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Masterflex SE Interim / Quarterly Report 2024
276_10-q_2024-11-06_9199d952-850d-421f-b16d-80f7f8b3e344.pdf
Interim / Quarterly Report
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RMASTERFLEX GROUP
Connecting Values
Quarterly statement $3 / 2024$
Masterflex at a glance
| in EUR thousand | 01.01-30.09.24* | 01.01-30.09.23* | Change |
|---|---|---|---|
| Consolidated revenue | 76,937 | 78,967 | $-2.6 \%$ |
| EBITDA | 15,128 | 14,729 | $2.7 \%$ |
| EBIT (operating) | 11,192 | 11,043 | $1.3 \%$ |
| EBIT | 11,072 | 10,818 | $2.3 \%$ |
| EBT (operating) | 10,211 | 10,171 | $0.4 \%$ |
| Financial result | $-981$ | $-872$ | $12.5 \%$ |
| Consolidated net income | 7,098 | 7,240 | $-2.0 \%$ |
| Consolidated earnings per share (EUR) | 0.74 | 0.75 | $-1.3 \%$ |
| EBIT margin (operating) | $14.5 \%$ | $14.0 \%$ | |
| Net return on revenue | $9.2 \%$ | $9.2 \%$ | |
| Employees (number) | 603 | 619 | $-2.6 \%$ |
| in EUR thousand | 30.09.24 | 31.12.23 | Change |
| Group equity | 61,871 | 57,602 | $7.4 \%$ |
| Consolidated balance sheet total | 97,517 | 93,691 | $4.1 \%$ |
| Group equity ratio | 63.4\% | 61.5\% |
- unaudited
MASTERFLEX SE:
Further increase in profitability in the first nine months of 2024
- Group revenue after nine months at EUR 76.9 million (9M/2023: EUR 79.0 million)
- Group operating EBIT at 9-month high of EUR 11.2 million (9M/2023: EUR 11.0 million), operating EBIT margin rises to $14.5 \%$ (9M/2023: 14.0\%)
- New syndicated loan provides more financial and strategic flexibility
- Forecast for the 2024 financial year confirmed
Management Board Report
Gelsenkirchen, 6 November 2024 - The Masterflex Group was able to once again increase its earnings to a new nine-month high in the first nine months of the financial year 2024, despite a moderate, economically driven decline in revenue. Ongoing productivity improvements enabled the Group to further increase its operating EBIT margin as planned.
The business development in the past quarter is largely a continuation of the development of the previous quarters. In the period from January to September 2024, the Masterflex Group generated revenue of EUR 76.9 million after EUR 79.0 million in the same period of the previous year. This corresponds to a slight year-on-year decline of $2.6 \%$. As in previous quarters, this reflects the weak economic development in Europe and particularly in Germany. As in previous quarters, customer sectors such as mechanical and plant engineering are experiencing cyclical weakness in demand. In addition, the otherwise high-growth aerospace sector recorded a surprising dip in growth in the third quarter, which has capacity-related causes outside Masterflex and is not permanent. In the medical technology area, Masterflex was confronted with somewhat greater than expected order postponements due to continued high inventory levels on the customer side, although catch-up effects are expected in 2025. The food and semiconductor sectors continued to show robust growth. From a regional perspective, economic development in Asia was sluggish in addition to Europe, while the US economy remained robust.
The EBITDA for the first nine months of 2024 amounted to EUR 15.1 million, up $2.7 \%$ on the previous year's figure of EUR 14.7 million. At EUR 11.2 million, operating EBIT for the first nine months of 2024 was up $1.3 \%$ compared to EUR 11.0 million achieved in the first nine months of 2023. The operating EBIT margin improved accordingly from $14.0 \%$ in the previous year to $14.5 \%$. The pleasing earnings development, despite the decline in revenue, is the result of a favorable product mix and further efficiency improvements. Consolidated net income amounted to EUR 7.1 million (9M/2023: EUR 7.2 million) or EUR 0.74 per share (9M/2023: EUR 0.75), influenced by a higher tax rate compared to the previous year.
