Preliminary Ergis Group results after Q1 2018: Higher sales with decrease of profitability; Negative impact of increase of remuneration and prices of raw materials.

ERGIS Group, the leader of plastics processing in Central and Eastern Europe, has published preliminary financial results after 1^st quarter of 2018. For this period, the Group recorded an increase of sale revenue by 4.3%, reaching PLN 191.2 million. Nonetheless, the company's profitability deteriorated. EBITDA decreased by 20.6% to PLN 13.5 million, operating profit dropped by 32.1%, to PLN 7.6 million, and net profit by 38.8%, to PLN 5.2 million.

The year-on-year profits were reduced by remuneration increase in the second half of 2017 as well as high prices of raw materials, mainly PET flakes, PVC, softeners and titanium white. The results were also negatively affected by EBITDA generated on the sales of rigid films and laminates for food packaging, which was PLN 1.6 million lower than in the 1^st quarter of 2017. The company has fully implemented its plans for the amount of EBITDA achieved on the sale of stretch film and PET strapping bands.

We are pleased to see the growth of sales. It shows our expansion in Poland and other geographical areas of the EU. On the other hand, the decline in profitability reflects an increase of remuneration and raw material costs as well as difficulties in convincing customers to recognize new realities of the market environment, which are associated with higher prices. We are currently implementing a program of price increases, which should allow us to restore profitability on previous levels - said Tadeusz Nowicki, President of Ergis S.A.

PRELIMINARY FINANCIAL RESULTS - DETAILS

Preliminary financial results of the ERGIS Group after Q1 2018 are presented below:

PLN thousand	Q1 2018	Q1 2017	dynamics
Sales revenue	191,215	183,401	4.3%
Operating profit	7,584	11,171	-32.1%
EBITDA	13,517	17,034	-20.6%
Gross profit	6,102	10,538	-42.1%
Net profit	5,160	8,431	-38.8%
Interest bearing debt	180,804	156,546	15.5%

FURTHER INFORMATION

The ERGIS Group, listed at the Warsaw Stock Exchange, holds the leading position in the plastics processing sector in Central and Eastern Europe. Out of its five manufacturing plants, four are situated in Poland and one in Germany. The Group`s profile includes manufacturing of packaging for food (printed multilayer laminates, and PVC and PET - based barrier films and laminates) and industrial packaging (LLDPE stretch films and PET binding tapes). Moreover, ERGIS is a manufacturer of films for packaging pharmaceuticals, hydro - insulating films and PVC compounds. In 2017 the Group`s revenue exceeded PLN 750 million.

Additional information is also available atwww.ergis.eu