Picanol : Consolidated results H1 2018

PRESS RELEASE

Regulated information

Half-yearly information-figures H1 2018

August 22, 2018-8:00 am CET

RESULTS OF THE FIRST HALF OF 2018 IN LINE WITH EXPECTATIONS

WELL-FILLED ORDER BOOK FOR THE SECOND HALF-YEAR

I. CONSOLIDATED RESULTS H1 2018

• In line with the previously announced forecast, the Picanol Group (Euronext: PIC)

  realized a consolidated turnover of 357.4 million euros in the first half of 2018, which was in line with the turnover of 364.7 million euros in the first half of 2017.

  The Weaving Machines division had a very strong half-year based on the well-filled order book at the end of 2017, although it experienced a slight decrease in turnover compared to the exceptionally strong first half of 2017. Despite the lower demand from the Weaving Machines division, the Industries division again realized a strong first half-year thanks to higher demand and projects from other customers. The Industries division thus continues to contribute to the growing diversification of the group by fully focusing on castings and mechanical finishing (Proferro), controller capacities (PsiControl) and precision parts (Melotte).

  These activities resulted in the first half of 2018 in a net profit of 47.8 million euros compared to 52.2 million euros in the same period in 2017. In addition, Tessenderlo Group nv contributed 19.4 million euros to the net result in the first half of 2018 (compared to 5.8 million euros in the same period last year). The Picanol Group closed the first half of 2018 with a net profit of 67.1 million euros, compared to 58.1 million euros in the first half of 2017.

• The order book for the second half of 2018 is well-filled. The Picanol Group expects a slight decrease in turnover over the full 2018 financial year compared to 2017-the best result in the history of the group-and is taking into account a further impact of rising commodity prices.

• The Picanol Group has currently some 70 vacancies at its headquarters in Ypres. The vacancies are published on the websitewww.picanolgroup.com.

KEY FIGURES:

Consolidated results(in '000 euros)	30/06/2018	30/06/2017
Sales	357,393	364,712
Cost of sales	-274,961	-274,546
GROSS PROFIT	82,432	90,256
Gross profit as % of sales	23%	25%
General and administrative expenses	-11,147	-9,988
Selling and marketing expenses	-8,731	-9,191
Other operating income	6	85
Other operating expenses	-49	-5
EBITDA*	66,418	73,999
EBIT**	62,511	71,156
Net financing expenses	1,373	997
Other financial result	-160	170
PROFIT OR LOSS BEFORE TAXES	63,724	72,323
Income taxes	-15,952	-20,107
PROFIT OR LOSS AFTER TAX EXCLUDING THE SHARE IN
THE RESULT OF ASSOCIATED COMPANIES ***	47,772	52,217
Share in the result of associated companies	19,361	5,834
SHARE OF THE GROUP IN PROFIT	67,133	58,051
Balance sheet information(in '000 euros)	30/06/2018	30/06/2017
SHAREHOLDERS' EQUITY	693,313	587,693
BALANCE SHEET TOTAL	843,025	749,348
Key figures per share(in euros, except number of
shares)	30/06/2018	30/06/2017
Basic earnings per share	3.79	3.28
Diluted earnings per share	3.79	3.28
Number of shares	17,700,000	17,700,000
*EBITDA: EBIT	62,511
+ depreciation and impairment of assets	+ 4,592
+ adjustments of write-offs on inventories and trade receivables	+ 882
+ adjustments of other provisions	- 1,568
**EBIT: Operating result

*** In order to make a clear distinction between the results achieved by Picanol Group and the other results generated through the associated company, it was decided to present the share in the result of associated companies after the profit after taxes.

