Palfinger AG — Interim / Quarterly Report 2018

Oct 29, 2018

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The future is: reinventing yourself over and over again. Interim Report for the First Three Quarters of 2018

KEY FIGURES OF THE PALFINGER GROUP

EUR thousand	Q1–Q3 2014	Q1–Q3 2015	Q1–Q3 2016	Q1–Q3 2017	Q1–Q3 2018
Income statement
Revenue	782,476	898,925	996,606	1,093,106	1,182,624
EBITDAn1)	81,997	114,326	131,066	147,581	157,108
EBITDAn margin1)	10.5%	12.7%	13.2%	13.5%	13.3%
EBITn1)	55,714	83,980	96,930	105,325	116,413
EBITn margin1)	7.1%	9.3%	9.7%	9.6%	9.8%
EBTn1)	47,752	75,315	87,519	93,051	103,332
EBITDA	81,997	107,676	121,395	134,131	147,575
EBITDA margin	10.5%	12.0%	12.2%	12.3%	12.5%
EBIT (operating result)	55,714	77,330	86,356	91,875	101,679
EBIT margin	7.1%	8.6%	8.7%	8.4%	8.6%
Result before income tax	47,752	68,665	76,945	79,600	88,598
Consolidated net result for the period	32,219	48,123	49,739	50,504	48,297
Balance sheet
Net working capital (average)	270,975	270,804	287,145	308,423	320,388
Capital employed (average)	720,028	848,623	969,741	1,099,112	1,115,116
ROCE	7.9%	8.2%	8.5%	7.7%	7.6%
Equity	458,070	502,611	551,940	579,282	608,077
Equity ratio	41.7%	41.3%	36.5%	36.9%	38.0%
Net debt	382,606	383,384	528,970	525,945	533,158
Gearing	83.5%	76.3%	95.8%	90.8%	87.7%
Cash flows and investments
Cash flows from operating activities	7,338	53,671	71,459	61,444	83,305
Free cash flows	(166,813)	11,809	(84,733)	24,568	26,427
Net investments	162,498	44,118	48,477	52,195	69,035
Depreciation, amortization and impairment	26,283	30,346	35,039	42,256	45,896
Human resources
Employees2)	8,647	8,908	9,981	10,119	10,678
Share
Number of shares	37,593,258	37,593,258	37,593,258	37,593,258	37,593,258
Market capitalization	939,831	904,118	970,282	1,445,085	1,082,686
Price as at month end (EUR)	25.00	24.05	25.81	38.44	28.80
Earnings per share (EUR)	0.89	1.29	1.33	1.34	1.28

1) Starting in 2015, these figures were normalized (n=normalized) by restructuring costs.

2) Starting in 2018, balance-sheet-date figures of consolidated group companies excluding equity shareholdings and excluding contract workers are being presented; the previous years' figures are average figures.

PERFORMANCE OF THE PALFINGER GROUP

The PALFINGER Group recorded strong organic growth in the first three quarters of 2018. This shows that the positive trend continued throughout the third quarter. The expansion of business was primarily a result of the good performance in Europe, North America and Russia. As expected, the restructuring measures in North America and in the marine business had a detrimental effect on earnings, but in North America all relevant one-time effects were recorded in the first half of 2018.

Despite ongoing restructuring measures, PALFINGER's operating profitability was only marginally below the 10 per cent threshold in the reporting period. However, the consolidated net result for the period fell short of expectations. A higher tax rate and the increase in earnings attributable to non-controlling shareholders were the main reasons for this development.

In the first three quarters of 2018, the PALFINGER Group's revenue reached a new record high of EUR 1,182.6 million. Compared with the previous year's revenue of EUR 1,093.1 million, this corresponds to organic growth in the magnitude of 8.2 per cent.

EBITDAn (EBITDA normalized by restructuring costs) increased by 6.5 per cent from EUR 147.6 million to EUR 157.1 million. The EBITDAn margin thus came to 13.3 per cent, as compared to 13.5 per cent in the previous year. EBITn grew from EUR 105.3 million to EUR 116.4 million, and the EBITn margin rose from 9.6 per cent to 9.8 per cent.