Due to the positive earnings development, Masterflex's financial position has further improved. Cash and cash equivalents rose from EUR 11.0 million as at December 31, 2023, to EUR 12.2 million as at September 30, 2024, despite the $25 \%$ increase in the dividend distributed in the third quarter. Net debt decreased compared to December 31, 2023, to EUR 12.0 million (December 31, 2023: EUR 13.1 million) as a result of scheduled repayments and the positive operating cash flow development. Group equity increased to EUR 61.9 million as at September 30, 2024, compared to EUR 57.6 million as at the 2023 balance sheet date. Despite the increase in total assets, the
Group's equity ratio climbed from $61.5 \%$ as at December 31, 2023, to $63.4 \%$ as at September 30, 2024, documenting the Group's high level of solidity.
This solidity is also reflected in the conditions - particularly in the interest rate and the level of collaterals - of the new syndicated loan of EUR 55 million agreed in September, including the option to increase by a further EUR 25 million. Masterflex has thus simplified its financing structure while at the same time increasing its financial and consequently strategic flexibility. The syndicated loan has a term of five years, with an option to be extended by up to two years. It serves to finance general corporate purposes, particularly in the area of M\&A, and thus strengthens the foundation for Masterflex's planned expansion.
Dr. Andreas Bastin, CEO of the Masterflex Group: "In an increasingly recessive market environment in some of our customer industries, we are performing satisfactorily on the revenue side, and on the earnings side, we stand firm like a rock, thanks to continuous progress in productivity and efficiency. The newly agreed syndicated loan provides us with the necessary flexibility to continue implementing our future strategy 'Hero@Zero' and expands our scope for future-oriented investments and M\&A activities. We remain confident that we will achieve our targets set for 2024 and beyond."
Earnings
In the first nine months of the year, the Masterflex Group recorded a cyclical decline in revenue of $-2.6 \%$ to EUR 76.9 million compared to EUR 79.0 million in the same period of the previous year. The slight year-on-year decline in revenue reflects the economic headwinds in cyclical customer sectors, such as mechanical and plant engineering. In the medical technology sector, orders were postponed due to persistently high inventories. The aerospace sector also recorded a moderate slowdown in momentum, particularly in the third quarter, with overall demand at a high level. The food and semiconductor sectors continued to show robust growth.
Operating earnings before interest and taxes (EBIT before non-operating income and expenses) increased by $1.3 \%$ to EUR 11.2 million in the first nine months of 2024 after EUR 11.0 million in the same period of the previous year. This corresponds to an operating EBIT margin in relation to revenue of $14.5 \%(9 M / 2023: 14.0 \%)$.
The cost of materials ratio (measured against total operating performance) was $29.3 \%$ as at September 30, 2024 (9M/2023: 32.2\%). The personnel cost ratio (measured against total operating performance) amounted to $35.1 \%$ after nine months, compared to $33.9 \%$ in the same period of the previous year, reflecting the slight increase in personnel costs due to inflation.
Other expenses decreased by $1.5 \%$ from EUR 12.9 million in the previous year to EUR 12.7 million after nine months of 2024.
Depreciation and amortization of EUR 4.1 million increased moderately in the first nine months of 2024 compared to the same period of the previous year at EUR 3.9 million.
Financing expenses rose to EUR 1.0 million in the nine-month period due to higher interest rates, compared to EUR 0.9 million in the previous year.
Consolidated net income amounted to EUR 7.1 million (9M/2023: EUR 7.2 million) or EUR 0.74 per share (9M/2023: EUR 0.75), which is attributable to the higher tax burden year-on-year.
Net assets and financial position
The increase in total assets by EUR 3.8 million to EUR 97.5 million as at September 30, 2024 (December 31, 2023: EUR 93.7 million) was mainly due to an increase in trade receivables by EUR 2.6 million to EUR 12.5 million (December 31, 2023: EUR 9.9 million) as at the reporting date.
