EMS Chemie : Earning document

Herrliberg, February 12, 2021

MEDIA INFORMATION

Annual Results 2020 of the EMS Group:

• - Worldwide business recovering

• - Strong new business and early measures safeguard high result margin

• - Pleasing order situation at the beginning of the year

• - Bottlenecks in global supply chains lead to price increases

• 1. Summary

• The EMS Group, with its companies combined in the EMS-CHEMIE HOLDING AG,

• is globally active in the business areas High Performance Polymers and Specialty Chemicals. In 2020, net sales of CHF 1,802 million (2,153) and a net operating in-come of CHF 515 million (624) were achieved. While net sales in the first half-year were significantly lower due to COVID-19, sales recovered in the third quarter and exceeded previous year's figures in the fourth quarter. Thanks to the strong position with speciality products and measures taken at an early stage, EMS was able to maintain the net operating income margin (EBIT margin) at the previous year's level.

Demand for consumer and investment goods declined to historic low levels in the first half-year of 2020 and automotive plants worldwide closed for several weeks.

However, demand recovered steadily in the second half of the year. Easing of COVID-19 measures in most countries and extensive state support programmes generated confidence and purchasing power for consumers and companies. Domes-tic demand in China already reached pre-crisis levels in the third quarter, while other regions in the world have still not achieved this. At many production plants, a need to catch up could be noticed.

For further information please contact:	M. Martullo	Phone [phone]
www.ems-group.com	Fax [phone]

Inventory stocks and capacity were generally reduced during the crisis. The sudden increase in demand in the second half of the year provoked various supply shortages in international supply chains as logistic capacity also reached its limits. A lack of semiconductors is having a damping effect on the global automotive industry.

EMS prepared particularly early for a slowing of the economy. A comprehensive effi-ciency programme and quickly implemented measures at all locations allowed rapid adjustment of costs to lower sales figures. In the second half-year, production plants in the world were successively ramped up to meet the strong demand.

In addition, development and expansion projects for new business were further fol-lowed. Due to the speciality position with innovative new business and decisive ac-tion taken at an early stage, EMS was able to achieve again a high operational cash flow margin (EBITDA) of 31.6% (31.4%). Net operating income (EBIT) amounted to CHF 515 million (624); the EBIT margin reached 28.6% (29.0%).

For the business year 2020, the Board of Directors intends to propose to the Annual General Meeting, distribution of an ordinary dividend of CHF 13.00 (15.60) per share and an extra-ordinary dividend of CHF 4.00 (4.40) per share. This means a total of CHF 17.00 (20.00) per share would be distributed.

For 2021, EMS is expecting further economic recovery. Economic stimulus pro-grammes and state support measures are encouraging demand although the exact course of economic recovery will further depend on the pandemic and the associated political interventions. Temporary instability in the global markets is, therefore, to be expected.

EMS has started well in the business year 2021. With its successful strategy of spe-cial products in the main area of High Performance Polymers, EMS is in good shape to continuously make quick and flexible use of market opportunities as they arise.

For 2021, EMS expects higher net sales and a higher net operating income (EBIT) than in the previous year.

For further information please contact:	M. Martullo	Phone [phone]
www.ems-group.com	Fax [phone]

2.

Development of income 2020: Key figures EMS Group

in million CHF	2020	2019
Net sales	1,802	2,153
Change from previous year	-16.3%
Organic development of net sales * Operational Cash Flow (EBITDA) 1)	-11.0% 569	677
Change from previous year	-15.9%
In % of net sales Net operating income (EBIT) 2)	31.6% 515	31.4% 624
Change from previous year	-17.4%
In % of net sales	28.6%	29.0%
Net financial income	-4	-3
Income taxes Net income 3)	-71 440	-88 532
Change from previous year	-17.3%
In % of net sales	24.4%	24.7%
Cash Flow 4)	494	585
Change from previous year	-15.5%
Investments	48	63
Change from previous year	-23.2%
Equity 5)	1,598	1,663
In % of balance sheet total	76.9%	75.1%
Return on equity Equity per share (in CHF) 6)	27.2% 68.31	31.7% 71.09
Number of employees	2,521	2,648

*) In local currencies, without the business unit EMS-PATVAG, sold per November 26, 2019

1)

EBITDA

• = Earnings Before Interest, Taxes, Depreciation and Amortisation

• = Operational Cash Flow

  2)

  EBIT

• = Earnings Before Interest and Taxes

• = Net operating income

  3)

  Net income Cash Flow

• = Profit after taxes, including minority shareholders

  4)

• = Net income plus amortisation of intangible assets, property, plants and equipment, plus value adjustments to securities

  5)

  Equity

• = Equity without minorities

6)

Average weighted number of registered shares as at 31.12.2020: 23,389,028 shares (31.12.2019: 23,389,028 shares)

For further information please contact:	M. Martullo	Phone [phone]
www.ems-group.com	Fax [phone]

3. Remarks on the development of net sales and income

3.1 Net sales

Compared to the previous year, net sales dropped by 16.3% to close at CHF 1,802 million (2,153). 4.8% of this decline is accounted for by the stronger Swiss Franc.

96.0% (96.3%) of net sales were generated outside of Switzerland, 49.0% (50.3%) in Europe (excl. Switzerland), 28.2% (26.7%) in Asia, 17.6% (18.2%) in America and 1.2% (1.1%) in other countries.

Demand for consumer and investment goods declined to historic low levels in the first half-year of 2020 and automotive plants closed world-wide for several weeks, significantly affecting business for EMS. Sales recovered remarkably in the third quarter, however, and exceeded pre-vious year's figures in the fourth quarter.

EMS implemented comprehensive measures and protective concepts at all locations at a very early stage to prevent COVID-19 infections. In order to ensure delivery reliability to customers at all times, local inven-tories of raw materials were stocked and stocks of finished goods built up near customer plants. Thanks to these farsighted measures, the de-livery capability of all EMS production sites was ensured.

With efficiency programmes already initiated in the previous year, ex-tremely cautious recruiting policies and quickly implemented cost-reducing measures, EMS had continually adjusted organisation, pro-cesses, production and inventory stocks to customer order levels. In Switzerland, order fluctuations were absorbed through a flexible work-ing hours model. As a sign of solidarity, the Board of Directors and Ex-ecutive Management of EMS voluntarily took a 15% reduction in fees and fixed salaries.

Development of specialties was further followed and market opportuni-ties were quickly realized. Thus, business with specialty products was successfully expanded in all regions of the world and positions with customers strengthened worldwide.

For further information please contact:	M. Martullo	Phone [phone]
www.ems-group.com	Fax [phone]