KAP : PDF half-year report 2021

Half-year report 2021

1 January to 30 June 2021

KEY FIGURES

Selected key figures

				H1 | 2021		H1 | 2020		Change in %
Group
Revenue1		€ millions	181.7	161.8	12.3
Normalised EBITDA1		€ millions	21.7	17.6	23.3
Normalised EBITDA margin1	%		11.9	10.9		1.0 pp
Earnings for the period after taxes		€ millions	23.7	-1.8		n. m.
Earnings per share		€	3.05	-0.23		n. m.
Investments		€ millions	15.5	9.9	56.6
Depreciation, amortisation and impairments		€ millions	12.7	13.6	-6.6
Cash flow from operating activities		€ millions	0.6	22.1	-97.3
				30/06/2021	31/12/2020		Change in %
Non-current assets		€ millions	200.8	185.2	8.4
Current assets		€ millions	152.5	112.7	35.3
Equity		€ millions	180.8	154.3	17.2
Equity ratio	%		50.0	49.3		0.7 pp
Non-current liabilities		€ millions	87.4	84.0	4.0
Current liabilities		€ millions	93.6	69.9	34.2
				H1 | 2021		H1 | 2020		Change in %
Employees (30 June)¹				2,374	2,619	-9.4

1 Continuing operations (excl. it/services).

2	KAP AG | HALF-YEAR REPORT 2021

CONTENTS

LETTER TO OUR SHAREHOLDERS	4
INTERIM MANAGEMENT REPORT	6
Macroeconomic environment	7
Development of important customer sectors	8
Business performance of the KAP Group	8
Group financial performance	9
Segment development	10
Cash flows	14
Financial position	15
Opportunities and risks	16
Events after reporting period	16
Outlook	17
CONSOLIDATED INTERIM FINANCIAL STATEMENTS	18
Consolidated statement of income	20
Consolidated statement of comprehensive income/loss	21
Consolidated statement of financial position	22
Consolidated statement of changes in equity	24
Consolidated statement of cash flows	26
Notes to the consolidated financial statements	27
RESPONSIBILITY STATEMENT	45
FINANCIAL CALENDAR
CONTACT	46

KAP AG | HALF-YEAR REPORT 2021

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LETTER TO OUR SHAREHOLDERS

DEAR SHAREHOLDERS,

Our business development in the first half of 2021 was highly satisfactory. We continued to demonstrate the high resilience of our portfolio management. In a significantly improved but still very volatile market environment, we acted flexibly, and quickly advanced the KAP Group's strategic transformation with our Accelerate programme. For example, the KAP Group's continuing operations generated revenue of almost €182 million - a year-on-year increase of 12.3%. Normalised EBITDA actually improved by 23.3% to €21.7 million.

The automotive sector's increasing recovery and the significant growth in industrial production had a positive impact on all segments' operating business. This was evident in the significant revival in customer demand in our diverse target markets.

This growth would doubtless have been even higher without the global supply chain problems and supply bottlenecks that resulted from the Covid-19 crisis. At the same time, during the year it became increasingly difficult to pass the price increases on the procurement side on to customers due to longer-term price agreements.

Nevertheless, we systematically continued the Accelerate improvement initiatives planned for 2021 and thus significantly improved the operating results of all our continuing segments. We successfully completed the sale of the it/services segment with the divestiture of the MEHLER Engineering Service GmbH subsidiary with effect as of 1 January and the it-novum GmbH subsi­ diary as of 30 June 2021. This meant we were able to increase our financial leeway and sharpen the focus of our investments on manufacturing SMEs. In addition, we made two attractive acquisi­ tions in the flexible films segment in the first quarter and thus expanded our competences in this high-growth area in a targeted way. The successful sale of our commercial property in Fulda, whose completion is planned for November 2021 at the latest, is in line with our overarching strategic objective. In addition, we invested more in the expansion and construction of production sites and in new equipment and machinery. We also extended our international sales initiatives. Overall, we made the KAP Group increasingly agile: for instance, new reporting and business intelligence systems, which improve our Group-wide risk management, were implemented in order, for example, to be able to respond more quickly to market changes.

Our business development in the first half of the year was better than we had expected, which is why we increased our forecast for the 2021 financial year at the end of August. We expect the KAP Group to achieve revenue of between €320 million and €350 million for the current financial year (previously: between €300 million and €330 million) and normalised EBITDA in a range from €32 million to €38 million (previously: €27 to 33 million).

4	KAP AG | HALF-YEAR REPORT 2021

You, our shareholders, should also benefit from this encouraging business performance and from the profits from the sale of the it/services. We will therefore propose to the Annual General Meeting convened for 30 September 2021 that an increased dividend for the 2020 financial year of €1.75 per share be paid (previously: €0.75 per share).

We stand by our existing corporate and portfolio strategies. Our overarching objective is to significantly and sustainably increase the profitability of the KAP Group by 2023. To this end, we have already significantly accelerated the transformation process in the Group. The KAP Group is now a focused, modern industrial holding company with a clear investment approach based on the entrepreneurially minded SME sector.

Together with our employees, we introduced an important culture change within the whole Group in the past half-year: We are significantly more agile, with a high level of autonomy at the relevant management levels. We will systematically continue on this path.

We would like to thank you, our shareholders, for your trust in our company. We will continue to report consistently and transparently on our business development and the important milestones­ from the Accelerate programme in the future. Our increased attention is currently on the supply bottlenecks shaping development in the second half of the year. Thanks to the improvement initiatives we have already implemented, however, we have sufficient financial flexibility to successfully master these challenges and drive the further development of the KAP Group.

Best regards,

Eckehard Forberich	Marten Julius
Spokesman of the Management Board	CFO

KAP AG | HALF-YEAR REPORT 2021

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