Polytec Holding AG

Interim / Quarterly Report • Aug 10, 2017

HALF YEAR FINANCIAL REPORT H1 2017

AT 0000 A00XX9

KEY FIGURES HALF YEAR 2017

Key figures by half year	Unit	H1 2017	H1 2016	Change
Sales	EUR m	348.3	326.3	6.7%
EBITDA	EUR m	45.1	33.0	36.6%
EBITDA margin (EBITDA/sales)	%	12.9	10.1	2.8% points
EBIT	EUR m	31.3	20.3	54.4%
EBIT margin (EBIT/sales)	%	9.0	6.2	2.8% points
Earnings after tax	EUR m	22.6	13.0	74.2%
Earnings per share	EUR	1.01	0.57	77.2%
Investments in tangible assets	EUR m	14.1	18.8	-25.0%
Equity ratio (equity/balance sheet total)	%	39.3	34.5	4.8% points
Net working capital (NWC)	EUR m	65.9	57.4	14.8%
Average capital employed	EUR m	289.8	280.8	3.2%
Net financial debt (+)/assets (-)	EUR m	82.0	105.8	-22.5%
Employees (incl. leasing personnel) - end of period	FTE	4,563	4,343	5.1%

Key figures quarterly	Unit	Q3 2016	Q4 2016	Q1 2017	Q2 2017
Sales	EUR m	155.6	168.5	178.3	170.0
EBITDA	EUR m	20.0	27.0	22.8	22.3
EBITDA margin (EBITDA/sales)	%	12.9	16.0	12.8	13.1
EBIT	EUR m	13.5	18.6	15.9	15.4
EBIT margin (EBIT/sales)	%	8.7	11.0	8.9	9.1
Earnings after tax	EUR m	9.5	14.5	11.6	11.0
Earnings per share	EUR	0.42	0.65	0.52	0.49
Investments in tangible assets	EUR m	7.3	7.1	4.4	9.7
Equity ratio (equity/balance sheet total)	%	36.3	37.9	38.4	39.3
Net working capital (NWC)	EUR m	56.5	40.1	54.7	65.9
Capital empolyed	EUR m	287.9	276.2	289.0	303.4
Net financial debt (+)/-assets (-)	EUR m	96.7	69.9	70.6	82.0
Employees (incl. leasing personnel) - end of period	FTE	4,261	4,427	4,483	4,563

GROUP SALES BY CUSTOMERS

compared to previous year

■ H1 2017

Group sales split showing the largest customers in period from January to June 2017 (red), compared to H1 2016 (grey), values in %

SALES & EBIT MARGIN

Comparision of the group sales and EBIT margin in the previous four quarters with Q2 2017

HALF YEAR FINANCIAL REPORT 2017

This interim consolidated fi nancial statement has not been subject to an audit or a review.

KEY FIGURES	02
GROUP MANAGEMENT REPORT	05
AUTOMOTIVE INDUSTRY DEVELOPMENTS	06
GROUP RESULTS	07
EMPLOYEES	08
CAPITAL EXPENDITURES AND KEY FINANCIAL FIGURES	08
RISKS AND UNCERTAINTIES	09
MATERIAL TRANSACTIONS WITH RELATED COMPANIES AND PERSONS	09
OUTLOOK	09
INTERIM CONSOLIDATED FINANCIAL STATEMENT ACCORDING TO IAS 34	10
CONSOLIDATED INCOME STATEMENT	11
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	11
CONSOLIDATED BALANCE SHEET	12
CONSOLIDATED CASH FLOW STATEMENT	13
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	14
SELECTED DISCLOSURES	14
SHARE AND INVESTOR RELATIONS	16
POLYTEC SHARE PRICE DEVELOPMENT	17
KEY SHARE FIGURES	17
17TH ORDINARY ANNUAL GENERAL MEETING	18
SHAREHOLDER STRUCTURE	18
RESEARCH COVERAGE	18
STATEMENT OF ALL LEGAL REPRESENTATIVES	19

GROUP MANAGEMENT REPORT H1 2017

AUTOMOTIVE INDUSTRY DEVELOPMENTS

In pieces	H1 2017	H2 2016	Change
China	10,929,100	10,618,600	2.9%
USA	8,401,700	8,598,300	-2.3%
European Union	8,210,900	7,844,300	4.7%
Japan	2,346,600	2,132,700	10.0%
India	1,530,900	1,420,300	7.8%
Brazil	993,100	952,300	4.3%
Russia	718,500	672,100	6.9%

REGISTRATIONS OF NEW CARS IN THE MAJOR INTERNATIONAL MARKETS

The worldwide car market continued to grow during the first half of 2017 and in absolute numerical terms China again led the global new registration statistic. However, as compared to the same period of last year it demonstrated only slight growth of around three per cent (H1 2016: 12.0%). The EU states showed healthy growth impetus with expansion of 4.7%, while the decline in sales of light vehicles (cars and light trucks) in the USA was prolonged. The Japanese market displayed double-digit growth. In spite of a fall in sales in June 2017, overall the Indian market was at a record level. Moreover, the pleasing trend of past months was maintained in Russia and Brazil.

