Growth in difficult market environment: INDUS increases sales and earnings across all segments in 2021

- Strongest growth in Engineering
- "Striving for Sustainability" becomes fourth strategic initiative
- Good start to 2022; consequences of Russia's war on Ukraine not yet foreseeable

Bergisch Gladbach, 23 March 2022 - The financial year 2021 saw stock exchange-listed INDUS Holding AG grow its sales by 11.7% to around EUR 1.74 billion (previous year: EUR 1.56 billion). Organically, the Group of small and medium-sized enterprises grew by 7.6%, with the newly acquired hidden champions JST, WIRUS and FLACO contributing 4.1%.

Earnings before interest and taxes (EBIT) amounted to EUR 115.4 million (previous year: EUR 25.1 million). The EBIT margin thus stood at 6.6% (previous year: 1.6%). Excluding impairment losses, the INDUS Group's EBIT amounted to EUR 123.6 million (previous year: EUR 65.7 million), while the EBIT margin was 7.1% (previous year: 4.2%). "In spite of the difficult conditions, the INDUS portfolio companies were able to clearly expand their business, with sales and earnings almost back at pre-COVID levels," says Dr. Johannes Schmidt, Chairman of the INDUS Group's Board of Management.

Three out of five segments report higher-than-expected sales and EBIT

As of the balance sheet date, the INDUS Group had 46 portfolio companies. The companies in the Construction / Infrastructure segment continued to perform very well despite supply bottlenecks and rising material prices: at 15.6%, the segment's EBIT margin was above the target range of 13% to 15% (previous year: 16.8%). In 2021, INDUS acquired window manufacturer WIRUS for this segment. Accounting for 25.9% of total sales, the segment was the strongest in terms of sales in 2021.

The Automotive Technology segment was again adversely affected by the upheaval in the industry and the chip shortage. In this difficult market environment, the sales shortfall resulting from the INTERIM SPRINT set of measures was nevertheless more than offset, with segment sales growing by 4.7%. Although the EBIT margin improved in 2021, it remained negative as projected at -20.3%, (previous year: -32.6%). The restructuring exercises of two series suppliers continued and again weighed on the bottom line. By selling the WIESAUPLAST Group at the end of 2021, INDUS further reduced the number of series suppliers in the portfolio.

An EBIT margin of 13.0% shows that the companies in the Engineering segment returned to former profitability following the COVID-induced slump (previous year: 8.5%). In 2021, INDUS acquired control room specialist JST, sub-subsidiary FLACO as well as further shares in TECALEMIT Inc., USA. The latest acquisition of HEIBER + SCHRÖDER is expected to be closed in the second quarter of 2022.

Although growth in the Medical Engineering / Life Science segment was again adversely affected by the effects of COVID-19 such as postponed surgeries, fewer doctor visits and fewer prescriptions, the portfolio companies were able to grow their sales by 4.6% in 2021. The EBIT margin improved to 8.1% (previous year: 7.2%).

The Metals Technology segment was able to offset the shortfall of sales caused by the discontinuation of BACHER and the sales made in the context of the INTERIM SPRINT program. The EBIT margin picked up noticeably to 10.1% (previous year: 3.7%).

Clearly increased investments - stable economic position

At EUR 136.4 million, operating cash flow in 2021 was below the high level of the previous year (EUR 174.4 million) due to the increased business activity and a corresponding rise in working capital. Moreover, the portfolio companies have increased their inventories to hedge against price increases and material shortages. Following the deliberately restrictive investment policy in the first COVID year, INDUS once again invested more heavily in its portfolio companies in the past financial year; investments property, plant and equipment as well as in intangible assets rose to EUR 75.6 million (previous year: EUR 52.5 million) and were thus on a par with 2019. A further EUR 67.3 million was spent on the acquisition of portfolio companies (previous year: EUR 0.0 million).

Total assets of the INDUS Group amounted to EUR 1,857.4 million as at the reporting date (previous year: EUR 1,728.8 million). At 42.3% (previous year: 39.1%), the equity ratio clearly exceeded the target of 40%. This was not least attributable to the capital increase carried out in March 2021. The liquidity built up as a precaution in the COVID year was reduced again and amounted to EUR 136.3 million as of the reporting date (previous year: EUR 194.7 million). At 2.3 years (previous year: 3.3 years), the repayment term (net liabilities / EBITDA) was within the target range of 2 to 2.5 years.

Earnings per share rose to EUR 1.78 (previous year EUR -1.10). In keeping with INDUS' long-term dividend policy, the Board of Management and the Supervisory Board will propose a divided of EUR 1.05 per share to the Annual Shareholders' Meeting on 31 May 2022 (previous year: EUR 0.80 per share).

Sustainability newly anchored in PARKOUR strategy

The long-term development of the portfolio companies is a key element of INDUS' business model. Apart from strengthening innovation, market excellence and operational excellence, the holding company places a special focus on sustainable and resource-efficient growth. As of the new financial year, INDUS will launch "Striving for Sustainability", the company's fourth strategic initiative, with a view to firmly anchoring sustainability in the PARKOUR strategy program. The new sustainability development bank set up at the beginning of the year is currently funding five projects in the portfolio companies.

Outlook on 2022: Macroeconomic effects of Russia's war on Ukraine not yet foreseeable

"Before the outbreak of Russia's war on Ukraine, we assumed that our portfolio companies' business would continue to normalize in 2022," says Dr. Johannes Schmidt, Chairman of the INDUS Board of Management. "This is also reflected in the portfolio companies' good start to the year 2022." Economic momentum is still intact and most of the companies are looking at good order backlogs.

"The war, about which we are all concerned, now confronts us with a new reality," Schmidt added. The economic consequences are not yet foreseeable as of today. The forecast for the financial year 2022 published in the 2021 Annual Report projects sales of EUR 1.80 billion to EUR 1.95 billion and earnings before interest and taxes (EBIT) of EUR 115 million to EUR 130 million. Possible negative effects of Russia's war on Ukraine are not included, as it is not possible at this stage to predict if and to what extent its macroeconomic consequences - such as rising material and energy prices and supply chain problems - will have an impact on INDUS. In particular, sales figures in the Automotive Technology segment remain unclear due to supply chain disruptions caused by the war in Ukraine. The direct economic effects on INDUS' business are manageable, as Russia and Ukraine account for only 1% of the Group's total sales. "The year 2022 will again ask a lot of the management teams and employees of our portfolio companies," says Dr. Johannes Schmidt. "Our decentralized and diversified business model will be a special strength also in times like these."

Click here for the full Annual Report of INDUS Holding AG. An overview of the key performance indicators is available here.

About INDUS Holding AG:

Established in 1989 and headquartered in Bergisch Gladbach, INDUS Holding AG is a leading specialist for sustainable corporate investment and development in the German-speaking SME sector. The industry focus is on construction and infrastructure, automotive technology, mechanical and plant engineering, medical engineering and life sciences as well as metals technology. As a growth-oriented financial investor with a long-term focus, INDUS currently supports 46 portfolio companies in their corporate development. Since 1995, INDUS Holding AG has been listed in the Prime Standard of the Frankfurt Stock Exchange (DE0006200108); in 2021, the Group generated sales of around EUR 1.74 billion. For more information on INDUS, visit www.indus.de.

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