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Masterflex SE
Earnings Release • Aug 7, 2024
276_10-q_2024-08-07_620e1989-0675-4fe8-a897-2283fa7cf0f6.pdf
Earnings Release
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RMASTERFLEX GROUP
Connecting Values
Interim Report First Half-Year 2024
Key figures
Highlights of the first six months of 2024
- Group revenue stable at EUR 51.6 million despite declining economic momentum (HI 2023: EUR 52.7 million)
- Record result thanks to profitability boost: operating EBIT margin rises from $12.9 \%$ to $14.6 \%$
- HERO@ZERO future program shows first successes
- Dividend increase to EUR 0.25 per share
- Stable order situation in medical technology, aviation, life science and specialized industries
- Full-year forecast confirmed
Masterflex at a glance
| In EUR thousand | 01.01.-30.06.24* | 01.01.-30.06.23* | Change |
|---|---|---|---|
| Consolidated revenue | 51,599 | 52,684 | $-2.1 \%$ |
| EBITDA (operating) | 10,069 | 9,371 | 7.4\% |
| EBIT (operating) | 7,508 | 6,779 | 10.8\% |
| EBIT | 7,420 | 6,647 | 11.6\% |
| EBT (operating) | 6,843 | 6,220 | 10.0\% |
| Financial result | $-66 \%$ | $-559$ | 19.0\% |
| Consolidated net income | 4,840 | 4,268 | 13.4\% |
| Consolidated earnings per share (€) | 0.50 | 0.44 | 13.6\% |
| EBIT margin (operating) | 14.6\% | 12.9\% | |
| Net return on revenue | 9.4\% | 8.1\% | |
| Employees (number) | 606 | 618 | $-1.9 \%$ |
| 30.06.24 | 31.12.23 | Change | |
| Group equity | 62,427 | 57,602 | 8.4\% |
| Consolidated balance sheet total | 96,797 | 93,691 | 3.3\% |
| Group equity ratio | 64.5\% | 61.5\% |
[^0]
[^0]: * unaudited
Content
To our Shareholders
Foreword by the Chairman of the Management Board
Masterflex Share and Annual General Meeting8
Interim Group Management Report
Business Development ..... 12
Earnings Position of the Group ..... 12
Net Assets of the Group ..... 13
Financial Position of the Group ..... 13
Employees ..... 14
Research and Development ..... 14
Opportunity and Risk Report ..... 14
Outlook ..... 14
Interim Consolidated Financial Statements ..... 15
Consolidated Statement of Financial Position ..... 15
Consolidated Statement of Income for the First Half-Year ..... 17
Consolidated Statement of Comprehensive Income for the First Half-Year ..... 18
Consolidated Statement of Income for the Second Quarter ..... 19
Consolidated Statement of Comprehensive Income for the Second Quarter ..... 20
Consolidated Statement of Changes in Equity ..... 21
Consolidated Statement of Cash Flows ..... 22
Notes to the Consolidated Financial Statements ..... 23
Notes ..... 23
Imprint ..... 27
Foreword by the Chairman of the Management Board
Dear shareholders,
The Masterflex Group continued the successful development of recent years in the first half of 2024. Although the economic conditions are not optimal, we have further increased efficiency and achieved new record figures in key earnings indicators despite a slight decline in revenue due to the economic situation. At the same time, we continued to drive the transformation of the Group to consolidate and expand our leading position in the market for hose and connection solutions.
Significant boost to profitability
Regardless of the economic situation, we were again able to significantly increase our profitability in the first half of the year. Although we had to accept a moderate decline in consolidated revenue of $2.1 \%$ to EUR 51.6 million in the first half of 2024 compared to the strong prior-year period of EUR 52.7 million, we were still able to increase our operating earnings before interest and taxes (operating EBIT) by $10.8 \%$ to EUR 7.5 million (previous year: EUR 6.8 million). Overall, we therefore achieved an operating EBIT margin of $14.6 \%$ concerning consolidated revenue, compared to $12.9 \%$ in the same period of the previous year. At EUR 4.8 million (previous year: EUR 4.3 million), consolidated net profit was $13.4 \%$ higher than in the previous year.
The slight decline in revenue compared to the previous year reflects the economic headwind in cyclical customer sectors such as mechanical and plant engineering. Activities in Asia were also slightly down on the previous year due to the economic situation and the uncertain geopolitical situation. In contrast, the aerospace, food and semiconductor sectors continued to show dynamic growth, as in previous quarters. At a regional level, the robust US economy in particular is reflected in the growth of activities in the USA.
Our extremely pleasing earnings performance is primarily the result of a strong increase in earnings in the aviation business, which was achieved through volume effects and improved efficiency. The positive business development of our US branch and the continued high earnings level of the other subsidiaries also made a significant contribution to the strong operating EBIT. Among other things, we were able to achieve further efficiency gains in production and optimizations in purchasing, which are reflected in an improved cost-of-materials ratio. We were also able to successfully counteract the higher personnel costs caused by inflation by optimizing capacity.
The pleasing earnings performance also resulted in a further strengthening of our balance sheet. Equity in the first half of 2024 amounted to EUR 62.4 million after EUR 57.6 million at the end of the 2023 financial year, resulting in a solid equity ratio of $64.5 \%$ (31 December 2023: 61.5\%) with total assets of EUR 96.8 million.