REGISTRATIONS OF NEW CARS IN THE EUROPEAN UNION

In pieces	H1 2017	Share	H2 2016	Share	Change (piece)
Germany	1,787,000	21.8%	1,733,800	22.1%	3.1%
United Kingdom	1,401,800	17.1%	1,420,600	18.1%	-1.3%
Italy	1,136,300	13.8%	1,034,400	13.2%	8.9%
France	1,135,300	13.8%	1,102,400	14.1%	3.0%
Spain	667,500	8.1%	623,200	7.9%	7.1%
Other EU countries	2,083,000	25.4%	1,929,900	24.6%	7.9%
EUROPEAN UNION	8,210,900	100%	7,844,300	100%	4.7%

New car registrations in the EU during the first half of 2017 were some 367,000 higher than in the same period of the preceding year. Italy demonstrated particularly strong growth and in terms of absolute figures remained slightly ahead of France. Conversely, although new car registrations in the UK during the first six months of 2017 were more than six per cent up on the 2016 figure, sales in the first halfyear as a whole were marginally lower.

As far as the registration of vehicles employing alternative drive technologies is concerned, no current data for the first half-year 2017 was available on the editorial closing date of this report at the beginning of August.

REGISTRATIONS OF NEW COMMERCIAL VEHICLES IN THE EUROPEAN UNION

In pieces	H1 2017	Share	H2 2016	Share	Change (piece)
Light commercial vehicles <=3.5 t	1,015,000	83.1%	969,700	82.7%	4.7%
Medium commercial vehicles >3.5 t to <=16 t	35,000	2.9%	35,000	3.0%	0.0%
Heavy commercial vehicles >16 t	151,900	12.4%	148,600	12.7%	2.2%
Medium and heavy buses & coaches >3.5 t	19,900	1.6%	19,200	1.6%	3.8%
EUROPEAN UNION	1,221,800	100%	1,172,500	100%	4.2%

New commercial vehicle registrations in the EU during the first half of 2017 increased by 4.2% to over 1.22 million units (H1 2016: 1.17 million). In the five most important markets, with 14.2% Spain showed by far the strongest expansion. Italy demonstrated growth of 8.7%, followed by France with 6,0% and Germany with 2.1%. The UK market failed to mirror this trend and during the first six months of the year was down by 2.7%.

Sources: German Automotive Industry Association (VDA), European Automobile Manufacturers Association (ACEA)

GROUP RESULTS

In EUR m	Q2 2017	Q2 2016	Change	H1 2017	H1 2016	Change
Sales	170.0	168.9	0.6%	348.3	326.3	6.7%
EBITDA	22.3	17.6	26.7%	45.1	33.0	36.6%
EBIT	15.4	10.9	41.2%	31.3	20.3	54.4%
Earnings after tax	11.0	7.1	55.1%	22.6	13.0	74.2%
EBITDA margin (EBITDA/sales)	13.1%	10.4%	2.7% points	12.9%	10.1%	2.8% points
EBIT margin (EBIT/sales)	9.1%	6.5%	2.6% points	9.0%	6.2%	2.8% points
Earnings per share (in EUR)	0.49	0.31	58.1%	1.01	0.57	77.2%

In the first six months of 2017, the consolidated sales of the POLYTEC GROUP rose by 6.7% to EUR 348.3 million (H1 2016: EUR 326.3 million). Revenues from parts and other sales from serial production, tooling and engineering were all higher than in the comparable half-year of 2016.

Group EBITDA in the first half of 2017 amounted to EUR 45.1 million, which represented growth of 36.6% and was therefore considerably above the level of the same period of the previous year (EUR 33.0 million). The EBITDA margin increased from 10.1% to 12.9% and in the first six months of 2017, POLYTEC GROUP EBIT was raised by 54.4% to EUR 31.3 million (H1 2016: EUR 20.3 million). The EBIT margin also improved by 2.8 percentage points to 9.0% (H1 2016: 6.2%).

