Interroll : increases dynamics to a high level

Sant'Antonino, Switzerland, March 22, 2019. The conveyor technology expert Interroll successfully continued its growth strategy into 2018, too.The high dynamics of the previous years were again significantly surpassed at all levels.The excellent annual result means that the dividends can again be increased (+33.3%) on the occasion of the company's 60th anniversary. Thanks to the good backlog of orders, the group was able to start the 2019 financial year positively in all regions and with all product groups.

In short:

• Record order intake of CHF 592.6 million (+29.4%)
• Net sales climb to a record level of CHF 559.9 million (+22.9%).
• All regions surpass the previous year with regard to order intake and net sales.
• Despite higher research and development expenditure: EBITDA grows by +40.6% to CHF 93.2 million·
• Net profits increase by +32.6% to the new high of CHF 51.8 million.·
• The operative cash flow climbs by a significant +45.9% to CHF 67.4 million.·
• New dividend increase proposed: By +33.3% to CHF 22.00/share (previous year: CHF 16.50/share)
• A good order backlog allows for a positive outlook on the 2019 financial year

In the 2018 financial year, Interroll achieved a record order intake of CHF 592.6 million (previous year: CHF 458.1 million) and grew by +29.4% in local currency and +27.9% in foreign currencies. All regions recorded increases in orders: The Asia-Pacific region increased orders by 49.5%, Americas by 32.9%, and Europe, the Middle East and Africa (EMEA) by 23.0%.

Net sales grew by 24.2%, reaching a new consolidated company record of CHF 559.9 million (previous year: CHF 450.7 million). The sales growth amounted to 22.9% in local currency.The product group "Conveyors and Sorters" made a particularly strong contribution to this with an increase of 54.6%, as did the "Drives" product group with an increase of 16.5% against the previous year. The order intake to net sales ratio reached 1.06 (previous year: 1.02).

Growing product business, numerous project orders

In the 2018 financial year, Interroll manufactured record volumes of conveyor rollers and the RollerDrive. The positive performance of the "Conveyor Rollers" product group is reflected in the sales and order intake for 2018. The consolidated sales of CHF 108.0 million (2017: CHF 105.8 million) and the order intake of CHF 109.0 million (2017: CHF 105.6 million) were again significantly above the record levels of the previous year by 2.1% and 3.2% respectively.

In total, the sales for the "Motors and Drives for Conveyor Systems" product group amounted to CHF 170.9 million and were therefore higher than the previous year by 16.5% (CHF 146.7 million). The consolidated order intake rose by 17.6% to CHF 175.9 million, compared to CHF 149.6 million in the previous year.

The "Flow Storage Systems" product group was able to record growth in 2018: With regard to sales, a rise in consolidated sales of 8.8% to CHF 60.5 million was recorded (previous year: CHF 55.6 million). The consolidated order intake also rose by an impressive 26.4% to CHF 64.3 million (previous year: CHF 50.9 million).

In the 2018 financial year, the "Conveyors and Sorters" product group achieved record rates of growth: The consolidated sales were CHF 220.5 million and therefore increased by 54.6% against the previous year (CHF 142.6 million). The order intake grew by a strong 60.1% to CHF 243.3 million, compared to CHF 152.0 million in the previous year. In 2018, Interroll was able to complete follow-up orders by equipping distribution centres for a leading parcel delivery company in North America. In Europe too, the company was able to record numerous orders in the area of postal services and logistics, as well as in the food and beverage industry. In Asia, Interroll received a follow-up order with a record number of conveying modules with a total length of 12 km, as well as eight spiral lifts for the distribution center for a customer from the e-commerce sector in South Korea.

Regions are reflecting globalisation

In the EMEA region, the strong growth of recent years continued into the 2018 financial year. Incoming orders increased by 23.0% compared to the previous year's CHF 268.3 million, reaching CHF 330.0 million. At CHF 307.6 million, turnover was 15.9% higher than the previous year (CHF 265.5 million). The driving force behind this development was a high demand for rollers, drives and conveyor systems.