Dr. Andreas Bastin
Chief Executive Officer
New growth phase with HERO@ZERO
We have set ourselves the goal of accelerating our growth on the one hand and further expanding our profitability on the other. We are pursuing this ambition with our future programme HERO@ZERO, which essentially has two main thrusts. Our medium-term goal, which has already been communicated, is anchored under "HERO" and provides for the expansion of our profitability and growth to EUR 200 million in revenue by the end of the decade. The effects of our clearly defined return orientation with HERO, the implementation of lean management in all areas of production, sales and administration and the utilization of economies of scale are already visible in the development of our key profitability figures. We can also point to initial successes in the future dynamization of our growth via the global roll-out of our product range, new products and materials, through to the manufacture of system components and end products. With the production of tumor markers and cable protection solutions for welding robots, we manufacture high-margin system components and end products. Thanks to our solid balance sheet position in conjunction with the conclusion of a new credit facility agreement in September 2024, we are also in a position to drive non-organic growth. We have intensified our ambitions in this regard in recent months. The previous requirement remains: Any acquisitions must be value-creating and ideally further increase the level of profitability achieved to date.
With the "ZERO" part of HERO@ZERO, we are pursuing the goal of gradually transforming our business model into a circular economy by 2035. In addition to regulation, changing consumer preferences, resource scarcity, cost pressure and technological innovations are the main catalysts for the further development of our business model. Together with our partner Remondis, we have been working for some time on various projects that will enable the establishment of a circular economy system for hose and connector solutions in the future. These include various digitalization projects, such as the AMPIUS ${ }^{\circledR}$ hose management system, which lays the foundations for a closed-loop system on a digital level. AMPIUS ${ }^{\circledR}$ is the central data platform for digital hose twins and their connecting elements to provide all stakeholders in the circular economy system with the data they need at all times. We are currently working on various network projects to establish the necessary interfaces to dealers, customers, transport companies, disposal partners, etc. We are also working flat out to utilize our material, product and application expertise to create the technical prerequisites for the transition to the circular economy, particularly on the materials side. Not every source material is recyclable; we are examining our existing product portfolio for recyclability and working on new products optimized for the circular economy as well as on new recycling and processing methods together with chemical companies and scientific institutions.
Achieving the goals associated with our vision will only be possible in the long term. However, we already have the finale of our endeavours in sight:
For Masterflex, HERO@ZERO means the expansion of the business model to include a Product-as-a-Service (PaaS) offering, with predictable revenue and reduced resource consumption as well as a sustainable strengthening of our competitive position. Our customers benefit from greater transparency in the supply chain, cost-optimization, for example by acquiring a usage license, and waste reduction, which should contribute to compliance with future official regulations. The path to the circular economy is mapped out - from a regulatory perspective - but it will be a marathon rather than a sprint. However, we are convinced that we will reap the rewards of our efforts during the marathon.
Dividend increased by 25\%
Our Annual General Meeting took place on 5 July 2024 as an in-person event. In light of the successful business performance in the 2023 financial year and thanks to our leading position in hose and connection solutions with good prospects combined with a first-class balance sheet quality, we have distributed a $25 \%$ higher dividend of EUR 0.25 per share to our shareholders. This fulfills our promise to allow our shareholders to participate substantially in our business success through a regular profit distribution.
Outlook 2024
Looking ahead to the rest of 2024, we remain optimistic that we will achieve our targets for the financial year with the necessary caution given the economic conditions. Masterflex is a leading partner for hose and connection solutions for customers from a wide range of industries, which makes our business highly resilient to excessive economic fluctuations. This is also reflected in the current year. While we are still experiencing headwinds in the traditional, cyclically sensitive industries, we expect stable and robust growth in medical technology, aviation, life science and other specialized industries.
Based on the successful business performance in the first half of 2024, the Executive Board confirms the previous forecast for the 2024 financial year. Assuming that there is no substantial deterioration in either the economic situation or geopolitical uncertainties, the Executive Board continues to expect revenues in the range of EUR 100 million to EUR 107 million and EBIT in the range of EUR 12 million to EUR 15 million for 2024 as a whole.
Finally, we would like to thank the entire Masterflex team for their extraordinary performance over the past months. We would like to thank you, our shareholders, for your trust and hope that you will continue to accompany Masterflex with us into what we see as an exciting and, above all, promising future.
Yours
Dr. Andreas Bastin
Chief Executive Officer (CEO)
Masterflex Share and Annual General Meeting
Share price performance in the first half of 2024
From around the end of October 2023, participants on the international capital markets began to price in key interest rate cuts due to falling inflation rates. Accordingly, the leading international indices recorded an upward trend that continued in the first quarter and to some extent in the second quarter. However, inflation is more persistent - in the English-speaking world, it is referred to as "sticky" - than expected. The US economy is also proving robust, which is reflected in the economic data there. As a result, investors are still waiting for the Fed to cut interest rates as hoped.
The domestic economy has also proved resilient so far, with the result that this year's economic forecasts for the Federal Republic of Germany have already been raised by official sources. Despite the ongoing uncertainty about economic development, the momentum of the German DAX share index to date is therefore somewhat at odds with this. By the end of June, the DAX had risen by around $8.9 \%$ compared to the Xetra closing price on 29 December 2023. In addition, the leading German index has already reached a new record high several times this year. In the first half of the year, it stood at 18,892.90 points. The Prime All Share, which also includes the shares of Masterflex SE, rose by $7.3 \%$ in the first six months of 2024. By contrast, the MDAX share index fell by $7.2 \%$. The SDAX, an important benchmark for Masterflex shares, rose by $2.6 \%$. The MDAX and SDAX thus developed significantly less dynamically than the DAX. ${ }^{1}$
The shares of Masterflex SE opened the current stock market year 2024 on Xetra at EUR 8.40. The lowest price in the first half of the year was EUR 7.62 on 27 February. Throughout the half-year and supported by a robust business performance, the shares rose to a half-year high of EUR 11.90 on 13 June. Masterflex shares closed the first six-month cycle at EUR 11.05 on 28 June.
