Westag AG — Interim / Quarterly Report 2016

Nov 10, 2016

INTERIM REPORT

1st to 3rd Quarter 2016

Sales

Westag & Getalit AG increased its sales revenues by 4.8% to € 179.6 million in the first nine months of 2016 (previous year: € 171.4 million). As already announced at the six-month stage, the company's export revenues again picked up disproportionately, climbing 8% from the previous year's € 35.4 million to € 38.3 million in the first nine months of 2016. Consequently, the export share rose from 20.8% to 21.5%.

Divisions

Sales revenue in € '000	Jan. 1- Sept. 30, 2016	Jan. 1- Sept. 30, 2015	Change in %
Doors/Frames	97,650	90,207	8.3
Surfaces/Elements	76,001	75,381	0.8

The Doors/Frames Division's sales revenues were up by 8.3% on the previous year to € 97.7 million in the first nine months of 2016 (previous year: € 90.2 million).

Sales revenues in the Surfaces/Elements Division rose by 0.8% from the previous year's € 75.4 million to € 76.0 million.

Earnings

Profit data in € '000	Jan. 1- Sept. 30, 2016	Jan. 1- Sept. 30, 2015	Change in %
Earnings before income taxes	8,556	7,673	11.5
Net Profit	5,989	5,371	11.5
Earnings per ordinary share (in €)	1.08	0.97	12.0
Earnings per preference share (in €)	1.14	1.03	11.3

Thanks to the positive sales trend resulting from the intensified distribution activities and the ongoing adjustment of the operational cost structures, the company's result improved notably in the reporting period. Earnings before taxes increased to € 8.6 million in the first nine months, up 11.5% on the € 7.7 million reported as of 30 September 2015. This trend also led to higher net profit for the period, which climbed from € 5.4 million to € 6.0 million. Net profit per share amounted to € 1.08 for the ordinary shares (previous year: € 0.97) and to € 1.14 for the preference shares (previous year: € 1.03).

Employees

Workforce	Sept.	Sept.	Change
	30, 2016	30, 2015	in %
Number of staff	1,311	1,308	0.2

As of September 30, 2016, Westag & Getalit AG employed a total of 1,311 people, three more than at the prior year reporting date.

Own shares

The number of own shares held by the company increased by 18,140 compared to 31 December to 328,968 shares as at September 30, 2016. All these shares are preference shares.

Capital expenditures

The company continues to project capital expenditures of roughly € 10.0 million for the fiscal year 2016. The bulk of these expenditures relates to capacity expansion in the form of a new frames production line for the Doors/Frames Division. In addition, the company invests in the ongoing optimisation of operational processes and the existing technical equipment in the Surfaces/Elements Division.

Outlook

As already announced at the six-month stage, the market environment showed a good trend also in the third quarter of 2016. Forecasts suggest that the company's market environment will generally remain positive for the rest of the year. The intensified distribution efforts and the continued good demand situation in the company's relevant export markets will form the basis for the successful performance of Westag & Getalit AG.

In view of these general conditions, the Management Board projects a continued positive revenue and earnings trend for the remaining months of the fiscal year. Consequently, management expects sales revenues to increase at the same rate as in the year to date and earnings to pick up sharply in the full year 2016.

Rheda-Wiedenbrück, November 2016 Westag & Getalit AG The Executive Board

BALANCE SHEET

Assets in € '000	Sept, 30, 2016	Dec, 31, 2015
Intangible assets	889	1,044
Tangible assets	71,790	73,830
Financial assets	1,200	1,230
Deferred tax liabilities	4,181	2,154
Non-current assets	78,060	78,258
Inventories	36,333	34,566
Receivables and other assets	32,979	27,938
Cash at banks or in hand	19,881	16,835
Current assets	89,193	79,339
Total assets	167,253	157,597
Equity and liabilities in € '000	Sept. 30, 2016	Dec. 31, 2015
Subscribed Capital	14,644	14,644
Capital reserve	24,399	24,399
Revenue reserves	60,911	60,911
Accumulated profit	3,418	6,577
Equity and reserves	103,372	106,531
Pension provisions	29,654	22,891
Other non-current provisions	1,502	1,304
Non-current liabilities	31,156	24,195
Trade payables	8,437	7,602
Other current liabilities	23,857	18,763
Current provisions	431	506
Current liabilities	32,725	26,871

