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EQS-News: KAP AG / Key word(s): Annual Report
KAP REACHES 2023 ADJUSTED GUIDANCE FORECAST AND PROJECTS SIGNIFICANTLY RISING EBITDA
2024-04-26 / 08:00 CET/CEST
The issuer is solely responsible for the content of this announcement.
KAP REACHES 2023 ADJUSTED GUIDANCE FORECAST AND PROJECTS SIGNIFICANTLY RISING EBITDA

. Revenue of EUR316.7 million and normalised EBITDA of EUR15.6 million (adjusted for the companies sold in
April 2023)
. Negative factors include supply chain issues and negative macroeconomic developments in the construction
sector and the automotive sector
. Structural measures are starting to produce first noticeable results
. Guidance forecast for 2024: moderate increase in revenue, significant increase in normalised EBITDA

Fulda, 26 April 2024 - KAP AG ("KAP"), a listed, medium-sized industrial holding company, reached in the 2023 financial
year its guidance forecast as adjusted in August in a difficult macroeconomic environment. While the Company is still
not satisfied with the figures achieved, it is already seeing a positive trend reversal on individual core markets.
Overall, the still weak global economy, negative exceptional economic developments in key target markets such as the
construction sector or the automotive industry as well as supply chain issues weighed on the Company in 2023. On a
comparable basis - that is without the subsection of the flexible films segment sold in April 2023 - KAP generated
revenue of EUR316.7 million in the 2023 financial year, down 12.1% (previous year: EUR360.1 million). Including the
subsection sold, revenue amounted to EUR337.0 million, down 22.3% on 2022.
Normalised EBITDA came to EUR15.6 million (previous year: EUR23.5 million) and the respective margin was 4.9% (previous
year: 6.5%) at the end of 2023, without the subsection of the flexible films segment sold in the reporting period.
Including the subsection sold, normalised EBITDA was at EUR17.3 million, which represents a substantial decrease on the
previous-year figure of EUR35.9 million. The normalised EBITDA margin came to 5.1% after 8.3% in the previous year. The
consolidated loss after taxes totalled EUR-0.1 million, up on the previous-year figure of EUR-1.7 million.
In the reporting year, net normalisation adjustments totalled EUR-41.2 million (previous year: EUR-7.6 million).
Non-recurring expenses and income of EUR-42.6 million thereof were attributable exclusively to the sale of a subsection
of the flexible films segment. Without considering these special and non-recurring effects, EBITDA increased by 34.5%
to EUR58.5 million (previous year: EUR43.5 million).
Marten Julius, Spokesman of the Management Board of KAP AG: "It's true that 2023 was impacted by many negative economic
factors that we were unable to influence, or only to a very limited extent. Nevertheless, we cannot be satisfied with
the result, which is why we have already initiated the necessary steps to make the KAP Group and its segments leaner,
more efficient and responsive. But, that aside, we can already see the environment slowly recovering and demand for our
products rising again on markets that are important to us, such as for pool liners for instance."
Segments exhibit varied developments
The flexible films segment recorded 24.8% lower revenue in 2023 than in the previous year on a comparable basis, that
is without the subsection sold. Including the subsection sold, revenue amounted to EUR98.3 million, down approximately
44.5% year on year (previous year: EUR177.1 million). In the reporting period, this segment was negatively affected by
the end of the pandemic-related economic buoyancy due to the cocooning effect - many dealers had bought products,
particularly pool liners, in the previous year but were unable to sell off the high level stockpiled at the anticipated
rate in the reporting period. Added to this was a noticeable downturn in the construction sector. Having said that, the
first signs of a trend reversal and of demand starting to rise again were already becoming apparent at the end of 2023.
On a comparable basis, normalised EBITDA decreased, in line with revenue, from EUR10.3 million to EUR8.1 million and the
normalised EBITDA margin increased by 0.5 percentage points from 9.9% to 10.4%. Including the subsection sold,
normalised EBITDA slid from EUR22.4 million down to EUR9.8 million. The normalised EBITDA margin narrowed by 2.6 percentage
points to 10.0% (previous year: 12.6%).
In the engineered products segment, both revenue and normalised EBITDA fell significantly. Revenue decreased from
EUR145.7 million in 2022 to EUR116.7 million and normalised EBITDA decreased from EUR9.2 million to EUR3.1 million. This is