Performance of revenue (Q1: EUR 394.2 million; Q2: EUR 407.6 million; Q3: EUR 380.8 million), EBITDAn (Q1: EUR 54.0 million; Q2: EUR 56.0 million; Q3: EUR 47.1 million) and EBITn (Q1: EUR 39.9 million; Q2: EUR 43.5 million; Q3: EUR 32.9 million) over the individual quarters shows that also in 2018, for seasonal reasons, performance in the third quarter was weaker than in the first two quarters.

In the reporting period, restructuring costs amounted to EUR 14.7 million (Q1–Q3 2017: EUR 13.5 million). The operating result (EBIT) thus increased by 10.7 per cent year on year from EUR 91.9 million to EUR 101.7 million. The consolidated net result for the first three quarters of 2018 came to EUR 48.3 million, which is 4.4 per cent lower than the previous year's figure of EUR 50.5 million. Earnings per share amounted to EUR 1.28, as compared to EUR 1.34 in the first three quarters of 2017.

Average net working capital increased from EUR 308.4 million in the first three quarters of 2017 to EUR 320.4 million in the reporting period, primarily due to higher inventories and trade receivables. Average capital employed rose year on year from EUR 1,099.1 million to EUR 1,115.1 million in the first three quarters of 2018. Return on capital employed (ROCE) decreased to 7.6 per cent, as compared to 7.7 per cent in the previous year.

DEVELOPMENT OF REVENUE

DEVELOPMENT OF EBITDAn

PERFORMANCE BY SEGMENT

Jan–Sept 2017

LAND	SEA	HOLDING	Segment consolidation	PALFINGER Group
908,802	184,304	-	-	1,093,106
10,290	4,743	-	(15,033)	0
153,806	5,776	(11,994)	(7)	147,581
123,489	(3,754)	(14,403)	(7)	105,325
114,627	(7,836)	(14,909)	(7)	91,875

1) These figures were normalized (n=normalized) by restructuring costs.

Jan–Sept 2018

EUR thousand	LAND	SEA	HOLDING	Segment consolidation	PALFINGER Group
External revenue	1,017,313	165,311	-	-	1,182,624
Intra-group revenue	9,284	7,109	-	(16,393)	0
EBITDAn1)	168,621	3,974	(15,487)	0	157,108
EBITn1)	139,205	(4,861)	(17,931)	0	116,413
EBIT	133,213	(13,338)	(18,196)	0	101,679

1) These figures were normalized (n=normalized) by restructuring costs.

LAND SEGMENT

In the first three quarters of 2018, revenue in the LAND segment increased by 11.9 per cent year on year from EUR 908.8 million to EUR 1,017.3 million. The segment's normalized EBITDA (EBITDAn) rose from EUR 153.8 million to EUR 168.6 million, an increase of 9.6 per cent. Thus, the segment's EBITDAn margin dropped slightly from 16.9 per cent to 16.6 per cent in the first three quarters of 2018. The restructuring costs allocated to this segment amounted to EUR 6.0 million in the reporting period, as compared to EUR 8.9 million in the first three quarters of 2017.

In the EMEA business area, PALFINGER once again recorded higher incoming orders than in the previous year. The bottlenecks which had existed in this connection since the end of 2017 were alleviated in the third quarter. As a consequence of the ongoing order backlog, delivery times for PALFINGER products have been slightly extended, but are still within the time periods customary in the market.

In North America, following a two-year restructuring phase, all larger one-off effects were recorded by the end of the first half of 2018. The aim is to raise operating profitability towards 10 per cent in the course of 2019, provided that demand remains strong. In South America, PALFINGER has now managed to adjust capacities to the consistently low level of demand; the market environment remained challenging throughout the first three quarters of 2018. In Russia/CIS, local value creation allowed for further growth despite the extension of the international sanctions. In Asia, particularly in China, the partnership with SANY has been the foundation for the sound development of business. During the reporting period, the Sany Palfinger joint venture recorded a highly satisfactory revenue increase of just under 40 per cent.