Total equity and liabilities 167,253 157,597

QUARTERLY STATEMENT OF COMPREHENSIVE INCOME

in € '000	Jul. 1- Sept. 30, 2016	Jul. 1- Sept. 30, 2015
Sales	60,774	58,990
In/decrease in inventories	-809	-721
Own work capitalised	38	121
Total operating performance	60,003	58,390
Other operating income	120	203
Cost of materials	28,763	27,991
Personnel expenses	18,672	18,242
Depreciation and amortisation	2,434	2,576
Other operating expenses	7,069	7,106
Other taxes	71	78
Operating result	3,114	2,600
Financial result	2	1
Earnings before income taxes	3,116	2,601
Income taxes	935	781
Net profit	2,181	1,820
Income components recognised in equity	-4,643	0
Comprehensive income	-2,462	1,820
Earnings per ordinary share (undiluted and diluted)	0.40	0.34
Earnings per preference share (undiluted and diluted)	0.40	0.34
Number of shares (undiluted and diluted)	5,394,798	5,409,172

Earnings per share as defined in IAS 33 are calculated for both ordinary and preference shares by dividing the net profit attributable to the respective share type by the average number of shares of the respective type. Accordingly, net profit for the year must be divided into the different share types taking into account the higher dividend for the preference shares. Diluted earnings are equivalent to earnings per share.

STATEMENT OF COMPREHENSIVE INCOME FIRST NINE MONTH

in € '000	Jan. 1- Sept. 30, 2016	Jan. 1- Sept. 30, 2015
Sales	179,602	171,383
In/decrease in inventories	1,357	1,731
Own work capitalised	182	220
Total operating performance	181,141	173,334
Other operating income	402	553
Cost of materials	86,897	83,356
Personnel expenses	56,979	54,739
Depreciation and amortisation	7,695	7,818
Other operating expenses	21,569	20,438
Other taxes	217	210
Operating result	8,186	7,326
Financial result	370	347
Earnings before income taxes	8,556	7,673
Income taxes	2,567	2,302
Net profit	5,989	5,371
Income components recognised in equity	-4,643	0
Comprehensive income	1,346	5,371
Earnings per ordinary share (undiluted and diluted)	1.08	0.97
Earnings per preference share (undiluted and diluted)	1.14	1.03
Number of shares (undiluted and diluted)	5,403,747	5,409,172

in € '000	Jan. 1- Sept. 30, 2016	Jan. 1- Sept. 30, 2015
Operating result/EBIT	8,186	7,326
Income tax payments	-1,772	-2,148
Depreciation and amortisation	7,695	7,818
Result from asset retirements	-82	-33
Change in current assets	-6,808	-9,802
Change in liabilities	5,350	3,723
Cash flow from operating activities	12,569	6,884
Investments in fixed assets	-5,560	-8,558
Change in financial assets	30	30
Income from investments	366	333
Income from fixed asset retirements	142	63
Cash flow from investment activities	-5,022	-8,132
Interest income	5	16
Interest expenses	-1	0
Acquisition/sale of own shares	-360	0
Dividend payments	-4,145	-5,237
Cash flow from financing activities	-4,501	-5,221
Change in liquid funds	3,046	-6,469
Cash and cash equivalents as of Jan. 1	16,835	17,316
Cash and cash equivalents as of Jun. 30	19,881	10,847