II. ABBREVIATED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

II.1.CONSOLIDATED INCOME STATEMENT

PICANOL GROUP(in '000 euros) Sales

Cost of salesGROSS PROFIT

30/06/2018357,393

-274,961 -274,546

30/06/2017364,712

82,432 90,256

Gross profit as % on turnover

23% 25%

General and administrative expenses Selling and marketing expenses Other operating income

Other operating expensesOPERATING RESULTTotal interest income Total interest expenses Other financial income Other financial expensesPROFIT OR LOSS BEFORE TAXESTaxes

PROFIT OR LOSS AFTER TAX EXCLUDING THE SHARE IN THE RESULT OF ASSOCIATED COMPANIES

-11,147 -9,988

-8,731 -9,191

6 -49

85 -5

62,511 71,156

2,267 2,399

-894 -1,402

423 784

-583 -614

63,724 72,323

-15,952 -20,107

47,772 52,217

Share in the result of associated companies

19,361 5,834

SHARE OF THE GROUP IN PROFIT

67,133 58,051

PICANOL GROUP(in euros) Basic earnings per share Diluted earnings per share

30/06/2018

ABBREVIATED CONSOLIDATED OVERVIEW OF THE TOTAL RESULTPICANOL GROUP(in '000 euros)PROFIT/(LOSS) OF THE PERIOD Total other comprehensive income

Items that will not be subsequently transferred to profit and loss:

Actuarial gains / (losses)

Actuarial gains / (losses) at associated companies

Items that will subsequently be transferred to profit and loss if specific conditions are met:

Currency exchange differences as a result of the conversion of foreign operations

Currency exchange differences as a result of the conversion of foreign operations at associated companies

Share of other comprehensive income of associated companies

Total other comprehensive income after taxes TOTAL RESULT

3.79 3.28

3.79 3.28

30/06/2018

67,133 58,051

1,141 3,106

1,141 3,106

-1,635 -3,037

124 -2,141

-1,907 -1,227

148 331

-494 69

66,639

30/06/2017

30/06/2017

58,120

II.2. CONSOLIDATED BALANCE SHEET

PICANOL GROUP(in '000 euros)			30/06/2018 31/12/2017
FIXED ASSETS			510,422 481,398
Intangible assets Goodwill Tangible fixed assets Interests in associated companies Other financial investments Non-current receivables Deferred tax assets			972 0 1,014 0 62,964 62,129 444,026 417,000 44 44 1,710 699 706 512
CURRENT ASSETS	332,603 296,292
Inventories Trade receivables Other receivables Cash and cash equivalents			69,589 63,767 81,187 70,295 22,403 28,881 159,424 133,350
TOTAL ASSETS	843,025 777,690
SHAREHOLDER'S EQUITY	693,313 630,214
Share capital	21,720 21,720 1,518 1,518 663,617 600,642 6,458 6,334 0 0
Share premiums
Reserves
Translation differences
Minority interests
NON-CURRENT LIABILITIES	9,788 10,313
Employee benefit obligations Provisions Deferred tax liabilities Interest-bearing debt Other liabilities			4,272 4,821 27 27 5,192 5,190 297 275 0 0
CURRENT LIABILITIES	139,924 137,163
Employee benefit obligations Provisions Interest-bearing debt Trade payables Income taxes payable Other current liabilities			1,060 1,060 7,371 8,390 3,649 1,983 75,653 73,810 2,865 3,401 49,326 48,519
TOTAL LIABILITIES			843,025 777,690

II.3. CONSOLIDATED CASH FLOW STATEMENT

PICANOL GROUP(in '000 euros)	30/06/2018	30/06/2017
Operating result	62,511	71,156
Depreciation on intangible and tangible fixed assets	4,452	4,119
Impairment losses of assets	140	72
Increase/(decrease) of write-offs
on current assets	882	-1,294
Changes in provisions	-1,568	-54
Profit/(loss) on disposals of assets	0	0
Gross cash flow from operating activities	66,418	73,999
Changes in working capital	-9,480	-28,884
Income taxes	-16,719	-12,537
Interest received	2,267	2,399
Net cash flow from operating activities	42,486	34,977
Acquisitions of intangible fixed assets	-60	-82
Acquisitions of tangible fixed assets	-5,286	-5,429
Acquisitions of associated companies	-8,283	-7,883
Net cash flow from investment activities	-13,629	-13,394
Interest paid	-894	-1,402
Dividends paid	-3,540	-1,770
Increase/(decrease) of export financing	1,762	2,007
Repayments of interest-bearing financial debt	-74	-98
Net cash flow from financing activities	-2,746	-1,264
Effect of exchange rate fluctuations	-36	-1,438
Adjustments to cash and cash equivalents	26,074	18,881
Net cash position-opening balance	133,350	81,285
Net cash position-closing balance	159,424	100,166
26,074	18,881
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