SEA SEGMENT

In the first three quarters of 2018, the SEA segment generated revenue of EUR 165.3 million, corresponding to a decline of 10.3 per cent from the previous year's figure of EUR 184.3 million. The contribution of the segment to PALFINGER's consolidated revenue thus shrank from 16.9 per cent to 14.0 per cent. This development reflects the extremely difficult business environment. The segment's normalized EBITDA (EBITDAn) decreased year on year from EUR 5.8 million to EUR 4.0 million; the EBITDAn margin came to 2.4 per cent, as compared to 3.1 per cent in the first three quarters of 2017. The restructuring costs incurred by this segment were EUR 8.5 million, as compared to EUR 4.1 million in the same period of the previous year.

Core customers in most of the product groups in the SEA segment depend on the oil and gas prices; this has dampened business performance considerably in recent years. The rise in the oil price over the past year is already being reflected in an expansion of service business, but not yet in the sale of new products. PALFINGER intends to position itself favourably for future upturns through restructuring. As recent market performance was distinctly weaker than originally expected, the restructuring of this segment has been continued intensively.

HOLDING UNIT

Reporting on the HOLDING unit presents the set of group functions that are bundled at headquarters, as well as strategic project costs incurred by this unit. In the first three quarters of 2018, EBITDAn amounted to EUR –15.5 million, after EUR –12.0 million in the same period of the previous year. The higher costs are primarily attributable to the forward-looking, group-wide initiatives PALFINGER Process Excellence and PALFINGER 21st. In addition, extraordinary employee benefits expenses as well as negative exchange rate effects impacted on costs. In the reporting period, the restructuring costs allocated to this unit came to EUR 0.3 million, as compared to EUR 0.5 million in the first three quarters of 2017.

OTHER EVENTS

As a result of bottlenecks in capacity and supply which occurred in the fourth quarter of 2017, PALFINGER commenced the 2018 financial year with a sizable delivery backlog. PALFINGER quickly countered the internal capacity bottlenecks with targeted employee programmes and investments. In the meantime, most of the delivery problems in connection with external suppliers have been resolved as well, allowing PALFINGER to reduce its delivery backlog in the third quarter. From today's point of view, the remaining backlog will be resolved, for the most part, by the end of 2018, even though the excellent order situation is expected to continue.

In September, the international fair IAA Commercial Vehicles was held in Hanover, Germany. PALFINGER's booths and numerous mountings covered an extensive area, and the Group's innovative developments, new products and features met with great interest. Visitors' feedback at this industrial fair is always a valuable indicator for market sentiment. The number of customers frequenting PALFINGER's booths at this year's SMM, the world's leading maritime trade fair, which took place in Hamburg in September, was also highly satisfactory. The great interest shown in the products presented reflects the industry's upward trend.

Andreas Klauser has been the new CEO of PALFINGER AG since the beginning of June. He is Austrian and 53 years of age. Most recently he was the Global Brand President of Case IH and STEYR as well as a member of the Group Executive Council of CNH Industrial.

In September 2018, PALFINGER began implementing a new global organizational structure designed to reduce the complexity of the Group, which has grown in size considerably, and utilize additional internal synergies. It is based on global team structures facilitating more cooperation across the areas. At the operational level, global competences are being created for the individual product lines. At group level, the corporate functions will introduce a greater number of mandatory guidelines than before. Moreover, global functions with global, direct reporting lines will be set up.

To optimize its existing financing structure, PALFINGER placed another promissory note issue in October. As at 24 October 2018, several promissory note loans were raised, featuring maturities between five and ten years and a volume of EUR 80 million and USD 25 million.

In previous years, PALFINGER used the financial indicators current capital and/or current capital ratio to manage current capital lockup. These indicators were somewhat difficult for investors and analysts to understand. Therefore, since the beginning of 2018, capital employed and its influencing factors and/or return on capital employed (ROCE) have been increasingly used for corporate management purposes instead. This relates to internal processes and targets as well as external reporting. PALFINGER's medium-term goal is to raise ROCE to a double-digit level.