CASH FLOW STATEMENT STATEMENT OF CHANGES IN EQUITY

in € '000	Subscribed capital	Capital reserve	Revenue reserve	mulated profit Accu	Total
As of Jan. 1, 2015	14,644	24,399	60,711	4,565	104,319
Transfer to other reserve					0
wn shares Change in o					0
Changes not recognised in profit/loss					0
Dividend				-5,237	-5,237
Net profit				5,371	5,371
As of Sept. 30, 2015	14,644	24,399	60,711	4,699	104,453
As of Jan. 1, 2016	14,644	24,399	60,911	6,577	106,531
Transfer to other reserve					0
wn shares Change in o				-360	-360
Changes not recognised in profit/loss				-4,643	-4,643
Dividend				-4,145	-4,145
Net profit				5,989	5,989
As of Sept. 30, 2016	14,644	24,399	60,911	3,418	103,372

in € '000	Jan. 1- Sept. 30, 2016	Jan. 1- Sept. 30, 2015	Change in %
Germany
Sales	141,266	135,939	3.9
Earnings before income taxes	6,837	6,192	10.4
Export
Sales	38,336	35,444	8.2
Earnings before income taxes	1,719	1,481	16.1
Full Company
Sales	179,602	171,383	4.8
Earnings before income taxes	8,556	7,673	11.5

NOTES ON THE REPORT

1. Accounting principles

Westag & Getalit AG's quarterly report for the period ended September 30, 2016 was, except for IFRS 8 "Operating Segments", compiled in full compliance with the Financial Reporting Standards (IFRS) as valid on the reporting date. All accounting and valuation principles are consistent with those used for the 2015 financial statements. The waiver of applying IFRS 8 was conducted in order to prevent our company from expected business harm. As regards further reasoning, we refer to our Annual Report 2015.

2. Cash flow statement

The cash flows in the cash flow statement were determined using the indirect method.

3. Liquid funds

Liquid funds shown in the balance sheet doesn't include securities.

4. Composition of subscribed capital

The subscribed capital of € 14,643,200 is composed of 2,860,000 no-par ordinary shares and 2,860,000 non-voting no-par preference shares with a total value of € 7,321,600.

5. Profit-neutral components of income and expenses

The increase in pension provisions is due to the sustainable change in interest rates on capital markets. Reporting in the statement of comprehensive income is made under consideration of the associated deferred taxes in the profit-neutral components of income and expenses.

6. Bestellobligo

As of September 30, 2016, purchase commitments amounted to € 1,796 thousand, compared to € 4,630 thousand in the previous year.

7. Opportunity and Risk Report

The opportunities and risks to which the company is exposed and which remain unchanged, are specified in the Management Report of the current Annual Report. From today's point of view, no additional assessable risks are discernible.

8. Review

The interim financial statements and the interim management report have been neither audited in accordance with section 317 HGB nor reviewed by the auditors.

9. Responsibility statement

The legal representatives of Westag & Getalit AG assure, to the best of their knowledge, that, in accordance with the applied principles of proper interim reporting, the present interim financial statements provide a true and fair view of the net worth, financial and earnings position of the company, that the interim management report presents a true and fair view of the business results and the situation of the company and that the main risks and opportunities of the expected development of the company during the rest of the fiscal year have been outlined.

FINANCIAL CALENDAR*

13.12.2016	Presentation of Westag & Getalit AG at the Prior
	capital market conference, Frankfurt/Main
30.03.2017	Publication of Financial Report 2015
	(on the Internet)
04.05.2017	Annual Accounts Press Conference
	in Rheda-Wiedenbrück
10.05.2017	Report on the first three months of 2017
27.06.2017	Annual General Meeting (AGM) of Shareholders
	in Rheda-Wiedenbrück
10.08.2017	Interim report on the first six months 2017
10.11.2017	Report on the first 9 months of 2017
	* For updates refer to:
	www.westag-getalit.de/financial-calendar

Westag & Getalit AG

Postfach 26 29 | 33375 Rheda-Wiedenbrück | Germany Tel. +49 5242 17-0 | Fax +49 5242 17-750 00 www.westag-getalit.de | ir@westag-getalit.de