The material ratio increased slightly by 0.4 percentage points to 47.8% (H1 2016: 47.4%). This was due mainly to an altered product mix in combination with a larger project volume and, to a lesser extent, higher raw material prices.

As compared to the same period of 2016, the personnel ratio was down by 2.6 percentage points to 31.3% (H1 2016: 33.9%). This fall resulted from an uncustomary, additional funding obligation of around EUR 2.9 million for a pension fund in the second quarter of the previous year, increased efficiency and a higher degree of automation, which reduced personnel expenses.

The financial result totalled minus EUR 1.3 million (H1 2016: minus EUR 2.5 million). The interest expense was reduced through the issue of new promissory note bonds. This is subject to markedly improved conditions and at the end of March 2017 was employed for the repayment of all the variable parts of the promissory note bonds from 2014. The group tax rate at the end of H1 2017 totalled 24.6%, which owing to a favourable country mix was 2.3 percentage points lower than in the first half of last year.

In the first six months of 2017, the POLYTEC GROUP generated a net profit of EUR 22.6 million, which was EUR 9.6 million, or 74.2%, higher than the comparable figure for 2016. Earnings per share rose from EUR 0.57 to EUR 1.01.

SALES BY MARKET AREAS

In EUR m	Q2 2017	Share	Q2 2016	H1 2017	Share	H1 2016
Passenger cars	110.2	64.8%	111.5	227.6	65.4%	215.0
Commerical vehicles	42.1	24.8%	37.8	85.0	24.4%	74.2
Non-automotive	17.7	10.4%	19.7	35.7	10.2%	37.1
POLYTEC GROUP	170.0	100%	168.9	348.3	100%	326.3

As compared to the same period of the previous year, sales in the passenger car market area, which with 65.4% represents the strongest area within the POLYTEC GROUP, were up by around 5.9% at EUR 227.6 million (H1 2016: EUR 215 million). Sales in the commercial vehicles market area (24.4%) during the period from January to June 2017 were also notably higher than in the same period of 2016, increasing by 14.6% to EUR 85.0 million. Sales in the non-automotive market area (10.2%) fell by 3.8% to EUR 35.7 million and were therefore slightly lower than in the successful, comparable period from January to June 2016.

SALES BY CATEGORY

In EUR m	Q2 2017	Share	Q2 2016	H1 2017	Share	H1 2016
Parts and other sales	152.3	89.6%	155.9	312.8	89.8%	302.3
Tooling and engineering sales	17.7	10.4%	13.0	35.5	10.2%	24.0
POLYTEC GROUP	170.0	100%	168.9	348.3	100%	326.3

Tooling and engineering sales are subject to cyclical fluctuations and in the first half of 2017 they increased markedly by 67.6%, or EUR 11.5 million, over the same period in the preceding year. This was due to the fact that in 2016 delays occurred to the progress of various projects at individual large customers.

In the second quarter of 2017, revenues from parts and other sales amounted to EUR 152.3 million but were lower than in the first quarter of 2017 at EUR 160.5 million. However, in total the serial production sales during the first half-year 2017 were 3.5% up on the 2016 figure.

SALES BY REGION

In EUR m	Q2 2017	Share	Q2 2016	H1 2017	Share	H1 2016
Austria	5.0	2.9%	4.5	10.9	3.1%	9.5
Germany	95.8	56.4%	90.8	193.9	55.7%	176.5
Other EU countries	59.1	34.8%	64.1	121.7	34.9%	122.7
Other countries	10.1	5.9%	9.5	21.8	6.3%	17.6
POLYTEC GROUP	170.0	100%	168.9	348.3	100%	326.3

EMPLOYEES

Full-time equivalents of employees incl.	End of period			Average period
leasing personnel (FTE)	30.06.2017	30.06.2016	Change	H1 2017	H1 2016	Change
Austria	531	578	-47	525	563	-38
Germany	2,231	2,237	-6	2,195	2,245	-50
Other EU countries	1,617	1,352	265	1,600	1,292	308
Other countries	184	176	8	180	169	11
POLYTEC GROUP	4,563	4,343	220	4,500	4,269	231

By the end of the first six months of 2017, group workforce numbers (including leasing personnel) had risen by 5.1%, or 220 employees. Personnel numbers in the highwage nations fell, but increased in the bestcost countries. This was due mainly to the acquisition in October 2016 of the POLYTEC Komló Kft. company in Hungary, which employs roughly 200 people.