Sales in the Americas region were CHF 172.8 million, therefore 43.4% higher than in the previous year (CHF 120.5 million). The lion's share of this development was made up of the North American market, with the United States (US) at the top. This is where Interroll saw significant further growth. The reason for this positive development is the continuing strong demand in e-commerce, food and distribution centers. In the US, Interroll completed the process of expanding capacity at the Hiram/Atlanta site in Georgia in the first half of 2018.

Interroll's sales in the Asia-Pacific region grew strongly by 22.8%, reaching CHF 79.4 million in the 2018 financial year (previous year: CHF 64.7 million). In contrast, however, the CHF 62.3 million worth of orders received in the previous year grew by a significant 49.5% to a new record level of CHF 93.1 million in total. Of special relevance here is a large order for Modular Conveyor Platforms (MCPs) and Spiral Lifts amounting to the low tens of millions (CHF). The order came from a leading e-commerce company.

Net profits are also reach a new high

Despite around CHF 5 million in additional research and development costs, earnings before interest, tax, depreciation and amortization (EBITDA) or operating result increased by 40.6% to CHF 93.2 million (previous year: CHF 66.3 million). Interroll's continuous increases in productivity and reductions in costs contributed significantly to this. The EBITDA margin was 16.6% (previous year: 14.7%). The earnings before interest and tax (EBIT) increased by 46.4%, reaching CHF 69.4 million (previous year: CHF 47.4 million).

The EBIT margin was 12.4% (previous year: 10.5%). The net profit increased by 32.6% to CHF 51.8 million (previous year: CHF 39.1 million). The net profit margin reached 9.3% (previous year: 8.7%).

Good development of the balance sheet

The balance sheet for the Interroll Group developed very solidly and, by the end of the period on December 31, 2018, showed a balance sheet total of CHF 417.6 million (previous year: CHF 355.3 million). In particular, the finished goods held in stock and work already started, along with receivables from customers, all increased. However, Interroll was also able to collect more advance payments. This development illustrates the intensive project activity in the group during the reporting period.

The company is debt-free and has net financial assets of CHF 52.0 million. The equity capital grew by 8.8% to CHF 284.8 million (31st December 2017: CHF 261.7 million). The equity ratio reached 68.2%, compared to 73.6% at the end of 2017.

Operative and free cash flow grow significantly

The operative cash flow grew significantly in comparison to the previous year (CHF 46.2 million) by 45.8% to CHF 67.4 million. The gross investment was CHF 28.6 million and therefore increased again over the previous year (CHF 25.4 million). The free cash flow more than doubled to CHF 40.9 million (previous year: CHF 20.1 million).

Innovation

In the reporting year, Interroll introduced important expansions to its innovative, modular-design drum motor platform. This is suitable for modern conveyor belt systems and comprises both synchronous and asynchronous drive solutions.

With the new Interroll Spiral Lift, Interroll offers a vertical conveyor solution. The Spiral Lift stands out for the extraordinarily small amount of floor area it requires, enabling optimum use of space. With a deep-freeze version of its Modular Conveyor Platform (MCP), Interroll is creating a conveyor platform for the temperature range down to -30 °C. With Interroll's new infeed conveyor modules, also known as infeeds, the company offers higher infeed speeds with reduced space requirements. The infeed conveyor modules are perfectly designed to work with Interroll crossbelt sorters and offer a substantial potential increase in goods flow in automatic sorting systems.

Positive price development for Interroll's shares and another increased proposed dividend

Interroll's shares were able to further increase their performance when compared to the previous year and, with a closing rate of CHF 1,452.00, saw an increase of +0.6% over the year-end rate for 2017 (CHF 1,443.00). The solid annual result for 2018 prompted the board of directors to increase the payout again and prompted the general meeting to propose a dividend of CHF 22.00 (+33.3) per share (previous year: CHF 16.50).

Outlook: positive and focused into the future

Thanks to the record order intake in 2018, the group was able to start the 2019 business year positively in all regions and with all product groups. In the core markets, there is no downward trend on the horizon. The sustainable expansion in the market is accompanied by the need to expand capacities. As a result, a new plant in Thailand will soon begin operations.

