Westag AG — Interim / Quarterly Report 2016

Aug 10, 2016

INTERIM REPORT

1st six months of 2016

INTERIM REPORT ON THE FIRST SIX MONTHS OF 2016

Sales

Thanks to the good economic trend in the relevant output markets, Westag & Getalit AG increased its sales revenues by 5.7% to € 118.8 million in the first half of 2016 (previous year: € 112.4 million). The company's export sales rose by a disproportionate 8.6% to € 25.3 million (previous year: € 23.3 million); as a consequence, the export share climbed from 20.7% to 21.3%.

As sales revenues and other operating income have been redefined under the German BilRUG Act, the recognition of both items has changed. This change has been applied in accordance with IFRS. Consequently, an amount of € 771 thousand was adjusted as of the reporting date (previous year: € 789 thousand). The other operating income fell accordingly.

Divisions

Sales revenue in € '000	Jan. 1- Jun. 30, 2016	Jan. 1- Jun. 30, 2015	Change in %
Doors/Frames	64,350	58,553	9.9
Surfaces/Elements	50,540	50,193	0.6

The Doors/Frames Division boosted its sales revenues by 9.9% to € 64.4 million in the first half of 2016, compared to € 58.6 million in the previous year.

At € 50.5 million, first-half sales revenues in the Surfaces/Elements Division were up by 0.6% on the previous year's € 50.2 million.

Earnings

Profit data in € '000	Jan. 1- Jun. 30, 2016	Jan. 1- Jun. 30, 2015	Change in %
Earnings before income taxes	5,440	5,072	7.3
Net Profit	3,808	3,551	7.3
Earnings per ordinary share (in €)	0.68	0.63	7.6
Earnings per preference share (in €)	0.74	0.69	6.9

As a result of the positive revenue trend, the company's earnings also improved compared to the previous year. Earnings before income tax increased by 7.3% from € 5.1 million as at June 30, 2015 to € 5.4 million. Consequently, net income for the period rose from € 3.6 million to € 3.8 million. Net income per share amounted to € 0.68 for the ordinary shares (previous year: € 0.63) and to € 0.74 for the preference shares (previous year: € 0.69).

Employees

Workforce	Jun.	Jun.	Change
	30, 2016	30, 2015	in %
Number of staff	1,304	1,300	0.3

As of June 30, 2016, the company employed a total of 1,304 people, three more than at the prior year reporting date.

Portfolio of own shares

As at June 30, 2016 Westag & Getalit AG held 322,430 own shares (change compared to December 31, 2015: 11,602). All these shares are preference shares.

Capital expenditure

At this state, the company plans to make investments in the amount of roughly € 10.0 million in FY 2016. Due to the current level of utilisation, investment activity will focus on further expanding production capacity in the Doors/Frames Division. This comprises, in particular, the completion of a new frames production line, which will be taken into operation in the third quarter of 2016. Investments planned for the Surfaces/Elements Division primarily relate to the optimisation of operational processes and the existing technical equipment.

Outlook

After the gratifying trend in the first six months of 2016, the outlook for the coming months is generally positive. From today's point of view, the Management Board assumes that the company will continue to benefit from the good development in the German construction sector. Management also expects the relevant output markets to show a generally positive trend. This expectation is supported by the intensified distribution activities abroad and the product portfolios customised to the individual markets. Against this background, the Management Board expects the sales trend in the year to date to continue until the end of the year. On this basis, the Management Board also believes that earnings will continue to show a positive trend.

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

BALANCE SHEET

Assets in € '000	Jun. 30, 2016	Dec. 31, 2015
Intangible assets	903	1,044
Tangible assets	72,168	73,830
Financial assets	1,210	1,230
Deferred tax liabilities	2,179	2,154
Non-current assets	76,460	78,258
Inventories	37,784	34,566
Receivables and other assets	33,500	27,938
Cash at banks or in hand	18,072	16,835
Current assets	89,356	79,339
Total assets	165,816	157,597

Equity and liabilities in € '000	Jun. 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	10,154	6,577
Equity and reserves	110,108	106,531
Pension provisions	22,980	22,891
Other non-current provisions	1,393	1,304
Non-current liabilities	24,373	24,195
Trade payables	8,469	7,602
Other current liabilities	22,449	18,763
Current provisions	417	506
Current liabilities	31,335	26,871
Total equity and liabilities	165,816	157,597