CAPITAL EXPENDITURES AND KEY FINANCIAL FIGURES

INVESTMENTS

In EUR m	Q2 2017	Q2 2016	Change	H1 2017	H1 2016	Change
Investments in tangible assets	9.7	8.6	12.8%	14.1	18.8	-25.0%

Additions to tangible assets in the first half of 2017 amounted to EUR 14.1 million (H1 2016: 18.8 million). In particular investment focused on the Telford location in the English Midlands, where work commenced on a new painting plant, and on enlargements at the Chodová Planá plant in the Czech Republic.

KEY FINANCIALS

The key financial figures are presented together with the figures from the last balance sheet date of 31 December 2016 as follows:

	Unit	30.06.2017	31.12.2016
Equity	EUR m	202.5	189.9
Equity ratio (Equity/balance sheet total)	%	39.3	37.9
Net working capital (NWC) 1)	EUR m	65.9	40.1
NWC/sales	%	9.8	6.2
Net debt (+)/assets (-)	EUR m	82.0	69.9
Net debt/EBITDA	-	0.90	0.87
Gearing (Net debt/equity)	-	0.40	0.37
Capital employed	EUR m	303.4	276.2
ROCE before tax (EBIT/Capital employed)	%	21.9	19.1

1) Net working capital = current assets less current liabilities

As compared to the December 31, 2016 balance sheet date, by the end of the first half of 2017, the group's total assets were up by EUR 14.1 million at EUR 515.5 million. In spite of a dividend payment at the end of May 2017 of around EUR 8.8 million (2016: EUR 6.6 million), the equity ratio rose by 1.4 percentage points to 39.3%. At EUR 82.0 million, net debt was EUR 12.1 million higher than on the December 31, 2016 balance sheet date, which was due largely to the dividend payment.

Owing to the increase in business volume and seasonal factors, at the end of the first half of 2017, net working capital had risen to EUR 65.9 million and was therefore EUR 25.8 million higher than on December 31, 2016.

At 0.90, the ratio of net debt to EBITDA key figure (which reflects the fictive duration of debt repayment) remained stable at the level of the December 31, 2016 balance sheet date. The gearing ratio stayed at a low level although it rose marginally from 0.37 to 0.40. ROCE (return on capital employed) in the first half of 2017 was 2.8 percentage points up on the ROCE for the 2016 financial year at 21.9% and was therefore well above the targeted figure of at least 15%.

RISKS AND UNCERTAINTIES

No significant effects upon the POLYTEC GROUP's operative business that could be attributed to the result of the BREXIT vote, or national or international developments were evident either prior to June 30, 2017 or the closing date of this report at the beginning of August 2017. Which other possible risks and uncertainties, such as the alleged cartel agreements among the German automotive manufacturers emerged at the end of July 2017, might possibly have an influence in future upon the sales and earnings curve of the POLYTEC GROUP cannot be estimated at present.

As far as risk reporting is concerned, we would refer to the information included in section G.2 of the notes to the consolidated financial statements in the annual report for 2016.

MATERIAL TRANSACTIONS WITH RELATED COMPANIES AND PERSONS

As compared to December 31, 2016, there were no material changes regarding business dealings with related companies and persons and therefore reference should be made to the notes to the consolidated financial statements of POLYTEC Holding AG as at December 31, 2016.

OUTLOOK

Based on the assumption of a stable economic situation and positive business development among all its major customers, at a minimum the POLYTEC GROUP executive management foresees slight growth in both group sales and operating results in the 2017 financial year.

INTERIM CONSOLIDATED FINANCIAL STATEMENT ACCORDING TO IAS 34

This interim consolidated fi nancial statement has not been subject to an audit or a review.

CONSOLIDATED INCOME STATEMENT

for the period from 1 January to 30 June 2017 and the period from 1 April to 30 June 2017 compared to the figures from the previous year

In EUR k		H1 01.01. - 30.06.	Q2 01.04. - 30.06.
	2017	2016	2017	2016
Net sales	348,267	326,279	169,999	168,912
Other operating income	2,392	2,035	1,548	1,099
Changes in inventory of finished and unfinished goods	2,829	-21	910	-954
Own work capitalised	606	897	278	404
Expenses for materials and services received	-169,143	-154,613	-81,813	-79,658
Personnel expenses	-109,921	-110,7091)	-54,364	-56,4551)
Other operating expenses	-29,938	-30,8531)	-14,277	-15,8051)
Result from companies accounted for using the equity method	0	105	0	39
Earnings before interest, taxes and depreciation (EBITDA)	45,091	33,018	22,280	17,580
Depreciation	-13,757	-12,726	-6,851	-6,651
Earnings before interest and taxes = operating result (EBIT)	31,334	20,291	15,429	10,929
Interest result	-1,502	-1,962	-525	-943
Other financial result	162	-547	-6	-202
Financial result	-1,340	-2,509	-531	-1,145
Earnings before tax	29,994	17,783	14,898	9,784
Taxes on income	-7,371	-4,792	-3,869	-2,672
Earnings after tax	22,624	12,991	11,030	7,112
thereof result of non-controlling interests	-398	-377	-185	-196
thereof result of the parent company	22,226	12,613	10,845	6,916