"The strong financial situation is allowing the group to decisively invest in capacity expansion in the 2019 financial year and beyond," explains Paul Zumbühl, CEO of the global Interroll Group. Last December, Interroll announced additional investment of around €40 million in southern Germany in order to take better advantage of the medium- to long-term growth opportunities in the "Conveyors and Sorters" sector with double the capacity in Europe and to therefore reinforce the global positioning of the group in the long term. Additional investments in expansion are in the pipeline.

Contacts

Paul Zumbühl Daniel Bättig

Chief Executive Officer Chief Financial Officer

[phone] [phone]

Martin Regnet

Global PR Manager

Via Gorelle 3 │ 6592 Sant'Antonino │ Switzerland

[phone]

[e-mail]

www.interroll.com

Financial calendar 2019

03.05. General meeting in Sant'Antonino, TI

05.08. Publication of Half-Year Report for 2019 and web conference (in English)

Interroll shares

Registered shares of Interroll Holding AG are traded in the Main Standard of the SIX Swiss Exchange under the securities number 637289.

Interroll profile

The Interroll Group is the leading global provider of material flow solutions. The company was founded in 1959 and has been listed on the SIX Swiss Exchange since 1997. Interroll supplies system integrators and plant manufacturers with a wide range of platform-based products and services in the following categories: "Rollers" (conveyor rollers), "Drives" (motors and drives for conveyor systems), "Conveyors & Sorters" and "Pallet & Carton Flow" (flow storage systems). Solutions from Interroll are used in express and postal services, in e-commerce, in airports, in the food and beverage, fashion and automotive sectors, and in many other industries. The company is used by leading brands such as Amazon, Bosch, Coca-Cola, DHL, Nestlé, Procter & Gamble, Siemens, Walmart and Zalando. With its headquarters in Switzerland, Interroll has a global network of 32 companies with a turnover of CHF 559.9 million and 2,300 employees (2018).

Development of the key figures 2014-2018

In CHF million, unless otherwise stated	2018	2017	2016	2015	2014
Order intake/net sales
Total order intake	592.6	458.1	405.2	385.1	350.7
Drives	170.9	146.7	123.6	110.3	114.9
Rollers	108.0	105.8	93.5	93.4	81.2
Conveyors and Sorters	220.5	142.6	120.9	107.2	79.8
Pallet and Carton Flow	60.5	55.6	63.5	49.8	59.4
Total net sales	559.9	450.7	401.5	360.7	335.3
Profitability
EBITDA	93.2	66.3	65.7	58.2	44.1
in % of net sales	16.6	14.7	16.4	16.1	13.2
EBITA	78.6	54.1	54.7	47.6	33.2
in % of net sales	14.0	12.0	13.6	13.2	9.9
EBIT	69.4	47.4	47.9	39.8	25.4
in % of net sales	12.4	10.5	11.9	11.0	7.6
Net profit	51.8	39.1	36.2	29.3	19.1
in % of net sales	9.3	8.7	9.0	8.1	5.7
Cash flow
Operating cash flow	67.4	46.2	36.8	40.2	27.8
in % of net sales	12.0	10.3	9.2	11.1	8.3
Free cash flow	40.9	20.1	18.0	17.3	12.0
in % of net sales	7.3	4.5	4.5	4.8	3.6
Total investment	28.6	25.4	19.5	24.3	16.8
Balance sheet (on 31st Dec.)
Total assets	417.6	355.3	324.8	293.0	278.2
Goodwill	17.3	17.6	17.3	16.7	17.6
Net financial assets	52.0	37.1	38.0	31.3	23.9
Equity capital	284.8	261.7	233.1	207.6	200.3
Equity ratio (equity capital as a % of the assets)	68.2	73.6	71.8	70.9	72.0
Equity return (in %)	19.0	15.8	16.4	14.4	9.9
Other key figures
RONA (Return on Net Assets, in %)	20.9	16.5	17.1	15.3	9.8
Average workforce	2198	2067	1892	1820	1675
Net sales per employee (in CHF thousand)	255	218	212	198	200
Productivity (value added/personnel costs)	2.17	2.02	2.11	2.04	1.86