equivalent to a normalised EBITDA margin of 2.7% after 6.3% in the previous year. The decrease in the EBITDA margin is
mainly attributable to the considerably lower level of revenue and the time lag in adjusting costs. Global economic
developments, particularly in the automotive sector, additionally weighed on the second half of the year in particular.
Added to this, a larger, high-margin customer contract had expired at the end of the previous year. In response to this
development, extensive structural measures to make production leaner and more efficient and achieve a noticeable
reduction in administrative functions at the headquarters in Fulda have already been implemented. In addition,
comprehensive initiatives have been launched with the aim of optimising working capital management and the product
portfolio.
The surface technologies segment increased its revenue in 2023 to EUR68.6 million, up 5.1% on 2022 (previous year: EUR65.3
million). Normalised EBITDA totalled EUR6.1 million at year-end (previous year: EUR6.8 million). The normalised EBITDA
margin came to 8.9% in 2023 (previous year: 10.4%). This segment was able to pass on to the market only part of the
rise in energy costs. As in the precision components segment, the weak global economy in the automotive sector also
made itself felt here.
The precision components segment generated revenue of EUR53.4 million in the reporting period, up 17.1% year on year
(previous year: EUR45.6 million). This positive performance was due in particular to the increased ability to pass on the
rise in energy and raw materials costs to the segment's customers as well as higher unit sales. Normalised EBITDA
amounted to EUR2.1 million, which marks an improvement on the previous-year figure of EUR-0.1 million. The normalised
EBITDA margin came to 3.9% in 2023 (previous year: -0.2%).
Measures to enhance efficiency
Primarily, but not only, in the engineered products segment, extensive structural measures were taken in 2023 to make
administration, production and sales leaner, more efficient and responsive. Some of the related expenses were already
normalised in 2023, and the measures taken are starting to produce the first noticeable results and improvements. We
therefore believe that the KAP Group is in a good position. However, we regularly review any need for further
optimisation measures in order to benefit from megatrends in niche markets in the long term.
Outlook
Considering the KAP Group's diversified investment model and its good market position in profitable niche markets with
a focus on long-term megatrends and the structural measures already initiated, the Management Board expects revenue in
the Group to increase moderately and normalised EBITDA to increase significantly in the current financial year compared
with the previous year. Accordingly, the projections for all segments anticipate stable or slightly increasing revenue
and a significant increase in normalised EBITDA year on year. Only the engineered products segment is expected to see
revenue decline slightly as a result of portfolio optimisations undertaken in certain regions.
The complete audited Annual Report 2023, including the independent auditors' report, is available on KAP AG's website.
Contact:
KAP AG
Kai Knitter
Head of Investor Relations & Corporate Communications
investorrelations@kap.de
+49 661 103 327
About KAP AG
KAP AG is a listed industrial holding company focused on upper mid-size operating companies that seizes attractive
growth opportunities in their respective niche markets. Specifically, KAP AG currently focuses on four distinct
operating segments: engineered products, flexible films, surface technologies and precision components. The Group lets
its shareholders participate in the long-term sustainable value development through an attractive dividend. KAP AG
currently has over 2,400 employees at 24 locations in eleven countries. KAP AG is a Participant of the United Nations
Global Compact and adheres to its principles-based approach to responsible business. KAP AG's shares are listed on the
Regulated Market of the Frankfurt Stock Exchange (General Standard, ISIN DE0006208408).
2024-04-26 CET/CEST Dissemination of a Corporate News, transmitted by EQS News - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Language:     English 
Company:      KAP AG 

Edelzeller Straße 44
36043 Fulda
Germany

Phone:        06611030 
Fax:          0661103830 
E-mail:       office@kap.de 
Internet:     www.kap.de 
ISIN:         DE0006208408 
WKN:          620840 
Listed:       Regulated Market in Frankfurt (General Standard); Regulated Unofficial Market in Berlin, Dusseldorf, 

Munich, Stuttgart, Tradegate Exchange
EQS News ID: 1889647

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