In recent months, the Austrian Financial Reporting Enforcement Panel (AFREP) carried out a review of PALFINGER AG's consolidated financial statements as at 31 December 2017 and interim consolidated financial information as at 30 June 2018. On 25 October 2018, PALFINGER was notified of a material need for impairment of the goodwill of the business area Marine cash-generating unit (CGU) as at 31 December 2017, most of which resulted from the Harding acquisition. The Management Board estimates that the extent of the potential restatement may amount to approximately half of the goodwill recorded (EUR 156.5 million as at 31 December 2017). Therefore, the impairment will substantially reduce the Group's equity and equity ratio and will additionally lead to a retrospective reduction of the 2017 results. PALFINGER AG expects to receive the final review report in the next couple of weeks and will perform and publish all necessary corrections on the basis of said report.

On 25 October 2018, PALFINGER and SANY signed an agreement for the repurchase of shares held by PALFINGER in Sany Lifting Solutions. In the course of a cross-shareholding, PALFINGER acquired 10 per cent in Sany Lifting Solutions in 2014, of which 2.5 per cent will now be repurchased by SANY. This corresponds to a funds inflow of EUR 28.6 million. Following this transaction, PALFINGER will have a 7.5 per cent shareholding in Sany Lifting Solutions, SANY will continue to hold 7.5 per cent of PALFINGER's shares. The cooperation between the two companies is to be further intensified.

IFRS STANDARDS TO BE APPLIED FOR THE FIRST TIME

The new IFRS 15 standard governs the recognition of revenue and has been applied by PALFINGER since 1 January 2018, using the modified retrospective approach. In the case of individual contracts, the recognition of revenue has shifted since 1 January 2018. The first-time application of IFRS 15 therefore led to a reduction in retained earnings in the amount of EUR 1,232 thousand as of 1 January 2018. IFRS 9 provides for changes regarding the classification and measurement of financial instruments and the impairment of financial assets, and introduces new provisions regulating hedge accounting. The first-time application as at 1 January 2018 led to an increase in bad-debt allowances for trade receivables in the amount of EUR 97 thousand.

Additional information on the new standards can be found in the Interim Report for the First Half of 2018 on pages 16–17.

OUTLOOK

In 2017, PALFINGER developed its vision and strategy for the digital age. With PALFINGER 21st, a new strategic pillar and unit for disruptive and revolutionary, scalable ideas, PALFINGER has placed special emphasis on digitalization issues. The incorporation of PALFINGER's vision and strategy throughout the Group, the development of resources and specific applications will remain priorities in 2018 and the following years. The group-wide initiatives with a focus on customer orientation and the optimization of processes will be further expanded in support of the PALFINGER Group's endeavour to position itself for the challenges of the years to come.

Another priority in this connection is the full integration of the numerous acquisitions made in previous years. For this reason, no major acquisitions are scheduled for the quarters to come. By the beginning of 2019, the new GLOBAL PALFINGER ORGANIZATION will have been fully implemented. PALFINGER's goal is to establish an organizational structure that facilitates the utilization of existing synergies and potential and thus the generation of long-term, profitable growth.

In the first three quarters of 2018, the PALFINGER Group again recorded an increase in incoming orders, which indicates that for the remaining 2018 financial year business performance will continue to be satisfactory overall.

In the first half of 2018, the restructuring measures in North America were largely implemented and all relevant one-time effects were recorded, but the ongoing restructuring measures in the marine business will continue to depress earnings in the first half of 2019. From today's point of view, the restructuring costs in 2018 will reach a slightly higher level than in the previous year.

The adjustment of the 2017 financial statements on the basis of the AFREP review will not have any effect on the 2018 results but will reduce the Group's equity and equity ratio accordingly.

The management continues to foresee an increase in revenue and operating profitability for 2018. As a result of the higher tax rate, further restructuring measures and the increase in earnings attributable to non-controlling shareholders, the consolidated net result for 2018 is not expected to reach the record levels of 2015 and 2016.