Earnings per share in EUR 1.01 0.57 0.49 0.31

1) Previous year adjusted: the expenses for leasing personnel disclosed under other operating expenses were reclassified as personnel expenses.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

01.01. - 30.06.2017 In EUR k	Group	Non controlling interests	Total
Earnings after tax	22,226	398	22,624
Currency translations	-1,221	0	-1,221
Total comprehensive income	21,004	398	21,402
01.01. - 30.06.2016 In EUR k	Group	Non controlling interests	Total
Earnings after tax	12,613	377	12,991
Currency translations	-1,561	0	-1,561

CONSOLIDATED BALANCE SHEET AS OF 30.06.2017

Compared to the figures from the balance sheet date as of 31 December 2016

	ASSETS (in EUR k)	30.06.2017	31.12.2016
	A. Non-current assets:
I.	Intangible assets	2,362	2,368
II.	Goodwill	19,180	19,180
III.	Tangible assets	224,093	224,192
IV.	Other non-current assets	126	126
V.	Other long-term receivables	372	556
VI.	Deferred tax assets	10,062	12,254
		256,196	258,678

	B. Current assets:
I.	Inventories	59,512	55,834
II.	Trade accounts receivable	65,641	49,791
III.	Receivables from construction contracts	43,381	35,862
IV.	Other current receivables	14,808	17,196
V.	Income tax receivables	577	397
VI.	Current interest-bearing receivables	4,248	4,149
VII.	Cash and cash equivalents	71,150	79,540
		259,317	242,770
		515,513	501,448

	EQUITY AND LIABILITIES (in EUR k)	30.06.2017	31.12.2016
	A. Shareholder's equity:
I.	Share capital	22,330	22,330
II.	Capital reserves	37,563	37,563
III.	Treasury stock	-1,855	-1,855
IV.	Retained earnings	147,341	133,913
V.	Other reserves	-9,538	-8,316
		195,841	183,635
VI.	Non-controlling interests	6,687	6,289
		202,528	189,924

	B. Non-current liabilities:
I.	Non-current, interest-bearing liabilities	133,408	128,837
II.	Provision for deferred taxes	1,098	917
III.	Provisions for personnel	27,922	27,789
IV.	Other long-term liabilities	8,577	10,198
		171,005	167,741

	C. Current liabilities:
I.	Current interest-bearing liabilities	23,994	24,795
II.	Liabilities on income taxes	5,701	6,752
III.	Trade accounts payable	46,469	50,603
IV.	Liabilities from construction contracts	3,319	1,597
V.	Other current liabilities	27,870	25,832
VI.	Current provisions	34,628	34,204
		141,980	143,783
		515,513	501,448

CONSOLIDATED CASH FLOW STATEMENT

for the periode from 1 January to 30 June 2017 compared to the figures from the previous period

			01.01. - 30.06.
	In EUR k	2017	2016
	Earnings before tax	29,994	17,783
-	Income taxes	-6,188	-1,984
+(-)	Depreciation (appreciation) of fixed assets	13,757	12,659
-(+)	Result for companies accounted for at equity	0	-105
+(-)	Other non-cash expenses and earnings	33	697
+(-)	Increase (decrease) in non-current provisions for employees	133	358
-(+)	Profit (loss) from asset disposals	-224	-71
=	Consolidated cash flow from earnings	37,505	29,338
-(+)	Increase (decrease) in inventories	-4,168	315
-(+)	Increase (decrease) in trade and other receivables	-21,540	-14,467
+(-)	Increase (decrease) in trade and other payables	1,132	1,413
+(-)	Increase (decrease) in provisions	-1,150	3,347
=	Consolidated cash flow from operating activities	11,779	19,947
-	Investments in fixed assets	-15,223	-20,061
-	Investments in financial assets	0	-13
+	Payments from the disposal of intangible and tangible assets	475	657
-(+)	Increase (decrease) interest-bearing receivables and other non-current receivables	-37	8,928
=	Consolidated cash flow from investing activities	-14,784	-10,489
+	Inflows from loan financing	216	301
-	Repayments of loan financing	-2,725	-2,953
-	Repayments of real estate loans	-2,687	-2,739
-	Outflows from financial leasing agreements	-786	-5,500
+(-)	Changes in current financial liabilities	1,040	922
+	Refinancing promissory note bonds	8,500	0
-	Third party dividends	-8,798	-6,599
=	Consolidated cash flow from financing activities	-5,239	-16,568
+(-)	Consolidated cash flow from operating activities	11,779	19,947
+(-)	Consolidated cash flow from investing activities	-14,784	-10,489
+(-)	Consolidated cash flow from financing activities	-5,239	-16,568
=	Changes in cash and cash equivalents	-8,245	-7,109
+(-)	Effect from currency translations	-146	72
+	Opening balance of cash and cash equivalents	79,540	57,683
=	Closing balance of cash and cash equivalents	71,150	50,647

