goods purchased for resale	1,515,741.04 15,169,991.25	1,346,033.97 11,596,671.57
		34,711.37	3,001.00
	4. Advance payments	30,524,996.42	26,594,203.76
	II. Receivables and other assets
	1. Trade receivables	22,956,156.44	16,754,549.48
	2. Receivables from subsidiaries and affiliated companies	2,452.90	751.28
	3. Other loans	12,159,765.55	8,605,637.70
		35,118,374.89	25,360,938.46
	III. Marketable securities
	Other securities	44,555.79	11,211.25
	IV. Cash on hand and balances held with banks	6,266,931.39	10,367,429.52
		71,954,858.49	62,333,782.99
	C. PREPAID EXPENSES	2,503,545.05	682,937.13
D. Deferred	tax asse ts	1,478,084.68	1,726,954.65
		227,413,246.51	220,066,345.14

| EQUITY AND LIABILITIES

30.06.2016	31.12.2015
€	€
12,803,150.00	12,803,150.00
81,226,096.15	81,226,096.15
	7,050,000.00
	-7,599,608.67
	15,874,686.23
	109,354,323.71
1,857,387.74	1,883,785.02
1,489,531.58	509,520.62
9,346,685.01	7,921,815.10
12,693,604.33	10,315,120.74
	79,020,984.08
19,422.85	32,910.04
12,636,576.44	12,541,540.62
13,982,909.34	7,188,373.19
105,224,599.97	98,783,807.93
49,211.56	78,829.36
Other retained earnings V. Consolidated net profits 1. Provisions for pensions and similar obligations 2. Payments received on account of order	7,050,000.00 -13,126,924.31 19,990,398.09 107,942,719.92 78,585,691.34

227,413,246.51 220,066,345.14

We spend approx. 80 % of our lives in enclosed rooms. But are we always aware what we are surrounding ourselves with? STEICO has set itself the target of developing building products which consider the needs of both man and nature. Our products are therefore produced using sustainable natural materials. They help reduce energy use and add considerably to a natural healthy internal climate.

STEICO products carry the natureplus™ seal of approval, which is a sign of High Quality, Healthy and Functional Building products. natureplus™ ensures that products are produced from sustainable raw materials, use minimum energy and have low emissions during their manufacture, and also help fix CO2. FSC® certification also ensures a traceable and fully sustainable usage of raw materials. All this helps make STEICO the number one choice for sustainable building solutions.

natural insulation and Construction systems for new builds and renovations – Roof, Ceiling, Wall and Floor

Renewable raw materials without harmful

1-2-3...

additives Weather tight

Light and easy to handle

Insulation for healthy living

Excellent heat insulation in winter

Excellent sound protection

Strong quality control

STEICO SE • Otto-Lilienthal-Ring 30 • 85622 Feldkirchen (GER) Tel.: +49-(0)89-99 15 51-0 • Fax: +49-(0)89-99 15 51-26 Internet: www.steico.com • E-Mail: info@steico.com

Environmentally friendly and worth

Energy Saving and increased property

recyclable

Compatible insulation and structural building systems