Based on the Xetra closing price of EUR 8.36 on 29 December 2023, the Masterflex share price rose by $32.2 \%$. Including the dividend of EUR 0.25 per share (previous year: EUR 0.20), this resulted in a total increase of $35.2 \%$ in the first half of 2024. This means that the performance of Masterflex shares in 2024 has so far significantly outperformed the selection indices (DAX, MDAX, SDAX) of Deutsche Börse.
On average, 3,624 Masterflex shares (previous year: 5,821 shares) were traded daily on all German trading centers during the reporting period.
The market capitalization of Masterflex SE as at 28 June 2024 was EUR 106.3 million with 9,618,334 total shares issued and a closing price of EUR 11.05. As at the 2023 reporting date, the market capitalization was EUR 80.4 million with the same number of shares and a closing price of EUR 8.36 (all figures based on Xetra prices).
The Masterflex share price performance in the first half of 2024 compared to the SDAX
Shareholder structure
The shareholder structure of Masterflex SE continues to be characterized by stability and constancy in the first half of 2024. Grondbach GmbH continues to hold 20.01\% of the shares in Masterflex SE. J.F. Müller \& Sohn AG holds 20.00\%. The shareholder structure continues to be characterized by family offices. 6.61\% of the shares are attributable to management. At the end of July, Lazard Frères Gestion S.A.S. reported a shareholding of 3.02\%. The company also holds around $1.40 \%$ of its own shares. The remaining $39.00 \%$ of shares are attributed to the free float (31 December 2023: 42.02\%).
Reportable shareholders (3\% or more):
The information on the shares generally relates to the most recent WpHG notifications to the company. Rounding differences may occur.
Analyst research
Masterflex SE shares are listed in the Prime Standard segment of the Frankfurt Stock Exchange and are regularly analyzed and evaluated by renowned research firms. Analyst Alexander Neuberger from Metzler Research once again recommended Masterflex shares as a buy-in for his study of 18 June 2024 and issued a price target of EUR 13.50. Miguel Lago Mascato - equity analyst at Montega AG - also gave the shares a "buy" rating and a price target of EUR 15.00 in his study dated 25 July 2024. The experts at SMC Research, which specializes in small-cap shares, also call for a price target of EUR 15.00.
Based on the closing price of the Masterflex share on 28 June 2024 of EUR 11.05, the upside potential is $22.2 \%$ to $35.7 \%$. Compared to the average analyst price target of EUR 14.50, this results in an upside potential of $31.22 \%$.
Detailed information on the reports is available to interested investors at MasterflexGroup.com in the Investor Relations/The Masterflex Share/Analyst Rating section.
Annual General Meeting 2024: Dividend increase to EUR 0.25 per share
Masterflex SE continued its dividend policy at the Annual General Meeting held on 5 July. Following the resolution of the Annual General Meeting, the dividend was increased from 20 cents to 25 cents compared to 2023. This corresponds to an increase of $25 \%$. A total of around EUR 2,404,583.50 (previous year: EUR 1,923,667) of the net retained profits was thus distributed to the shareholders of Masterflex SE. The Annual General Meeting expressed its confidence in the members of the Executive Board and the Supervisory Board of Masterflex SE for the 2023 financial year and approved all items on the agenda with large majorities. The attendance rate was $57.7 \%$ of the share capital (2023: 61.8\%).
In his speech at the Annual General Meeting, Dr Andreas Bastin, CEO of Masterflex SE, explained the HERO@ZERO program for the future. At the heart of this program is the gradual transformation of Masterflex's business model as the market leader in hose and connection systems into a circular economy by 2035. The extended focus on the second half of the product life cycle will create a new market for Masterflex with corresponding positive impetus for medium to long-term business development.
Capital market communication
The Masterflex Group maintains an open information policy towards all participants in the capital market that is synchronized in terms of time and content. Insofar as the Masterflex Group's competitive position as one of the few listed hose manufacturers permits and is not jeopardized by the disclosure of information, the most detailed data possible is made available. The aim of capital market communication is to increase awareness of Masterflex shares on the capital market by means of the highest possible degree of transparency and regular dialogue with investors, analysts and representatives of the press in order to contribute to a fair valuation of the shares. In the period under review, the Executive Board intensified contact with capital market participants at virtual, hybrid and physical roadshows and investor conferences as well as other formats. In addition, the management of Masterflex SE was in continuous dialogue with representatives of the press, investors and financial analysts as well as the financial community.
Financial Calendar 2024
| 07 August | Half-Year Report 2024 |
|---|---|
| 21 - 22 August | HIT - Hamburg Investors Days |
| 06 November | Quarterly Statement 3/2024 |
| 13 - 14 November | MKK - Munich Capital Market Conference |
The financial calendar is published on the company's website (www.MasterflexGroup.com).
Information on the Share
| ISIN code | DE0005492938 |
|---|---|
| GSIN | 549293 |
| Class of shares | Ordinary bearer shares |
| Ticker symbol | MZX |
| Bloomberg abbreviation | MZX GR |
| Reuters abbreviation | MZXG.DE |
| Market segment | Prime Standard |
| Component of the following indices | CDAX Prime All Share Index Classic All Share Index Prime Industrial Index |
| Designated Sponsor | ICF Bank AG |
| Number of shares (30 June) | $9,752,460$ |
| Number of treasury shares | 134,126 |
| Market capitalisation (28.06.) | EUR 106.3 million |
Interim Group Management Report for the first half of 2024
Business Development
In the first half of 2024, the Masterflex Group continued the successful development of recent years. Despite challenging economic conditions, it succeeded in further increasing efficiency and setting new records in the key earnings figures, although revenue declined slightly due to the economic situation.