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

In EUR k	Share capital	Capital reserves	Treasury stock	Retained earnings	Other reserves	Shares of POLYTEC Holding AG stockholders	Non controlling interests	Total
Balance as of January 1, 2017	22,330	37,563	-1,855	133,913	-8,317	183,635	6,289	189,924
Comprehensive income after tax	0	0	0	22,223	0	22,226	398	22,624
Other results after tax	0	0	0	0	-1,221	-1,221	0	-1,221
Dividend payments	0	0	0	-8,798	0	-8,798	0	-8,798
Balance as of June 30, 2017	22,330	37,563	-1,855	147,341	-9,538	195,841	6,687	202,528

In EUR k	Share capital	Capital reserves	Treasury stock	Retained earnings	Other reserves	Shares of POLYTEC Holding AG stockholders	Non controlling interests	Total
Balance as of January 1, 2016	22,330	37,563	-1,855	104,217	-5,345	156,910	6,015	162,925
Comprehensive income after tax	0	0	0	12,613	0	12,613	377	12,991
Other results after tax	0	0	0	0	-1,561	-1,561	0	-1,561
Dividend payments	0	0	0	-6,599	0	-6,599	0	-6,599
Balance as of June 30, 2016	22,330	37,563	-1,855	110,231	-6,906	161,363	6,392	167,756

SELECTED DISCLOSURES

GENERAL INFORMATION

POLYTEC Holding AG (listed in the Commercial Registry of the City of Linz under the number FN 197646 g) is an Austrian holding company, which together with its subsidiaries is mainly operating in the automotive and plastics industry.

ACCOUNTING AND EVALUATION METHODS

This interim report as of June 30, 2017 was compiled pursuant to the legal provisions of International Financial Reporting Standards (IFRS), and more specifically, in conformity with IAS 34 (interim reports). The same accounting and evaluation methods adopted on December 31, 2016 were applied to this report. This interim report does not include all information and data contained in the consolidated financial statements as of December 31, 2016 of POLYTEC Holding AG. Please refer to the consolidated financial statements for more information.

Reclassification was undertaken in the consolidated income statement in order to enhance its informative value. The expenses for leasing personnel were transferred from the item "Other operating expenses" to "Personnel expenses". Above all, disclosure as personnel expense is correct owing to the fact that during operating procedures no differentiation is made between company and leasing personnel in the POLYTEC GROUP's calculation and business analysis of the costs of manual labour (production wages). In addition, the effective employment of leasing personnel demands extensive human resource support and the use of suitable managerial instruments. Accordingly, disclosure in the consolidated income statement is in line with internal reporting. The figures for the preceding year were adjusted appropriately.

SCOPE OF CONSOLIDATION

The consolidated financial statement includes all major Austrian and foreign companies, where POLYTEC Holding AG directly or indirectly holds a majority of voting rights. Apart from the initial inclusion of POLYTEC ESTATES UK Ltd., between January 1, 2017 and June 30, 2017, the scope of consolidation remained unchanged. Consequently,

49 companies are now fully consolidated of which 38 are international.

ACQUISITIONS 2016

In the first half-year of 2017, there were no changes in the valuations related to acquisitions in 2016. For further information, reference should be made to the an-

EQUITY

At the 17th Annual General Meeting on May 22, 2017, a dividend of EUR 8.8 million (previous year EUR 6.6 million) was agreed unanimously and paid out on May 31, 2017. This corresponds with a dividend of EUR 0.40 per eligible share (previous year EUR 0.30).

nual report for 2016.

DEBT CAPITAL

On March 30, 2017, the entire variable percentage of the 2014 promissory note bonds amounting to EUR 36,500 k was repaid prematurely and refinanced with the issue of new promissory note bonds to the value of EUR 45,000 k. This was again issued in four instalments with terms of five and seven years and respective fixed and floating interest rates. The cancelled instalments were redeemed directly by the arranger of the new promissory note bonds, whereby POLYTEC Holding AG only received the mark-up sum.

