The Ergis Group after 3Qs 2016: another good quarter, 30% increase in sales of nanoERGIS® film

After three quarters of 2016, the ERGIS Group, leading plastics processing company in Central and Eastern Europe, generated revenue of PLN 530.8 million, which represents a 4% increase relative to 2015. The Group recorded operating profit of PLN 30.2 million (a 6% increase) and net profit of PLN 21.1 million (a 3% decrease due to higher provisions for income tax). EBITDA for 3Qs 2016 totalled PLN 48.9 million (a 5% increase).

In the third quarter alone, the Group's revenue went up by 9% compared to Q3 2015. Moreover, the comparison to Q3 2015 demonstrates growth in operating profit, EBITDA and net profit by 125%, 46% and 241%, respectively.

One of the reasons behind that improvement is a 30% increase in the sales of the Group's most innovative product - the nanoErgis® film.The entire industrial packaging segment saw an increase in sales of almost 6%. Sales of soft PVC film and printed packaging grew by 13% and 7%, respectively. Successful restructuring activities aimed to integrate the production of multilayer rigid packaging film with the production of PET mono film in a single manufacturing plant in Berlin had a positive influence on the Group's performance.

As announced earlier, the Group started to build another line for the production of the nanoErgis film in the Oława plant. The line is due to be launched in the second half of 2017. Total expenditure on the line will not exceed PLN 30 million. The Group believes that the packaging products segment is experiencing a dynamic growth, and it will be focusing on further developing this area of its business.

FINANCIAL PERFORMANCE IN DETAILS

Financial results of the ERGIS Group in Q3 2016 and cumulative results after 3Qs 2016 are presented in the table below:

PLN '000	Q3 2016	Q3 2015	Change	Q1-Q3 2016	Q1-Q3 2015	Change
Revenue	180,369	166,025	+8.6%	530,759	511,469	+3.8%
Operating profit	9,405	4,177	+125.2%	30,228	28,451	+6.2%
Gross profit	8,899	2,508	+254.8%	26,185	26,800	-2.3%
EBITDA	15,491	10,574	+46.5%	48,911	46,593	+5.0%
Net profit	7,095	2,080	+241.1%	21,116	21,800	-3.1%

In Q3 2016, the prices of raw materials did not change significantly as compared to Q2 2016. In comparison with Q3 2015 the prices of all strategic raw materials were lower - in the case of PVC, there was only a minor decrease, but the prices of all other raw materials went down more clearly - by up to about 10%.

'We are satisfied with the financial results achieved in the third quarter of 2016. On the one hand, the results reflect the success of the Group's most innovative product, that is the nanoErgis film, and on the other hand, they are a consequence of last year's restructuring process carried out in Germany and good results generated in the remaining segments. We are building another line for the production of the multilayer stretch nanoErgis film, which is to be launched in the second half of 2017 with a view to intensifying our research and development activities in the packaging segment,' said Tadeusz Nowicki, President of the Management Board of ERGIS S.A.

ADDITIONAL INFORMATION

The ERGIS Group, listed at the Warsaw Stock Exchange, holds the leading position in the plastics processing sector in the 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 2015 the Group's revenue exceeded PLN 675 million.

Additional information is also available atwww.ergis.eu