At the same time, the Group's transformation was driven forward in order to consolidate and expand its leading position in the market for hose and connection solutions.
Business performance in the first half of 2024 was characterised by an economic headwind in cyclical customer industries such as mechanical and plant engineering, while the order situation in the aerospace, food and semiconductor sectors and other special industries was dynamic.
Earnings Position of the Group
1.1 Revenue development and incoming orders
In the half-year under review, the Masterflex Group recorded a cyclical decline in revenue of minus $2.1 \%$ to EUR 51.6 million compared with EUR 52.7 million in the same period of the previous year. The slight year-on-year decline in revenue reflects the economic headwind in cyclical customer industries such as mechanical and plant engineering, while the aerospace, food and semiconductor sectors continued to show dynamic growth.
From a regional perspective, activities in Asia were slightly down on the previous year due to the economic situation and the uncertain geopolitical situation. In contrast, activities in the USA showed solid growth thanks to the robust US economy.
Incoming orders in the first half of 2024 were stable despite the economic conditions. The order backlog stood at EUR 20.0 million as at 30 June 2024, compared to EUR 20.8 million at the end of the first quarter and EUR 20.5 million at the end of 2023.
1.2 Development of earnings
Operating earnings before interest and taxes (EBIT before non-operating income and expenses) rose by $10.8 \%$ or EUR 0.7 million to EUR 7.5 million in the first half of 2024, compared to EUR 6.8 million in the same period of the previous year. This corresponds to an operating EBIT margin concerning sales of $14.6 \%$ (06/2023: 12.9\%).
On the one hand, the stability of earnings reflects the favourable product mix with a higher proportion of highermargin sales. On the other hand, price adjustments and efficiency improvements in purchasing contributed to the positive development. In addition, significantly higher wage and salary costs due to inflation were partially offset by higher productivity. This is reflected in a significant decrease in the cost of materials ratio and a moderate increase in the personnel cost ratio compared to general wage and salary inflation.
The cost of materials ratio (measured against total operating performance) was $29.6 \%$ as at 30 June 2024 (06/2023: 33.0\%). In the first half of the year, the personnel cost ratio (measured against total operating performance) was $34.9 \%$ after $34.0 \%$ in the same period of the previous year, which essentially reflects the sharp rise in personnel costs due to inflation.
Other expenses decreased by $2.2 \%$ from EUR 8.7 million in the previous year to EUR 8.5 million in the first half of 2024 due to falling freight and packaging costs and lower energy costs.
Depreciation and amortization of EUR 2.6 million remained stable in the first half of 2024 compared to the same period of the previous year at EUR 2.6 million, which is also due to the declining investment volume.
Due to rising interest rates, financing costs rose only slightly from EUR 0.6 million in the first half of 2023 to EUR 0.7 million in the first half of 2024 despite contractual repayments (totalling EUR 0.8 million).
Consolidated net income rose to EUR 4.8 million in the first six months of the current financial year (06/2023: EUR 4.3 million). Earnings per share thus increased by $13.6 \%$ to EUR 0.50 in the reporting period (compared to EUR 0.44 in the same period of the previous year).
Net Assets of the Group
The increase in total assets by EUR 3.1 million to EUR 96.8 million as at 30 June 2024 (31 December 2023: EUR 93.7 million) is mainly due to the increase in inventories of EUR 0.3 million and the increase in trade receivables of EUR 3.3 million.
The Masterflex Group's cash and cash equivalents remain stable at around EUR 11.0 million as at 30 June 2024 (31 December 2023: EUR 11.0 million), which is in particular due to the dividend payment falling in the second half of 2024 .
Due to the positive earnings situation of the Masterflex Group, equity increased by EUR 4.8 million to EUR 62.4 million as at 30 June 2024. This corresponds to an equity ratio of $64.5 \%$ as at 30 June 2024 after $61.5 \%$ as at 31 December 2023.
Financial Position of the Group
Net debt amounted to EUR 12.5 million as at 30 June 2024 (31 December 2023: EUR 13.1 million). The ratio of net debt to EBITDA remained constant at 0.7 .
Current and non-current financial liabilities amounted to EUR 23.4 million as at 30 June 2024 (31 December 2023: EUR 24.1 million).
The development of cash flow in the first half of 2024 was largely characterized by the increase in trade payables and, in contrast to the previous year, the dividend payment falling in the second half of the year as well as a reduction in investing activities. Cash flow from operating activities for the first half of 2024 totalled around EUR 3.0 million (previous year: EUR 1.2 million). Cash flow from investing activities for the first half of 2024 fell significantly compared to the previous year to around EUR 1.4 million (previous year: EUR 2.4 million). The payment of the dividend for the 2023 financial year in the amount of EUR 2.4 million (EUR 0.25 per share), which was not made until the second half of the year, and the higher interest expenses of EUR 0.58 million (previous year: EUR 0.50 million) characterized the development of cash flow from financing activities.
Employees
The number of employees fell from an average of around 618 in the first half of 2023 to 606 in the first half of 2024.
Research and Development
In the first half of 2024, our development work continued to focus in particular on customer-specific development projects.