Cash and cash equivalents increased to EUR 12.2 million as at September 30, 2024 (December 31, 2023: EUR 11.0 million) despite the higher in working capital and the $25 \%$ increase in dividends.
Group equity amounted to EUR 61.9 million as at September 30, 2024, after EUR 57.6 million as at December 31, 2023. Despite the simultaneous increase in total assets, the Group's equity ratio rose from $61.5 \%$ as at December 31, 2023, to $63.4 \%$ as at September 30, 2024.
Net debt decreased compared to December 31, 2023, to EUR 12.0 million (December 31, 2023: EUR 13.1 million), mainly due to scheduled repayments. The new syndicated loan agreement as at September 30, 2024, has resulted in all financial liabilities being reported under non-current liabilities.
Compared to the previous year, the development of cash flow in the first nine months of 2024 was mainly characterized by a lower increase in working capital, in particular a lower increase in receivables, and lower capital expenditures as well as higher interest and tax payments and the $25 \%$ increase in dividend payments to shareholders.
Cash flow from operating activities increased significantly to EUR 9.3 million (9M/2023: EUR 7.6 million). The investment volume was slightly below the previous year's level (9M/2024: EUR 2.6 million; 9M/2023: EUR 3.5 million), while cash flow from financing activities amounted to EUR -5.2 million (9M/2023: EUR -4.4 million). Overall, cash and cash equivalents improved from EUR 11.0 million on December 31, 2023 to EUR 12.2 million on September 30, 2024.
Outlook
Based on the successful business development in the first nine months of 2024, the Management Board confirms its previous forecast for the financial year 2024, despite a more challenging economic environment. Assuming no further substantial deterioration in either the economic situation or geopolitical uncertainties, the Management Board continues to expect full-year 2024 revenues in the range of EUR 100 million to EUR 107 million and an EBIT between EUR 12 million and EUR 15 million.
Consolidated Statement of Financial Position
| Assets in EUR thousand | 30.09.2023 | 31.12.2023 |
|---|---|---|
| Non-current assets | ||
| Intangible assets | 13,340 | 13,353 |
| Licenses, industrial property rights | 1,152 | 1,306 |
| Development costs | 2,434 | 2,269 |
| Goodwill | 9,187 | 9,187 |
| Advance payments | 567 | 591 |
| Property, plant and equipment | 36,226 | 35,753 |
| Land and buildings | 19,518 | 19,099 |
| Technical equipment and machinery | 12,309 | 12,491 |
| Other equipment, operating and office equipment | 3,549 | 3,213 |
| Advance payments and assets under construction | 850 | 950 |
| Financial assets | 79 | 62 |
| Investment securities | 79 | 62 |
| Other assets | 52 | 120 |
| Deferred taxes | 124 | 100 |
| 49,821 | 49,388 | |
| Current assets | ||
| Inventories | 22,079 | 22,245 |
| Raw materials consumables and supplies | 13,409 | 13,160 |
| Unfinished goods and services | 355 | 379 |
| Finished products and goods | 8,315 | 8,706 |
| Receivables and other assets | 13,366 | 10,686 |
| Trade receivables | 12,497 | 9,886 |
| Other assets | 869 | 800 |
| Income tax assets | 69 | 346 |
| Cash and bank balances | 12,182 | 11,026 |
| 47,696 | 44,303 | |
| Total assets | 97,517 | 93,691 |
[^0]