CONSOLIDATED INCOME STATEMENT (CONDENSED)

EUR thousand		July–Sept 20171) July–Sept 2018 Jan–Sept 20171)		Jan–Sept 2018
Revenue	339,355	380,757	1,093,106	1,182,624
Cost of sales	(253,980)	(285,725)	(821,841)	(878,905)
Gross profit	85,375	95,032	271,265	303,719
Other operating income	5,014	5,856	18,098	14,515
Research and development costs	(6,809)	(8,250)	(20,923)	(24,697)
Distribution costs	(25,349)	(27,866)	(81,340)	(84,091)
Administrative costs	(31,030)	(30,994)	(88,484)	(94,363)
Other operating expenses	(6,451)	(5,693)	(15,329)	(18,457)
Income from companies reported at equity	4,285	2,551	8,588	5,053
Earnings before interest and taxes – EBIT	25,035	30,636	91,875	101,679
Net financial result	(4,971)	(4,215)	(12,275)	(13,081)
Result before income tax	20,064	26,421	79,600	88,598
Income tax expense	(5,182)	(8,732)	(20,526)	(26,893)
Result after income tax	14,882	17,689	59,074	61,705
attributable to shareholders of PALFINGER AG (consolidated net result for the period)	11,880	13,072	50,504	48,297
attributable to non-controlling interests	3,002	4,617	8,570	13,408
EUR
Earnings per share (undiluted and diluted)	0.32	0.35	1.34	1.28
Average number of shares outstanding	37,593,258	37,593,258	37,593,258	37,593,258

1) Since 1 January 2018, IFRS 9 and IFRS 15 have to be applied (see Interim Report for the First Half of 2018). The previous year's figures were not adjusted.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (CONDENSED)

EUR thousand		July–Sept 20171) July–Sept 2018 Jan–Sept 20171)		Jan–Sept 2018
Result after income tax	14,882	17,689	59,074	61,705
Amounts that may be reclassified to the income statement in future periods
Unrealized profits (+)/losses (–) from foreign currency translation (after tax)	(5,982)	(9,157)	(43,190)	(6,511)
Unrealized profits (+)/losses (–) from cash flow hedge (after tax)	2,098	1,409	6,879	2,317
Other comprehensive income after income tax	(3,884)	(7,748)	(36,311)	(4,194)
Total comprehensive income	10,998	9,941	22,763	57,511
attributable to shareholders of PALFINGER AG	8,486	6,797	15,433	47,399
attributable to non-controlling interests	2,512	3,144	7,330	10,112

1) Since 1 January 2018, IFRS 9 and IFRS 15 have to be applied (see Interim Report for the First Half of 2018). The previous year's figures were not adjusted.

CONSOLIDATED BALANCE SHEET

EUR thousand	30 Sept 20171)	31 Dec 20171)	30 Sept 2018
Non-current assets
Intangible assets	374,163	368,171	374,339
Property, plant and equipment	313,083	312,106	329,056
Investment property	313	308	293
Investments in companies reported at equity	164,350	167,266	166,205
Other non-current assets	2,365	1,724	1,226
Deferred tax assets	16,234	14,890	15,363
Non-current financial assets	31,256	30,166	25,241
	901,764	894,631	911,723
Current assets
Inventories	301,156	289,034	328,613
Trade receivables	186,464	190,046	206,201
Contract assets from customer contracts	82,499	76,844	65,337
Other current receivables and assets	44,946	43,777	44,758
Income tax receivables	2,257	1,852	1,700
Current financial assets	9,625	9,098	6,019
Cash and cash equivalents	40,801	39,756	34,257
	667,748	650,407	686,885
Total assets	1,569,512	1,545,038	1,598,608
Equity
Share capital	37,593	37,593	37,593
Additional paid-in capital	86,844	86,844	86,844
Retained earnings	455,663	460,037	492,378
Foreign currency translation reserve	(30,099)	(41,556)	(44,771)
Total equity of the shareholders of PALFINGER AG	550,001	542,918	572,044
Non-controlling interests	29,281	32,796	36,033
	579,282	575,714	608,077
Non-current liabilities
Liabilities from puttable non-controlling interests	3,196	2,580	2,754
Non-current financial liabilities	524,476	492,957	407,882
Non-current purchase price liabilities from acquisitions	15,754	15,478	9,342
Non-current provisions	45,029	46,235	48,480
Deferred tax liabilities	18,314	14,798	14,537
Non-current contract liabilities from customer contracts	345	320	222
Other non-current liabilities	2,318	3,705	3,664
	609,432	576,073	486,881
Current liabilities
Current financial liabilities	83,071	99,268	190,714
Current purchase price liabilities from acquisitions	0	0	1,118
Current provisions	18,575	18,829	20,465
Income tax liabilities	15,099	13,933	9,078
Trade payables and other current liabilities	234,367	231,521	251,086
Current contract liabilities from customer contracts	29,686	29,700	31,189
	380,798	393,251	503,650
Total equity and liabilities	1,569,512	1,545,038	1,598,608