Opportunity and Risk Report
The management system for recording opportunities and risks and the measures to limit risks were described in detail in the summarized management report 2023. In addition, the main opportunities and risks arising for the Masterflex Group in the course of its business activities were also explained there. There were no changes to this opportunity and risk situation in the first half of 2024.
Outlook
The following statements on the future business development of the Masterflex Group and on the assumptions regarding the economic development of markets and industries that are considered to be material are based on estimates that the management considers to be realistic according to the information currently available. However, against the background of the current geopolitical upheavals in connection with the war in Ukraine and the ongoing tensions between the USA and China and the Middle East, these are subject to significantly greater uncertainty than in the past and therefore harbour the unavoidable risk that the forecast developments will not occur either in their tendency or in their extent. Depending on further developments, these external factors may have an impact on supply chains and thus on the availability and price development of raw materials as well as on the energy supply, which cannot be reliably predicted. Overall, the supply situation on the raw materials side remains critical in terms of both prices and availability.
Since the Masterflex Group has so far been able to manage these uncertainties well and due to the successful first half of the year and the solid order situation, management expects business to continue to develop very profitably in the second half of 2024. For the current financial year, the management therefore confirms its target of generating revenue in the range of EUR 100 million to EUR 107 million. At the same time, the forecast for EBIT, which is expected to be in the range of EUR 12.0 million to EUR 15.0 million, is also confirmed.
Gelsenkirchen, August 7, 2024
Dr. Andreas Bastin
Chief Executive Officer
Mark Becks
Chief Financial Officer
Interim Consolidated Financial Statements
Consolidated Statement of Financial Position
| Assets in EUR thousand | 30,06,2024 | 31,12,2023 |
|---|---|---|
| Non-current assets | ||
| Intangible assets | 13,351 | 13,353 |
| Concessions, industrial property rights | 1,258 | 1,306 |
| Development costs | 2,339 | 2,269 |
| Goodwill | 9,187 | 9,187 |
| Advance payments | 567 | 591 |
| Property, plant and equipment | 35,078 | 35,753 |
| Land and buildings | 18,336 | 19,099 |
| Technical equipment and machinery | 12,619 | 12,491 |
| Other equipment, operating and office equipment | 3,433 | 3,213 |
| Advance payments and assets under construction | 690 | 950 |
| Financial assets | 71 | 62 |
| Securities held as fixed assets | 71 | 62 |
| Other assets | 55 | 120 |
| Deferred taxes | 164 | 100 |
| 48,719 | 49,388 | |
| Current assets | ||
| Inventories | 22,558 | 22,245 |
| Raw materials, consumables and supplies | 14,045 | 13,160 |
| Unfinished goods and services | 410 | 379 |
| Finished products and goods | 8,102 | 8,706 |
| Advance payments made | 1 | 0 |
| Receivables and other assets | 14,248 | 10,686 |
| Trade receivables | 13,211 | 9,886 |
| Other assets | 1,037 | 800 |
| Income tax assets | 321 | 346 |
| Cash and cash equivalents | 10,951 | 11,026 |
| 48,078 | 44,303 | |
| Total assets | 96,797 | 93,691 |
[^0]
[^0]: * unaudited
Consolidated Statement of Financial Position
| Equity and liabilities in EUR thousand | 30,06,2024* | 31,12,2023 |
|---|---|---|
| Equity | ||
| Consolidated equity | 62,078 | 57,236 |
| Issued capital | 9,618 | 9,618 |
| Capital reserve | 31,306 | 31,306 |
| Retained earnings | 22,138 | 17,374 |
| Reserve for the market valuation of financial instruments | $-636$ | $-646$ |
| Reserves for the fair value measurement of hedging instruments | $-147$ | 71 |
| Reserve for currency differences | $-201$ | $-487$ |
| Non-controlling interests | 349 | 366 |
| Total equity | 62,427 | 57,602 |
| Non-current liabilities | ||
| Provisions | 320 | 321 |
| Financial liabilities | 3,352 | 3,283 |
| Other liabilities | 625 | 625 |
| Deferred taxes | 1,474 | 1,024 |
| 5,771 | 5,253 | |
| Current liabilities | ||
| Provisions | 154 | 154 |
| Financial liabilities | 20,096 | 20,862 |
| Income tax liabilities | 1,081 | 3,237 |
| Other liabilities | 7,268 | 6,583 |
| Trade payables | 2,972 | 2,023 |
| Other liabilities | 4,296 | 4,560 |
| 28,599 | 30,836 | |
| Total liabilities and shareholders' equity | 96,797 | 93,691 |
- unaudited
Consolidated Statement of Income for the First Half-Year
| 01.01.-30.06.24* | 01.01.-30.06.23* | ||
|---|---|---|---|
| EUR thousand | EUR thousand | ||
| 1. Revenue | 51,599 | 52,684 | |
| 2. Decrease/increase in inventories of finished and unfinished goods | $-167$ | 414 | |