[^0]: * unaudited
Consolidated Statement of Financial Position
| Liabilities in EUR thousand | 30.09.2023 | 31.12.2023 |
|---|---|---|
| Equity | ||
| Consolidated equity | 61,498 | 57,236 |
| Issued capital | 9,618 | 9,618 |
| Capital reserve | 31,306 | 31,306 |
| Retained earnings | 21,993 | 17,374 |
| Reserve for the fair value measurement of financial instruments | $-628$ | $-646$ |
| Hedging instruments | $-36$ | 71 |
| Currency differences | $-755$ | $-487$ |
| Non-controlling interests | 373 | 366 |
| Total equity | 61,871 | 57,602 |
| Non-current liabilities | ||
| Provisions | 320 | 321 |
| Financial liabilities | 22,814 | 3,283 |
| Other liabilities | 625 | 625 |
| Deferred taxes | 1,870 | 1,024 |
| 25,629 | 5,253 | |
| Current liabilities | ||
| Provisions | 154 | 154 |
| Financial liabilities | 1,370 | 20,862 |
| Income tax liabilities | 1,021 | 3,237 |
| Other liabilities | 7,472 | 6,583 |
| Trade accounts payable | 2,412 | 2,023 |
| Other liabilities | 5,060 | 4,560 |
| 10,017 | 30,836 | |
| Total liabilities and shareholders' equity | 97,517 | 93,691 |
[^0]
[^0]: * unaudited
Consolidated Statement of Income (9M)
| 01.01.-30.09.24* | 01.01.-30.09.23* | ||
|---|---|---|---|
| EUR thousand | EUR thousand | ||
| 1. | Sales revenue | 76,937 | 78,967 |
| 2. | Increase or decrease in inventories of finished and unfinished goods | $-54$ | 540 |
| 3. | Other own work capitalized | 56 | 26 |
| 4. | Other income | 391 | 610 |
| Operating performance | 77,330 | 80,143 | |
| 5. | Cost of materials | $-22,547$ | $-25,640$ |
| 6. | Personnel expenses | $-26,993$ | $-26,921$ |
| 7. | Depreciation and amortization | $-4,056$ | $-3,911$ |
| 8. | Other expenses | $-12,662$ | $-12,853$ |
| 9. | Financial result | ||
| Financing expenses | $-987$ | $-878$ | |
| Other financial result | 6 | 6 | |
| 10. | Earnings before taxes | 10,091 | 9,946 |
| 11. | Income taxes | $-2,942$ | $-2,668$ |
| 12. | Consolidated result | 7,149 | 7,278 |
| thereof: non-controlling interests | 51 | 38 | |
| thereof: share of shareholders of Masterflex SE | 7,098 | 7,240 | |
| Earnings per share (undiluted and diluted) | 0.74 | 0.75 |
- unaudited
Consolidated Statement of Income (Q3)
| 01.07.-30.09.24* | 01.07.-30.09.23* | ||
|---|---|---|---|
| EUR thousand | EUR thousand | ||
| 1. | Sales revenue | 25,338 | 26,283 |
| 2. | Increase in inventories of finished and unfinished goods | 113 | 126 |
| 3. | Other own work capitalized | 20 | 9 |
| 4. | Other income | 145 | 163 |
| Operating performance | 25,616 | 26,581 | |
| 5. | Cost of materials | $-7,303$ | $-8,117$ |
| 6. | Personnel expenses | $-9,046$ | $-8,853$ |
| 7. | Depreciation and amortization | $-1,495$ | $-1,319$ |
| 8. | Other expenses | $-4,119$ | $-4,121$ |
| 9. | Financial result | ||
| Financing expenses | $-318$ | $-315$ | |
| Other financial result | 2 | 2 | |
| 10. | Earnings before taxes | 3,337 | 3,858 |
| 11. | Income taxes | $-1,054$ | $-868$ |
| 12. | Consolidated result | 2,283 | 2,990 |
| thereof: non-controlling interests | 24 | 18 | |
| thereof: share of shareholders of Masterflex SE | 2,259 | 2,972 | |
| Earnings per share (undiluted and diluted) | 0.24 | 0.31 |
- unaudited
Consolidated Statement of Comprehensive Income (9M)
| Consolidated result | 01.01.-30.09.24 | 01.01.-30.09.23* |
|---|---|---|