1) Since 1 January 2018, IFRS 9 and IFRS 15 have to be applied (see Interim Report for the First Half of 2018). The previous year's figures were not adjusted.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONDENSED)

			Equity attributable to the shareholders of PALFINGER AG
EUR thousand	Share capital	Additional paid in capital	Retained earnings	Foreign currency translation reserve	Non-controlling interests	Equity
As at 1 Jan 2017	37,593	86,844	418,180	11,851	25,452	579,920
Total comprehensive income
Result after income tax	0	0	50,504	0	8,570	59,074
Other comprehensive income after income tax
Unrealized profits (+)/losses (–) from foreign currency translation	0	0	0	(41,950)	(1,240)	(43,190)
Unrealized profits (+)/losses (–) from cash flow hedge	0	0	6,879	0	0	6,879
	0	0	57,383	(41,950)	7,330	22,763
Transactions with shareholders
Dividends	0	0	(21,428)	0	(8,715)	(30,143)
Reclassification non-controlling interests	0	0	(327)	0	(9)	(336)
Addition non-controlling interests	0	0	0	0	5,223	5,223
Other changes	0	0	1,855	0	0	1,855
	0	0	(19,900)	0	(3,501)	(23,401)
As at 30 Sept 2017	37,593	86,844	455,663	(30,099)	29,281	579,282
As at 31 Dec 2017	37,593	86,844	460,037	(41,556)	32,796	575,714
Adjustment IFRS 9	0	0	33	0	(31)	2
Adjustment IFRS 15	0	0	(1,232)	0	0	(1,232)
As at 1 Jan 2018 adjusted	37,593	86,844	458,838	(41,556)	32,765	574,484
Total comprehensive income
Result after income tax	0	0	48,297	0	13,408	61,705
Other comprehensive income after income tax
Unrealized profits (+)/losses (–) from foreign currency translation	0	0	0	(3,215)	(3,296)	(6,511)
Unrealized profits (+)/losses (–) from cash flow hedge	0	0	2,317	0	0	2,317
	0	0	50,614	(3,215)	10,112	57,511
Transactions with shareholders
Dividends	0	0	(17,669)	0	(7,813)	(25,482)
Reclassification non-controlling interests	0	0	(115)	0	(59)	(174)
Addition non-controlling interests	0	0	713	0	1,028	1,741
Other changes	0	0	(3)	0	0	(3)
	0	0	(17,074)	0	(6,844)	(23,918)
As at 30 Sept 2018	37,593	86,844	492,378	(44,771)	36,033	608,077

CONSOLIDATED STATEMENT OF CASH FLOWS (CONDENSED)