MATERIAL TRANSACTIONS WITH RELATED COMPANIES AND PERSONS

There were no material changes regarding business transactions with companies and persons as compared to December 31, 2016 and therefore in this regard reference should be made to the notes contained in the consolidated financial statements of POLYTEC Holding AG as at December 31, 2016.

BUSINESS SEASONALITY

The quarterly reporting of POLYTEC GROUP's sales throughout one financial year strictly correlates to the car manufacturing operations of the Group's customers. For this reason, quarters in which customers normally close for works holidays generally have lower rates of sales turnover than quarters without such effects. In addition to this, sales from one quarter can also be influenced by the billing of large tooling or engineering projects.

SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD

No significant events have occurred after June 30, 2017.

SHARE & INVESTOR RELATIONS

POLYTEC SHARE PRICE DEVELOPMENT

KEY SHARE FIGURES

	Unit	H1 2017	Change	H1 2016	H1 2015
Closing price last trading day of period	EUR	16.49	124.7%	7.34	7.88
Highest closing price during period	EUR	18.38	124.4%	8.19	8.45
Lowest closing price during period	EUR	10.40	56.4%	6.65	6.20
Market capitalisation last day of period	EUR m	368.2	124.7%	163.9	176.0
Earings per share	EUR	1.01	77.2%	0.57	0.53

The POLYTEC share (ISIN: AT0000A00XX9) started the stock exchange year on January 2, 2017 at closing price EUR 10.40. This was the lowest closing price during the whole reporting period and even beyond. During the fi rst six months of the year, the price of the share developed in an extremely positive manner and on June 30, 2017 it closed at EUR 16.49. The absolute increase in value of EUR 6.09 corresponded with performance of about 58.6%. In the Vienna Stock Exchange's performance rating list, which contains 73 titles, the POLYTEC share was ranked third. On the fi nal stock exchange trading day of the second quarter of 2017, market capitalisation amounted to EUR 368.2 million, which represented the 35th place among the 39 Viennese Prime Market stocks. On May 16, 2017, the closing price of the POLYTEC share reached a high for the period of EUR 18.38, which also represented the best fi nal quotation since the IPO at the end of April 2006. In the fi rst half of 2017, the STOXX® Europe 600 Automobile & Parts lost 2.5% of its value and closed on June 30 with a low for the period of 537.

In the fi rst six months of 2017, money turnover relating to the POLYTEC share on the Vienna Stock Exchange involved roughly EUR 131.4 million (H1 2016: EUR 31.9 million) and share turnover of 9.2 million shares (H1 2016: 4.3 million). During the 123 trading days, an average of 74,432 POLYTEC shares were traded daily, as opposed to 35,308 in the preceding year. Both fi gures are based on double counting. Due to the publication of the preliminary results for the 2016 fi nancial year, the highest trading level was reached on January 24, 2017, with 366,794 POLYTEC share contracts and on January 23, with 253,550, (double counting).

17TH ORDINARY ANNUAL GENERAL MEETING ON 22 MAY 2017

The 17th Annual General Meeting of POLYTEC Holding AG took place on Monday, May 22, 2017 at group headquarters in Hörsching. The shareholders and shareholder representatives attending voted unanimously for the payment of a dividend for the 2016 financial year of 0.40 per eligible share, which corresponded with a total amount of about EUR 8.8 million.

All the members of the POLYTEC Holding AG

Board of Directors and Supervisory Board incumbent in 2016 were granted respective unanimous discharge. The resolution proposing that remuneration of EUR 98,750.00 be paid to the members of the Supervisory Board in the 2016 financial year was also passed unanimously.

The AGM elected KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft, 4020 Linz, Austria as the auditors for the financial statements and the consolidated financial statements for the 2017 financial year.

The detailed voting results can be downloaded from the company website, www.polytec-group.com from the Investor Relations section under the heading Annual General Meeting.

