Holland Colours : Press Release Holland Colours Financial Results 2015-2016.2016.05.26

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HOLLAND COLOURS PRESS RELEASE FINANCIAL RESULTS 2015/2016

(this is a translation of the Dutch press release issued by the company on the same date)

8% HIGHER REVENUE AND 6% IMPROVED NET RESULT

Key figures (€ million)	2015/2016	2014/2015	Difference
Revenue	73.7	68.2	5.5
Operating result	5.7	5.3	0.4
Net result	3.6	3.4	0.2

Holland Colours achieved a revenue increase of € 5.5 million compared to the previous year despite disappointing sales in Asia, especially in China. Of this increase, € 4.4 million relates to the appreciation of the US dollar. Organic growth of the business came in at 1.5%.

The revenue developed well in the first quarter which was partly explained by a concentration of deliveries that were more evenly spread in the prior year. The second and fourth quarters ended almost at par with previous year while the third quarter showed an improvement.

Third-party revenue in both Europe and Americas increased by 4% (as measured in euros and US dollars respectively). All segments contributed, except for Elastomers USA where an important customer moved to in-house production. Revenue in Asia, as measured in US dollars, was down significantly amongst others due to a weaker economy in China and a disappointing domestic market in Indonesia.

Adjusted for currency impact, Holland Colours realised 2% growth in Building & Construction and Packaging, both important markets for the company. Most of the growth in the Building & Construction market originated in the Americas, while Asia, a much smaller market for Holland Colours, stayed behind. Growth in Packaging occurred mostly in the Americas this year, supported by Europe, while Asia (again relatively small) contributed negatively. Silicones & Elastomers ended below prior year mainly due to the slowdown in the Chinese economy and the aforementioned customer-specific development in the Americas. The 3% growth in Specialties was almost entirely generated in Europe, more than offsetting the decline in Asia.

Net margin improved, also as a percentage of sales.

Operating expenses increased by € 2.3 million, of which € 1.8 million was due to the higher exchange rate of the US dollar (translation effect). The remaining increase of € 0.5 million relates to exchange-rate differences on financial assets and liabilities as recognised in the income statement.

Net financing expenses amounted to € 0.13 million versus € 0.26 million in the prior year. Income tax expenses ended at € 2.0 million compared to € 1.6 million in the previous financial year.

The return on average invested capital for the year came to 20.0%, versus 18.5% in 2014/2015.

The effective tax rate was 35.6%. The increase compared to the 31.9% in the previous year is largely due to the higher share of the US entity in the results of Holland Colours.

The net result ended at € 3.6 million (compared to € 3.4 million in 2014/2015), whereby € 1.9 million was realized in the first half of the year (equal to prior financial year) and € 1.7 million in the second part of the year (versus € 1.5 million in the second half of 2014/2015).

Capital expenditures (including capitalised R&T hours) amounted to € 2.1 million (previous year € 1.3 million) which is in line with depreciation (€ 2.0 million in both this year and the prior year). The average level of capital expenditures over the past five years is € 1.4 million.

Operating cash flow amounted to € 7.6 million (versus € 5.6 million in the previous year). Of this amount,

€ 2.5 million was used for bank loan redemption. The net cash flow came to € 1.5 million, compared to

€ 3.1 million in the previous year.

The company continued to meet all ratios as agreed with the bank. The Total Debt/EBITDA ratio improved further, from 0.5 to 0.1. The company's solvency was 71.0% at the end of March 2016, compared to 66.1% in the previous year.

The net result per share amounts to € 4.23, against € 4.02 in the previous year.

The dividend proposal to be approved to the General Meeting of Shareholders on 7 July 2016 amounts to

€ 2.15 in cash per share (compared to € 2.00 in 2014/2015). OUTLOOK FOR 2016/2017

Holland Colours will continue to work on achieving revenue growth in existing and new geographical regions. New product development as well as the commercialization of new products will be continued. Given the company's position in its existing markets, especially in Europe and the Americas, this is essential for further growth.

The revitalised sales organisation (as implemented over the past years) and the appointment of a Director of Global Marketing will further strengthening the connection with the market. It should be noted that Holland Colours operates in markets in which acceptance of (new) products takes time. Actions designed to increase the efficiency of the business operation and implementation of the findings of Activity Based Costing will be continued and intensified where needed. Developments in Asia will be closely monitored and further action will be taken where necessary.

The ongoing focus on growth and introduction of new products will require additional capital expenditures which are expected to be covered from internal funding.

As experienced in recent years, fluctuations in exchange-rates can significantly affect the company's result, both directly, since Holland Colours operates globally, and indirectly, due to the effect of exchange rates on economic activity in general. Furthermore, the economic development of the markets relevant to Holland Colours continues to be uncertain.

Based on the above, as well as the general volatility in the markets in which Holland Colours operates, Holland Colours will not issue an outlook for the 2016/2017 financial year.

For further information on the 2015/2016 financial results of Holland Colours and other background information on the company, please visit our website:www.hollandcolours.com.

Apeldoorn, 26 May 2016 Board of Management

Rob Harmsen Margret Kleinsman

More information Holland Colours NV

Rob Harmsen

Chief Executive Officer Telephone: [phone]

Financial statement 2015/2016 HOLLAND COLOURS NV CONDENSED CONSOLIDATED INCOME STATEMENT

for the financial year ending March 31, 2016

In thousands of euros	01-04-2015	01-04-2014
to	to
31-03-2016	31-03-2015
Revenue	73,732	68,246
Gross operating profit	35,468	32,667
Personnel costs	16,810	15,180
Amortisation, depreciation and impairments	2,027	1,958
Other operating costs	10,883	10,212
29,720	27,350
Operating profit	5,748	5,317
Financial income and expenses	(113)	(260)
Income tax expenses	(1,998)	(1,613)
Net result	3,617	3,444
Attributable to:
Shareholders of the company	3,643	3,462
Minority interest	(26)	(18)
Average number of shares issued	860,351	860,351
Total Earnings per share attributable to	4.23	4.02
shareholders (ordinary and diluted)