Cash flows from operating activities Result before income tax 79,600 88,598 Write-downs (+)/write-ups (–) of non-current assets 42,254 45,897 Gains (–)/losses (+) on the disposal of non-current assets 1,707 Interest income (–)/interest expenses (+) 9,766 9,410 Income from companies reported at equity (8,589) Change in purchase price liabilities 197 2,461 Other non-cash income (–)/expenses (+) 6,735 223 Increase (–)/decrease (+) of assets (71,262) Increase (+)/decrease (–) of provisions (5,073) Increase (+)/decrease (–) of liabilities 25,132 22,295 Cash flows generated from operations 80,467 119,762 Interest received 1,178 466 Interest paid (9,726) (8,058) Dividends received from companies reported at equity 4,222 2,695 Income tax paid (14,697) (31,560) 61,444 83,305 Cash flows from investing activities Cash receipts from the sale of intangible assets and property, plant and equipment 5,590 2,559 Cash payments for the acquisition of intangible assets and property, plant and equipment (60,066) (70,936) Cash payments for the acquisition of subsidiaries net of cash acquired (2,958) 0 Cash payments for investments in companies reported at equity (1,626) 0 Cash receipts from the disposal of other business units 12,337 0 Cash receipts from the disposal of other business units in previous year 0 1,257 Cash payments for the acquisition of securities (856) (12) Cash payments for/cash receipts from other assets 3,154 3,962 (44,425) (63,170) Cash flows from financing activities Dividends to shareholders of PALFINGER AG (21,428) Dividends to non-controlling shareholders (9,001) Cash payments for the acquisition of non-controlling interests in previous year (9,845) Loans for the acquisition of interests 60,000 0 Repayment of loans for acquisitions (2,000) Non-current refinancing of redemptions and maturing current loans 0 30,000 Repayment of maturing/terminated loans (105,000) Issue of promissory note loans 200,000 0 Repayment of bridge financing loans for the acquisition of interests (90,000) 0 Current financing 0 45,000 Repayment of current financing 0 (2,678) Redemption of maturing/terminated leasing liabilities (9,609) 0 Cash payments for/cash receipts from other financial liabilities (21,084) 18,948 (7,967) (24,827) Total cash flows 9,052 Free cash flows1) 24,568 26,427 EUR thousand 2017 2018 Funds as at 1 Jan 33,922 39,756 Effects of changes in foreign exchange rates (2,173) Total cash flows 9,052	EUR thousand	Jan–Sept 2017	Jan–Sept 2018
			(375)
			(5,053)
			(43,181)
			(513)
			(17,669)
			(7,814)
			(6,447)
			(24,167)
			(60,000)
			(4,692)
			(807)
			(4,692)
Funds as at 30 Sept 40,801 34,257 1) Sum total of cash flows from operating activities and cash flows from investing activities plus interest on borrowings minus tax shield on interest on borrowings.

FINANCIAL CALENDAR

18 February 2019	Publication of the Integrated Annual Report 2018
19 February 2019	Balance sheet presentation
10 March 2019	Record date Annual General Meeting
15 March 2019	Deadline for certificates of deposit
20 March 2019	Annual General Meeting
22 March 2019	Ex-dividend date
25 March 2019	Record date dividend
26 March 2019	Dividend payment date
30 April 2019	Publication of results for the first quarter of 2019
30 July 2019	Publication of results for the first half of 2019
29 October 2019	Publication of results for the first three quarters of 2019

Additional dates, such as those of trade fairs, will be announced on the Company's website under Financial Calendar.

INVESTOR RELATIONS

Hannes Roither, Company Spokesperson

Phone +43 662 2281–81100 Fax +43 662 2281–81070 h.roither@palfinger.com

PALFINGER AG LAMPRECHTSHAUSENER BUNDESSTRASSE 8 5101 BERGHEIM AUSTRIA

WWW.PALFINGER.AG

The English translation of this PALFINGER Report is for convenience. Only the German text is binding. Minimal arithmetic differences may arise from the application of commercial rounding to individual items and percentages in this report.

This Report contains forward-looking statements made on the basis of all information available at the date of the preparation of this Report. Forward-looking statements are usually identified by the use of terminology such as "expect", "plan", "estimate", "believe", etc. Actual outcomes and results may be different from those predicted.

Published on 29 October 2018.

Typesetting: in-house, using firesys

No liability is assumed for any typographical or printing errors.