| 3. Other own work capitalised | 36 | 17 | |
| 4. Other income | 246 | 447 | |
| Operating performance | 51,714 | 53,562 | |
| 5. Cost of materials | $-15,244$ | $-17,523$ | |
| 6. Personnel expenses | $-17,947$ | $-18,068$ | |
| 7. Depreciation and amortisation | $-2,561$ | $-2,592$ | |
| 8. Other expenses | $-8,543$ | $-8,732$ | |
| 9. Financial result | |||
| Financial expenses | $-669$ | $-563$ | |
| Other financial result | 4 | 4 | |
| 10. Earnings before taxes | 6,755 | 6,088 | |
| 11. Income taxes | $-1,888$ | $-1,800$ | |
| 12. Consolidated result | 4,867 | 4,288 | |
| thereof: non-controlling interests | 27 | 20 | |
| thereof: share of shareholders of Masterflex SE | 4,840 | 4,268 | |
| Earnings per share (undiluted and diluted) in € | 0.50 | 0.44 |
- unaudited
Consolidated Statement of Comprehensive Income for the First Half-Year
| Consolidated result | 01.01.-30.06.24* | 01.01.-30.06.23* |
|---|---|---|
| EUR thousand | EUR thousand | |
| 4,867 | 4,288 | |
| Other income | ||
| Items that are subsequently reclassified to profit or loss if certain conditions are fulfilled | ||
| 1. Currency gains/losses from the translation of foreign financial statements | 210 | $-195$ |
| 2. Changes in the market value of financial instruments | 10 | $-10$ |
| 3. Changes in the market value of hedging transactions | $-281$ | $-86$ |
| 4. Income taxes | 63 | 25 |
| 5. Other comprehensive income after taxes | 2 | $-266$ |
| 6. Comprehensive income | 4,869 | 4,022 |
| Comprehensive income | 4,869 | 4,022 |
| thereof: non-controlling interests | 27 | 20 |
| thereof: share of the shareholders of Masterflex SE | 4,842 | 4,002 |
- unaudited
Consolidated Statement of Income for the Second Quarter
| 01.04.-30.06.24* | 01.04.-30.06.23* | ||
|---|---|---|---|
| EUR thousand | EUR thousand | ||
| 1. Revenue | 25,392 | 25,051 | |
| 2. Decrease/increase in inventories of finished and unfinished goods | $-412$ | 256 | |
| 3. Other own work capitalised | 24 | 17 | |
| 4. Other income | 109 | 199 | |
| Operating performance | 25,113 | 25,523 | |
| 5. Cost of materials | $-7,191$ | $-8,582$ | |
| 6. Personnel expenses | $-8,983$ | $-8,912$ | |
| 7. Depreciation and amortisation | $-1,285$ | $-1,307$ | |
| 8. Other expenses | $-4,473$ | $-4,209$ | |
| 9. Financial result | |||
| Financing expenses | $-347$ | $-306$ | |
| Other financial result | 3 | 3 | |
| 10. Earnings before taxes | 2,838 | 2,210 | |
| 11. Income taxes | $-815$ | $-1,359$ | |
| 12. Consolidated result | 2,023 | 851 | |
| thereof: non-controlling interests | 22 | 6 | |
| thereof: share of the shareholders of Masterflex SE | 2,001 | 845 | |
| Earnings per share (basic and diluted) in € | 0.20 | 0.08 |
- unaudited
Consolidated Statement of Comprehensive Income for the Second Quarter
| Consolidated result | 01.04.-30.06.24* | 01.04.-30.06.23* |
|---|---|---|
| EUR thousand | EUR thousand | |
| 2,023 | 851 | |
| Other income | ||
| Items that are subsequently reclassified to profit or loss if certain conditions are met | ||
| 1. Currency gains/losses from the translation of foreign financial statements | 113 | $-75$ |
| 2. Changes in the market value of financial instruments | 5 | $-13$ |
| 3. Changes in the market value of hedging transactions | $-337$ | $-37$ |
| 4. Income taxes | 80 | 11 |
| 5. Other comprehensive income after taxes | $-139$ | $-114$ |
| 6. Comprehensive income | 1,884 | 737 |
| Comprehensive income | 1,884 | 737 |
| thereof: non-controlling interests | 22 | 6 |
| thereof: share of the shareholders of Masterflex SE | 1,862 | 731 |
- unaudited
Consolidated Statement of Changes in Equity
| Sub- scribed capital |
Capital reserve |
Retained earnings | Reserve for the market valuation of financial instruments | Reserve for hedging transactions | Ex- change- differences |
Shares of shireholders of Masterflex SE | Non-controlling interests | Equity | |
|---|---|---|---|---|---|---|---|---|---|
| in EUR thousand | |||||||||
| Equity as at 31 December 2023 | 9,618 | 31,306 | 17,374 | $-646$ | 71 | $-487$ | 57,236 | 366 | 57,602 |
| Distributions | 0 | 0 | 0 | 0 | 0 | 0 | 0 | $-44$ | $-44$ |
| Overall result | 0 | 0 | 4,764 | 10 | $-218$ | 286 | 4,842 | 27 | 4,869 |
| Consolidated net income | 0 | 0 | 4,840 | 0 | 0 | 0 | 4,840 | 27 | 4,867 |
| Other comprehensive income after income taxes | 0 | 0 | $-76$ | 10 | $-218$ | 286 | 2 | 0 | 2 |
| Changes in the fair value of financial instruments | 0 | 0 | 0 | 10 | 0 | 0 | 10 | 0 | 10 |
| Changes in the market value of hedging instruments | 0 | 0 | 0 | 0 | $-281$ | 0 | $-281$ | 0 | $-281$ |
| Currency gains/losses from the translation of foreign financial statements | 0 | 0 | $-76$ | 0 | 0 | 286 | 210 | 0 | 210 |
| Income taxes attributable to other comprehensive income | 0 | 0 | 0 | 0 | 63 | 0 | 63 | 0 | 63 |
| Equity as at 30 June 2024 | 9,618 | 31,306 | 22,138 | $-636$ | $-147$ | $-201$ | 62,078 | 349 | 62,427 |
