Progress-Werk Oberkirch AG: PWO reports preliminary figures for the first nine-months of 2020 and publishes a new fiscal year forecast

- Visible business upturn in the third quarter
- EBIT before currency effects and provisions for personnel adjustments clearly positive in the third quarter
- Full-year forecast continues to be affected by considerable uncertainty

Oberkirch, October 27, 2020 - Based on preliminary figures, PWO's business performance in the first nine months of 2020 was as anticipated significantly lower than in the same period in the prior year. The impact of the corona-pandemic contributed mainly to this development. As already communicated, provisions for personnel adjustments at the Oberkirch site in the amount of EUR 10.0 million were also recognized in the third quarter.

PWO's business picked up significantly in the third quarter. Revenue was down slightly more than 8 percent year-on-year, compared to a decline of more than 25 percent for the nine-month period. Revenue in the third quarter amounted to EUR 99.2 million (p/y: EUR 108.5 million). EBIT before currency effects decreased to EUR -4.0 million (p/y: EUR 3.5 million) as a result of the aforementioned provisions. Revenue in the nine-month period reached EUR 257.4 million (p/y: EUR 345.3 million), and EBIT before currency effects amounted to EUR -2.9 million (p/y: EUR 14.3 million).

All international locations achieved a satisfactory positive EBIT before currency effects in the third quarter. Particularly worth noting was the solid earnings momentum recorded by the China location. At the Oberkirch location, EBIT before currency effects and provisions for personnel adjustments was at break-even.

Net debt also developed favorably and fell to EUR 111.2 million as of the September 30, 2020 reporting date, compared to EUR 132.5 million at the end of the previous fiscal year. The equity ratio as of September 30, 2020 declined to 28.2 percent compared to 30.1 percent as of December 31, 2019. Free cash flow was positive in the third quarter, as well as in the first half and second quarter of 2020, and at EUR 22.0 million for the nine-month period (p/y: EUR 14.2 million), significantly exceeded the level in the prior year.

There is still considerable uncertainty with respect to the further development in the current fiscal year, particularly regarding the potential effects of the present substantial increase in infections throughout Europe and their possible impact on our locations in Germany and in Czechia. This makes it impossible to provide a forecast with the usual level of detail.

Currently, we expect revenue in the 2020 fiscal year to reach around EUR 350 million, and EBIT before currency effects to be negative as a result of the high provisions. Free cash flow is expected to be influenced largely by the concrete plan for personnel adjustments. Funds for investments will continue to be made available in the fourth quarter on a very restrictive basis only. Both free cash flow and investments are projected to be visibly lower than in the prior year.

We are strengthening our competitiveness and our position by implementing the ongoing structural measures within the Group and, above all, by making the necessary adjustments to the revenue development expected in the years ahead at the Oberkirch site in Germany. This will enable us to master any upcoming challenges.

Disclaimer: EBIT before currency effects and free cash flow are not considered performance measures according to IFRS. Information on the calculation of these figures can be found on pages 19 and 24 of the Annual Report 2019, which is available on the Company's website at https://www.progress-werk.de/en/investors-press/news-publications/reports/annual-report-2019/.

Progress-Werk Oberkirch AG
The Management Board

End of the ad hoc announcement