DGAP-News

KAP AG SURPASSES REVENUE AND EARNINGS FORECAST DESPITE DIFFICULT MARKET ENVIRONMENT - Seite 2

Eckehard Forberich, Member and Spokesman of the Management Board of KAP AG: "We're satisfied with our business performance in light of the extremely gloomy and uncertain market environment. The faster-than-expected recovery from the effects of the pandemic has shown that we responded appropriately to the crisis and have a diverse and thus overall resilient investment portfolio. We'd like to extend our special thanks to our employees. They have demonstrated the highest level of flexibility in these difficult times and made this robust business performance possible. We have therefore been able to continue to concentrate on significantly improving our operating profitability."

Varied segment development
Business performance in the segments was very mixed in 2020. The engineered products, surface technologies and precision components segments were hit particularly hard by the COVID-19 pandemic, as they operate in sectors that were exposed to a sharp decrease in demand, such as the automotive industry. Their revenue therefore performed significantly worse than in the previous year. However, in the engineered products segment, the realignment implemented showed visible effects and resulted in a significant improvement in the operating result. The flexible films segment proved to be a winner in the crisis and was able to make use of attractive market opportunities, despite the uncertain market environment, and thus achieve double-digit growth in revenue. The operating segment result and the profit margin were also significantly higher than the previous year. The flexible films segment benefited from its strong market position and new sales opportunities, e.g. in the field of medical protective clothing. The it/services segment, which is held for sale due to a very attractive offer, was hardly impacted by the pandemic and continued on its growth course. The diversified portfolio approach successfully cushioned the considerable effects of the pandemic.

Significant reduction in net debt and strong cash flow
KAP AG further optimised its financing structure in the 2020 financial year despite the challenging environment. Net debt was thus reduced even more significantly over the course of the year than in the previous year. Compared to 2019, it fell by nearly 40% to around EUR 55 million as of 31 December 2020. Due to successful measures to improve working capital management and careful management of investments, there were significantly higher cash inflows in 2020. Free cash flow increased to EUR 30 million (previous year: EUR 19 million).