| Equity as at 31 December 2022 | 9,618 | 31,306 | 11,339 | $-620$ | 172 | $-202$ | 51,613 | 372 | 51,985 |
| Distributions | 0 | 0 | $-1,924$ | 0 | 0 | 0 | $-1,924$ | 0 | $-1,924$ |
| Overall result | 0 | 0 | 3,845 | $-10$ | $-61$ | 228 | 4,002 | 20 | 4,022 |
| Consolidated net income | 0 | 0 | 4,268 | 0 | 0 | 0 | 4,268 | 20 | 4,288 |
| Other comprehensive income after income taxes | 0 | 0 | $-423$ | $-10$ | $-61$ | 228 | $-266$ | 0 | $-266$ |
| Changes in the fair value of financial instruments | 0 | 0 | 0 | $-10$ | 0 | 0 | $-10$ | 0 | $-10$ |
| Changes in the market value of hedging instruments | 0 | 0 | 0 | 0 | $-86$ | 0 | $-86$ | 0 | $-86$ |
| Currency gains/losses from the translation of foreign financial statements | 0 | 0 | $-423$ | 0 | 0 | 228 | $-195$ | 0 | $-195$ |
| Income taxes attributable to other comprehensive income | 0 | 0 | 0 | 0 | 25 | 0 | 25 | 0 | 25 |
| Equity as at 30 June 2023 | 9,618 | 31,306 | 13,260 | $-630$ | 111 | 26 | 53,691 | 392 | 54,083 |
Consolidated Statement of Cash Flows
| in EUR thousand | 30.06.2024* | 30.06.2023* |
|---|---|---|
| Profit for the period before taxes, interest expenses and financial income | 7.420 | 6.627 |
| Income tax expenses | $-3.407$ | $-808$ |
| Depreciation and amortisation of property, plant and equipment and intangible assets | 2.561 | 2.592 |
| Decrease/Increase in provisions | $-1$ | 8 |
| Other non-cash expenses/income and losses from the disposal of fixed assets | $-9$ | 3 |
| Increase in inventories | $-313$ | $-2.071$ |
| Increase in trade receivables and other assets not attributable to investing or financing activities | $-3.536$ | $-4.391$ |
| Increase/decrease in trade payables and other liabilities not attributable to investing or financing activities | 309 | $-731$ |
| Cash flow from operating activities | 3.024 | 1.229 |
| Payments for investments in non-current assets | $-1.424$ | $-2.412$ |
| Cash flow from investing activities | $-1.424$ | $-2.412$ |
| Payments to company owners and minority shareholders | $-44$ | $-1.924$ |
| Interest and dividend income | 4 | 4 |
| Interest expenses | $-583$ | $-501$ |
| Payments for lease liabilities | $-588$ | $-635$ |
| Payments for the repayment of loans | $-750$ | $-750$ |
| Cash flow from financing activities | $-1.961$ | $-3.806$ |
| Cash-effective changes in cash and cash equivalents | $-361$ | $-4.989$ |
| Changes in cash and cash equivalents due to exchange rates and other changes in value | 286 | 228 |
| Cash and cash equivalents at the beginning of the period | 11.026 | 9.746 |
| Cash and cash equivalents at the end of the period | 10.951 | 4.985 |
| * unaudited |
Notes to the Consolidated Financial Statements
1. Accounting policies
This interim report was prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU and the International Accounting Standards (IAS) of the International Accounting Standards Board (IASB) and is consistent with the company's significant accounting policies as presented here. The same accounting, valuation and consolidation methods were applied as for the consolidated financial statements for the financial year ended 31 December 2023.
All other changes to accounting standards had no or no material impact on this interim report.
In accordance with IAS 34, a condensed scope of reporting has been selected compared to the consolidated financial statements.
2. Scope of consolidation
There have been no changes to the scope of consolidation compared to 31 December 2023.
| Name of the company | Registered office of the company | Share of Masterflex SE in \% | |
|---|---|---|---|
| Masterflex SARL | F | Béligneux | 80 |
| Masterflex Technical Hoses Ltd. | GB | Oldham | 100 |
| Masterduct Holding, Inc.* | USA | Houston | 100 |
| Flexmaster U.S.A., Inc. | USA | Houston | $100^{*}$ |
| - Masterduct, Inc. | USA | Houston | $100^{*}$ |
| - Masterduct Holding S.A., Inc. | USA | Houston | $100^{*}$ |
| - Masterduct Brasil LTDA. | BR | Santana de Parnaiba | $100^{*}$ |
| Novoplast Schlauchtechnik GmbH | D | Halberstadt | 100 |
| FLEIMA-PLASTIC GmbH | D | Wald-Michelbach | 100 |
| Masterflex Handelsgesellschaft mbH | D | Gelsenkirchen | 100 |
| Masterflex Česko s.r.o. | CZ | Planá | 100 |
| M \& T Verwaltungs GmbH* | D | Gelsenkirchen | 100 |
| - Matzen \& Timm GmbH | D | Norderstedt | $100^{*}$ |
| Masterflex Scandinavia AB | S | Kungsbacka | 100 |
| Masterflex Vertriebs GmbH* | D | Gelsenkirchen | 100 |
| - APT Advanced Polymer Tubing GmbH | D | Neuss | $100^{*}$ |
| Masterflex Asia Holding GmbH* | D | Gelsenkirchen | 100 |
| - Masterflex Asia Pte. Ltd. | SG | Singapore | $100^{*}$ |
| - Masterflex Hoses (Kunshan) Co., Ltd. | CN | Kunshan | $100^{*}$ |
3. Financial instruments
The accounting treatment of fixed asset securities measured at fair value and forward transactions is explained in the notes to the consolidated financial statements in the 2023 Annual Report under points 3b and 16.