SHAREHOLDER STRUCTURE

As at the June 30, 2017 closing date, POLYTEC Holding AG's share capital remained unaltered at EUR 22.3 million divided into 22,329,585 bearer shares. On the reporting date, POLYTEC Holding AG held 334,041 treasury shares, which was an unchanged figure and represented roughly 1.5% of share capital. The Huemer Group continued to hold approximately 29.0% (16.0% Huemer Holding GmbH and 13.0% Huemer Invest GmbH) of POLYTEC Holding AG share capital. On April 10, 2017, POLYTEC Holding AG received a notification that with effect from 7 April 2017, NN Group N.V., Amsterdam (Netherlands) had purchased all the shares of the Amsterdam-based Delta Lloyd N.V. (Netherlands) and its affiliated companies. Therefore, from April 7, 2017 onwards, the entire POLYTEC Holding AG shares held by Delta Lloyd N.V. and its affiliated companies are to be classified as being under NN Group N.V. ownership. According to own information, as at 7 April 2017 NN Group N.V. held 1,400,000 POLYTEC Holding AG shares, which represented or 6.27% of share capital. On April 11, 2017, POLYTEC Holding AG issued a notification to this effect in accordance with § 93 Para. 2 Austrian Stock Exchange Act.

As at the editorial closing date of this report at the beginning of August 2017, on the basis of the issued shares, the shareholder structure of POLYTEC Holding AG had the following form:

RESEARCH COVERAGE

The financial institutions listed below publish reports on POLYTEC GROUP and the recommendations and price targets up to the editorial closing date of this report at the beginning of August 2017 were as shown in the table. The current recommendations and price targets can be called up from the company website at www.polytec-group.com in

Institute	Recommendation	Latest price target
BAADER Helvea Equity Research	BUY	EUR 21.00
ERSTE Group Research	HOLD	EUR 19.00
M.M.Warburg Research	BUY	EUR 21.00
Raiffeisen CENTROBANK Research	HOLD	EUR 15.50

the Investor Relations, Share and Research section.

STATEMENT OF ALL LEGAL REPRESENTATIVES PURSUANT TO SECTION 87 PARA. 1 PT. 3 AUSTRIAN STOCK CORPORATION ACT

We confirm to the best of our knowledge that the condensed interim financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group as required by the applicable accounting standards and that the group management report gives a true and fair view of important events that have occurred during the first six months of the financial year and their impact on the condensed interim financial statements, and of the principal risks and uncertainties for the remaining six months of the financial year and of the major related party transactions to be disclosed.

This interim consolidated financial statement has not been subject to an audit or a review.

Hörsching, August 10, 2017

The Board of Directors of POLYTEC Holding AG

FRIEDRICH HUEMER CEO, Chairman of the Board of Directors

Responsibilities: M&A, Investment Management, Corporate Strategy, Corporate Communications, Legal Affairs

MARKUS HUEMER COO, Vice Chairman of the Board of Directors

Responsibilities: Business Development, Plants, Production, Purchasing, HR, IT

ALICE GODDERIDGE CSO, Member of the Board of Directors

Responsibilities: Sales & Engineering (Sales, Marketing, Development)

PETER HAIDENEK CFO, Member of the Board of Directors

Responsibilities: Finance, Controlling, Accounting, Investor Relations, Internal Audit The Interim Report Q3 2017 to be published November 7, 2017.

Current news see online in the section Investor Relations of corporate website www.polytec-group.com

Contact:

POLYTEC Holding AG, Paul Rettenbacher, Head of Investor Relations, Polytec-Strasse 1, 4063 Hörsching, Austria; T +43 7221 701-292; paul.rettenbacher@polytec-group.com

Note:

This interim consolidated financial statement has not been subject to an audit or a review. This interim report has been prepared with the greatest possible care and every effort has been made to ensure the accuracy of the data that it contains. Nevertheless, rounding, typographical and printing errors cannot be excluded. The use of automatic calculating devices can result in rounding-related differences during the addition of rounded amounts and percentages. This interim report contains assessments and assertions relating to the future made on the basis of all the information currently available. Such future-related statements are usually introduced with terms such as "expect", "estimate", "plan", "anticipate", etc. We would draw your attention to the fact that various factors could cause actual conditions and results to deviate from the expectations outlined in this report. This interim report is published in German and English. In cases of doubt, the German version shall take precedence. This half year financial report 2017 was published on August 10, 2017.

Imprint:

Editor: POLYTEC Holding AG; VAT identification number: ATU49796207; LEI: 529900OVSOBJNXZACW81; Commercial Register: FN 197676 g, Commercial Court Linz; Polytec-Strasse 1, 4063 Hörsching, Austria; T +43 7221 701-0; Board of Directors: Friedrich Huemer, Markus Huemer, Alice Godderidge, Peter Haidenek; Chairman of the Supervisory Board: Fred Duswald; Photos: © POLYTEC Holding AG; Typesetting: Ingeborg Schiller Grafik-Design, Salzburg; www.polytec-group.com

PASSION CREATES INNOVATION www.polytec-group.com