| EUR thousand | EUR thousand | |
| 7,149 | 7,278 | |
| 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 | $-342$ | 99 |
| 2. Changes in the fair value of financial instruments | 18 | $-15$ |
| 3. Hedging transactions | $-139$ | $-12$ |
| 4. Income taxes | 32 | 3 |
| 5. Other income after taxes | $-431$ | 75 |
| 6. Comprehensive income | 6,718 | 7,353 |
| Comprehensive income: | 6,718 | 7,353 |
| thereof: non-controlling interests | 51 | 38 |
| thereof: share of shareholders of Masterflex SE | 6,667 | 7,315 |
- unaudited
Consolidated Statement of Comprehensive Income (Q3)
| Consolidated result | 01.07.-30.09.24 | 01.07.-30.09.23* |
|---|---|---|
| EUR thousand | EUR thousand | |
| 2,283 | 2,990 | |
| 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 | $-552$ | 294 |
| 2. Changes in the fair value of financial instruments | 8 | $-5$ |
| 3. Hedging transactions | 142 | 74 |
| 4. Income taxes | $-31$ | $-22$ |
| 5. Other income after taxes | $-433$ | 341 |
| 6. Comprehensive income | 1,850 | 3,331 |
| Comprehensive income: | 1,850 | 3,331 |
| thereof: non-controlling interests | 24 | 18 |
| thereof: share of shareholders of Masterflex SE | 1,826 | 3,313 |
- unaudited
Consolidated Statement of Cash Flow
| In EUR thousand | $30.09 .2024^{*}$ | $30.09 .2023^{*}$ |
|---|---|---|
| Result for the period before taxes, interest expense and financial income | 11,072 | 10,780 |
| Income tax expenses | $-4,074$ | $-1,232$ |
| Depreciation and amortization of property, plant and equipment and intangible assets | 4,056 | 3,911 |
| Decrease/Increase in provisions | $-1$ | 4 |
| Other non-cash income and gain on disposal of non-current assets | $-5$ | 12 |
| Decrease/Increase in inventories | 166 | $-2,414$ |
| Increase in trade receivables and other assets not attributable to investing or financing activities | $-2,359$ | $-4,124$ |
| Increase in trade accounts payable and other liabilities not attributable to investing or financing activities | 407 | 621 |
| Cash flow from operating activities | 9,262 | 7,558 |
| Payments for investments in non-current assets | $-2,600$ | $-3,496$ |
| Cash flow from investing activities | $-2,600$ | $-3,496$ |
| Payments to company owners and minority shareholders | $-2,449$ | $-1,974$ |
| Interest and dividend income | 4 | 6 |
| Interest payments | $-866$ | $-767$ |
| Payments for lease liabilities | $-927$ | $-923$ |
| Payments for the repayment of loans | $-1,000$ | $-750$ |
| Cash flow from financing activities | $-5,238$ | $-4,408$ |
| Cash-effective changes in cash and cash equivalents | 1,424 | $-346$ |
| Changes in cash and cash equivalents due to exchange rates and other changes in value | $-268$ | 202 |
| Cash and cash equivalents at the beginning of the period | 11,026 | 9,746 |
| Cash and cash equivalents at the end of the period | 12,182 | 9,602 |
| * unaudited |
Consolidated Statement of Changes in Equity
| Development of Group equity | Subscribed capital | Capital reserve | Retained earnings | Reserve for the market valuation of financial instruments | Reserve for hedging transactions | Currency difference | Shares of shareholders of Masterflex SE | Non- con- trolling interests |
Equity |
|---|---|---|---|---|---|---|---|---|---|
| in EUR thousand | |||||||||