The market value of securities held as fixed assets totalled EUR 71 thousand. In the first half of the year, increases in market value amounting to EUR 9 thousand were recognized directly in equity. The securities held as fixed assets are allocated to level 1 as input factors with quoted prices in active markets for identical assets.
The market value of the forward exchange transactions concluded for a total of USD 5,280 thousand amounted to EUR -210 thousand on the balance sheet date and was recognized under financial liabilities. The change in the forward component was recognized in other comprehensive income as a change in the value of the hedging instrument and amounts to EUR -281 thousand before netting with deferred taxes. The fair value of the forward exchange transaction is calculated on the basis of the interest rate difference between the eurozone and the USA compared to the contracted forward exchange rate. The forward exchange transaction was allocated to level 2.
As at 30 June 2024, the amount recognized in the reserve for hedging instruments was EUR -210 thousand less deferred taxes.
There were no reclassifications between Level 1 and Level 2 in the half-year under review.
For trade receivables measured at amortized cost, other current financial assets and cash and cash equivalents, the carrying amount corresponds to the fair value.
For trade payables and other current liabilities, the carrying amount corresponds to the fair value. The fair value of liabilities to banks corresponds to the stated carrying amount.
4. Dividend
On 5 July 2024, the Annual General Meeting of Masterflex SE approved the payment of a dividend of EUR 0.25 per share. The distribution of a total of EUR 2,404,583.50 was made on 10 July 2024.
5. Segment reporting
The Masterflex Group organizes its operating segments in accordance with the criteria of IFRS 8. Management is based on the information that the Executive Board as Chief Operating Decision Maker receives for performance measurement and resource allocation for the entire Masterflex Group (management approach).
There have been no changes in the segmentation basis compared to the consolidated financial statements as at 31 December 2023. The Masterflex Group reports one operating segment, the core Hightech Hose Systems (HTS) business unit.
Segment Reporting 30 June 2024
| In EUR thousand | High-tech Hose Systems |
|---|---|
| Sales revenue from third parties | 51,599 |
| EBIT | 7,420 |
| Investments in property, plant and equipment and intangible assets | 1,424 |
| Depreciation | 2,561 |
| Assets | 96,797 |
Segment Reporting 30 June 2023
| In EUR thousand | High-tech Hose Systems |
|---|---|
| Sales revenue from third parties | 52,684 |
| EBIT | 6,647 |
| Investments in property, plant and equipment and intangible assets | 2,412 |
| Depreciation | 2,592 |
| Assets | 91,789 |
The reconciliation of EBIT to earnings after taxes is as follows:
| Reconciliation to consolidated earnings after tax in EUR thousand | 30.06.2024 | 30.06.2023 |
|---|---|---|
| EBIT | 7,420 | 6,647 |
| Interest income/income from investments | 4 | 4 |
| Interest and similar expenses, etc. | -669 | -563 |
| EBT | 6,755 | 6,088 |
| Taxes on income and earnings | $-1,412$ | -807 |
| Deferred taxes | -476 | -993 |
| Earnings after taxes | 4,867 | 4,288 |
6. Earnings per share
Basic earnings per share are calculated in accordance with IAS 33 by dividing the consolidated net income by the weighted average number of shares outstanding during the reporting period. As at 30 June 2024, basic earnings per share amounted to EUR 0.50 with a weighted average number of shares of 9,618,334.
As there is no share option program, the calculation of diluted earnings is not applicable.
7. Treasury shares
As at 30 June 2024, Masterflex SE held 134,126 treasury shares.
8. Employees
The number of employees in the reporting period was 606, 1.9\% below the previous year's figure of 618.
9. Income taxes
The income tax expense in the half-year financial report was calculated based on the estimated effective tax rate for Masterflex SE for the full year 2024, which was based on the pre-tax result for the reporting period. The effective tax rate is based on current earnings and tax planning.
10. Cash flow statement
The consolidated cash flow statement has been prepared in accordance with IAS 7 ("Cash Flow Statements"). A distinction is made between cash flows from operating, investing and financing activities. The liquidity recognised in the cash flow statement corresponds to the balance sheet item "Cash and cash equivalents".
11. Relationships with related companies and persons
The relationships are explained in the 2023 Annual Report in the notes to the consolidated financial statements under item 33 .
12. Special aspects of the financial year in connection with the war in Ukraine and the conflict in the Middle East
The presentation of the net assets, financial position and results of operations in the interim financial statements is dependent on recognition and measurement methods as well as assumptions and estimates. All assumptions and estimates are made to the best of our knowledge and belief and are reviewed on an ongoing basis. This applies in particular with regard to the possible effects of the war in Ukraine and the conflict in the Middle East.
As things stand, the war in Ukraine and the conflict in the Middle East will not have any serious impact on the development of the Masterflex Group. However, this could change dramatically if the war intensifies and expands.
13. Auditor's review of the interim report
The interim financial statements and the interim management report were neither audited in accordance with Section 317 of the German Commercial Code (HGB) nor reviewed by an auditor.
14. Responsibility statement
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the interim management report of the Group includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.
August 7, 2024
Dr. Andreas Bastin
Chief Executive Officer
Mark Becks
Chief Financial Officer
Imprint
Masterflex SE
Willy-Brandt-Allee 300
45891 Gelsenkirchen
Germany
Contact us
Phone: +49 209970770
Fax: +49 2099707733
[email protected]
www.MasterflexGroup.com
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