QUARTERLY STATEMENT OF COMPREHENSIVE INCOME

in € '000	Apr. 1- Jun. 30, 2016	Apr. 1- Jun. 30, 2015
Sales	58,501	56,119
In/decrease in inventories	794	1,142
Own work capitalised	71	75
Total operating performance	59,366	57,336
Other operating income	266	244
Cost of materials	28,103	27,577
Personnel expenses	18,931	17,991
Depreciation and amortisation	2,564	2,621
Other operating expenses	7,100	6,705
Other taxes	76	75
Operating result	2,858	2,611
Financial result	2	6
Extraordinary items	0	0
Earnings before income taxes	2,860	2,617
Income taxes	858	785
Net profit	2,002	1,832
Income components recognised in equity	0	0
Comprehensive income	2,002	1,832
Earnings per ordinary share (undiluted and diluted)	0.37	0.34
Earnings per preference share (undiluted and diluted)	0.37	0.34
Number of shares (undiluted and diluted)	5,407,338	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.

HALF-YEAR STATEMENT OF COMPREHENSIVE INCOME

in € '000	Jan. 1- Jun. 30, 2016	Jan. 1- Jun. 30, 2015
Sales	118,828	112,393
In/decrease in inventories	2,166	2,452
Own work capitalised	144	99
Total operating performance	121,138	114,944
Other operating income	282	350
Cost of materials	58,134	55,365
Personnel expenses	38,307	36,497
Depreciation and amortisation	5,261	5,242
Other operating expenses	14,500	13,332
Other taxes	146	132
Operating result	5,072	4,726
Financial result	368	346
Extraordinary items	0	0
Earnings before income taxes	5,440	5,072
Income taxes	1,632	1,521
Net profit	3,808	3,551
Income components recognised in equity	0	0
Comprehensive income	3,808	3,551
Earnings per ordinary share (undiluted and diluted)	0.68	0.63
Earnings per preference share (undiluted and diluted)	0.74	0.69
Number of shares (undiluted and diluted)	5,408,255	5,409,172

CASH FLOW STATEMENT

in € '000	Jan. 1- Jun. 30, 2016	Jan. 1- Jun. 30, 2015
Operating result/EBIT	5,072	4,726
Income tax payments	- 1,214	- 1,459
Depreciation and amortisation	5,261	5,242
Result from asset retirements	- 63	- 25
Change in current assets	- 8,780	- 10,118
Change in liabilities	4,199	4,024
Cash flow from operating activities	4,475	2,390
Investments in fixed assets	- 3,519	- 6,313
Change in financial assets	20	20
Income from investments	366	333
Income from fixed asset retirements	124	39
Cash flow from investment activities	- 3,009	- 5,921
Interest income	3	5
Interest expenses	- 1	0
Repayment of non-current financial liabilities	0	0
Acquisition/sale of own shares	- 231	0
Dividend payments	0	0
Cash flow from financing activities	- 229	5
Change in liquid funds	1,237	- 3,526
Cash and cash equivalents as of Jan. 1	16,835	17,316
Cash and cash equivalents as of Jun. 30	18,072	13,790

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					0
Net profit				3,551	3,551
As of Jun. 30, 2015	14,644	24,399	60,711	8,116	107,870
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				- 231	- 231
Changes not recognised in profit/loss					0
Dividend					0
Net profit				3,808	3,808
As of Jun. 30, 2016	14,644	24,399	60,911	10,154	110,108

STATEMENT OF CHANGES IN EQUITY

in € '000	Jan. 1- Jun. 30, 2016	Jan. 1- Jun. 30, 2015	Change in %
Germany
Sales	93,561	89,128	5.0
Earnings before income taxes	4,467	4,200	6.4
Export
Sales	25,267	23,265	8.6
Earnings before income taxes	973	872	11.6
Full Company
Sales	118,828	112,393	5.7
Earnings before income taxes	5,440	5,072	7.3

SEGMENT REPORT FOR THE FIRST THREE MONTHS

NOTES ON THE REPORT FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2016

1. Accounting principles

Westag & Getalit AG's quarterly report for the period ended June 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. Purchase commitments

As of June 30, 2016, purchase commitments amounted to € 6,145 thousand, compared to € 5,950 thousand in the previous year.

6. 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.

7. 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.

8. 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 2016*

March 29, 2016	Press release
	Report on the results of the fiscal year 2015
March 30, 2016	Publication of Financial Report 2015
	(on the Internet)
April 28, 2016	Annual Accounts Press Conference
	in Rheda-Wiedenbrück
May 10, 2016	Report on the first three months of 2016
August 10, 2016	Interim report on the first six months 2016
August 23, 2016	Annual General Meeting (AGM) of Shareholders
	in Rheda-Wiedenbrück
November 3, 2016	Presentation of Westag & Getalit AG at the
	Small Cap Conference in Düsseldorf
November 10, 2016	Report on the first 9 months of 2016

* 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