| Equity as of 31.12.2022 | 9,618 | 31,306 | 11,339 | $-620$ | 172 | $-202$ | 51,613 | 372 | 51,985 |
| Distributions | 0 | 0 | $-1,924$ | 0 | 0 | 0 | $-1,924$ | $-50$ | $-1,974$ |
| Comprehensive income | 0 | 0 | 7,137 | $-15$ | $-9$ | 202 | 7,315 | 38 | 7,353 |
| Consolidated result | 0 | 0 | 7,240 | 0 | 0 | 0 | 7,240 | 38 | 7,278 |
| Other income after income taxes | 0 | 0 | $-103$ | $-15$ | $-9$ | 202 | 75 | 0 | 75 |
| Changes in the fair value of financial instruments | 0 | 0 | 0 | $-15$ | 0 | 0 | $-15$ | 0 | $-15$ |
| Changes in the fair value of hedging instruments | 0 | 0 | 0 | 0 | $-12$ | 0 | $-12$ | 0 | $-12$ |
| Currency gains/losses from the translation of foreign financial statements | 0 | 0 | $-103$ | 0 | 0 | 202 | 99 | 0 | 99 |
| Income taxes on other comprehensive income | 0 | 0 | 0 | 0 | 3 | 0 | 3 | 0 | 3 |
| Equity as of 30.09.2023 | 9,618 | 31,306 | 16,552 | $-635$ | 163 | 0 | 57,004 | 360 | 57,364 |
| Equity as of 31.12.2023 | 9,618 | 31,306 | 17,374 | $-646$ | 71 | $-487$ | 57,236 | 366 | 57,602 |
| Distributions | 0 | 0 | $-2,405$ | 0 | 0 | 0 | $-2,405$ | $-44$ | $-2,449$ |
| Comprehensive income | 0 | 0 | 7,024 | 18 | $-107$ | $-268$ | 6,667 | 51 | 6,718 |
| Consolidated result | 0 | 0 | 7,098 | 0 | 0 | 0 | 7,098 | 51 | 7,149 |
| Other income after income taxes | 0 | 0 | $-74$ | 18 | $-107$ | $-268$ | $-431$ | 0 | $-431$ |
| Changes in the fair value of financial instruments | 0 | 0 | 0 | 18 | 0 | 0 | 18 | 0 | 18 |
| Changes in the fair value of hedging instruments | 0 | 0 | 0 | 0 | $-139$ | 0 | $-139$ | 0 | $-139$ |
| Currency gains/losses from the translation of foreign financial statements | 0 | 0 | $-74$ | 0 | 0 | $-268$ | $-342$ | 0 | $-342$ |
| Income taxes on other comprehensive income | 0 | 0 | 0 | 0 | 32 | 0 | 32 | 0 | 32 |
| Equity as of 30.09.2024 | 9,618 | 31,306 | 21,993 | $-628$ | $-36$ | $-755$ | 61,498 | 373 | 61,871 |
Share information
| Stock exchange symbol | MZX |
|---|---|
| WKN | 549293 |
| ISIN | DE0005492938 |
| Stock Exchange | Frankfurt, FWB |
| Stock exchange segment | Prime Standard |
| Total number of shares | $9,752,460$ pieces |
| Shares outstanding | $9,618,334$ pieces |
| Own shares | 134,126 shares |
| Dividend FY 2023 | EUR 0.25 |
| Designated Sponsor | ICF Bank AG |
Investor Relations
CROSS ALLIANCE communication GmbH
Susan Hoffmeister
Phone: +49 (0) 8912509 03-33
E-mail: [email protected]
www.crossalliance.de
Imprint
Responsible
Masterflex SE
Willy-Brandt-Allee 300
45891 Gelsenkirchen, Germany
Phone: +49 (0) 209970 77-0
Fax: +49 (0) 209970 77-33
E-mail: [email protected]
www.MasterflexGroup.com
Text \& Editing
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Layout
FAME Sommer Kippenberg GmbH www.fame-brand.com
Forward-looking statements
This report contains forward-looking statements. These statements are based on the current expectations, assumptions and forecasts of the Management Board and the information currently available to it. The forward-looking statements are not to be understood as guarantees of the future developments and results mentioned therein. Rather, future developments and results depend on a variety of factors, they include various risks and uncertainties and are based on assumptions that may not prove to be accurate. We assume no obligation to update the forward-looking statements made in this report.
